20060405 TZCA Dar es Salaam

,.,

IN THE COURT OF APPEAL OF TANZANIA

AT DAR ES SALAAM CIVIL APPLICATION NO. 137 OF 2005 UNIVERSAL ELECTRONICS & HARDWARE LIMITED AND TWO OTHERS ............................... APPLICANTS

VERSUS N.B.C. LIMITED ................................................. RESPONDENT (Application for Stay of Execution from the decree of the High Court of Tanzania, Commercial Division, at Dar es Salaam) (Kalegeya, J.) dated the 11th day of March, 2005 in Commercial Case No. 198 of 2002 Date hearing of the matter was concluded: 21 st March, 2006 Date Ruling was delivered: 5 th April, 2006

RULING MUNUO, J.A.: The applicant, Universal Electronics and Hardware Limited and two others, through the services of Mr. Mhango and Professor Fimbo, learned advocates, brought a Notice of Motion under Rule 9 (2) (b) of the Tanzania Court of Appeal Rules, 1979, seeking stay of execution of the decree in Commercial Case No. 198 of 2002 in the Commercial Division of the High Court of Tanzania, before Kalegeya, J. The respondent, N.B.C. Limited was represented by Mr. Kabakama, learned advocate. 2 Counsel for the respondent filed a preliminary objection, contending that the application for stay of execution is time barred so it should be dismissed with costs. The application for stay, counsel for the respondent argued, ought to have been filed within a period of sixty days from the date of the decree on the 11th March, 2005. He cited the case of National Housing Corporation versus Ettiennes Hotel, Civil Application No. 175 of 2004 (CA) (unreported) in which the Court held that the period of limitation for applications for stay of execution is sixty days. Opposing the preliminary objection, Professor Fimbo, learned counsel for the applicant contended that the Ettiennes Hotel case cited supra is distinguishable for in the said case, there was no notice of appeal for the intended appeal so the application for stay was dismissed with costs. Furthermore, counsel for the applicant

argued, no period of limitation is provided for under Rule 9 (2) (b) of the Court Rules, 1979 so the Court should not impose a period of limitation on applications for stay. 3 The issue is whether the application for stay of execution is time barred. The reply to the above question has to be negative. The decree sought to be stayed was signed by the learned trial judge on the 11th March, 2005. The respondent did not bother to execute the decree so to date it has not been executed. On the other hand, the applicant filed a Notice of Appeal and an Appeal to challenge the decision of the High Court, i.e. Civil Appeal No. 29 of 2005 which is pending in this Court. Meanwhile the applicant filed the application for stay of execution pending the determination of appeal. The application for stay was filed seven months after the decree was issued but before execution commenced. Since Rule 9 (2) (b) of the Court Rules, 1979, does not provide for a period of limitation, an order for stay of execution remains discretionary. As the respondent had not even started executing the decree when the application for stay was instituted, and because Rule 9 (2) (b) does not provide for a period of limitation, I find that the application for stay of execution was not inordinately delayed. I agree with Professor Fimbo that the Ettiennes Hotel case cited supra is distinguishable because in the 4 said

case, there was no notice of appeal so the application for stay could not be sustained in law. In view of the above, I overrule the preliminary objection. On the merits of the application, Mr. Mhango, learned co- advocate for the applicant submitted that the applicant would suffer irreparable loss if the property is attached for purposes of execution because the factory in question employs 200 people and generates shillings 1.8 billion annually. He further contended that the issue of jurisdiction is a serious triable issue in the pending appeal. He referred the Court to the case of AMI {T) Limited versus OTTU on behalf of P.L. Assenga and 106 others, Civil Application No. 51 of 2000 (CA) (unreported) wherein the Court held that stay would be granted in matters involving questions of jurisdiction. Counsel for the applicant also cited the case of Sylvester Lwegira Bandio versus N.B.C. Limited, Civil Application No. 113 of 2003 (CA) (unreported) in which the Court granted stay on the ground that attachment of immovable property would cause irreparable injury. On the balance 5 of convenience, counsel for the applicant prayed that stay of execution be granted pending appeal. Learned counsel for th~ respondent vigorously resisted the application for stay of execution . He adopted the affidavit in reply wherein he deponed that the applicant knowingly and willingly pledged the Mbezi

Tiles factory as security for an over draft facility so the said property should be attached to pay the outstanding debt of shillings 332 million plus interest. Distinguishing the AMI (T) Limited case cited supra, counsel for the respondent observed that in the AMI (T) Limited, the High Court lacked jurisdiction to determine the dispute whereas in the present case the Court had jurisdiction. Counsel for the respondent urged the Court to dismiss the application for stay with costs because the applicant filed no accounts or documents to substantiate the assertion that the factory employs 200 persons or that it generates shillings 1.8 billion per annum. The proceedings and judgement of the High Court clearly show that the claim related to interest charged by the respondent on an 6 overdraft facility which is indication that the principal debt has been discharged. The proceedings and judgement also show that jurisdiction was an issue at the trial. Ground 7 of the pending appeal also relates to jurisdiction. Under the circumstances there are serious triable issues in the pending appeal. On the balance of convenience, therefore, an order for stay of execution is justified. I accordingly grant stay of execution pending the determination of Civil Appeal No. 29 of 2005. Costs for this application to abide the result of appeal. DATED at DAR ES SALAAM this 5th day of April, 2006. (S. M. ~ UM YIKA) DEP,MTY REGISTRAR /