VODACOM TANZANIA PUBLIC LIMITED V

THE UNITED REPUBLIC OF TANZANIA IN THE HIGH COURT OF TANZANIA (DAR ES SALAAM SUB-REGISTRY) AT DAR ES SALAAM CIVIL APPEAL NO. 16171 OF 2024 (Arising from the Judgement delivered on 13/12/2023 by Hon. E.R. Rwehumbiza, PRM in Civil Case No. 178 of 20232 in the District Court of Kinondoni District at Kinondoni) VODACOM TANZANIA PUBLIC LIMITED..................................... APPELLANT VERSUS GABRIEL ALOYCE MUNISHI...................................................RESPONDENTS JUDGMENT Date of Last Order: 04/02/2025 Date of Judgment: 04/03/2025 B. E. K. Mganga, J. Facts of this appeal briefly are that, Respondent filed Civil case No. 178 of 2022 before the District Court of Kinondoni at Kinondoni alleging that appellant unlawfully terminated his contract of Key Account retail Agreement that was entered on 11th August 2016. In the said suit, respondent prayed to be paid inter-alia special damages amounting to TZS 61,800,000/= being loss of income due to the alleged unlawful termination of the contract and TZS 100,000,000/= being general damages and interest thereof. 1 Having heard evidence of the parties, on 13th December 2023, Hon. E.R. Rwehumbiza, PRM, held that the agreement was unlawfully terminated and awarded respondent to be paid TZS 46,800,000/= as special damages and interest of 18 % from the date of judgment to full payment. Appellant was aggrieved with the said Judgment and Decree hence this appeal. In the Memorandum of appeal, appellant has raised four (4) grounds namely: - 1. The learned Trial Magistrate erred in law and fact in holding that a notice of termination of the agreement dated 29 April 2022 could not in law have been revoked and replaced by a notice of termination dated 9 May 2022. In doing so the learned Magistrate erred in failing to note that there is no law which bar a party from revoking a notice of termination of a contract. 2. The learned Trial Magistrate erred in law in holding that a terminated agreement cannot be reinstated. In doing so the learned Magistrate erred; (a) in holding that Section 73(1) of the Law of Contract Act is an authority for a position that a terminated contract cannot be reinstated and performed. (b) failing to note that as per the Commission Report- (Exhibit P8), the Respondent had continued to operate the shop under the Key Account Retail Agreement and was subsequently paid accordingly as per the agreement until July 2022, therefore, implying that the termination had occurred vide a Notice of Termination dated 09 May 2022 – (Exhibit -D3) which was set to expire after two months that is July 2022. In the alternative. 3. Upon finding that the termination of the agreement had occurred on 29 April 2024 the learned Trial Magistrate erred in law in holding that such termination was unlawful for failure to issue a two months’ notice. In 2 doing so the learned Magistrate erred in failing to not that clause 12.2 entitled the Appellant to termination of the agreement immediately in the event of material breach. 4. The learned Trial Magistrate erred in law and fact in awarding the sum of TZS 46,800,000 as specific damages without them being specifically proved. When the appeal was called on for hearing, Ms. Miriam Bachuba and Eunice Mtiro, learned advocates appeared and argued for and on behalf of the Appellant while Mr. Gabriel Munishi, learned advocate, appeared in person. After both counsel have submitted in support and against the appeal, I quickly perused the record of the trial Court and found that respondent relied on his witness statement but the same was not marked by the Court to form part of the respondent’s evidence. I also noted that the said witness statement is not in the record of the trial Court but in its judgment, the trial Court considered inter-alai evidence in the witness statement. Apart from that, upon perusal of the contract between the parties (exhibit P1), I noted that, the parties agreed on three stages of resolving the dispute whereas the last stage was to refer the dispute to Arbitration so that it can be dealt in accordance with the Arbitration Act. With those observations, I asked the parties to address the court as whether the procedure on use of witness statements was 3 complied with, if not, the effect thereof. In addition, I asked learned counsels to address whether parties complied with a three-stage dispute resolution contained in the contract entered by the parties and effect thereof. Responding to the issues relating to use of witness statement, Ms. Bachuba, advocate for the appellant submitted that, proceedings of the trial court do not clearly show that the witness written statement of the respondent was adopted to form part of the respondent's evidence. Counsel further submitted that, in absence of the said witness statement, it cannot be said that there is evidence of the respondent in chief. Counsel added that, the irregularity is fatal because, in absence of evidence of the plaintiff in chief, all evidence thereafter is irregular. She went on that; proceedings of the trial court are a nullity. Responding to the issue relating to three-stage dispute resolution contained in the contract entered by the parties, Ms. Mtiro advocate admitted that, clause 13.1.3 of the contract (exhibit P1) is arbitration clause. Counsel submitted that, the said clause provided that, at stage three, the dispute shall be referred to arbitration to be resolved in accordance with the Arbitration Act of Tanzania, Cap 15. In her submissions, counsel conceded the parties did not refer the dispute to the arbitrator in compliance with the said clause. She also submitted 4 that, the 1st and 2nd stage of dispute resolution provided under clause 13 of exhibit P1 were not complied with. In a nutshell, counsel admitted that all three stages provided in the said clause were not complied with. Ms. Mtiro further submitted that, parties are bound by their agreement and courts do respects agreements of the parties. She added that, in the said arbitration clause, the parties intended to resolve the dispute amicably. With those submissions, counsel for the appellant prayed the court to nullify proceedings of the trial Court, quash and set aside the judgment and decree so that the parties can go to arbitration as they agreed in exhibit P1 and that each party should bear his or her costs. On the other hand, responding to the issue relating to witness statement, Mr. Munishi, the respondent, briefly submitted that the trial Court complied with procedures of using witness statements as evidence. But at a later stage and upon reflection, he submitted that the procedure was not complied with because the said witness statement does not form part of the trial court proceedings. Responding to the issue relating to three-stage dispute resolution contained in the contract entered by the parties, respondent submitted that, he complied only with clause 13.1.1 by serving the appellant with the complaint but did not comply with clause 13.1.2. Respondent further submitted that, both parties did not comply with clause 13.1.3 of 5 exhibit P1 that requires the parties to refer the dispute to arbitration. In his submissions, respondent concurred with Ms. Mtiro, counsel for the appellant that the purpose of the said arbitration clause was to ensure that the parties resolve the dispute between them amicably. He added that, in the said clause, the parties submitted themselves to jurisdiction of arbitrator. Respondent was quick to submit that, based on the decision of the Court of Appeal in the case of Scova Engineering S.P.A & Another, Civil Appeal No. 133 of 2017, CAT(Unreported) this court has jurisdiction because the parties did not go to arbitration instead, they opted to subject themselves to this Court. When probed, respondent conceded that, in no time the trial court lost its jurisdiction over the matter in order to conclude that the parties submitted themselves to the jurisdiction of the Court. Upon reflection, respondent submitted that, the appeal arose from a decree issued from premature proceedings because the agreed stages of dispute resolution between the parties were not complied with. With those submissions, respondent prayed the Court to nullify trial Court proceedings, quash and set aside the judgment and decree of the trial so that the parties can refer the matter to arbitration. I have considered submissions of the parties both on the grounds of appeal that were raised by the appellant and the issues raised by the 6 Court. In disposing this appeal, I wish to start with the issues that were raised suo mottu by the court. It is undisputed by the parties that respondent partly used his written witness statement to prove his case. It is undisputed that, proceedings of the trial Court do not show that the said written witness statement was adopted by the Court as part of evidence of the respondent. It is also undisputed that the said written witness statement is not in the record of the trial court though, in my careful reading of the judgment of the trial court, I found the trial Magistrate considered it. It is my considered opinion that, procedures in use of written witness statement were not complied with. I am of that view because the said witness statement of the respondent was not adopted to form part of his evidence in-chief, and it is not part of the trial court’s record. To that end, I am guided by the decisions of the Court of Appeal in the case of Total Tanzania Ltd vs Samwel Mgonja (Civil Appeal No.70 of 2018) [2021] TZCA 265 (25 June 2021), Hood Transport Company Limited vs East African Development Bank (Civil Appeal 262 of 2019) [2022] TZCA 383 (21 June 2022), Hood Transport Company Limited vs East African Development Bank (Civil Application No. 429/01 of 2022) [2024] TZCA 73 (20 February 2024) and Aggreko International Trade & Consultancy Services Limited (Civil Appeal No. 83 of 2020) 7 [2023] TZCA 17781 (27 October 2023). In Mgonja’s case (supra) the Court of Appeal held inter-alia that: - “…In other words, a witness statement is a written testimony made by a witness before a commissioner for oath for the purpose of giving evidence in-chief before appearing in court for cross-examination. Essentially, it is the testimony in- chief of that witness regarding the case… Among other things, it ought to be accompanied by the intended exhibits to be tendered during trial. Therefore, a witness statement is only a statement of that witness which is treated as evidence in-chief and such treatment does not extend to the documents attached to it. A witness, whose statement was filed in the trial court, ought to be caused to appear before the trial court or through a video link for cross examination. Upon appearance, he is either affirmed or sworn-in. Thereafter, he identifies and adopts his witness statement and the normal procedure of admissibility of any document annexed to his witness statement, in terms of sections 63, 64, 64A, 65, 66, 67, 68 and 69 of the Evidence Act, Cap. 6 RE 2019, has to be followed. That is, if the witness wants to tender a particular document, pleaded and attached to his witness statement, he ought to make a prayer for tendering it as exhibit.” (Emphasis is mine). In Hood’s case (supra) the Court of Appeal held inter-alia that: “…the witness statement becomes and forms part of the record upon admission…” As I have pointed out hereinabove, the witness statement of the respondent was neither admitted nor adopted to form part of his evidence as such it is not part of the trial Court’s record. Worse the same is not in the trial Court’s record though the trial Court Magistrate considered it as it was correctly conceded by the respondent. In other words, the trial Court in its judgment considered matters that are not on 8 record. That is a fatal irregularity. Based on the foregoing, trial. Court proceedings are a nullity, the judgment and decree arising therefrom are liable to be quashed and set aside. As a matter of completeness but in a passing, it is undisputed by the parties that, in their contract agreement (exhibit P1) they agreed three stages of resolving the dispute. The first stage was through issuance of notice of complaint to the other party calling a meeting of amicable resolution of the dispute by the respective managers of the parties who were required to resolve the dispute within seven (7) days. The parties also agreed that in case they fail to resolve the dispute in the first stage, then the dispute will be referred to the second stage. The parties agreed that in this stage Vodacom will be represented by the Head of Department as per clause 13.1.1 of exhibit P1. The second stage was through amicable resolution of the dispute through Senior Managers (chief officers) and failure of which the dispute was to be escalated to the Parties’ Directors or top Executive. In this stage, the parties agreed that the dispute must be resolved within fourteen (14) days. They further agreed that if they fail to resolve the. dispute in the second stage, then the dispute shall be referred to the third stage namely to the arbitrator to be arbitrated in terms of the Arbitration Act of Tanzania. 9 In their submissions, parties conceded that they did not adhere to what they agreed in exhibit P1 in relation to three stages of dispute resolution. In fact, respondent admitted that he only complied with the first stage and that there was no attempt to. Comply with the rest stages. It is my view that, whenever parties agree, they should comply with their agreement prior to taking a different route. In fact, the Court of Appeal in the case of Jovet Tanzania Limited vs Bavaria N.V (Civil Appeal 207 of 2018) [2022] TZCA 557 (14 September 2022) had this to say:- “We are in agreement with the learned High Court Judge on this point. The parties had already agreed on how the dispute between them should be resolved. That was final between them and the Court cannot decide otherwise. The appellant cannot now renege and assert that the place of arbitration is not convenient to her. That arbitration clause binds her and survives even after the Agreement is terminated…In the case at hand, applying the above legal position, the parties having been agreed that disputes arising out of the Agreement would be resolved by a certain forum, they did not mean to oust the jurisdiction of the courts in Tanzania. We are of the considered view that ground five of the memorandum of appeal lacks merit as well.” (Emphasis is mine). In the appeal at hand, clause 13 of exhibit P1 is arbitration clause. In the said clause, the parties chose to resolve the dispute through arbitration and not through the court. In other words, the parties submitted themselves to the jurisdiction of the arbitrator in terms of the 10 Arbitration Act of Tanzania but that did not take away the jurisdiction of this Court. They are bound by the said arbitration clause prior to filing the dispute before the jurisdiction of the trial Court. What I have discussed hereinabove has disposed the whole appeal. For that reason, I will not discuss grounds of appeal raised by the applicant. For all said hereinabove, I hereby nullify proceedings of the trial Court, quash and set aside the judgment and decree arising therefrom. Dated at Dar es Salaam this 4th March 2025 B. E. K. Mganga JUDGE Judgment delivered on this 4th March 2025 in Chambers in the presence of Eunice Mtiro, Advocate for the Appellant Gabriel Munishi, the Respondent. B. E. K. Mganga JUDGE 11