YARA T LTD VS NEW EZOYE ENTERPRISES T LTD COMM CASE NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL CASE NO. 69 OF 2023 YARA TANZANIA LIMITED....................................................... PLAINTIFF VERSUS NEW EZOYE ENTERPRISES (T) LIMITED..................................DEFENDANT EXPARTE JUDGEMENT Date of Last Order: 28/06/2024 Date of Judgment: 16/08/2024 GONZI, J. The suit arose out of allegations of breach of contract of supply of fertilizers on credit basis entered between the plaintiff and the defendant in 2017, 2018 and 2019. The Plaintiff sued the defendant praying for judgment and decree praying for orders that: - a. A declaration that the defendant is in breach of contract of supply of fertilizers concluded with the plaintiff herein. b. An order for payment of TZS. 337,148,766.45 (Tanzanian shillings three hundred and thirty-seven million one hundred forty-eighty thousand seven hundred sixty-six and forty-five cents only) being 1 an outstanding purchase price for fertilizers supplied by the plaintiff to the defendant. c. Payment of interest at the agreed rate of 5% per month from the date of Judgment to the date of full settlement of the debt; d. Interest on the decretal sum at Court rate from the date of judgment to the date of full settlement of the debt; e. Payment of TZS. 50,000,000 (say Tanzanian shilling fifty million only) as general damages. f. Costs of this suit; and g. Any other remedy that this honorable Court deem fit to grant. The facts of the case as can be gathered from the plaint are that in the years 2017, 2018 and 2019, the parties herein entered into fertilizers supply agreement under which the plaintiff supplied fertilizers to the defendant on credit basis pursuant to the orders which were placed by the defendant. During the duration of the said contract and for all the transactions, both parties were bound by YARA Tanzania Limited conditions of sale that were incorporated in each delivery note evidencing supply and delivery of the ordered fertilizers consignment to the defendant. On diverse dates in 2017, 2018 and 2019, the defendant, through various Local Purchase Orders, ordered fertilizers from the Plaintiff on credit basis. The ordered fertilizers consignment was payable subject to YARA general conditions of the sale and time stipulated in the delivery notes. In response to the defendant's orders, the plaintiff supplied the defendant with a consignment of a fertilizers worth TZS. 1,684,117,794/= (Say Tanzanian Shillings One Billion Six Hundred Eighty-Four Million One Hundred Seventeen Thousand Seven Hundred 2 Ninety-Four Shillings Only). Basing on the above supplies, the plaintiff issued various invoices to the defendant covering the total amount of the supplied fertilizers. The invoices were to be honoured by the defendant within 30 days according to the agreed terms and conditions. The Plaintiff alleged that out of all the invoices issued, only TZS. 1,346,969,028/= (Say Tanzania Shillings One Billion Three Hundred Forty Six Million Nine Hundred Sixty- Eighty Thousand Shillings and Twenty Eighty Shillings) was paid by the defendant leaving out a total of TZS.337,148,766.45/= pending and unpaid The plaintiff made several follow- ups advising the defendant to pay the outstanding sums but the defendant has failed to honour the same. This prompted the plaintiff to engage her Attorney M/S Nex Law advocates to issue a demand notice dated 12th December, 2019 which was sent to the defendant via post on the 13th December 2019. The defendant has not paid the outstanding amount which is the subject to this suit. The omissions by the defendant to pay for the fertilizers has occasioned enormous losses and distress on the part of the plaintiff whose business was solely dependent upon timely payment by the customers. The plaintiff, therefore, suffered loss of legitimate expected revenues from the sale of the said fertilizers and reinvestments of the moneys obtained therefrom. The Plaintiff has also incurred expenses in making follow-ups and reminding the defendant to settle the amount. On the 18th April 2023, the Board of Directors of the plaintiff company passed a Board Resolution that legal proceedings be instituted against the defendant and therefore the present suit was filed. 3 When the case was called for hearing on 13th June 2024 at 10:00 A.M, the Plaintiff's Lawyers were present but the defendant was not present in court. The Defendant's Lawyers were also absent. The Court kept the matter pending for an hour before calling it again. When the case was called, once again, at 11:00 A.M., the defendant had not yet attended in Court for hearing of the case despite the fact that the defendant and her lawyers were aware of the scheduled date and time of hearing. The defendant had therefore absented herself from the hearing of the case without any lawful excuse or notice communicated to the Court. The Plaintiff's Advocate made a prayer for the witness statements of the defendant to be struck out under Rule 56(1) (2) of the High Court (Commercial Division) Procedure Rules GN No.250 of 2012 due to failure by the Defendant to bring her witnesses when the case was scheduled for hearing. The Court granted the Plaintiff's prayers and ordered the case to continue exparte the Defendant. In making exparte proof of the claim, the Plaintiff filed Form No. 1 accompanied with an affidavit of proof of the claim. The Form No. 1 was accompanied by an affidavit sworn by Jacqueline Ngeleshi, the Financial Controller of the plaintiff Company. The affidavit of proof carried with it some exhibits to substantiate the claim. Exhibit Pl is made up of copies of outstanding invoices and delivery notes for unpaid local purchase orders. Exhibit P 2, P7 and P8 are the original account statements, certificate of authenticity of the electronic print out records and Bank Statement from NMB Bank, respectively. The exhibits evidence that in the normal cause of business and in the course of follow­ up of the defendant's debts, the plaintiff prepared an account statement showing the extent of the defendant's indebtedness. The account shows 4 the total invoices raised and sent to the defendant, the total deposits which the defendant made after receiving the invoices raised and the pending invoices which are the subject of the present case. Exhibit P 3 is a demand letter to the defendant and a cash memo of Tanzania Posts Corporations collectively. Exhibit P 5 is an exchequer receipt and copy of the written Statement of Defence in Civil Case No.21 of 2019 evidencing that from the parties' pleadings in civil Case No.21 of 2019, the defendant acknowledged the debt and proposed a repayment plan dated 10th October 2019. Exhibit P 9 is a copy of the New Ezoye Enterprises (T) Repayment Plan. It shows that apart from the defendant's acknowledgement of the debt via the repayment plan dated 10th October 2019, the Defendant never repaid in full the amount indebted to the plaintiff. Exhibit P 6 is a letter dated 8th January 2019 requesting for confirmation of balance. It is evidencing that the defendant herein had another subsidies account with the plaintiff herein which is not related with this case. This was an account in respect of one New Ezoye Investment /WFP which in the cause of follow up of the debt confirmation, the said New Ezoye Investment /WFP confirmed its debt in that account that as of 31st December, 2018 it was standing at TZS 503,553,680/=. The plaintiff testified that the amount that stood unpaid as of 31st December, 2018 in the New Ezoye Investment/WFP account is nowhere related to the plaintiff's claims in this suit. Exhibit P 4 is the board resolution showing that that since the defendant had committed herself to repaying the outstanding amount as per the repayment plan referred herein above but had failed to repay the 5 outstanding amount in full, therefore, on the 18th April, 2023 the Board of Directors of the plaintiff company passed a board resolution to institute the present suit against the defendant. That was all from the Plaintiff. Essentially, the case at hand is one for breach of contract. Existence and validity of a Contract is therefore, the first issue. I find that the Plaintiff and the Defendant had a valid agreement for supply of fertilizers on credit and that pursuant to that contract, the Plaintiff did supply the said fertilizers to the Defendant. The existence of the contract and its terms and conditions are evidenced by Exhibit Pl which is made up of copies of outstanding invoices and delivery notes for unpaid local purchase orders The Debt repayment plan tendered and admitted as Exhibit P9 is an acknowledgment by the Defendant of being indebted for the supplied fertilizers. Hence it evidences breach of the terms of the contract by the Defendant. The losses suffered by the Plaintiff are brought forward through Exhibits P2, P7 and P8 which are the original account statements, certificate of authenticity of the electronic print out records and Bank Statement from NMB Bank, respectively. They constitute an account statement showing the extent of the defendant's indebtedness to the Plaintiff. I have gone through the evidence in this case in the Witness Statement for the Plaintiff and the vital documents including the Invoices; the Unpaid Local Purchase Orders; delivery notes; bank statements from NMB BANK PLC; letter of acknowledgement of a debt; Demand letter to the defendant and a Cash Memo of Tanzania Posts Corporations; Exchequer Receipts; additional list of documents in Civil Case No.21 of 2019; letter dated 8th January 2019 on request of confirmation balance 6 and the Plaintiff's Board Resolution. I find that there existed a valid agreement in form of the terms contained in the Invoices and the Local Purchase Orders. The Defendant received the supplied fertilizers under credit from the Plaintiff which she was supposed to pay for within 30 days of the Plaintiff's raising an invoice. The Defendant is in arrears of TZS 337,148,766.45 hence in breach of the contract. The Plaintiff has suffered further losses and inconveniences in attempting to make the Defendant repay the debt. The Defendant went as far as entering into Debt Repayment plan with the Plaintiff and thereby admitting liabilities but only to default once again. General damages are therefore awardable to the Plaintiff. The Plaintiff has suffered for non-use of the money in its business transactions over the years since 2017. That money must therefore carry interest so as to take care of the would-be profits. In the Plaint, however, the Plaintiff prayed that this agreed interest should start to run from the date of Judgment and not from the date of default to repay the outstanding sum. The prayer is therefore granted as prayed. This Court does hereby enter exparte Judgment in favour of the Plaintiff against the Defendant that: - a. It is hereby declared that the defendant is in breach of contract of supply of fertilizers concluded with the Plaintiff herein. b. The defendant is hereby ordered to pay the plaintiff the sum of TZS.337, 148, 766.45 (Three hundred thirty-seven million, one hundred forty-eighty thousand seven hundred sixty six shillings and forty five cents only) being an outstanding purchase price for fertilizers supplied by the plaintiff to the defendant. 7 c. The Defendant shall pay interest on (b) above at the agreed rate of 5% per month from the date of judgement to the date of full settlement of the debt; d. The defendant is hereby ordered to pay sum of TZS. 10,000,000 (Tanzanian shillings ten million only) as general damages. e. The Defendant shall pay interest on the decretal sum at the Court's rate of 7% per annum from the date of Judgment to the date of full and final satisfaction thereof; f. Costs of this suit to be borne by the defendant. It is so ordered. Judgment is delivered in Court this 16th day of August 2024 in the presence of Samson Lukumay Advocate for the Plaintiff and Advocate Ibrahim Malekela holding brief for Mr. Ambroce Nkwera Advocate for the Defendant. 16/08/2024 8