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Tanzania decisions
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A director who was not a party to the original suit and against whom the decree was not issued cannot be detained as a civil prisoner for the company’s debt unless the corporate veil is first lifted by a separate application establishing special circumstances.
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Given the failure of the 1st respondent to satisfy the decree, absence of attachable assets, and evidence of directors' control, the court found it just to lift the corporate veil and hold the directors personally liable for the company's debt.
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The High Court allowed an appeal against attachment of the appellant’s motor vehicle, holding there was no contractual basis or proven security to justify the seizure.
In execution proceedings, the High Court lifted the corporate veil and ordered a company director to pay the decretal sum within 30 days, though not immediate arrest.
A majority shareholder does not have locus standi to object to the attachment and sale of company property in execution of a decree against the company; the property belongs to the company, not its shareholders, and only the company can bring such proceedings.
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A shareholder, even if holding a majority of shares, does not have locus standi to object to the attachment and sale of company property in execution of a decree against the company; only the company itself may do so. The District Court erred in allowing the respondent's objection.
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The Court of Appeal upheld personal liability against a managing director, holding that special circumstances justified lifting the corporate veil to satisfy a company decree.
The High Court of Tanzania allowed third-party objections to attachment, finding the attached farms and plots belonged to the objector companies, not the judgment debtor.
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