IN THE HIGH COURT OF TANZANIA

(COMMERCIAL DIVISION)

AT DAR ES SALAAM

COMMERCIAL CASE NO. 80 OF 2015

MAHESHKUMAR RAOJIBHAI PATEL PLAINTIFF

VERSUS

KARIM SHAMSHUDDIN SULEMAN DEFENDANT

7th December, 2015 & 18th February, 2016

RULING

MWAMBEGELE, J.:

Against the suit filed by the plaintiff Maheshkumar Raojibhai Patel, the

defendant Karim Shamshuddin, through Mr. Audax Kahendaguza Vedasto,

learned counsel, has filed a preliminary objection. The preliminary objection

is composed of three points; namely:

i. The Honourable Court lacks jurisdiction to entertain this matter;

ii. The plaint is lacking facts showing that this court has jurisdiction; and

iii. The plaintiff seeks to enforce a contract which the law forbids him from

enforcing.

The preliminary objection (henceforth "the PO'') was argued on 07.12.2015

during which Mr. Yudathade Alexander Paul and Audax Kahendaguza

Vedasto, learned advocates, appeared for the plaintiff and defendant

respectively. The learned advocates had earlier filed their respective skeleton

written arguments as dictated by the provisions of rule 64 of the High Court

(Commercial Division) Procedure Rules, 2012 - GN No. 250 of 2012

(hereinafter "the Rules'') which both learned counsel sought to adopt at the

oral hearing.

It was Mr. Vedasto, learned counsel, who kicked the ball rolling. He

submitted in support of the first point of the POthat the plaintiff claims, interalia, for payment of USD3,300,000. He submits that this inappropriate as the

courts in this jurisdiction can only award reliefs in Tanzania Shillings. The

courts in this jurisdiction have no jurisdiction to grant reliefs in USDs, he

submits. The learned counsel has cited Berril & Co. Ltd Vs Lakhani and

Others [1970] HCD n. 264 to buttress this proposition. In that case, this

court (Georges,0) held:

"I find that courts in this country can give

judgment only in Tanzania shillings".

On this take, the learned counsel submits that the suit filed by the plaintiff be

dismissedwith costs.

The learned counsel for the defendant also argues in addition to the first

point of objection that the claim is seeking to enforce the laws of Mauritius.

The learned counsel urges this court to read the plaint and that by so doing it

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will realise that the Agreement sought to be enforced (Annexture MRP-1) in

which the joint venture is sought to be dissolved is controlled by the laws of

Mauritius. The learned counsel submits that the laws of Mauritius do not fall

within the group of laws that this country can enforce. The laws that this

court can apply and enforce, he submits, falls in four sets:

a) The Constitution of Tanzania, 1977 under the authority of Article

64 (5) and 30 (3) of the Constitution of Tanzania, 1977;

b) Written laws, under the authority of section 2 (3) of JALA, Cap 358

RE 2002. 'Written Laws,' are defined by section 4 Cap to be Acts of

Tanzania and of the Community and subsidiary legislation under them;

c) Received laws, under the authority of section 2 of JALA, Cap 358 RE

2002. These are mentioned in s. 2 (3) as common law, statutes of

general application and doctrines of equity in force in England as of

22/7/1920; and

d) Customary laws, under the authority of section 11 of the Judicature

and Application of Laws Act (JALA), Cap 358 RE 2002. Customary law'

is defined by s. 4 of the Interpretation of LawsAct, cap 1 to mean' any

rule whereby rights ... are acquired ... by usage in any African

community in Tanzania".

He states that the agreement between the parties is not enforceable under

section 23 (2) of the Law of Contract Act, Cap. 345 of the Revised Edition,

2002 as its obvious object is to defeat the provisions of sections 333 to 346 of

the CompaniesAct, Cap. 212 which provide for special procedure of winding

up companies.

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On the second point of the PO, the learned counsel for the defendant submits

that the plaint is lacking facts showing that this court has jurisdiction contrary

to the provisions of Order VIII rule 1 (f) of the Civil Procedure Code, Cap. 33

of the RevisedEdition, 2002. He states that what is stated at para 10 of the

plaint does not show the amount claimed and thus does not meet the

requirement of the law. The case of Assanand & Sons (Uganda) Ltd. Vs

East African Records Ltd. [1959] E.A. 360 which was followed by this court

in Lucas Mal/ya Vs Mukwano Industries Limited, Commercial Case No.

60 of 2004 (unreported) is cited in support of this proposition.

In addition, the defendant's counsel submits that in the circumstances of this

case where the dissolution agreement intended to be enforced is a contract

for a dissolution of a limited liability company alleged to have been formed in

Mauriutius, the plaintiff was enjoined to state in addition the facts showing

that although the company was incorporated in Mauritius, Tanzania courts

have jurisdiction.

On the third point of PO, the learned counsel for the defendant submits that

the contract sought to be enforced is forbidden by section 23 (2) of the Law

of Contract Act. The learned counsel submits further that the joint venture

dissolution agreement which sought to be enforced is unlawful because under

the Companies Act, the procedures of voluntary winding up of a company

differ depending on whether it is a voluntary winding up at the instance of

members (section 339-346 etc) or voluntary winding up at the instance of

creditors (section 347-355). The mode of winding up by the parties is stated

in preamble 'F' of the joint venture agreement (annexure MRP-1) in a

language which equates it with 'members voluntary winding up' under our

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CompaniesAct. Under this Act this processencompassesdetailed procedures,

conditions and limitations. The requirements include (a) a declaration of

solvency (section 338), (b) resolution of winding up (section 333 (1) (b), (c)

publication of the resolution of winding up (section 334), appointment of a

liquidator (s. 340) to adjust credits and debits of the shareholders, creditors,

the government and so on.

The learned counsel submits further that a liquidator is not a free person,

working on his own wishes. His businesses are statutorily controlled. The

CompaniesAct sets out a total of 14 sections (sections 294 - 307) under the

heading 'liquidators' to provide for the business of this person. Among the

things the liquidator and the controlling bodies are there to serve are interests

of the public at large. In short, he argues, under the Tanzania laws, a

company cannot to dissolved by the likes of the Dissolution of the 'Dissolution

of joint Venture Agreement' which is now in Court for enforcement. So, to

continue to hear this claim, the learnded counsel argues, means to do the

same business which section 23 (f) & 22 (2) have stated this Court cannot

entertain. He thus prays that the suit be struck out with costs.

The defendant's counsel has also argued that the plaintiff lacks locus standi in

that clause D of the preamble to the contract and clause 1:1 thereof the

object of the contract is for the defendant to compensate the plaintiff for the

contribution the defendant made in Pwani International Haulers Limited. He

submits further that a company is a different person from its shareholders

and therefore the plaintiff should have claimed the amount from defendant in

the name of company, for it is the company, if at all, to which he is indebted.

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In the same line of argument, the defendant counsel argues that the plaintiff

should have sued the company becausethe case before the court is a case by

the plaintiff to ask the court to order the defendant to repay the plaintiff the

money allegedly paid in excess by the plaintiff; not to the defendant but to

Pwani International Hauliers Limited. Thus the plaintiff wants the court to

order the defendant to repay him money he paid in excess to a third party.

This he submits is against our public policy in terms of section 23 (1) (e) of

the Law of Contract Act and therefore unenforceable under section 23 (2) of

the Act.

On the strength of all the above, the defendant's counsel urges the court to

dismiss the suit with costs.

On the other hand, the plaintiff's counsel submits on the first point of POthat

courts in this jurisdiction can grant reliefs in USD. He states that the

Lakhani case cited by the learned counsel for the defendant in support of

this point is no longer the position in this country. The learned counsel cites

Renair Limited Vs Phoenix Tanzania Assurance Company Limited,

Civil Case No. 77 of 2009 (unreported) in which the court of appeal granted

relief in USD.

On the point that this court will be enforcing the laws of Mauritius, the

learned counsel for the plaintiff states that the objection goes into the merits

of the case. He argues that a POcannot be raised in any fact which has to be

ascertained in the course of deciding it. He cites Karata Ernest & others

VsAttorney General, Civil Revision No. 10 of 2010 (unreported) to support

this point.

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Regarding the objection that the plaint does not have the facts showing that

the court has jurisdiction, the learned counsel for the plaintiff argues that the

facts contained in para 10 of the plaint are enough to show that this court has

jurisdiction to entertain and hear the case. He states that the cases cited by

the learned counsel for the defendant dealt with situations where such clause

was completely omitted.

On the objection to the effect that the plaintiff is seeking to enforce a contract

which is not enforceable at law; the contract being forbidden by law, the

plaintiff lacking locus standi and the plaintiff claiming against a wrong person,

the learned counsel reiterates the position that discussing the annexture at

this stage is tantamount to going into the merits of the case which is not

permissible under the authority of the Karata case (supra).

The plaintiff's counsel states further that the amount claimed is USD

3,300,000 which is a huge sum of money within the pecuniary jurisdiction of

this court. In the alternative, the plaintiff's counsel submits that they be

allowed to amend the plaint under the provisions of rule 24 (1) of the Rules

so that the amount is shown in Tanzania Shillings.

On the arguments above, the learned counsel for the plaintiff submits that the

POshould be dismissed with costs.

In rejoinder, the learned counsel for the defendant states on the first point of

PO that the decision of Gorges, CJ has not been overruled by any superior

court and urges this court to follow the principle in Tambueni Abdallah &

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89 others Vs National Social Security Fund, Civil Appeal no 33 of 2000

(unreported) at page 9 that the Renair case (supra) cited did not overrule

the Lakhani case. That since the Lakhani case has not been overruled, it is

binding upon this court as was heard in the Jumuiya ya Wafanyakazi

Tanzania Vs Kiwanda cha Uchapishaji cha Taifa [1988] 146, at 153 in

which it was held a subordinate court should be bound by its earlier decisions.

On the alternative prayer by the learned counsel for the plaintiff to have the

plaint amended so as the amount claimed is shown in Tanzania Shillings, the

learned counsel for the defendant submits that this is not permissible. He

promised to avail to the court with authorities on the subject and indeed the

learned counsel walked the talk. He supplied Kantibhai M. Patel Vs

Dahyabhai F. Mistry [2003] TLR 437, Petromark Africa Ltd &3 ors Vs

Exim Bank (T) Ltd Civil Appeal No. 58 of 2012. He also supplied a book he

authored titled Laws Applicable and International Conflict of Laws in

Tanzania, Idea International Publishers, Oar, 2009, pp 6 - 10 to buttress the

point that Tanzania courts cannot apply the laws of Mauritius.

As for clause 12 of the Joint Venture Agreement the learned counsel submits

that it is of no consequence as parties cannot confer jurisdiction upon the

court. An unreported decision of this court in Samwel Mjema Vs Editha

Phitipo, Civil Appeal No. 101 of 2013 is cited in support of this proposition.

He adds that clause 0 of the Joint Venture Agreement shows that there is

third person and as per Salomon VsSalomon and Company [1895-9] All

ER 33; also reported in [1897] AC 22, a company is a different person from

its shareholder.

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Let me start by pointing out the fact that the learned counsel for the

defendant fronted in the PO three points of objection as shown at the

beginning of this ruling. However, when arguing the same; in both skeleton

argument and oral hearing the learned counsel added one more point of

objection; the question of locus standi. This has been responded by the

learned counsel for the plaintiff but the obvious is no notice was given

thereof. It has been stated more often than not that a PO must be raised in

time and on reasonable notice - see MIS Majembe Auction Mart Vs

CharlesKaberuka Civil Appeal No. 110 of 2005 (unreported). In that case,

the Court of Appeal stated reasons why a PO must be raised in time and on

reasonablenotice in the following terms:

" ... reasonable notice of the preliminary objection

is to be given to the other parties including the

appellant as in this case. The logic behind this

provision hardly needs to be overemphasized.

With the notice given within reasonable time, the

other parties ... would not be taken by surprise.

In that situation the parties would be in a position

to respond in advance to the issues raised in the

preliminary objection. It is to be emphasized that

in fairness to the parties and in the interest of

justice, counsel intending to raise preliminary

objection are enjoined as far as possible to serve

the notice of preliminary objection within

reasonable time."

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In the case at hand, Mr. Yudathade for the plaintiff did not raise any alarm at

this point of objection being raised without notice. Instead, as already said,

he responded to this point of preliminary objection on which no prior notice

was given and I commend him for this. Be it as it may, and for that reason, I

will consider this point in this ruling despite its being raised without notice.

In determing the PO, I propose to put into one basket the points respecting

enforcing a contract which the law does not allow, the plaintiff lacking locus

standi, the plaintiff suing a wrong party and the plaintiff seeking to enforce

the laws of Mauritius. I have put these points together because, I think, as

rightly put by Mr. Yudathade, learned counsel for the plaintiff, they need

factual proof and touch upon the merits of the case. In arguing these points

of objection, the learned counsel for the defendant made heavy reliance on

the Joint Venture Agreement and its contents. Going into the contents of the

Joint Venture Agreement disqualifies these points to fall within the realm of a

preliminary objection. That this is the law has been stated in a number of

cases in this jurisdiction. These caseshave been drawing inspiration from the

oft-cited Mukisa Biscuit Manufacturing Co Ltd Vs West End

DistributorsLtd [1969] 1 EA 696. This case is so notorious and it is an

authority for the point that a preliminary objection should be on matters of

law and that a preliminary objection which requires factual proof to prove it is

not a preliminary objection. It should suffice to quote what was said by Law,

JA as to what His Lordship considered would be preliminary objection. His

Lordship stated:

"So far as I am aware, a preliminary objection

consists of a point of law which has been pleaded,

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or which arises by clear implication out of

pleadings, and which if argued as a preliminary

point may dispose of the suit. Examples are an

objection to the jurisdiction of the Court, or a plea

limitation, or a submission that the parties are

bound by the contract giving rise to the suit to

refer the dispute to arbitration."

The case has been consistently followed in this jurisdiction ever since it the

formulated principle. Such cases which have followed Mukisa Biscuit

include the Karata case cited by the counsel for the plaintiff, Shakida Abdul

Hassanali Kassim VsMahd Mohamed Gulamali Kanji, Civil Application

No. 42 of 1999 (unreported), Leila Jalaludin Haji Jamal Vs Shaffin

Jalaludin Haji Jamal, Civil Case No 373 of 2001 (unreported) Citi Bank

Limited Vs TTCL and 3 others, Civil Application No. 64 of 2003

(unreported) and Mohamed Enterprises (T) Ltd Limited Vs Masoud

Mohamed Nasser, Civil Application No. 33 of 2012 (unreported), to mention

but a few. This position is now settled law in our jurisdiction.

In the present case, deciding on this group of points of the PO would entail,

as the learned counsel did, travelling through the contents of the Joint

Venture Agreement which, as I have said above, disqualifies the point to fall

within the realm of preliminary objection. I would therefore, without

nesitation, overrule all the points falling within this basket.

This takes me to the point the remaining points of the PO. The first point is

that this court has no jurisdiction to entertain and grant reliefs on any

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currency other than Tanzania Shillings. The learned counsel has cited an

authority; the decision of this court in the Lakhani case which was decided in

1970 in which the court (Georges, CJ) held that courts in this jurisdiction case

enter judgment only in Tanzania Shillings. I have read the digest of the case

as reported in the High Court Digest of 1970. His Lordship decided the case

relying on the provisions of section 2 (2) of the then Judicature and

Application of Laws Ordinance, Cap 453 (now the Judicature and Application

of Laws Act, Cap 358) and Manners Vs Pearson & Son [1898] 1 Ch. 581

and decided that in England as at the reception date, courts would only grant

reliefs in pound sterling. From that premise, His Lordship, the then Chief

Justice of Tanzania, reached a verdict that Tanzanian courts would only give

judgment in the Tanzanian currency.

Mr. Vedasto, learned counsel for the defendant has urged me to be bound by

the authority arguing that it has never been overruled and therefore it binds

me. He relies on Jumuiya ya Wafanyakazi Tanzania (supra) for this

proposition. With unfeigned respect to the learned counsel, I am not

prepared to accept this proposition. The Lakhani case was decided by this

court. Then, appeals from the High Court of Tanzania lied to the Court of

Appeal for East Africa. Decisions of the High Court of Tanzania were

therefore not final; appeals against them lied to the Court of Appeal for East

Africa before which, they lied to the Privy Council - see: Dodhia Vs

National & Grindlays Bank Ltd & another [1970] EA 195 and Jumuiya

ya Wafanyakazi Tanzania; the decisions of Court of Appeal of East Africa

and the Court of Appeal of Tanzania respectively.

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The Lakhani case was decided by the High court of Tanzania; it does not

therefore bind me. However, as a matter of prudence, I am supposed to

respect it and whenever I feel like having a different opinion, instead of

dissenting lightly to the considered decision of my fellow judge, I have to give

reasons for taking that course. This is practically so because, as was stated

by this court [Bwana, J. (as he then was)] in ULC (Tanzania) Limited Vs

National Insurance Corporation And Another [2003] TLR 212, Judges of

the same Court should not give conflicting decisions over similar issues,

unless it is absolutely necessary. And in Ally Linus & 11 others Vs

Tanzania Harbours Authority & Another [1998] TLR 5, the Court of

Appeal at p. 11, underlined the need for a judge to not lightly dissent from

the considered opinions of his brethren. The Court of Appeal articulated:

" it is not a matter of judicial courtesy but a

matter of duty to act judicially which requires a

judge not lightly to dissent from the considered

opinions of his brethren."

Now let me revert to the subject at hand. I wish to state that a lot of water

has passedunder the bridge ever since the Lakhani case was decided that in

the present jurisprudence in this jurisdiction, courts now award reliefs in USD.

There is a string of cases of the Court of Appeal in which such course has

been taken. One such case is the Renair case; a case cited by the learned

counsel for the plaintiff. Other cases include Stanbic Bank Tanzania

Limited VsAbercrombie & Kent (T) Limited, Civil Appeal No. 21 of 2001,

Arabian Ventures Zanzibar Limited Vs t/.a Ocean Paradise Resort Vs

Max Village Limited & 2 Ors, Civil Appeal No. 120 of 2015, DT Dobie

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(Tanzania) Ltd Vs Phantom Modern Transport (1985) Ltd, Civil appeal

No. 74 of 2002; unreported decisions of the Court of Appeal and Tanzania

Steel Pipes Ltd Vs Y. K Yong, Commercial case No. 41 of 2007 an

unreported decision of this court, to mention but a few.

I have found it difficult to comprehend the argument by Mr. Vedasto, learned

counsel for the defendant when he argues that the Renair case did not

overrule Lakhani. I think the learned counsel wanted the Court of Appeal to

state in no uncertain terms that Lakhani has been overruled. But the Court

of Appeal could not have stated so because that was not the issue in that

case. What is obvious from the learned authorities cited above is that,

presently, courts in this jurisdiction give judgments in currencies other that

the national currency; the Tanzania Shilling. That means that the Lakhani

case has, technically, been overtaken by events. The Lakhani case was

therefore good law then but, by lapse of time and practice, it has lost its

strength given the new development in the jurisprudence of this court on the

matter.

I would therefore overrule the first point of PO.

Another point of PO is about facts showing that the court has jurisdiction.

The learned counsel for the defendant submits that the plaint is devoid of

facts showing that this court has jurisdiction to try this case. This, he states,

offends the provisions of Order VIII rule 1 (f) of the cpc. He states that what

is stated at para 10 of the plaint is not sufficient as it does not show the

amount claimed and thus does not meet the requirement of the provisions of

Order VIII rule 1 (f) of the cpc. The Assanand & Sons and Mal/ya cases

14

are cited in support of this proposition. On the other hand, the plaintiff's

counsel states that what is stated at para 10 of the plaint is sufficient to show

that this court has jurisdiction. Let me, first, for easy reference, quote para

10 of the plaint. It reads:

"That the parties live in Dar es Salaam and the

amount claimed is within the jurisdiction of this

court."

As evident in the paragraph, there is no amount stated. The learned counsel

for the defendant is of the view that this omission is fatal. The amount is

stated elsewhere; at para 3. Respectfully, I do not think this is fatal. I find

fortification in Mogha's Law of Pleadings in India (18th Edition) by S. N.

Dhingra and G. C Mogha in which it is stated at p. 271 that:

"The jurisdiction can be of three types, territorial

jurisdiction, subject matter jurisdiction and

pecuniary jurisdiction. A plaintiff is supposed to

specify all the three types of jurisdiction in the

plaint. He must specify how the territorial

jurisdiction of the court was being invoked and

whether the court has jurisdiction over the subject

matter and if the suit fell within the pecuniary

jurisdiction of the court."

In my considered opinion the contents of para 10 of the plaint, read in

context of the whole plaint, is sufficient to show that the court has the three

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kinds of jurisdiction envisaged by the law; that is, the provisions of Order VIII

rule 1 (f) of the (PC. Failure to particularise in a specific paragraph that the

court has jurisdiction is not, in my view, an incurable ailment.

I would therefore overrule this point of POas well.

The foregoing disposes of all the preliminary points of objection raised by the

defendant. However I wish to state at this juncture on the prayer by the

counsel for the plaintiff to the effect that he should be allowed to amend the

plaint so that the claim is put in Tanzania Shillings. This prayer has met a

strenuous objection from Mr. Vedasto; learned counsel for the defendant. He

has cited the Kantibhai and Petromark cases to back up his strenuous

objection. I think Mr. Vedasto is right. In view of what I have found and

held above, the prayer seems to be redundant. I wish to reiterate that Mr.

Vedasto is right when he states that the course is unacceptable. The course

suggested is illegal and therefore not maintainable at law. He is, I repeat,

right. I shall demonstrate.

Taking the course suggested by Mr. Yudathade; counsel for the plaintiff, to

allow an amendment of the plaint after the preliminary objection has been

raised would mean pre-empting the preliminary objection raised by the

defendant which course is illegal. That this is the law has been stated times

without number in a string of cases in this jurisdiction. If I would be required

to cite one such case, I would cite Mary John Mitchell Vs Sylvester

Magembe Cheyo & ors, Civil Application No. 161 of 2008 (unreported) in

which the Court of Appeal reiterated its earlier position it stated in Method

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Kimomogoro VsBoard of Trustees of TANAPA,Civil Application No. 1 of

2005 (also unreported) in which it stated:

"This court has said in a number of times that it

will not tolerate the practice of an advocate trying

to pre-empt a preliminary objection either by

raising another preliminary objection or trying to

rectify the error complained of."

This was not the first case the Court of Appeal gave this guidance; that a

preliminary objection should not be pre-empted. The court of appeal had an

opportunity to state the principle in Shahida Abdul Hassanali Kassam Vs

Mahedi Mohamed Gulamali Kanji Application No. 42 of 1999

(Unreported), Almas Iddie Mwinyi Vs National Bank of Commerce &

Another [2001] TLR 83, Alhaji Abdallah Talib Vs Eshakwe Ndoto

Kiweni Mushi [1990] TLR 108, The Minister for Labour and Youth

Development and Shirika la Usafiri DSM VsGaspa Swai & 67 Others

[2003] TLR 239] and Frank Kibanga VsACCULtt/, Civil Appeal No. 24 of

2003 (unreported), to mention but a few.

Thus, even if I had sustained the objection by the learned counsel for the

defendant that courts in this jurisdiction would only grant reliefs in Tanzanian

Shillings, I would not have allowed Mr. Yudathade amend the plaint to rectify

the ailment for the reasons stated.

The above said and done, and for the reasons stated hereinabove, the three

point PO raised by Mr. Vedasto, learned counsel for the defendant, including

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an additional one raised without notice which surfaced in the skeleton

arguments and the oral hearing, is overruled in its entirety with costs. The

suit filed by the plaintiff should proceed for hearing on merits on a date to be

slated today.

Order accordingly.

DATED at DAR ES SALAAM this 18th day of February, 2016 ..--., ..•.

l<f7o'1~

J. C. M. MWAMBEGELEJUDGE

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