IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA

(COMMERCIAL DIVISION)
AT DAR ES SALAAM
COMMERCIAL CASE NO. 41 OF 2023

EAST AFRICA DEVELOPMENT BANK LIMITED…………PLAINTIFF

RULING

Date of last order: 17/11/2023

AGATHO, J.:

The Plaintiff, EAST AFRICA DEVELOPMENT BANK on 14th April

2023 filed the suit against the 1st and 2nd Defendants, and the 3rd and 4th

Defendants as necessary parties. In her suit the Plaintiff is seeking for

declaratory order that she is entitled to the payment of decree amount

in Commercial Case No. 67 of 2009 to the tune of USD 608, 491 plus

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accrued interest thereupon or any other amount as may be adjudicated

by the Court of Appeal in Civil Appeal No. 111 of 2020, and for an order

directing the 3rd and 4th Defendants to pay directly to the Plaintiff the

decree money in Commercial Case No. 67 of 2009 amounting to USD

608,491 plus accrued interest or such other amount as may be

adjudicated by the Court of Appeal among other orders. This ruling dealt

with issues of jurisdiction, assignment of decree, res judicata, res sub

judice, cause of action, locus standi, and procedural irregularities and

incompetency of suit.

Having been served upon with a copy of plaint, the 1st and 2nd

Defendants filed their Written Statement of Defence prefaced with a

notice of Preliminary Objections. The 4th Defendant too raised

Preliminary Objections (POs) against the Plaintiff’s suit. The court

ordered the hearing of the POs be heard by way of written submissions.

Appreciatively, the parties filed their submissions timely.

In terms of legal representation, the Plaintiff was represented by

advocate Gabriel Simon Mnyele whereas advocate Jovinson Kagirwa

appeared for the 1st and 2nd Defendants. The 3rd Defendant wa

represented by Michael Kabekenga, and Ms. Hamida Sheikh, learned

counsel represented the 4th Defendant. It suffices to point out at this

juncture that the 3rd Defendant never raised any preliminary objection.

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 Regarding the POs raised, these are of two sets. First, the POs

raised by the 1st and 2nd defendants, and a second set comprises of the

POs raised by the 4th Defendant. To begin with the first set, the POS

were:

a. That the suit is hopeless statutorily barred for being filed out of

time in violation of Section 3 and Part I item 7 of the schedule of

the Law of Limitation Act [Cap 89 R.E. 2019];

b. That the suit is Res Judicata;

c. That the suit is Res Sub-judice.

d. That the Court has no jurisdiction to entertain this matter following

the initiation of Appeal before the Court of Appeal in Civil Appeal

No. 192 of 2023 emanating from Commercial Case No. 35 of 2022

between the Plaintiff and the 2nd Defendant.

The set of POs raised by the 4th Defendant were:

(a) The plaintiff has no cause of action against the 4th Defendant.

(b) this suit has been filed prematurely as the decree in High Court

Commercial Case No. 67 of 2009 which forms the basis of the Plaintiff’s

claim is before the Court of Appeal in Civil Appeal No. 111 of 2020.

that the suit is res sub judice.

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(c) The inherent vice of the equipment means that the equipment was

not insurable.

(d) the 1st Defendant did not have an insurable interest to insure the

equipment in its name as they had just leased if from the Plaintiff and it

was only the plaintiff itself, the owner of the equipment who was legally

competent to insure the equipment.

(e) the Plaintiff named/joined the 4th Defendant as a necessary party

erroneously as the 4th Defendant cannot be a necessary party. That

means the Plaintiff has sued a wrong party.

It suffices to restate at this juncture the prayers in the plaint,

namely:

(a) A declaratory order against the 1st and 2nd Defendants that the

plaintiff is entitled to receive and be paid the decree amount to

the tune of USD 608, 491.

(b) An order directing the 3rd and 4th Defendants to jointly and

together to pay all sums in prayer (a) to the Plaintiff.

(c) The 1st and 2nd defendants be ordered to pay general damages to

the Plaintiff.

(d) The 1st and 2nd Defendants to pay costs of the suit.

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 But before examining the POs raised, it is worthwhile to restate

briefly the facts of this case. The suit is based on financial leasing and

insurance. According to paragraph 7 of the plaint on 27th August 2004

and 28th November 2005 the Plaintiff entered into two lease agreements

with the 1st Defendant. It was agreed that the Plaintiff would purchase a

total of 28 Tread Steer Bogie Wagons for the purpose of leasing the

same to the 1st Defendant. The 2nd Defendant who was and still is a

visible director of the 1st Defendant executed a deed of guarantee

guaranteeing the payment of the rentals to the Plaintiff. It was the term

of the lease agreements that the 1st Defendant would insure the Wagons

and the Plaintiff will be designated as a sole beneficiary of the insurance

policies. In June 2007 the insured Wagons were involved in an accident

at Salanda, Dodoma Region. Being a risk covered by the insurance

policy, however the 3rd and 4th Defendants repudiated the claim. That

forced the 1st Defendant to file a Commercial Case No. 67 of 2009

whose judgment was delivered on 10th April 2019 in favour of the 1st

Defendant. While the Commercial Case No. 67 was still pending in court,

the 1st and 2nd Defendants acknowledged the liability towards the

Plaintiff and agreed to use the decree Money to discharge it. Along that

there was another case filed, that is Commercial Case No. 35 of 2022

which was dismissed on 26th October 2022. While that suit was pending

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in court the 1st and 2nd Defendants committed yet again to pay the

Plaintiff all the decree amount in Commercial Case No. 67 of 2009. That

agreement was concluded on 3rd November 2022. Ever since the 1st and

2nd Defendants have refused to cede the decree money to the Plaintiff.

Prior to analysing the POs raised, one preliminary point eluded the

parties mind but somewhat connected to the PO (b) raised by the 4th

Defendant is worth pondering. That is the assignment of decree. Among

the POs raised by the 4th Defendant is that the present suit has been

filed prematurely as the decree in High Court Commercial Case No. 67 of

2009 which forms the basis of the Plaintiff’s claim is before the Court of

Appeal in Civil Appeal No. 111 of 2020. That is linked with competence

of the suit. The court has on a different angle regarded that PO being

intertwined with the question of assignment of a decree. Whether in the

case at hand there was an assignment of 1st Defendant’s decree to the

plaintiff? The reason for raising this point is that the basis of the

Plaintiff’s claim is the 1st Defendant’s decree, which she claims to have

contracted to be paid from it. But does that entitle the Plaintiff to front

her claim directly from the decree? The facts in the plaint states that

while the Commercial Case No.67 was still pending in court, the 1st and

2nd Defendants acknowledged the liability towards the Plaintiff and

agreed to use the decree Money to discharge it. In the India case of

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Dhani Ram Gupta & Others v Lala SRI Ram & Another (1980)

AIR 157 the Supreme Court of India dealt with the issue of assignment

of a decree and held that assignment of decree is possible, but one has

to follow the procedures laid in the law.

Back to the case at hand, there was yet another case filed, that is

Commercial Case No. 35 of 2022, which while still pending in court on

3rd November 2022, the 1st and 2nd Defendants concluded an agreement

to pay the Plaintiff all the decree amount in Commercial Case No. 67 of

2009. Even after entering into that agreement committing to pay the

Plaintiff, the 1st and 2nd Defendants have refused to cede the decretal

sum to the Plaintiff. As a preliminary question, this court is asking itself

whether the said agreement is an assignment of a decree? Whether the

1st defendant assigned her decree to the Plaintiff to entitling the later

suing on the decree or applying for execution of the same.

Indisputably, a decree can be assigned. In Tanzania the

assignment of decree is provided for under Order XXI Rule 14 of the

CPC [Cap 33 R.E. 2019]. It provides that the transferee can apply for

execution of the decree assigned to him. As held in Gupta’s case

(supra), a decree being in a form of receivables it can be assigned. But

in this case if it was assigned then the Plaintiff could not have sued the

1st Defendant as they had concluded the decree assignment contract.

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Instead, she could have applied for execution. Moreover, and as rightly

pointed out by the 4th Defendant the suit is premature and incompetent.

Indeed, the Plaintiff is at liberty to assign her decree to even a

third party. But here there is no application for execution filed. It is

incompetent. Instead of filing of a fresh suit, the assignee of a decree

ought to have filed an application for execution. Further, the decree is

premature as there is a pending appeal at the CAT. It is thus contingent.

Turning to the POs, the court began examining the issue of res

judicata. In Commercial Case No. 35 of 2022 the Plaintiff was suing the

2nd Defendant in attempting to enforce the guarantee. This makes the

case at hand in terms of subject matter to be different. In the present

case the plaintiff is asserting her right over the decree amount in

Commercial Case No. 67 of 2009 subject of appeal, in Civil Appeal No.

111 of 2020 pending at the CAT. While that eliminates the PO on res

judicata, yet the propriety of this case is questionable. First the decree is

subject of appeal at the CAT, and second the plaintiff is not a decree

holder. Even if she has interest, the way to realize it in the decree is by

way of seeking an order for attachment of the decree (execution

proceedings) not to file a suit claiming a right over the decree as done in

the present suit. This has been the contention of the 4th Defendant.

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 Strangely, and as read from paragraph six of the plaint the plaintiff

pegged the reliefs dependent upon the determination of the appeal at

the CAT. This is a contingent suit. It implies that the Plaintiff is aware of

existence of the appeal at the CAT.

Turning to the POs raised by the 1st and 2nd Defendants. The

counsel for these Defendants abandoned the first PO on time limitation,

and remained with three POs (b, c, and d). These POs were submitted

together as they intertwined that when one talks of res-judicata he will

certainly touch upon court jurisdiction. Hereinabove a hint on res-

judicata has been given.

The law on res judicata is not had to grasp. Section 9 of the CPC

imposes a bar on courts to try any suit or issue in which the matter is

directly and substantially in issue in a former suit between the same

parties or between the parties under whom they or any of them claim or

litigating under the same title in a court competent to try such

subsequent suit or the suit in which such issue has been subsequently

raised and has been heard and finally decided by such court. See

Stephen Masatu Wassira v Joseph Sinde Warioba and A.G.

[1999] TLR 334. The matter at hand is not res judicata because the

parties are not the same.

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 Besides the res-judicata there is an allegation of res sub-judice.

The latter under the provision of Section 8 of the CPC means that courts

are barred from proceeding with the trial of any suit in which the matter

in issue is also directly and substantially in issue in a previously

instituted suit between the same parties, or between parties under

whom they or any of them claim or litigating under the same title where

such suit is pending in the same or any other court in Tanzania having

jurisdiction to grant relief claimed.

In addition to the two doctrines, the PO on jurisdiction was raised.

Jurisdiction is the power of the court to hear and determine matters

which are litigated before it. In M/S Tanzania China Friendship

Textile Co. Ltd v Our Lady of the Usambara Sisters [2006] TLR

70 it was held that jurisdiction as an objection based on pure point of

law can be raised any time even on appeal. The court in considering

whether it has jurisdiction it looks at:

(1) Whether the subject in issue is the same

(2) Whether the parties between whom the issue is joined are the

same or litigating under the same title.

(3) Whether the reliefs claimed are the same.

In the case at hand as the pleadings bear witness, there was

Commercial Case No. 67 of 2009 that was finally determined. It

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prompted an appeal, Civil Appeal No. 111 of 2020 at the CAT. There is

also Commercial Appeal No. 35 of 2022 which culminated into Civil

Appeal No. 192 of 2023.

But who were the parties to Commercial Case No. 67 of 2009.

What was the subject matter? What were the issues? What were the

reliefs sought therein? Do all these matches or substantially related to

what is claimed in the present case? Are the parties in both the same?

Answering these questions disposes the issue of res-judicata, and hence

jurisdiction point. The 1st and 2nd Defendants have fiercely contended

that this court lacks jurisdiction to entertain the matter since in the

present case the issues raised in the plaint, the parties and the reliefs

sought and those in Commercial Case No. 35 of 2022 are one and the

same. That renders the case at hand res judicata or albeit re sub judice.

Clearly, there were two cases that were before the HCCD, and

they were finally determined. These are Commercial Case No. 67 of

2009 and Commercial Case No. 35 of 2022. The decisions in these cases

are subject of appeal at the CAT. In Commercial Case No. 67 of 2009

like the present case, it was on insurance agreement in which the 1st

Defendant (in the case at hand) was claiming for breach of the said

agreement for failure to indemnify her. She thus claimed inter alia for

specific damages to the tune of USD 574,000.83 due to railway accident

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where 11 out of 18 wagons were damaged. The case ended in favour of

the 1st Defendant. But it is apparent that the plaintiff was not a party to

Commercial Case No. 67 of 2009. Nevertheless, in the present case, the

Plaintiff claims for payment of USD 608, 491, a decretal amount in

Commercial Case No. 67 of 2009 which was awarded to the 1st

Defendant (in the present case). This confirms that the matter was

finally determined. But as rightly raised by the 4th Defendant, how can

the plaintiff claim rights or enforcement of decree that was not given in

her favour much less the reality that the decree is subject of appeal in

Civil Appeal No.111 of 2020 which is pending at the CAT. In the court’s

view, the plaintiff’s filing of this suit is an alien procedure. The plaintiff is

conspicuously not a party to Commercial Case No. 67 of 2009 HCCD,

and the Civil Appeal No. 111 of 2020 CAT. Thus, the plaintiff appears to

lack locus standi to sue the 4th Defendant on the decree that was

awarded to the 1st defendant. It is noticed that the 4th Defendant has

submitted that the Plaintiff wrongly sued the 3rd and 4th Defendants as

she has no cause of action against them. She has sued wrong parties.

Nor could she execute the decree that was not granted in her favour

unless there same was assigned to her. Moreover, and as above

observed even if there was a decree in her favour, its execution is not

commenced by presentation of a plaint.

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 Looking at the pleadings, the present case is almost a replica of

East African Development Bank Ltd v Panache Ltd and Mona

Pundugu, Commercial Case No. 35 of 2022 HCCD. Hence that could

have been res sub judice. However, the Plaintiff’s claim in Commercial

Case No, 35 of 2022 was for guarantee against the 2nd Defendant

herein. Yet, it is surprising that the Plaintiff sued the 2nd Defendant in

this case while she is aware that the 2nd Defendant has filed an appeal,

Civil Appeal No 193 of 2023 CAT challenging the decision in Commercial

Case No. 35 of 2022. But unlike in that case, the present case is for

decretal sum awarded to the 1st Defendant in Commercial Case No. 67

of 2009. Hence res judicata and res-sub judice does not apply.

The court is of considered view that Commercial Case No. 67 of

2009 was cited out of context. But it is worth noting that the appeal is

pending at the CAT which has ordered this court to take additional

evidence on the aspect concerning ownership of Wagons so that the

appeal at CAT can eventually be determined. As it stands now, the

appeal at CAT is still pending. It is impossible to predict the outcome of

that appeal.

Aside from Commercial Case No. 67 of 2009, it is undisputed that

the Plaintiff knows that there is a pending appeal at the CAT as she

rightly pointed out in the plaint. Moreover, in Commercial Case No. 35 of

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2022 the plaintiff sued for payment of USD 1,102, 244.17 being money

due and payable by the 2nd Defendant (Clothilda Pundugu) pursuant to

the default of 1st Defendant (Panache Limited) herein as of 19/02/2013.

The appeal against that HCCD decision in Commercial Case No. 35 of

2022 is Civil Appeal No. 192 of 2023 is still pending before the CAT. In

the present case (Commercial Case No. 41 of 2023) the plaintiff is

claiming for payment of the decree amount USD 608, 491 awarded in

Commercial Case No. 67 of 2009.

The proof that there is an appeal at the CAT is existence of notice

of appeal. It is also the law that once there is notice of appeal at CAT

this court lacks jurisdiction to entertain the matter. The decisions in

Commercial Case No. 35 of 2022 has been appealed against via Civil

Appeal No. 192 of 2023 at CAT which is still pending.

The court finds that the present Commercial Case is somewhat res

judicata of Commercial Case No. 35 of 2022, the variation in terms of

amount does not make these cases dissimilar. But the former was on

guarantee, whereas the present is on decree amount. To make matters

worse there is an appeal that is still pending at the CAT, for that reason

this Court is barred from entertaining the present suit.

As rightly held in Exaud Gabriel Mmari v Yona Seti Akyo and

Nine Others, Civil Appeal No. 91 of 2019 CAT that:

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 “…once a notice of appeal to this Court have been duly

lodged, the High Court ceases to have jurisdiction over

the matter.”

Moreover, it should be emphasized that since the plaintiff has been

kind enough to state in the plaint that the court be pleased to grant the

relief sought as will be determined by the CAT, that clearly confirms that

there is an appeal pending at the CAT. The court is prohibited to

entertain matters that have been appealed against at the CAT. And

assuming that the 1st Defendant assigned her decree to the Plaintiff by

agreement that would be invalid as the decree is subject of appeal at

the CAT.

That said and done, the suit at hand has been brought in

contravention to law for it is not execution proceedings in which one is

seeking to attach the 1st defendant’s decree. That aside, from the above

analysis, the suit is not res judicata. Moreover, the plaintiff is not party

to the appeal pending at the CAT. However, the filing of a suit before

this court claiming the decretal amount is contingent as the CAT has not

determined the appeal and considering that the plaintiff is not a decree

holder in Commercial Case No. 67 of 2009 meaning that he cannot

execute the same. The present suit is thus alien and incompetent before

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this Court. It is struck out. The Defendants who raised and prosecuted

the POs shall have their costs.

It is so ordered.

DATED at DAR ES SALAAM this 24th Day of November 2023.

U. J. AGATHO

JUDGE

24/11/2023

Date: 24/11/2023

Coram: Hon. U.J. Agatho J.

For Plaintiff: Absent

For 1st and 2nd Defendants: Thomas Mathias, Advocate

For 3rd Defendant: Michael Kabekenga, Advocate

For 4th Defendant: Michael Kabekenga, Advocate, holding brief

Hamida Sheikh, Advocate.

C/Clerk: Beatrice
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Court: Ruling delivered today, this 24th November 2023 in the

presence of Thomas Mathias, advocate for the 1st and 2nd

Defendants, also present was Michael Kabekenga, advocate for the

3rd Defendant also holding brief of Hamida Sheikh, advocate for the

4th Defendant, but in the absence of the plaintiff.

U. J. AGATHO

JUDGE

24/11/2023

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