IN THE HIGH COURT OF THE UNITED REPUBLIC

OF TANZANIA
(COMMERCIAL DIVISION)
AT DAR-ES-SALAAM
COMMERCIAL CASE NO. 105 OF 2021

NAS HAULIERS LIMITED............................... 1ST PLAINTIFF

EVEREST FREIGHT LIMITED........................ 2ND PLAINTIFF
TANGA PETROLEUM..................................... 3RD PLAINTIFF
VERSUS
EQUITY BANK (T) LIMITED....................... 1ST DEFENDANT
EQUITY BANK (K) LIMITED......................2ND DEFENDANT

JUDGEMENT
Last Order: 07/02/2023
Date of Judgment 19/04/23

NANGELA, J.
This is a long judgement! As I was preparing it, I was
reminded of this poetic tone concerning a judgement, a lamentation
perhaps, like that of one of the old prophets, jotted down by A. P.
Pandey, “A long Judgement” Journal of the Indian Institute, Vol. 25
(4), (1983), pp.588-594. He wrote, and I quote:
“A JUDGEMENT,
Of a court,
As to number of pages,
Can anyone predict?

Page 1 of 164
 Perhaps,
Not even the Judge,
Who,
Is to give the verdict.
Alas!
There is no limit,
And nothing to restrict.
A judgment,
Long
And voluminous, upsets,
And exhausts….”
I placed the above extract as a preamble to this long
judgement to signify that, myself, I feel quite uneasy about its
length. But it has been inevitably lengthy owing to, not only its
intricate facts, but also, the issues addressed therein. In this
Judgement, matters regarding ‘syndicated financial transactions’ and
‘Letters of Credit’ are discussed. Such matters are premised on claims
and counterclaims brought by the three Plaintiffs and the
Defendants herein, as shall be lucidly narrated shortly hereunder.
The Plaintiffs, who are Tanzania registered companies, are
suing the Defendants, who are related-banks, one operating in
Tanzania and the other in Kenya respectively. In their claims, the
Plaintiffs are seeking for judgment and decree against the
Defendants, jointly and severally, and crave for the following orders
of this Court:
1. A declaration that the Defendants
are in breach of the credit facility
agreements executed between the
Defendants with the Plaintiffs prior

Page 2 of 164
 to the banking facility of the 22nd
May 2019;
2. A declaration that the banking
facility dated 22nd May 2019
purporting to provide Standby
Letter of Credit (SBLC) executed
between the Plaintiffs and the
Defendants did not take effect;
3. A declaration that the First, Second
and Third Plaintiffs have fully paid
and satisfied the banking facility
agreement which the Defendants
advanced to them prior to the
facility agreement dared 22nd May
2019 and, that, they do not have
any outstanding loan with the
Defendants;
4. A declaration that the Defendants
breached the credit facility
agreements executed prior to the
banking facility with the Plaintiffs
by refusal to discharge and return to
the Plaintiffs all the collaterals
which were used to secure credit
facility agreements which were all
liquidated;
5. A declaration that the 1st and 2nd
Defendants are not lenders of the
Loan Facility granted by Lamar
Commodity Trading

Page 3 of 164
 DMCC/Numora Trading PTE
Limited;
6. A declaration that, the 1st and 2nd
Defendants are not entitled to
recover any part or the whole of
credit facility advanced by Lamar
Commodity Trading DMCC/
Numora Trading PTE Limited to
the 1st Plaintiff;
7. A declaration that the 1st Defendant
is not a security agent of the 2nd
Defendant and, that, the 1st
Defendant in regard to the banking
facility from Lamar Commodity
Trading DMCC/Numora Trading
PTE Limited is just a banker for the
transaction;
8. A declaration that, all mortgage
deeds and deeds of variation
registered in favour of the 1st
Defendant as security trustees of the
2nd Defendant for credit facility
advanced by Lamar Commodity
Trading DMCC/ Numora Trading
PTE Limited are unlawful;
9. An order that, the Defendants
should discharge all Debentures
registered in favour of the 1st
Defendant as security trustees of the
2nd Defendant;

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 10. An order discharging director’s
personal guarantees and indemnity
executed by the directors of the
Plaintiffs;
11. A declaration that the status of the
2nd Defendant in regard to the
banking facility from Lamar
Commodity Trading DMCC/
Numora Trading PTE Limited is of
a broker for the transaction and is
not a lender;
12. A declaration that, all collaterals,
including chattel mortgage on
vehicles/ trucks registered in favour
of the Defendants to secure the
banking facility from Lamar
Commodity Trading DMCC/
Numora Trading PTE Limited in
favour of the Defendants as security
trustees of the 2nd Defendant are
illegal and should be discharged;
13. General damages to be assessed by
the Court;
14. Costs of the suit, and;
15. Any other reliefs the Court deems
fit to grant.
To better understand the Plaintiffs’ claims, I will set out a brief
factual background to this case. From the year 2015 or so, the
Plaintiffs and the 1st Defendant entered into a continuing banking
relationship. Under it, the Plaintiffs managed to access, from the 1 st

Page 5 of 164
Defendant Bank, several credit facilities and various other banking-
related services.
It has been alleged that, sometime in April 2019 the Plaintiffs
fell into a financial distress and a need of funds to pay off their
indebtedness and capitalize their businesses arose. However, it was
alleged that, based on their relationship with the 1st Defendant, the
Plaintiffs were advised to connect with the 2nd Defendant for her
assistance to source a foreign financier/lender from whom the
Plaintiffs could access the much-needed financial assistance to
service their debts.
The Plaintiffs alleged to have accepted the advice and got in
touch with the 2nd Defendant who, subsequently, introduced them
to a Kenyan-based financial consulting firm namely, M/s NISK
Capital Limited, (“Niski”). From such alleged engagements, the 2nd
Defendant and “Nisk” carried out an analysis to establish the
Plaintiffs’ credit viability, and, thereafter, assisted the Plaintiffs to
source the would-be financier/lender, M/s Lamar Commodity
Trading DMCC (“Lamar”). This potential lender was introduced to
the Plaintiffs in early May 2019. The Plaintiffs alleged, however,
that, before the Plaintiffs and “Lamar” executed a credit facility
agreement, the Defendants executed a ‘Banking Facility’ with the
Plaintiffs worth USD 16, 275,000 on the 22nd of May 2019.
Under the alleged banking facility, the 2nd Defendant was to
provide a “Standby Lender of Credit or Letter of Credit” (“SBLC/LC”)
for the purpose of securing the anticipated loan facility to be issued
to the Plaintiffs by “Lamar”. The tenor of the executed banking
facility was for a year, i.e., up to the 21st of May 2020, but was
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renewable up to a maximum of five (05) years. In a further lining
up of events, it was alleged that, on diverse dates and months in
2019, the Plaintiffs executed Directors’ Guarantee and Indemnity,
mortgage deeds and debenture in favour of the 1st Defendant (who was
acting as Security Trustee of the 2nd Defendant).
The Plaintiffs alleged, however, that, although the banking
facility dated 22nd day of May 2019 secured the foreign credit facility
from “Lamar”, such credit facility, which was ‘still in the making’,
“did not materialize”. Instead, the Plaintiffs so alleged, in May 2019,
the 1st Plaintiff “re-negotiated and executed a foreign credit facility
agreement alone with “Lamar”” for a similar amount of US$
16,275,000 and for a duration of 360 days.
According to the Plaintiffs, the renegotiated facility
agreement with “Lamar” had a condition that, “Lamar” will not
disburse the funds to the 1st Plaintiff until she receives SBLC/LC
from the 1st Defendant. As such, the Plaintiffs alleged that,
“Lamar” never disbursed the funds up and until the facility
agreement they had signed with the Defendants expired.
Even so, it was alleged that, on 4th June 2019, the 1st Plaintiff
got informed by the 2nd Defendant that, the foreign loan was
disbursed from a company known as M/s Numora Trading PTE
Limited (“Numora”), and, that, the said disbursements went “to
the 2nd Defendant” in Nairobi, Kenya wherein the 2nd Defendant
had opened and operated, with all mandate, an escrow account in
the name of the 1st Plaintiff.

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 The Plaintiffs alleged further that, although the issuance of
the foreign loan facility from “Lamar” to the Plaintiffs “had failed”,
the Defendants went ahead with the perfection of documents and
execution thereof between the Plaintiffs and the Defendants. As
such, the Plaintiffs alleged that, the 1st Defendant has continued to
wrongfully withhold their original vehicle registration cards, some
of which the 1st Defendant is a registered title holder.
The Plaintiffs claimed further that, on the 23rd day of
September 2020, the two Defendants offered a banking facility to
them “that had reference to the foreign loan facility from “Lamar”
which did not materialize.” The Plaintiffs alleged, however, that,
information sent from the 1st Defendant to Credit Bureau Tanzania
Limited and the information obtained from the Credit Bureau
Tanzania Limited to the Plaintiffs indicated that, the Plaintiffs do not
have any outstanding loan to the Defendants.
According to the Plaintiffs, on the 19th day of September 2019,
the 1st Plaintiff had requested the 1st Defendant to register the foreign
loan with the Bank of Tanzania and the 1 st Defendant had written
to the Bank of Tanzania (BOT) to request for foreign loan
registration. Even so, it was alleged that, the BOT did not register
the loan, owing to various anomalies which included the absence of
disbursement of the loan fund from abroad to Tanzania and, that,
the loan amount involved opening of an escrow account in Nairobi
Kenya contrary to the Forex Circular No.6000/DEM/EX.REG/58
dated the 28th day of September 1998.
It is from that background, therefore, that, on the 6th of
October 2021, the Plaintiffs herein, by way of a board resolution
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dated 20th July 2021 and through the legal services of their learned
advocate Mr. Frank Mwalongo, filed in this Court this present suit
seeking for judgement and decree against the Defendants as earlier
indicated hereabove.
Following the filing and the service of the Plaint to the
Defendants, the two Defendants, through the services of Mr. Dilip
Kesaria of Kesaria & Company Advocates, filed two separate written
statements of defense and raised several preliminary objections.
Their respective preliminary objections, however, were overruled by
this Court through its ruling dated 24th March 2022. Unfortunately,
Mr. Dilip Kesaria did not live to see the ruling dated 24th March 2022.
He sadly, and, indeed, from our human perspective, untimely,
passed away. In his place, however, the Defendants hired the
services of FB Attorneys and, Mr. Timon Vitalis and Ms. Jasbir
Mankoo, learned advocates, took over the conduct of the
Defendants’ case.
On the 11th of April 2022, Mr. Vitalis applied for an
amendment of the Written Statement of Defense. The amendment,
which I readily granted, necessitated a re-scheduling of the entire
case, right to its preliminaries. Consequently, on the 25th day of
April 2022, the Defendants filed separate written statements of
defense denying, except where admitted, each and every allegation
in the amended Plaint, including the Plaintiffs’ entitlement to the
reliefs claimed in the amended Plaint.
In particular, while the 1st Defendant admitted that on diverse
dates between the years 2014 and 2017, she availed several credit
facilities to the Plaintiffs, on the other hand, both Defendants
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alleged that, on or about the 22nd May 2019 the 2nd Defendant
availed to the Plaintiffs a Banking Facility for a Standby Letter of
Credit/Letter of Credit (“SBLC/LC”) of US$ 16,275,000/-upon
terms and subject to conditions of the Banking Facility letter dated
22nd May 2019 (“SBLC/LC Facility”). The Defendants alleged that,
as per the “SBLC/LC Facility”, the Plaintiffs were the borrowers
while the 2nd Defendant was the “Financier/lender” and the 1st
Defendant played the role of the “Bank” and a “Security Trustee” of
the Second Defendant.
The Defendants did admit that, the tenor of the “SBLC/LC
Facility” was 12 months renewable for up to 5 years and, that, it was
intended to secure the Plaintiffs’ borrowing from “Lamar” in order
to, inter alia, pay off and extinguish the Plaintiffs’ existing
indebtedness to the Defendants. They alleged, however, that, it was
the Plaintiffs who engaged “Nisk” as their financial consultant and
the SBLC/LC Facility had required that there be an enforceable
tripartite agreement between the two Defendants, “Nisk” and the
Plaintiffs.
The Defendants alleged further that, on the 24th day of May
2019, “Lamar” assigned and transferred all her rights, title and
interest in the SBLC/LC Facility to Numora Trading PTE Ltd
(hereafter to be referred to as “Numora”). They further alleged that,
on the 29th day of May 2019, the 1st Plaintiff filled a Documentary
Credit Application Form applying for an Irrevocable Letter of Credit (LC)
for USD 16,275,000/- to be issued by the 2nd Defendant in favour
of “Numora”; and, that, the 2nd Defendant accepted the

Page 10 of 164
Documentary Credit Application and issued a Letter of Credit (LC
(OLCF000012319)) in favour of “Numora”, on two conditions,
namely, that:
1. The 1st Plaintiff authorizes the 2nd
Defendant to debit the 1st Plaintiff’s
account with the 2nd Defendant’s
commissions, charges, marginal
deposits, and expenses together
with those of the 2nd Defendant’s
correspondents where applicable as
and when they become due.
2. The 1st Plaintiff agree to give the 2nd
Defendant any additional security
that the 2nd Defendant may, from
time to time, require to cover the 1st
Plaintiff’s liabilities to the 2nd
Defendant under the LC.
It was a further alleged fact by the Defendants, that, the 1st
Plaintiff’s application for the “LC” in favour of “Numora” was in
full knowledge that, the funds received would be applied towards
repayment in full of the Plaintiffs’ outstanding liabilities with the 1 st
and 2nd Defendants amongst others, as per the “Lamar Facility
Agreement, and that, the Lamar’s Facility (loan) was conditional
upon receipt by “Lamar” and /or her assignee of the “Irrevocable
SBLC/LC” in “the form and substance” satisfactory to “Lamar” or her
permitted assignee “Numora”, to be issued by the 2nd Defendant.
They utterly refuted the Plaintiffs’ alleged fact that, the “Lamar
Facility” did not materialize. On the contrary, the Defendants

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alleged that, on 22nd June 2019, the Plaintiffs executed a “Syndicated
Facilities Agreement and a Security Trustee Agreement” with the 1st and
2nd Defendants, so as to secure the “SBLC/LC Facility” dated 22nd
May 2019.
It was also the Defendants’ alleged fact that, the loan amount
from “Numora” (under the “Lamar Facility Agreement”) was
received into the 1 st Plaintiff’s Escrow Account No.08102650193
with the 2nd Defendant through SWIFT notification of the “LC”
and, from the escrow account, payments were made for the
extinction of the Plaintiffs’ outstanding liabilities with the two
Defendants, as well as transaction charges and 2 nd Defendant’s
commission for the SBLC/LC Facility granted to the Plaintiffs.
In particular, the Defendants alleged that, on 4 th June 2019
“Numora” disbursed the sum of US$ 14,123,527.50 (being the loan
amount of US$ 16,275,000 less one year’s advance interest charges)
to the 1st Plaintiff’s escrow account No.08102650193 with the 2 nd
Defendant. The Defendants alleged that, the net loan disbursed
from “Numora” under the “Lamar Facility Agreement” paid off
transaction charges, “Nisk’s” charges, repaid the Plaintiffs’
outstanding indebtedness to the Defendants and to the UBL Bank
Tanzania and Amana Bank Limited and, that, the remaining
balance was paid into the Plaintiffs Bank Accounts.
The Defendants alleged further that, it is the Plaintiffs who,
upon the 1st anniversary of “Lamar’s Facility Agreement”, defaulted
in their repayment resulting in the crystallization of the SBLC issued
by the 2nd Defendant in favour of “Numora” which resulted into
default under the “SBLC/LC Facility” dated 22nd May 2019 and the
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Syndicate Facilities Agreement, hence, forcing “Numora” to recall the
“SBLC/LC Facility” issued by the 2nd Defendant and collected the
amount of USD 16,275,000 due to her under the “Lamar Facility
Agreement” from the 2nd Defendant, thus, culminating into a default
of the “SBLC/LC Facility” issued by the 2nd Defendant on the 22nd
day of May 2019.
The Defendants have alleged further that, in efforts to enable
the Plaintiffs to make good their default, they offered the Plaintiffs
a “New Term Loan” of One Hundred and Thirty-Two (132) months
(inclusive of an initial 12 months moratorium on principal interest
for the sum of US$ 16,500,000, being the crystallized SBLC amount
and accrued interest charges but the Plaintiffs, neglected and/or
refused to accept and continued to remain in default under the
“SBLC/LC Facility” dated 22nd May 2019 and the “Syndicated
Facilities Agreement”. As such, the two Defendants denied that the
Plaintiffs are ever entitled to the reliefs sought and called for the
dismissal of the Plaintiff’s claims with Costs.
On the other hand, the Defendants (as Plaintiffs in the
counterclaim) raised a counterclaim against the Plaintiffs and Eight
(8) more others, namely: Ally Hemed Said; Ahmed Hemed Said;
Bahman Salim Hemed; Idrissa Said Abraham; Issa Mohamed Said;
Suleiman Nassoro Mohamed; Samiha Ally Hemed Said and Alexandria
Estate Limited. In their counterclaim, the Plaintiffs in the
counterclaim alleged that, the “SBLC/LC Facility” issued to the 1st
up to the 3rd Defendants in the counterclaim, was secured by the 4th
to 10th Defendants in the counterclaim, by way of guarantee and
indemnities.
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 It was alleged further in the counterclaim that, by virtue of a
“Security Trustee Agreement” dated 22nd June 2019, the 1st Plaintiff in
the counterclaim appointed the 2nd Plaintiff in the counterclaim
(Equity Bank (T) Ltd) to oversee her interest on the various securities
pledged by all eleven (11) Defendants in the counterclaim as
securities for the loan under the “SBLC/LC Facility”. The counter
claimers alleged further that, following the default by the 1 st, 2nd and
3rd Defendants in the counterclaim, the 1st Plaintiff in the counter
claim was obliged to pay US$ 16,275,000 under the “SBLC/LC
Facility” to “Numora”.
The counter claimers alleged further that, although the 1st
Plaintiff in the counter claim availed a “New Term Loan Facility” of
132 months (inclusive of an initial 12 months moratorium on
principal and interest, for the sum of US$ 16,500,000 for repayment
of the amount she had paid to “Nomura” under the “SBLC/LC
Facility”, the 1st, 2nd and 3rd Defendants in the counterclaim declined
the said “New Term Loan Facility” and have never taken any steps to
pay off their indebtedness to the Plaintiffs in the counterclaim.
Besides, it was alleged in the counterclaim, that, the 2nd
Plaintiff in the counterclaim being a “Security Trustee” of the 1st
Plaintiff in the counterclaim, served demands for payment dated
28th September 2021 on 4th to 11th Defendants requiring payment of
US$ 18,710,737 being amount due and outstanding from the 1 st, 2nd
and 3rd Defendants in the counterclaim but the same was ignored as
none complied with it. The 1st Plaintiff in the counter claim alleged,
therefore, that, the amount due and outstanding as of 19th April

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2022 is US$ 19,769,680 which the Defendants in the counterclaim
have failed, refused or neglected to pay.
In view of the above alleged facts in the counterclaim, the
Plaintiffs in the counterclaim prayed for the following
orders/reliefs:
1. A declaration that the 1st, 2nd and 3rd
Defendants in the counterclaim are
jointly and severally on breach of
SBLC/LC Facility dated 22nd May
2019.
2. A declaration that, the 4th to 11th
Defendants in the counterclaim
being guarantors have not complied
with the demand for payment
issued by the 2nd Plaintiff in the
counterclaim.
3. The Defendants be jointly and
severally ordered to pay the 1st
Plaintiff in the counterclaim the
principal loan amount plus accrued
interest amounting to a total of
USD 19,769,680.
4. Payment of interest on the
outstanding amount from the date
of filing of the counterclaim to the
date of judgment at the agreed upon
rate under the SBLC/LC Facility.
5. Payment of interest on the total
amount in 3 and 4 above from the
date of judgement to the date of

Page 15 of 164
 final satisfaction of the decree as the
Court rate.
6. The Defendants in the counterclaim
be condemned to pay costs of this
counterclaim.
7. Such further orders and reliefs this
Honorable Court may deem just,
equitable and convenient to grant.
On 2nd May 2022, the 1st, 2nd, and 3rd Plaintiffs in the main
claim filed their reply to the 1 st and 2nd Defendants’ written
statements of defense. They, as well, filed their written statement of
defense to the counterclaim. As regards their reply to the
Defendants’ written statement of defense, the three (3) Plaintiffs
maintained their stance that, the banking facility dated 22 nd May
2019, upon which the 2nd Defendant in the main claim was to issue
SBLC/LC to secure borrowing from “Lamar”, and to which the 2nd
Defendant was to be a “transaction bank”, never materialized.
The Plaintiffs maintained as well, that, all facilities which the
1st Defendant admitted to have issued to the Plaintiffs in the past,
were cleared and the rest remains as history. As regards the external
loan facilitation, the three Plaintiffs alleged, instead, that, it was the
1st Plaintiff alone who entered into a Facility Agreement with
“Lamar”, which, as well, never materialized. According to the 1st
Plaintiff, all collaterals were perfected in anticipation of the
forthcoming credit facility which never materialized.
As such, the Plaintiffs’ understanding was and remained that,
the SBLC was never issued and, that, “Lamar” never issued the
alleged loan facility to the three Plaintiffs. In their further reply to
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the Written Statements of Defense filed by the 1st and 2nd
Defendants herein, the three Plaintiffs maintained that, the 1st
Plaintiff in the main case engaged “Nisk” after she was introduced
to her by the 1st and 2nd Defendants. The three Plaintiffs stated
further in reply, that, the Syndicate Security Agreement and the Security
Trustee Agreement are not a subject of this suit in this Court.
As regards the alleged disbursement of foreign loan proceeds
by “Numora”, the Plaintiffs alleged in reply to the 1 st Defendant’s
written statement of defense that, the loan was disbursed to the 2 nd
Defendant in Nairobi in an escrow bank account she opened and
operated with all mandate in the name of the 1st Plaintiff and, that,
the Plaintiffs came to know that fact by the way and belatedly on 4th
June 2019. The Plaintiffs contended further in their reply to the
written statements of defense that, though the facility amount (loan)
by “Numora” cleared and paid-off all the Plaintiffs outstanding
amounts and other indebtedness, the same was not secured.
In their written statement of defense to the counterclaim, the
eleven (11) Defendants to the counterclaim alleged that, the
SBLC/LC Facility Agreement dated 22nd May 2019 never materialized
and the intended SBLC securing the credit facility from “Lamar”
was never issued by the 1st Plaintiff in the counterclaim to secure
foreign loan facility which was to be granted by “Lamar” to the 1st,
2nd and 3rd Defendants to the counterclaim. They, as well, alleged
that the Security Trustee Agreement dated 22nd June 2019 is not subject
to Tanzanian Courts and, that, the same did not take effect because
the guaranteed foreign facility did not materialize. The Defendants
to the counterclaim alleged further, that, the “SBLC/LC Facility
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Agreement” dated 22nd May 2019 never materialized, no “SBLC/LC
Facility” was ever issued and, that, all collaterals did not take effect
and had to be discharged.
Besides, it was alleged in response that, the Plaintiffs in the
counterclaim did not take part in the funds transferred from
“Numora”, and, even if the loan from “Numora” cleared all
liabilities of the 1st and 2nd Defendants in the counterclaim, the same
was not secured by any of the Plaintiffs in the counterclaim. The
Defendants to the counterclaim alleged further that, the 1st, 2nd, 3rd
Defendants to the counterclaim declined to the proposed New Term
Loan Facility which was illegal. The eleven (11) Defendants, thus,
urged this Court to dismiss the counterclaim with costs.
On the 11th day of May 2022, the Plaintiffs in the
counterclaim filed a reply to the written statement of defense to the
counterclaim, jointly filed by the eleven (11) Defendants. They
emphasized that, the “SBLC/LC Facility” dated 22nd May 2019
materialized as the 1st Plaintiff to the counterclaim issued the
“SBLC/LC Facility” in favour of “Numora” (the permitted assignee
of ‘Lamar’) to secure the loan taken by the 1 st, 2nd and 3rd
Defendants to the counterclaim, and, that, the “SBLC/LC Facility”
was secured by, among other security, guarantees and indemnities
by the 4th to 11th Defendants in the counterclaim.
The Plaintiffs in the counterclaim replied further to the
written statement of defense to the counterclaim that, the Security
Trustee Agreement became effective and the loan from “Numora”
was secured by the “SBLC/LC” issued by the 1 st Plaintiff to the
counterclaim and the Plaintiffs in the counterclaim took part in
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getting the loan disbursed to the 1 st, 2nd and 3rd Defendants to the
counterclaim and their creditors.
The Plaintiffs in the counterclaim stated further in their reply
that, the proposed New Term Loan Facility which the Defendants to
the counterclaim had declined to accept was legal and, that, it was
meant to assist the Defendants make good their default on the
“SBLC/LC Facility” as well as allow the 1st, 2nd and 3rd Defendants
to the counterclaim a longer tenure to repay the loan. Having stated
all that, the Plaintiffs in the counterclaim reiterated their prayers
claimed in the counterclaim urging this Court to grant them. So far,
such were the parties’ pleadings.
Since the parties had failed to resolve their dispute amicably
or during the mediation sessions, their suit proceeded to a final pre-
trial conference as per the rules of procedure applicable to this Court
and, the following issues were agreed upon by the parties and
recorded by the Court:
1. Whether the 2nd Defendant availed
to the Plaintiffs a banking facility
for Standby-Letter-of-Credit/Letter
of Credit (SBLC/LC) of USD
16,275,000 to secure the loan
facility from Lamar Commodity
Trading DMCC.
2. Whether the 2nd Defendant issued
the Standby-Letter-of-Credit/Letter
of Credit (SBLC/LC) in favour of
Numora Trading PTE Limited,
being the assignee of Lamar
Commodity Trading DMCC, to
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 secure the Loan Facility from
Lamar Commodity Trading
DMCC.
3. Whether the Plaintiffs are in breach
of the SBLC/LC Facility dated 22nd
May 2019, executed by the parties
for issuance of SBLC/LC to secure
the Loan from Lamar Commodity
Trading DMCC.
4. Whether the 1st Defendant was/is
legally authorized to become a
security agent of the 2nd Defendant.
5. Whether the Plaintiffs (Defendants
in the counterclaim) owe the
Defendants (Plaintiffs in the
counterclaim) a sum of USD
19,769,680 as claimed in the
counterclaim.
6. To what reliefs are the parties
entitled.
Following the conclusion of the final pretrial conference, the
parties herein were directed to file their respective witness
statements and the matter was scheduled for hearing on the 26 th
September 2022.They did so. However, when the hearing was about
to commence on the appointed date, Mr. Vitalis, the learned
counsel for the Defendants, raised a preliminary legal issue and
sought for the striking out from the record, the witness statement
filed by the Plaintiffs and, henceforth, the Plaintiffs’ case.
The said objection was heard and, upon consideration, this
Court issued its ruling on the 28th September 2022 thereby
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dismissing it. The suit, therefore, proceeded to its full hearing. At
the commencement of the hearing of the Plaintiff’s case and the
Defense case in the counterclaim, the Plaintiffs in the main case
(and consequently the Defendants in the counterclaim as well)
called only one witness, Mr. Ally Hemed Said.
Mr. Said, who had earlier on filed his witness statement in
Court, testified for and on behalf of the three Plaintiffs herein, as
well as for all Defendants in the counterclaim, himself being the 4th
Defendant therein. He testified as Pw-1 and, his witness statement
was adopted as his testimony in chief. In the course of his testimony,
he also tendered a number of documents in Court, which, being
numerous, were admitted collectively in 14 batches.
On the other hand, the Defendants called a total of six (6)
witnesses. In efforts to prove the Defendants’ case and to support
the counter claim raised by the Defendants (Plaintiffs in the
counterclaim), the witnesses tendered in Court a total of 22
documents as exhibits. I will, therefore, examine the testimonies of
these witnesses starting with the testimony of the witness for the
Plaintiffs, who, as I stated earlier hereabove, testified as Pw-1 and,
is as well, the 4th Defendant in the counterclaim.
In his testimony in chief, Pw-1 told this Court that, he is a
director of all the three Plaintiffs in the main case and also a
shareholder in each of the three Plaintiffs. He told this Court that,
by virtue of his position, he oversees at supervisory level, all
operations of the Plaintiffs who are also staffed by General
Managers and other employees. Pw-1 told this Court that, as from
the year 2015, the 1st Defendant herein has, been a banker to the
Page 21 of 164
three Plaintiffs. He admitted that, the 1 st Plaintiff has on different
occasions, accessed several credit facilities from the 1st Defendant.
In particular, the facilities admitted to have been issued include:
(a) Term Loan Facility Letter dated 2nd
September 2017 in the tune of USD
705,000,000 being a converted Over Draft
(OD) facility into a term loan;
(b) Term Loan Facility Letter dated 11th June
2016 (structured and standing as Assets
Financing in TZ) in the tune of USD
6,084,901.94; Assets Finance (KE) (USD
819,354 and Business Loan (KE) USD
284,914.44.
(c) Temporary OD Letter dated 29th March
2017 in the tune of USD 70,700.
The above three facility letters were tendered in Court and
collectively admitted as Exh.P-1.
Pw-1 went on to tell this Court that, through the advice and
connection of the 1st Defendant, the Plaintiffs were connected to the
2nd Defendant for assistance to procure for the Plaintiffs, a
financier/lender for purposes of debt refinancing/ operating capital.
He stated that, under such assistance and connection, the Plaintiffs
got introduced to “Nisk Capital Limited”, a firm which is not a party
in this suit. He told this Court that, as a result, on the 29th June 2019,
“the Plaintiffs”, “2nd Defendant”, and “Nisk” inked a business
consultancy agreement wherein “Nisk” in particular and the 2nd
Defendant provided financial advisory and brokerage services to the
Plaintiffs to source a financier/lender.

Page 22 of 164
 It was a further testimony of Pw-1 that, the 2nd Defendant and
“Nisk” did carry out financial analysis to establish the Plaintiffs’
credit viability. He tendered in Court a letter of engagement and a
business consultancy agreement and these were admitted collectively as
Exh.P-2. Pw-1 told this Court that, sometime in May 2019, the 2nd
Defendant and “Nisk” introduced “Lamar Commodity Trading
DMCC” (“Lamar”), the potential lender, to the Plaintiffs. Pw-1
stated, however, that, even before the Plaintiffs had signed a foreign
facility agreement with the potential lender (“Lamar”), the 1st and
2nd Defendants, on the one hand, and the Plaintiffs on the other
hand, executed, on the 22nd May 2019, a banking facility for US$
16,275,000.
Pw-1 testified further that, under the executed facility
agreement, whose tenor was one-year (from 22nd May 2019 to 21st
May 2020 and renewable up to a maximum of five (5) years) the 2nd
Defendant was to provide a Standby Letter of Credit/Letter of
Credit (SBLC/LC) to secure the loan facility that was to be
advanced by “Lamar” to the Plaintiffs. The Banking Facility dated
22nd May 2019 was tendered and admitted into evidence as Exh.P.3.
He stated, however, that, the secured event did not take place.
In his testimony, Pw-1 told this Court as well, that, on 30 th
May 2019, 30th June 2019 and 30th August 2019, several documents
in the form of Directors’ Guarantee and Indemnity, Mortgage
Deeds and three Debentures were executed in favour of the 1 st
Defendant Bank as security trustee of the 2 nd Defendant to secure
the aggregate of USD 16,275,000.00 that was either advanced or to
be advance. He told the Court that, the mortgage deeds were for
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Plots No. 70 & 71 Block “O” Nyasubi Kahama; Plot 16381,
Masasani Bay DSM, 779 Masasani Beach Kinondoni DSM, 783
Msasani Beach, Kinondoni, DSM, and Plot No. 52 Mandela Road
DSM.
According to Pw-1, all these collaterals in the form of five
mortgages, a directors guarantee and indemnity as well as the three
debentures were “executed in anticipation performance” of the banking
facility dated 22nd May 2019 (i.e., Exh.P-3). Pw-1 stated further that,
the awaited foreign facility did not materialize. The said directors’
guarantee and indemnity were tendered and admitted as Exh.P-4.
Further, the five mortgages were admitted as Exh.P-5 and the three
debentures, were collectively admitted as Exh.P-6.
Pw-1 told this Court that, in terms of Clause 2.1 of and Clause
10 of Exh.P4, the Directors of the Plaintiffs had guaranteed that they
would discharge debtor’s obligation on demand in writing by the
Bank, sent to the guarantors. He told this Court that, the guarantors
have never received any certification of the debtor’s obligation,
because the Defendants have never at any point demanded from the
guarantors to meet the debtors’ obligations after certificate of the
amount. As such, Pw-1 told this Court that, the Directors’ guarantee
and indemnity has never been called on to be used as a collateral for
recovery of any outstanding amount.
In his testimony in chief, Pw-1 told this Court that, although
the three Plaintiffs were expecting to get a foreign facility from
“Lamar” which they had also secured by way of the banking facility
dated 22nd May 2019, the transaction did not materialize. Instead,
according to Pw-1, it was the 1st Plaintiff who went ahead solo and
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re-negotiated with “Lamar” and thereby concluded a foreign credit
facility for the same amount of USD 16,275,000, for a duration of
360 days in May 2019. He told this Court that, on the cover page
the agreement is dated 2019 but on the first page it is dated 2018.
The Facility Agreement between the 1st Plaintiff and “Lamar” was
tendered and admitted in Court as Exh.P-7.
Pw-I did also tell this Court that, under this Exh.P-7, the
parties subjected issues pertaining to it under the English law and
the English Courts. He also told this Court that, according to Clause
1.3 (a) of Exh.P-7, the Defendants as third parties to Exh.P-7 cannot
enforce it at any given point in time and, that, Clause 1.3 (b) of
Exh.P-7 does cement the fact that, Exh.P-7 is solely between the 1st
Plaintiff and “Lamar” and no other person.
Pw-1 stated further that, under Clause 3 of Exh.P-7, it is
categorical that “Lamar” had agreed to lend USD 16,275,000 to the
1st Plaintiff which was to “be applied towards repayment in full of
the Borrowers’ obligation under the existing Equity Bank Facility”.
It was his testimony, therefore, that, the lending was between the 1 st
Plaintiff and “Lamar” and, that, the facility did not bind any other
party other than the two parties.
In further efforts to broaden his testimony before the Court,
Pw-1 told this Court, and in reliance to Clause 5.1 of Exh.P-7, that,
the performance of the facility agreement between the 1 st Plaintiff
and “Lamar” was conditional upon receipt of a Standby Letter of
Credit/Letter of Credit (SBLC/LC) in substance and form, from
Equity Bank, without which the facility was not to be drawn.

Page 25 of 164
 Pw-1 told this Court that, the Defendants never issued such
particular SBLC/LC to secure the facility worth USD 16,275,000
in favour of “Lamar” and, that, the 2nd and 3rd Plaintiff were never
party to the foreign facility agreement between “Lamar” and the 1st
Plaintiff. Concerning disbursement of the loan amount obtained
from “Lamar” to the 1st Plaintiff, Pw-1 testified that, “Lamar” never
disbursed it up and until when the facility agreement expired.
He told this Court that, it was until 04 th of June 2019 when
the 1st Plaintiff was informed by the 2 nd Defendant that, the foreign
loan amount was disbursed from “Numora” to the 2nd Defendant in
Nairobi Kenya and, he told this Court further that, the 2 nd
Defendant opened and operated with all mandate an escrow
account in the name of the 1st Plaintiff.
Pw-1tendered in Court and were collectively received as
Exh.P-8, a Bank Statement of the said escrow account together with
an affidavit authenticating the correctness of the statement.
According to Pw-1, “Lamar” had breached the facility
agreement he had with the 1st Plaintiff (i.e., Exh.P-7). Pw-1 assigned
several reasons:
first, that, after signing the Exh.P-7, the initial step
expected to follow before drawing the facility amount
was for “Lamar” to receive the irrevocable
unconditional SBLC/LC. He maintained that, to date,
“Lamar” has never received the SBLC/LC required
under Clause 5.1 of Exh.P-7.
Second, Company in the name of “Numora” (not
“Lamar”) disbursed the USD 16,275,000 to the 2 nd
Page 26 of 164
 Defendant in Kenya, and third, “Lamar” has never
officially communicated disbursement of the USD
16,275,000 to date.
As regards the performance of the banking facility dated 22 nd
May 2019 (Exh.P.3), Pw-1 testified that, such performance never
took place because no SBLC was ever issued by the Defendants to
secure foreign loan facility from “Lamar” which the three Plaintiffs
had expected to receive. On the other hand, Pw-1 told this Court
that, although the foreign facility from “Lamar” to the three
Plaintiffs did not materialize, the Defendants proceeded with the
perfection of documents and execution thereof, between the
Plaintiffs and the Defendants. He tendered in Court as exhibit a
letter from K& M Advocates dated 19 th June 2019 which this Court
admitted as Exh.P-9.
Pw-1 testified further that, on 23 rd September 2020, the
Defendants offered a banking facility to the Plaintiffs that had
reference to the foreign loan facility with “Lamar” which, according
to Pw-1, had failed to materialize, and, that, the Defendants have
been pressing and pushing the Plaintiffs to convert the “non-existent
loan” from ‘Lamar’. Pw-1 tendered in Court a copy of the facility
agreement dated 23rd September 2020 which this Court admitted as
Exh.P.11.
He told this Court that, according to information sent by the
1st Defendant to the Credit Bureau Tanzania Limited and obtained
from the Bureau to the Plaintiffs, the Plaintiffs do not have any
outstanding loan to the Defendants. Pw-1 tendered in Court copies

Page 27 of 164
of letters from the 1st Defendant and from the Credit Bureau Tanzania
Ltd which this Court admitted collectively as Exh.P-12.
Further still, Pw-1 told this Court that, on the 19th day of
September 2019, the 1st Plaintiff requested the 1st Defendant to
register the foreign loan with the Bank of Tanzania (BOT) and, the
1st Defendant wrote to the Bank to request for that service.
According to Pw-1, the Bank of Tanzania pointed out seven
anomalies including the absence of disbursement of the said loan
fund from abroad to Tanzania and, that, the loan amount involved
opening an escrow account in Nairobi, Kenya, which fact is
contrary to the Foreign Exchange Circular No.6000/
DEM/EX.REG/58 of 28th September, 1998. Copies of the
correspondences with the BOT were tendered and admitted in
Court as Exh.P-13.
Pw-1 told this Court that, the 1 st Defendant has continued to
hold original vehicle registration cards belonging to the Plaintiffs,
some of which the 1st Defendant is registered as the title holder,
without justification and without any colour of right. A total of 91
copies of the M/V registration Cards were tendered in Court and
collectively admitted as Exh.P-10. In view of all such incidences and
facts, Pw-1 told this Court that, the Plaintiffs resolved to sue the
Defendants. He tendered in Court copies of Board Resolutions
which were admitted into evidence as marked as Exh.P-14.
When cross-examined by the learned counsel for the
Defendants, Pw-1 told this Court that, he is not a director of the 2 nd
Plaintiff but there are no loans which the 1 st and 3rd Plaintiffs could
borrow without his knowledge and he does get monthly financial
Page 28 of 164
reports of all transactions of the 1 st and 3rd Plaintiffs. He told this
Court that, the negotiations which the 1 st Plaintiff had with
“Lamar” were done through “Nisk” and that, Pw-1 did, on 3rd
September 2018, sign an engagement latter (Exh.P2) for them to
negotiate a loan with “Lamar”. He, however, denied that there was
a facility negotiated between the three Plaintiffs and “Lamar” and
stressed to the Court that, the “Lamar facility” did not materialize.
Pw-1 maintained that; “Lamar” disbursed the loan amount
to Equity Bank (K) for the contract signed with the 1 st Plaintiff. He
told this Court that, although the three companies did negotiate a
facility for the purpose of debt refinancing for all of them, it was
only the 1st Plaintiff who signed it. He admitted to have signed
Exh.P-7 together with one Behman Hemed. He also admitted that,
after the signing of Exh.P7, the three Plaintiffs did also approach the
2nd Defendant to secure a Standby Letter of Credit (SBLC). He
admitted as well that, Exh.P-7 is for USD 16,275,000.
When asked about Exh.P3 (the SBLC facility dated 22nd May
2019), Pw-1 responded by telling this Court that, indeed the three
Plaintiffs were the borrowers and the lenders were the Equity Bank
(K) and Equity Bank (T) and the amount involved was USD
16,275,000 whose purpose was debt-refinancing. When further
asked about Exh.P7, Pw-1 told this Court that, as per Clause 5.1 of
that Exh.P-7, the foreign lender (“Lamar”) could not have disbursed
the loan amount without first receiving the SBLC/LC from Equity
Bank (K) Ltd.
Pw-1 admitted that, he signed most of letters communicated
between the 2nd Defendant and the Plaintiffs and that, most of their
Page 29 of 164
communications were channeled through Equity Bank (T) Ltd. He
admitted as well that, Exh.P-2 was signed between the Plaintiffs, the
2nd Defendant and “Nisk” wherein the latter was to continue being
a consultant for the Plaintiffs in respect of the Facility from
“Lamar”.
Pw-1 admitted further that, as per Exh.P-3, page 4, there is
disclosed a manner regarding how the loan was to be utilized as
Clause 2 shows that US$ 8,762,733 were to be used to pay off the
borrowers’ loan obligations, and US$ 2,106,261 were to liquidate
existing loan obligation of the borrowers at UBL Bank and Aman
Bank, while the rest of the balance was intended to be used as
working capital. Besides, Pw-1 told this Court that, the securities
were beefed up so as to secure the SBLC from Equity Bank (K) as
there were earlier securities at Equity Bank but, upon seeking to
refinance their debts, Equity Bank (K) asked for additional securities
to perfect the documentations so that they could open up an
SBLC/LC in favour of “Lamar”.
When asked about the amount shown on page 4 of Exh.P-4,
Pw-1 admitted that, the amount shown therein is US$ 16,275,000.
He did admit, likewise, that, the amount shown in Exh.P-5 is US$
16,275,000 for the three Plaintiffs. He also admitted that, in Exh.P-
6, the amount of loan stated therein is US$ 16,275,000. As regards
the signing of the Deeds of variation and Debenture, Pw-1 told this
Court that the same were signed to secure the SBLC/LC facility.
Upon being cross-examined further, Pw-1 told this Court that,
Exh.P-10 were part of the securities offered to secure the SBLC/LC
facility (i.e., Exh.P-3). He admitted that, the Security Trustee
Page 30 of 164
Agreement (attached as Annex.10 to the witness statement) was signed
by the three Plaintiffs (on one hand) and by Equity Bank (K)/(T) on
the other hand on 22nd June 2019 the purpose being to appoint
Equity (T) to act as agent of Equity Bank (K) Ltd and the
transactions amounts stated in that document is US$ 16,275,000.
Pw-1 admitted to have personally signed it.
Pw-1 admitted further that, Exh.P-13 was dated 19th
September 2019 and, that, it was the 1 st Plaintiff who was requesting
Equity Bank (T) to register the loan with the BOT. He admitted that,
Exh.P-13 was making reference to a facility dated 22 nd May 2019
involving US$ 16,275,000. When asked, Pw-1 did admit as well
that, Annexure 11 to his witness statement is a Syndicated Agreement
signed on 22nd June 2019, between the three Plaintiffs and the two
Defendants herein. He admitted that, the amount of the loan stated
therein is US$ 16,275,000.
Upon being further cross-examined, Pw-1 told this Court that,
it is indeed true that Exh.P-12 shows a credit number for NAS-
Hauliers (1st Plaintiff) which is 3006511111789 with an amount of
5,835,000 (but no currency denomination indicated). He also stated
that, the loan (credit) facility account for the 2 nd Plaintiff is
3006511111775 and the amount shown there in is 1,806,000 (no
currency denomination shown). Pw-1 told this Court that, the
dispute between the parties is centered on Exh.P-3 and this has
different credit reference numbers from those in Exh.P-12.
He further told the Court that, Exh.P11 was an offer to
restructure the SBLC/LC which the Plaintiffs declined to do by not
signing it. He admitted that, before signing Exh.P-3, the 2nd Plaintiff
Page 31 of 164
had an outstanding facility with Amana Bank Ltd and that, such
outstanding loan facility was paid off by monies from “Lamar
facility”.
He also admitted that, the loan in respect of the 2 nd Plaintiff
was cleared by monies from “Lamar” and that, the 2nd Plaintiff’s
loan was secured by a legal mortgage and the title Deed (Exh.P5)
which was used by the 2nd Plaintiff is held by the 1st Defendant. He
also admitted that, the same title deed used to secure the Amana
Bank’s Loan was the same used to secure loans from Equity Bank
(T) and, that, Amana Bank discharged the security after it was paid
off through Equity Bank (T), and Equity Bank (T) is in possession
of Exh.P-5 (CT. No. 8206).
Pw-1 admitted as well, that, prior to the signing of the
SBLC/LC Facility and the “Lamar” facility, the 1st Plaintiff had a
secured facility with UBA Bank which was secured by CT.
No.16381/1 and, that particular CT is currently in the possession of
the 1st Defendant having been discharged by the UBA Bank after its
loan was paid off using monies from “Lamar” Facility.
Upon being further cross-examined, Pw-1 admitted that, as
per clause 2 of Exh.P-3, the loan from “Lamar” was agreed to be
held in an escrow account held in Equity Bank (K). He stated,
however, that, it was the 2nd Defendant (Equity Bank (K) who
forced that the account be opened in Kenya as the 1st Plaintiff had
such an account with Equity Bank (K) since 2015. He also told this
Court that, it was not until the 04th day of June 2019 that the 1st
Plaintiff got informed about the disbursements of USD
14,123,527.5 from “Numora”.
Page 32 of 164
 Pw-1 told this Court further that, on the 07th day of June 2019
a total of USD 8,219,500.01 were transferred from the 1 st Plaintiff’s
Escrow Account held with Equity (K) to Equity Bank (T). He
admitted to be acquainted with the signature of one Mr. Bahman,
and could identify it in Exh.P-3 and that, the 1st Plaintiff received a
loan from “Lamar” but through Equity (K) and has not re-paid
“Lamar” to date and the same loan was never secured by an SBLC
from Equity Bank (K). He told the Court that, as per the
requirements of Clause 5 of Exh.P4, “Lamar” could not have
disbursed the loan without there being SBLC/LC from Equity Bank
(K).
Pw-1 denied to be made aware that Equity Bank (K) had
issued a Letter of Credit (LC) in favour of “Numora” who, in turn,
disbursed the loan and, that, Pw-1 only came to know of that fact
having read from the Defendants’ documents filed in Court. He
stated further under cross-examination, that, much as the Plaintiffs
had asked for SBLC/LC from Equity Bank (K) to guarantee the
loan from “Lamar”, and has been inquiring about it from Equity
(T), even before the monies got disbursed, the Plaintiffs never
received it to date. He admitted, however, that, a Letter of Credit
could be issued to a third party and not the applicant.
During re-examination, Pw-1 told this Court that, under
Exh.P-5 the amount of USD 16,275,000 was meant to repay the
three Plaintiffs’ loans. He told the Court that, the SBLC/LC which
was to be issued by Equity Bank (K) was for the purpose of securing
a loan facility from “Lamar” and such was never issued to-date.
When asked about the status of the “Lamar’s loan”, Pw-1 told the
Page 33 of 164
Court that, the loan from “Lamar” is a non-issue before the Court
as of now because the dispute at hand is with the Defendants. He
told this Court that, the SBLC/LC shown to them in Court was only
brought to their attention in the Defendants’ documents filed in
respect of this suit.
When asked by this Court, Pw-1 replied that, before “Lamar”
could have issued the loan, it was a condition precedent that, Equity
Bank (K) Ltd should have issued SBLC/LC to secure such loan, but
Equity (K) never did that. However, he stated that, there was
disbursement of funds from “Lamar” to the 1st Plaintiff but that was
based on Exh.P-7, the agreement signed between “Lamar” and the
1st Plaintiff only. He told this Court that, the disbursed amount was
unsecured because no SBLC/LC was ever issued. Pw-1 stated as
well to the Court that, the loan monies from “Lamar” were
supposed to have been registered in Tanzania but the Plaintiffs did
not see it registered since it never came to Tanzania.
He stated further, that, immediately as the loaned amount
which was supposed to have come to Equity Bank (T) went to
Equity Bank (K), the latter cleared the three Plaintiffs’ outstanding
debts. He stated, therefore, that, their debt is not with Equity (K)
but with “Lamar”. So far, that was the testimony of Pw-1 and, the
three Plaintiffs’ and Defendants in the counterclaim’s case came to
a closure, opening room for the Defendants’ case (also Plaintiffs in
the counterclaim).
On the 05th of December 2022, the hearing of the
Defendants/Plaintiffs in the counterclaim, case commenced. As I
stated earlier, the Defendants (also Plaintiffs in the counter claim)
Page 34 of 164
summoned six (6) witnesses who testified as Dw-1 to Dw-6. The
first witness for the Defence was one Mr. Elly Humphrey Manzi,
testifying as Dw-1. In his testimony in chief received by this Court,
Dw-1 stated that, he worked with the 1st Defendant as relations
manager since 2012 up to 2021 when he left and joined Exim Bank.
He told this Court that, prior to this suit, the Plaintiffs and the
Defendants had a banking relationship wherein, between 30th June
2014 and 20th December 2017, the 1st Defendant availed the
Plaintiffs with several banking facilities.
He tendered in Court facility letters offered to the Plaintiffs as
follows:
 Banking Facility Letter dated 30th June 2014, offered
to the 2nd Defendant for a loan amounting to USD
3.5 million.
 A Banking Facility Letter dated 28th day of August
2015 offered to the 2nd Defendant for a loan
amounting to for a loan amounting to USD 300,000.
 A Banking Facility letter dated 4th September 2015
for assets finance loan worth USD 6,436,224 and
TZS 1,000,000,000/= to the 1st Plaintiff.
 A Banking Facility Letter dated 25 th February 2016
to the 2nd Plaintiff for a loan worth USD 300,000.
 A Banking Facility (Restructuring of Loan) dated
29th April 2016 to the 2nd Plaintiff worth USD
1,621,396.
 A Term Loan Facility dated 23rd March 2017 for
USD 1,637,400 for purpose of loan restructuring.

Page 35 of 164
  A Bank Facility Letter issued to the 2 nd Plaintiff on
29th March 2017 as a Temporary Overdraft (TOD)
Facility of USD 29,0000.
 A Banking Facility dated 02nd August 2017 to the 2nd
Plaintiff as a TOD Facility of USD 250,000/=.
 A Banking Facility issued on 20th December 2017 to
the 2nd Plaintiff worth USD 1,806,000 as loan
restructuring.
The above nine (9) facilities were tendered in Court as
Exh.D-1. Dw-1 told this Court that, these facilities were secured
by immovable as well as movable properties, debentures,
corporate and directors’ guarantees. Dw-1 told this Court
further that, in April 2019, the Plaintiffs approached the 1st
Defendant for additional funding to meet working capital needs
as well as liquidating existing debts with the 1st Defendant,
UBL Bank Tanzania Ltd (UBL- Bank) and Amana Bank.
Dw-1 told this Court, however, that, the 1st Defendant
was unable to foot the financial request of the Plaintiffs given
the enormity of the amounts involved which exceeded the
single borrower’s limit restrictions prescribed under the
Tanzanian banking laws.
He testified further that, given the inability of the 1st
Defendant arising from the single borrower’s limitations, the
Plaintiffs decided to look for a foreign lender and, thereby,
engaged “Nisk” as a financial adviser, who ultimately
connected the Plaintiffs to “Lamar” who could accommodate
Page 36 of 164
their funding requirements. He placed reliance on the already
admitted Exh.P-2. He told this Court that, “Nisk” negotiated
with “Lamar” a ‘Revolving Trade Loan Facility’ (the “Lamar
Facility”) of USD 16,275,000 for the Plaintiffs for a period of
360 days.
It was Dw-1’s testimony, however, that, in order to secure
this loan, the Plaintiffs approached the 2nd Defendant (Equity
Bank (K) Ltd) for an Irrevocable Letter of Credit (LC), and, on 22nd
May 2019, the Plaintiffs and the Defendants signed the
SBLC/LC Facility (Exh.P-3) for USD 16,275,000 whose tenor
was for a period on twelve (12) months renewable annually up
to a period of five (05) years.
According to Dw-1, on the 29th May 2019 the Plaintiffs
filled a Documentary Credit Application Form requesting the
2nd Defendant to issue a Letter of Credit (LC) in favour of
“Numora”, the assignee of the “Lamar loan” in order to obtain
the SBLC/LC, and, that, on the same day, the 2nd Defendant
issued “LC” in favour of “Numora”, the assignee. Dw-1 told
this Court that, on 4th June 2019, “Numora” disbursed a sum
of USD 14,123,527.50 being the loan amount of USD
16,275,000 less one year’s advance interest charges to the
Plaintiffs’ escrow account with the 2nd Defendant.
Dw-1 testified further that, after the disbursement of the
“Lamar loan” to the 1st Plaintiff’s escrow account held with the
2nd Defendant, but before the completion of the process to
Page 37 of 164
secure the LC in accordance with the SBLC/LC Facility (i.e.,
Exh.P-3), the 2nd Plaintiff wrote a letter to the 1st Defendant
requesting for an advance payment of the credit facility of USD
500,000 to cater for its operational needs. The letter, a copy of
which is dated 12th June 2019, together with a supporting
affidavit were collectively tendered in Court and
unobjectionably admitted as Exh.D-2.
Further still, Dw-1 told this Court that, on the 22nd day of
June 2019, the Plaintiffs and Defendants signed, in fulfillment
of the terms and conditions of the SBLC/LC Facility (i.e.,
Exh.P-3) other agreements in order to secure the LC. The
agreements signed were the Syndicated Facilities Agreement
(‘SFA’) and Security Trustee Agreement (‘STA’). These two
documents were tendered in Court and were collectively
admitted as Exh.D-3.
According to Dw-1, as per Exh.D-3, the 1st Defendant was
appointed a Security Agent and Trustee of the 2nd Defendant, and,
that, on the same date, the Plaintiffs, the Defendants and ‘Nisk’
signed a Business Consultancy Agreement and ‘Nisk’ was
appointed by the Plaintiff as a ‘consultant for the business for which
the loan’ was advanced to improve financial oversight, an
appointment approved by the 1st Defendant as Security Trustee
and Agent and the 2nd Defendant as the “lender.”
Dw-1 testified that, the Plaintiffs and the Defendants
signed six (06) mortgage deeds (four of which are dated 30th
Page 38 of 164
May 2019 and two dated 30th August 2019) with a view to
further and fully secure the Letter of Credit (SBLC/LC). These
mortgage deeds were earlier admitted as Exh.P-5.
On the other hand, Dw-1 told this Court further that,
apart from the mortgage deeds, on the 28th day of August 2019,
the 1st Defendant in its capacity as Security Agent and Trustee of
the 2nd Defendant, did, in compliance with the SBLC/LC
Facility, signed director’s personal guarantee and indemnity
agreement (earlier admitted as Exh.P-4) with Mr. Ally Hemed
Said, Ahmed Hemed Said, Bahman Salim Hemed, Idrisa Said
Abraham, Issa Mohamed Said, Suleiman Nassor Mohamed and
Samiha Ally Hemed Said for the purposes of securing the
SBLC/LC issued by the 2nd Defendant in favour of “Numora”
the assignee of the “Lamar Loan”.
He testified further that; the LC issued by the 2nd
Defendant in favour of “Numora”, was also secured by five
(05) separate debentures dated 30th day of August, 2019. These
were earlier collectively admitted as Exh.P-6.
It was Dw-1’s testimony that, on the 19th September 2019,
the 1st Plaintiff wrote a letter to the 1st Defendant requesting the
latter to register “Lamar’s loan” with the BOT. He, stated,
however, that, the said loan was not registered because, under
the BOT Foreign Exchange Circular of 1998, a foreign loan whose
term do not exceed 360 days is not registrable. Earlier, this

Page 39 of 164
Court had received all correspondences with the BOT as Exh.P-
13.
Dw-1 testified further that, on 10th June 2019, the UBL
Bank Tanzania Ltd wrote a letter to the 1st Defendant and copied
it to the 1st Plaintiff, requesting the 1st Defendant to take over
the loan exposure of the 1st Plaintiff to UBL Bank. Equally, that,
on 12th June 2019, Amana Bank did also write a similar letter
copied to the 2nd Plaintiff asking the 1st Defendant to take over
the loan exposure of the 2nd Plaintiff at Amana Bank. The two
letters were tendered and admitted into evidence as Exh.D-4.
Dw-1 told this Court that, the Plaintiffs did also request
for disbursement of the credit facility to extinguish their
indebtedness to the 1st Defendant, UBL Bank and Amana Bank
and an amount to cater for operational costs. He stated that,
upon receiving the request for disbursement, the Defendants
disbursed the credit amount as follows:
a) 4th June 2019: Payment of US$
53,675 to the 2nd Defendant to pay
off the Plaintiffs’ existing liabilities
with the 2nd Defendant.
b) 6th June2019: Payment of US$
10,735 to 2nd Defendant to pay off
the Plaintiffs’ existing liabilities
with the 2nd Defendant.
c) 7th June 2019: Payment of US$
591,191 to the 2nd Defendant to pay

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 off the Plaintiff’s existing liabilities
with the 2nd Defendant.
d) 7th June 2019: Payment of US$
390,600 being the 2nd Defendant’s
commission for issuing SBLC/LC.
e) 7th June 2019: Payment of US$
8,219,500 to the 1st Defendant to
pay off the Plaintiff’s existing
liabilities with the 1st Defendant.
f) 13th June 2019: Payment of US$
1,943,643 to the 1st Defendant to
pay off the Plaintiff’s existing
liabilities with Amana Bank Ltd of
US$ 1,493,642.99 and with UBL
Bank (Tanzania)Ltd of USD
450,000.
g) 26th June 2019: Payment of US$
500,000 to the 1st Defendant for 2nd
Defendant’s operational costs.
h) 06th September 2019: Payment of
US$ 1,000,000 to the 1st Defendant
for the 1st Defendant’s operational
costs.
i) 05th November 2019: Payment of
US$ 139,000 to the 1st Defendant
following the request by the 1st
Plaintiff for the release of the
available balance of the facility.
j) 11th November 2019: Payment of
USD 500,000 to the 1st Defendant

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 for the 1st Defendant’s operational
costs.
k) 8th January 2020: Payment of US$
500,000 to the 1st Defendant for the
1st Plaintiff’s working capital
and/operational costs.
l) 4th February 2020: Payment of US$
100,000 to the 1st Defendant for the
1st Plaintiff’s operational costs.
m) 18th April 2020: Payment of US$
239,586.16 to the 1st Defendant for
the 1st Plaintiff’s operational costs.
Dw-1 tendered in Court six (06) letters hailing from the 1 st
Plaintiff to the 1st and 2nd Defendant respectively in relation to the
requests for the transfers. These were admitted as Exh.D-5. He also
tendered a Bank Statement in respect of the 1st Plaintiff’s US$ A/c
No.3006211101346 starting from 11th June 2019 to 30th June 2020, as
well as the 1st Plaintiff’s Bank Statement in respect of the Escrow A/c No.
3006211572900 starting from 01st of June 2019 to 30th June 2020.
Further still, Dw-1 tendered a Bank Statement in respect of
the 2nd Plaintiff A/c No.30062111707- running from 01st June 2019 to
30th June 2020; and the 3rd Plaintiff’s Bank Statement for US$ A/c
No.3006211182995. Together with these accounts, Dw-1 did also
tender in Court an affidavit regarding proof of the authenticity of
those statements. All these were admitted collectively as Exh.D-6.
He told this Court that, the Plaintiffs defaulted in repaying the
“Lamar loan” to “Numora”, the assignee, within the specified
contractual period and, consequently, the “LC” issued by the 2 nd

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Defendant to “Numora” was recalled by “Numora” who collected
the credit facility amounting to US$ 16,275,000 due to it under the
Lamar Facility Agreement, and which was secured by the 2 nd
Defendant through a Standby Letter of Credit (SBLC/LC) and, thus,
the Plaintiffs became indebted to the Defendants.
Dw-1 testified further that; the Defendants sought to
accommodate the Plaintiffs to make good the default by offering to
them a new Term Loan Facility of US$ 16,500,000 repayable in 132
months. He stated, however, that, the Plaintiffs declined to accept
the offer whereof they remained indebted and the 1st Defendant, as
Security Trustee and Agent, sent various demand notices to the
Plaintiffs and the guarantors, in demand of payment of the
outstanding loan amount of US$ 19,769,680. He tendered in Court
demand notices and confirmation of partial delivery, all of which
were collectively admitted as Exh.D-7. Dw-1 did admit, however,
that this amount was not registered with Dun and Bradstreet, Credit
Bureau of Tanzania because it was a foreign loan advanced by a
foreign credit entity.
Upon being cross-examined, Dw-1 told this Court that, the
Defendants have a claim against the Plaintiffs because the loan from
“Lamar” paid off all their outstanding debts they had with the 1 st
Defendant. He told this Court that, up to the time he ceased to be
an employee of the 1st Defendant in 2021, he was unaware of any
other new loan issued to the Plaintiffs, but all previous loans were
cleared off through monies from the loan from “Lamar”. He
admitted as well that, Exh.P-3 is between the three Plaintiffs and
Equity Bank (K) Ltd (the 2nd Defendant) and, that, as shown on its
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page 4, it was executed for the purpose of securing the loan from
“Lamar”.
Furthermore, Dw-1 admitted that, the SBLC/LC was solely
meant to secure the loan from “Lamar” and, that, it was to be issued
by Equity Bank (K) Ltd. He told this Court that, nowhere in the
SBLC/LC was it stated that it was for the purposes of securing
“goods” since the fact was that, the SBLC/LC was for the purposes
of securing the loan facility from “Lamar”.
He told this Court further that, he was unaware of the
documentary credit application but did know that the Plaintiffs
requested for and were issued with SBLC/LC. He also stated that,
he was not conversant with the assignment of “Lamar’s loan” to
another person but that, the mere fact that the funds came from
“Lamar”, meant that, the SBLC/LC was issued. He admitted,
however, that, the loan from “Lamar” could as well be unsecured
loan and, that “Lamar” and the 1st Plaintiff could agree that the loan
be unsecured.
The second witness for the Defendants was Mr. Jeremiah
Henry Munuo, an employee of the Bank of Tanzania (BOT) who
testified in Court as Dw-2. In his testimony in chief received in
Court, he stated that, he deals with issues of domestic debts and
policy analysis as well as external debt and fiscal affairs in the Fiscal
Debt Management Department of the BOT. Dw-2 told this Court
that, in performing his affairs at the BOT, he is normally guided by
the laws including, the Foreign Exchange Act, 1992, the Foreign
Exchange Regulations 2006 and BOT Circulars.

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 According to Dw-2, in the year 1998, the BOT issued a
circular and press release and these are posted on its website as well,
and they are concerned with registration of foreign loans. He told
this Court that, much as borrowers from Tanzania are allowed to
borrow from external sources, all borrowing entities are obliged to
request for a Debt Registration Number (DRN) and register their
foreign loans with the BOT.
Dw-2 tendered in Court the BOT Foreign Exchange Circular,
1998 and a Press release which requires borrowing entities to register
their foreign loans and how they should do it. The two documents
tendered in Court were admitted collectively as Exh.D-8. He told
this Court that, on the basis of Exh.D8, the BOT guide commercial
banks operating in the country on registration of all external loans
and the minimum requirement for such registration is for loan
maturity of more than 365 days.
Dw-2 told this Court as well that, registration is required for
the purposes of regulating the BOT’s foreign currency reserve to
meet its obligations arising from importation of goods and any long-
term foreign loan becomes a future obligation of the United
Republic of Tanzania. According to Dw-2, in the course of
registering a foreign loan, the loan agreement between the parties
involved as well as their address, the law applicable to it and the
KYC details and all transactions pertaining to the said loan, must
be submitted/reported to the BOT.
Dw-2 told this Court that, the foreign loan is not obliged to be
registered in Tanzania if the same is not disbursed in the country or
if it is a short-term loan whose maturity period does not exceed
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365days regardless of the amounts disbursed. He told this Court
that, as a regulator, the BOT cannot and does not interfere or
intervene and neither is it privy to the contents of any short-term
loan agreement as the one involved in the subject matter of this suit.
He also stated that, the SBLC/LC issued by the 2 nd Defendant,
though a credit facility, could not be registered with Dun and
Bradstreet; Credit Bureau of Tanzania Ltd.
During cross-examination, Dw-2 admitted that, the BOT
once dealt with Exh.P-13 and did indicate about seven (7) defects on
it regarding the attempted registration of the foreign loan between
“Lamar” and the 1st Plaintiff. He told this Court that, indeed there
was no proof that monies had been disbursed in Tanzania. He told
the Court further that, if the loan monies are in cash, there should
be evidence of SWIFT or Bank Statement showing the said amount
of money transferred to Tanzania. Besides, Dw-2 told this Court
that, if it is goods, there should be evidence of customs
documentation from the Tanzania Revenue Authority (TRA).
He also told the Court that, the other defect observed was the
existence of a foreign escrow account, a fact which was contrary to
the conditions. Dw-2 told the Court that, to the best of his
knowledge, to date there has never been a response to Exh.P13. He
told the Court as well that, the 1 st Defendant is one of the regulated
banks in the country licensed by the BOT.
It was Dw-2’s testimony, therefore, that, the BOT is aware
that there was an SBLC/LC that secured a loan and if there was a
recall, one of the things the BOT would need is the loan agreement,
proof of fulfillment, SBLC/LC and then the BOT will allow the
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transaction to go through. He stated that, some of these
requirements were fulfilled and submitted in the initial attempts to
register the loan. He stated, however, that, he does not know if the
SBLC/LC was ever registered in Tanzania. He admitted that, as per
Exh.P13, the loan attempted to be registered was from “Lamar” and
not from the 2nd Defendant (Equity Bank (K) Ltd).
During re-examination, Dw-2 told this Court that, there is a
requirement, as per Clause 3.1 of the 1998 Foreign Exchange Circular
that, a Tanzanian resident cannot open an account outside the
country and operate it. He admitted that, as for the loan from
“Lamar” there was a need for SBLC/LC from Equity Bank, but
unable to say which Equity Bank between Equity Bank (T) and
Equity Bank (K). However, he admitted that, the one issuing
SBLC/LC will also open an escrow account but the monies
deposited in the escrow account in Equity Bank (K) were not
Tanzanian monies.
When asked by this Court, Dw-2 emphasized that, the monies
deposited in the escrow account were not Tanzanian monies and
the Tanzanian entities had nothing to do with it as regulators in
Tanzania had no mandate with it since it was an off-shore account.
The third Defense witness was Mr. Andrew Kigira, a Kenyan
citizen who testified as Dw-3. In his testimony in chief received by
this Court, Dw-3 stated that, he works with the 2nd Defendant and
has a 20 years’ experience in Trade and Finance matters, having
worked with two multinational banks before joining the 2 nd
Defendant.

Page 47 of 164
 According to Dw-3, the 2nd Defendant’s department of Trade
and Finance does provide financial instruments and products which
are used to facilitate both domestic and international commerce and
trade, some of those products being issuance of SBLC/LC. As
regards “LCs”, Dw-3 told this Court that, when documents
presented matches with its terms and conditions, the bank before
which they are presented must effect payment. He told this Court
that, by a facility letter dated 22nd May 2019, the 1st Defendant as
the Plaintiffs’ Commercial Banker and the 2 nd Defendant as the
Financier, granted to the Plaintiffs, SBLC/LC Facility as per a
Letter of Facility Referenced as EBTL/ PRESTIGE/ 3006211161348
for USD 16,275,000. (The respective Facility letter was earlier
admitted as Exh.P.3).
Dw-3 told this Court further that, subsequent to the facility,
on 29th May 2019, the 1st Plaintiff submitted to the 2nd Defendant, a
signed comprehensive “LC” Application Form containing terms
and conditions of the “LC” requesting the 2 nd Defendant to issue a
Letter of Credit in favour of “Numora Trading PTE, Singapore” for an
amount of USD 16,275,000. He tendered in Court the letter of credit
application by the 1st Plaintiff, sent to Equity Bank (K) and dated
29th May 2019. This Court admitted it as Exh.D-9.
Dw-3 told this Court further that, having received the
application form for “LC”, the 2nd Defendant did, on the very same
date, issue a Letter of Credit on behalf of the 1st Plaintiff in favour
of “Numora” for the amount of US$ 16,275,000. He testified that;
the “LC” was transmitted through Standard Chartered Bank Malaysia
as the Bankers of “Numora”. He further stated that, the Standard
Page 48 of 164
Chartered Bank Malaysia did acknowledge receipt of the “LC” by
SWIFT Message with swift output number FIN 730 dated 30 th May
2019.
He tendered in Court the “LC” and a SWIFT message with
input number FIN 700 from the 2nd Defendant to Standard Chartered
Bank (Malaysia) and an accompanying affidavit as well as the
SWIFT Message (output Number 730) as exhibits. This Court
admitted the “LC” as Exh.D-10 while the affidavit and the SWIFT
Message (output number 730) were admitted collectively as Exh.D-
11. The SWIFT Message (input number 700 from the 2nd Defendant
to Standard Chartered Bank (Malaysia) was as well tendered and
admitted as Exh.D-12.
It was a further testimony of Dw-3 that, on the 04th day of
June 2019, the 2nd Defendant received the “LC” documents from
Standard Chartered Bank (Malaysia). The submitted documents as per
Dw-3 were:
(i) Commercial Invoice issued by
“Numora” and addressed to the 1st
Plaintiff.
(ii) Delivery Note which was signed and
accepted by the 1st Plaintiff.
Dw-3 tendered in Court the two documents which were
readily admitted into evidence as Exh.D-14. Besides, Dw-3 told this
Court that, having received the “LC Complying documents”, the 2nd
Defendant gave authorization to Standard Chartered Bank (Malaysia)
to claim reimbursement from the corresponding bank, Citibank
New York, upon maturity of “LC” on 27th May 2020 for the amount
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of US$ 16,275,000 as per the terms and conditions of the Letter of
Credit. He tendered in Court the authorization SWIFT Message
from the 2nd Defendant to the Standard Chartered Bank (Malaysia)
bearing SWIFT input number 799 dated 04/06/2019. This Court
admitted this SWIFT Message as Exh.D-12. He also tendered in
Court a SWIFT Message from Standard Chartered Bank Malaysia to
Equity Bank (K) Ltd (the 2nd Defendant) making a claim of US$
16,275,000.
The SWIFT Message dated 04th June 2019 was admitted as
Exh.D13. Dw-3 went on to testify that, upon maturity of the “LC”
on 27th May 2020, the Standard Chartered Bank (Malaysia) received
payment of US$ 16,275,000 from the 2 nd Defendant through their
correspondent bank, the Citibank New York. The SWIFT Message
from Citibank New York, informing the 2nd Defendant that its account
had been debited was tendered and admitted as Exh.D-15. Dw-3
testified further that, the demand and subsequent payment of the
“LC” has given the Defendants the right to claim reimbursement of
US$ 16,275,000 and interest thereon from the Plaintiffs as per the
SBLC/LC Facility dated 22nd May 2019 availed to the Plaintiffs by
the Defendants.
He told this Court that, after the payment of the “LC”, the 2 nd
Defendant sent a SWIFT Message to Standard Chartered Bank
(Malaysia) seeking its confirmation if it received the payment of the
“LC” upon maturity date on 27th May 2020 and if the account of
the beneficiary of the “LC” (Numora) was credited.
According to Dw-3, the Standard Chartered Bank (Malaysia) did
confirm the reception of the LC payment and that, it proceeded to
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credit the account of “Numora”. He tendered in Court a SWIFT
Message sent by the 2nd Defendant to Standard Chartered Bank
(Malaysia) bearing a SWIFT input number FIN 799 dated 28 th day
of January 2022 and this was admitted as Exh.D-16. Dw-3 did also
tender in evidence a SWIFT response from Standard Chartered Bank
(Malaysia) to the 2nd Defendant bearing a SWIFT output number
FIN-799 dated 20th day of February 2022. This confirmed that the
payments were made and the beneficiary’s account was indeed
credited. This Court received it as Exh.D-17.
During cross-examination of Dw-3, he told this Court that, he
is an expert in LCs/SBLCs. He admitted that, in creating the
“SBLC/LC” there has to be a legal contract and underlying the
transaction but to input the “LC” to the system it does not need the
contract to be there, but there has to be one. However, he denied
that, the contract between the clients (Plaintiffs) and “Lamar” to
secure the credit was a necessary requirement for the creation of the
“LC”.
In a further response while being cross-examined, Dw-3
admitted that, there has to be a transaction before “LC” is created
since “LC” is issued at the instruction of the parties involved. He
admitted, therefore, that, there should have been a contract between
the parties before the issuance of the “SBLC/LC”.
When shown Exh.D-10, Dw-3 admitted that, it contains
“terms” and “description” of “goods” on its 2nd page. He stated that,
those were the contents which the client had requested they be
inserted and one cannot tell the intention of doing so. He told this
Court that, the contents of the “LC” (Exh.D-10) are based on the
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two parties, i.e., the 1st Plaintiff and “Numora” and those are the
words to appear on the “LC”. Dw-3 admitted, however, that, from
the contents of the “LC”, it was not possible to tell what exactly it
was securing. He told the Court, however, that, the parties were at
best to respond to that question and the 2nd Defendant cannot
respond to it. He told this Court, however, that, looking at the
contents of the “LC” the 2nd Defendant is unaware of what Exh.D-
10 is/was securing.
When shown Exh.P3 and asked as to its purpose, Dw-3
responded to this Court that, Exh.P3 was for the purpose of securing
the borrowing from “Lamar”. He also stated that, the purpose of
the agreement was to secure the “SBLC/LC”. Besides, Dw-3 told
this Court that, Exh.D-10 is the “LC” which is securing the Exh.P-3.
He clarified that, the “LC” (Exh.D-10) was issued on the basis of this
facility (Exh.P-3). He told this Court further that, the “LC” (Exh.D-
10) is the same as the one contemplated in Exh.P-3 (i.e., as
SBLC/LC).
However, when asked about Exh.D-9 and the reference to
which the exhibit makes, Dw-3 admitted that, Exh.D-9 makes
reference to “heavy equipment (machineries) and not to Exh.P-3. He
admitted that, the two issues as captured in these documents are
different as the SBLC/LC (Exh.P-3) was for the purpose of securing
issuance of “LC” but the content of the “LC” is to be determined by
the parties. Dw-3 was emphatic to this Court that, Exh.D10 was the
“LC” applied for under the SBLC/LC facility and no other “LC”
has ever been issued by the 2nd Defendant.

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 Upon further cross-examination, Dw-3 denied there being
two transactions, one for “heavy equipment” and another for
securing loan from “Lamar”. In his view, the transactions were one
and the same. He admitted to be aware of there being documents
allowing for assignment of responsibility of “Lamar” to “Numora”
though not conversant regarding how that assignment happened.
Dw-3 admitted further, about the existence of a “delivery note” in
respect of heavy equipment (machineries), but denied to be party to
any transaction about it or whether the stated equipment were
delivered or not, stating that, those are matters privy to the parties
(i.e., the 1st Plaintiff and “Numora”).
Responding to the question why he brought to the Court
Exh.D-14, Dw-3 told this Court that, those were documents which
were requested as part of the “LC” and submitted from “Numora”.
He told this Court that, the recall of the “LC” is made by the Bank
but the Bank follows instructions put on the “LC” by the parties. He
maintained that; the trigger was “Numora” after presenting the
required “LC” documentation, which were the commercial invoice
and delivery note (Exh.D-14) but Bill of Lading was not part of them.
He admitted that, it is “Numora” who recalled the “LC” through
their banker.
In addition, Dw-3 denied there being any element of fraud in
the underlying transactions and reiterated his awareness that Exh.P3
was meant to secure a foreign facility issued to the three Plaintiffs
in this case and, that, there was only one “LC” which was issued
and which emanated from the three Plaintiffs. He maintained that,
it was the application which the 2nd Defendant received under the
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Facility Agreement (Exh.P3) and the “LC” thereto was issued to
“Numora” and payments were made against it. He admitted,
however, the application for “LC” was not made by the three
Plaintiffs but only the 1st Plaintiff. Even so, he told the Court that,
he was aware of a resolution which authorized the issuance of the
“LC”.
On being asked by the Court, Dw-3 responded that, according
to the SBLC/LC Facility (Exh.P3) the “LC” was meant to secure
borrowing from “Lamar”. He stated that, the terms of the “LC” or
the contents were to be negotiated between the lender and the
borrower and, once negotiated, an “LC” application would be made
to the 2nd Defendant in favor of the lender. So, he stated that, what
they disclosed to the bank is what is contained in the “LC”. He
admitted, however, that, under the “LC” the agreed contents were
that, the applicant is the 1st Plaintiff and the beneficiary is
“Numora” and the amount is US$ 16,275,000; further that, the
payment is to be made in 360 days of the Commercial Invoice date.
Moreover, Dw-3 acknowledged that, the description of goods
under the “LC” is “Heavy Equipment” and the documents to be
presented to the bank are the Commercial Invoice and Delivery Note
countersigned by the 1st Defendant.
The fourth witness for the Defence was Mr. Moses Ndirangu, a
Kenyan citizen residing in Nairobi. He testified in Court as Dw-4.
According to him, he has been working with the 2 nd Defendant for
more than 14years now, currently serving as the Director of
Corporate Banking. He told this Court that, the 1 st Plaintiff has been
the customer of the Defendants for some years now and, that, in
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May 2019, the Plaintiffs through their financial advisor (“Nisk”)
approached the 2nd Defendant for a Standby- Letter of Credit / Letter
of Credit (SBLC/LC) to secure a revolving trade loan facility of US$
16,275,000 from “Lamar”.
Dw-4 told this Court that, the Plaintiffs application for
SBLC/LC was accompanied with a facility agreement between
“Lamar” and the 1st Plaintiff. He told this Court that, the tenor of
the “Lamar” Facility was 360 days. He stated that, on the 22 nd May
2019, the Plaintiffs and the Defendants signed the SBLC/LC
Facility for US$ 16,275,000 whose tenor was 12 months renewable
for 5years. He stated further that, by a Notice of Assignment of Letter
of Credit dated 24th May 2019 addressed to “Numora”, “Lamar”
did assign all her rights, title and interest in the SBLC/LC to
“Nomura” and, that, “Nomura” did accept such assignment.
It was a further testimony of Dw-4 that, by a letter dated 27 th
May 2019, “Lamar” informed “Nisk” about the assignment to
“Numora” and asked “Nisk” to have the 1st Plaintiff make the
necessary “LC” application as the beneficiary of the “LC”. (The
letter referred to by Dw-4 was later tendered in Court by Dw-6 as
Exh.D-21). Dw-4 also told this Court that, on 29 th May 2019, the 1st
Plaintiff did fill a documentary credit application form applying for
a Letter of Credit in favour of “Numora” and, that, on the same day
the 2nd Defendant issued a Letter of Credit in favour of “Numora”.
Dw-4 did also tell this Court that, on the 04 th day of June
2019, “Numora” disbursed a sum of US$ 14,123,587.50 being the
total loan amount (US$ 16,275,000) less the one year’s advance
interest and bank charges. He stated that, the said amount was
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deposited into the 1st Plaintiff’s escrow account held with the 2 nd
Defendant. In Court, Dw-4 tendered a bank statement in respect of
US$ escrow A/c No. 0810265750193 running from the 14 th day of
December 2015 to 23rd June 2020.
He also tendered in Court an affidavit of authenticity of the
account’s records. These were admitted as Exh.D-18. Besides, Dw-4
tendered a ‘Payee Advice” dated the 04th day of June 2019, issued by
Standard Chartered Bank, (Malaysia) at 7.00pm and received at Equity
Bank (K) Ltd, advising that, payments were made on behalf of
“Numora” for US$ 14,123,587.50. The said document, marked
MT103 Payee Advice was admitted as Exh.D-19.
Testifying further to the Court, Dw-4 told this Court that, the
Defendants were informed of the disbursements of “Lamar loan”
but, because the SBLC/LC Facility required the Plaintiffs to sign
other agreements to secure the LC issued in favour of “Lamar”, the
Defendants asked the Plaintiffs to sign those agreed deeds as a
precondition for disbursement of the “Lamar Loan” to them and to
their creditors. He told this Court that, to secure the LC issues, the
Plaintiffs and the Defendants did on 22 nd June 2019, sign three
agreements namely: Syndicated Facility Agreement, Security Trustee
Agreement and Business Consultancy Agreement.
According to Dw-4’s testimony, under these agreements,
“Nisk” was to open a collection account with the 2 nd Defendant in
order to hold “Lamar Loan” pending execution of the agreements
with the Defendant. He stated that, the three agreements were
meant to secure the “LC” issued in favour of “Lamar”. He also told
this Court that, the 1st Defendant as security agent and trustee of the
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2nd Defendant executed various deeds with the Plaintiffs and their
guarantors to secure the “LC” issued in favour of “Lamar”. He
testified that, after execution of the deeds securing the “LC” the
Plaintiffs requested for disbursement of the credit facility, which the
2nd Defendant did disburse, to extinguish their indebtedness to the
1st Defendant, UBL Bank and Amana Bank and, that, an amount to
cater for operations.
He also told this Court that, by a letter from the 2 nd Plaintiff
to the 1st Defendant, dated 12th June 2019, the 2nd Plaintiff
acknowledged to have signed off credit facilities offer letter for US$
16,275,000 being restructuring and refinancing of its existing debts
with Equity Bank. He stated that, the 2 nd Plaintiff did apply for an
advance payment of US$ 500,000 to be recovered from the loan-
disbursed amount.
According to Dw-4, that amount was paid on the 26 th day of
June 2019. He further told this Court that, the Plaintiffs did not
repay the Lamar Loan to “Numora”, the assignee of “Lamar”
within the specified time and, as a result, the “LC” issued by the 2 nd
Defendant to “Numora” was recalled by “Numora” who collected
the credit facility amounting to US$ 16,275,000 due to it under the
Lamar Facility Agreement and which was secured by the 2nd
Defendant through the “LC”. He stated that, the crystallization of
the “LC” resulted into default of SBLC/LC Facility executed
between the Plaintiffs and the Defendants and the Plaintiffs became
indebted to them.
Dw-4 stated further that, in an effort to accommodate the
Plaintiffs to make good their default, the Defendants offered to them
Page 57 of 164
a New Term Loan Facility of US$16,500,000 repayable in 132 months
but the Plaintiffs deliberately declined and thereby the Defendants
served them with demand notices dated 28th September 2021 on the
guarantors of the Plaintiffs requiring payment of US$ 18,710,737
being amount due and outstanding from the Plaintiffs plus accrued
interests up to the date of the demand (which stood at US$
19,769,680 at the time of filing the suit).
He tendered in Court a Bank statement of the 1 st Plaintiff’s
A/c No. 222059889525, running from 23 rd of June 2021 to 25th
March 2022 and this was admitted as Exh.D-20.
During cross-examination, Dw-4 told this Court that he was
well aware of Exh.P-3 dated 22nd May 2019 (the SBLC/LC) issued
by the 1st Defendant to the three Plaintiffs. He told the Court that,
the obligation which the 2nd Defendant had was to issue the
SBLC/LC for US$ 16,275,000, and, that, the purpose of issuing the
SBLC/LC as captured at page 4 of the Exh.P.3 was to ‘secure the
borrowing from “Lamar” to liquidate existing group exposure and
offer additional capital to settle transaction costs. He admitted that,
from the Exh.P-3’sunderstanding, the SBLC/LC was issued to
secure the borrowing from “Lamar.”
He added, however, that, subsequently, the Defendants were
availed with a Notice of Assignment by “Lamar” to “Numora” and
also an “LC” application from the 1st Plaintiff in favour of
“Numora” for the same amount of US$ 16,275,000. He stated that,
it is on that basis the 2nd Defendant issued the “LC”. Upon being
shown Exh.D-10 (the LC), Dw-4 confirmed that the same was issued
to “Numora” as per the Notice of Assignment. He told this Court that,
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the applicant of the ‘LC’ is the 1 st Plaintiff and the beneficiary is
“Numora”. He admitted that, on page 2 of Exh.D-10, the description
of the goods thereon is “Heavy Equipment” and a “Proforma Invoice”
dated 18th March 2019. He admitted, however, that, for one to get
to know the purpose of the LC issued by the 2 nd Defendant in favour
of “Numora”, one has to go the Exh.P3 (the SBLC/LC agreement
between the Defendants and the three Plaintiffs), and, that, what
was secured by the “LC”, was the borrowing by the Plaintiffs.
When asked about the underlying contract of the “LC”
(Exh.D-10), Dw-4 responded that, the negotiations were between the
applicants of the LC (the 1 st Plaintiff) and the beneficiary
(“Numora”) and the Bank was not a party to the negotiations
leading to the request for the “LC”. He stated further that, the goods
listed in page 2 of Exh.D-10 are by no way meant to secure the “LC”.
He told this Court that the “LC” was secured by a list of securities
captured on page 5 to7 of the Exh.P-3 (SBLC/LC Agreement dated
22nd May 2019).
He also stated that the “LC” was as well not securing the
goods mention on it. He stated that, the business of the bank (2 nd
Defendant) was to issue a credit facility and the borrowers were
given two options: SBLC/LC. He denied, however, that, it was the
business of the bank to verify whether the goods/equipment were
indeed there or not, so, he was unaware as to whether the business
of heavy equipment took place or not.
When asked as to whether the 1st Plaintiff took title to the
goods noted in Exh.D10 and whether they were delivered in
Tanzania, Dw-4 told this Court that, the bank deals with documents
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and, that, by virtue of the Delivery Note countersigned by the 1st
Plaintiff, the 2nd Defendant had no reason to doubt that the Plaintiffs
took title to the goods.
Regarding the reasons why “Numora” recalled the “LC”, it
was Dw-4’s testimony during cross-examination that, the SBLC
facility’s tenor was for 12 months (renewable up to 5 years) meaning
that, every year the “LC” would need to be rolled over for a
maximum of five (5) years), and so it was in a circle of 360days, that
being as per Clause 42C of the “LC” (Exh.D-10). He also referred to
Clause 78 of the “LC” which authorizes a claim for reimbursement.
Dw-4 referred to Exh.P7 to further explain as to why a
reimbursement was needed.
He told this Court that, the loan facility from “Lamar” was a
revolving trade loan facility and has a tenor of 360 days and every
year the 1st Plaintiff (as a borrower) and “Lamar” (as the lender),
has to process a trade loan of US$ 16,275,000. He stated that, since
the 2nd Defendant is not a party to the Exh.P.7, after the year 1 of the
trade loan, a claim was received under the “LC” for an amount of
US$ 16,275,000. The claim received was, thus, from “Numora” to
the 2nd Defendant through Citibank as the 2 nd Defendant has an
account with Citibank.
Dw-4 admitted that, under Exh.D-10, the 1st Plaintiff is a
borrower and that, under the same Exh.D-10, there is a business of
borrowing between “Lamar” and the 1st Plaintiff. But when asked
whether Exh.D-10 has a business of heavy equipment or not, Dw-4
stated that he was not capable or competent of answering that
question even if Exh.D10 was tendered in Court by the 2 nd
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Defendant. He told this Court that, he could only respond if he was
to see the agreement under which the “LC” was issued since an
“LC” alone does not provide sufficient information and its contents
was a negotiation between the applicant and the beneficiary.
Even so, Dw-4 did tell this Court that, he neither know why
the Exh.D10 refer to such heavy equipment nor does he understand
why the Commercial Invoice and Delivery Note are mentioned in the
“LC”. He stated, however, that, those two documents- i.e., the
Commercial Invoice and Delivery Note, were the ones authorizing
the beneficiary (“Numora”) to claim reimbursement from the issuer
of the “LC” who is the 2nd Defendant. Dw-4 confirmed to the Court
that, the commercial invoice is for US$ 16,275,000 as the
description of the “goods” as per the “LC”.
Dw-4 admitted that, the amount shown in the invoice is a
price for the goods. He, however, told this Court that, the
transaction which the Court is dealing with is one transaction,
starting with a loan agreement between the 1 st Plaintiff and
“Lamar” of US$ 16,275,000. He stated that, the 1st Plaintiff was a
client of the Defendants and had borrowed as well from UBL Bank
and Amana Bank. He told the Court that, there was assignment
dated 27th May 2019 to “Numora” before even the “LC” was issued
on 29th May 2019.
He told this Court that, subsequently 2nd Defendant received
an application for “LC” whose contents are described as “goods”
and on issuance of the “LC” to beneficiary the beneficiary disburses
the trade loan facility agreed with the borrower (the 1 st Plaintiff). He
admitted, however, that, the Notice of Assignment (admitted as
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Exh.D-21) makes no reference to “purchase of goods” but to a
revolving trade loan facility to be granted by “Numora” to the 1st
Plaintiff.
When shown Exh.D-19, Dw-4 admitted that, it was
evidencing the disbursement of the loan amount from “Numora” to
the 1st Plaintiff. He admitted that, item No.70 of the Exh.D-19 does
state that, the payments to “Numora” were paid “against purchase
of goods for Lamar Kenya”. He stated, however, that, though not
written anywhere, it was in fulfillment of the loan agreement
between Numora and the 1st Plaintiff. When asked what clause 70
of Exh.D19 meant, Dw-4 said he was not competent to respond to
that other than stating that, Exh.D19 evinces a transfer of funds.
During re-examination, Dw-4 told this Court that, as
provided in the “LC”, 360 days from when the 2nd Defendant
received from the client the documents described in the “LC”,
Citibank authorized a claim for reimbursement from the 2nd
Defendant, being year one of the revolving trade loan facility. He
stated further that, by year one what it means is that, in a 5year
circle, after 360 days, a renewal from the trade loan facility between
“Numora” and the 1st Plaintiff is to happen, and, that did not
happen.
Dw-4 stated further, that, because the 2 nd Defendant’s “LC”
guaranteed that trade loan, the 2 nd Defendant had an obligation to
pay the beneficiary for the loan proceeds which the borrower had
received and applied as far as the funds described in Exh.P-3 (the
SBLC/LC Facility). As regards the purpose of the loan, Dw-4
referred to page 4 of Exh.P-3 and stated that, it was for the purpose
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of liquidating existing loans in Equity Bank (K) and Equity Bank
(T) as well as paying off existing loans at UBL Bank and Amana
Bank, consultation charges, interest payable upfront to the lender,
Equity Bank commission for the “LC”, excise duty payable on it,
advisory fees to “Nisk” and a legal fee for the syndication. He told
this Court that, the responsibility of the 2 nd Defendant was to issue
the “SBLC/LC” acceptable in form and substance to the
beneficiary.
He stated further that, what that fact entails were for the bank
to receive a copy of the loan agreement between “Lamar” and the
1st Plaintiff as well as an application for a Letter of Credit. According
to Dw-4, the bank had no other role apart from verifying that the
applicant was offered a credit facility by the beneficiary – “Numora”
and the amount – US$16,275,000.
The fifth (5th) Witness for the Defense was Mr. Shadrack
Kipkoriri Nyobii, a citizen of Kenya working as an Associate Director
at “Nisk”. He testified as Dw-5 and stated that, the Plaintiffs as one
of their clients, did, on 3rd September 2018 approach “Nisk” seeking
for financial advice for restructuring of their debts and liabilities in
Tanzania. He testified that, “Nisk” agreed to provide such services
for a fee of US$ 880,000 (being mobilization fee and commission).
Dw-5 testified further that, “Nisk” did negotiate with
“Lamar” for a revolving trade loan facility on behalf of the
Plaintiffs. He told this Court that “Lamar” agreed to grant the 1st
Plaintiff a revolving trade loan facility amounting to US$
16,275,000 repayable within 360 days.

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 According to Dw-5, “Lamar” needed a security in the form
of SBLC/LC issued in favour by the 2nd Defendant as a pre-
condition for the issuance of the “Lamar Loan”. He stated that, due
to that pre-condition, “Nisk” reviewed the options and
recommended the “LC” route and, consequently, “Nisk”
negotiated for a Letter of Credit with the 2nd Defendant on behalf of
the Plaintiffs and, on the 22nd day of May 2019, they signed
SBLC/LC Facility whose tenor was 12 months but renewable for
5years.
He told this Court that, on 27th May 2019, “Lamar” informed
“Nisk” that, it has assigned its rights, obligations and benefits under
the “Lamar facility” to “Numora.” Also, that, “Lamar” informed
“Nisk” to have the 1st Plaintiff make the application for the
SBLC/LC with “Numora” as the beneficiary of the SBLC/LC. He
told this Court that, the 1st Plaintiff applied for “LC” on the 29th day
of May 2019, and, as per the Lamar Facility, the 2nd Defendant
issued it in favour of “Lamar” on the same date.
He also stated that, the Plaintiffs signed a business
consultancy agreement appointing “Nisk” as the consultant for the
business for which the loan was advanced and, that, “Nisk” got
informed by the 2nd Defendant that on 4th June 2019 the loan was
disbursed to the 1st Defendant’s escrow account maintained with the
2nd Defendant. He told this Court that, later in May 2020, “Nisk”
was informed by the Defendants that the Plaintiffs have defaulted
paying the “Lamar Loan” within the greed period, hence the
recalling of the “LC”.

Page 64 of 164
 During cross-examination, Dw-5 maintained that, the basis
of the “LC” being issued was the loan agreement between “Lamar”
and the 1st Plaintiff. He, however, told this Court that, he did not
happen to see the “LC” issued in favour of “Lamar”. When shown
Exh.D-10, he admitted that, the goods negotiated in Exh.D-10 are
“heavy equipment”. He denied, however, to have advised the 2nd
Defendant to issue the “LC”.
When asked as from where the goods mentioned on Exh.D-10
were sourced, Dw-5 did not disclose the place they were procured,
but stated that, the parties had restructured the transaction and, that,
the restructuring came up with such description of goods. He
admitted, however, that, the role of “Nisk” was to arrange for
funding to be used to re-finance and give additional capital to the
Plaintiffs as they were financially distressed and, that, given their
situation, it was not possible for “Nisk” to approach their
conventional capital lending sources such as the banks and so they
approached “Lamar”.
Upon being further cross-examined regarding how the earlier
“Lamar” transaction was restructured, Dw-5 told this Court that,
they looked at what goods “Numora” had and do “a Sale and Buy-
back Transaction” took place. He told this Court that, given the
urgency of the matter, it was “Numora” who had the goods at the
time and that is how “Numora” came to the picture and, the goods
he had were the “heavy equipment”.
He further disclosed that, to generate cash which “Nisk”
needed, “Numora” would sale the goods to the client (the 1 st

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Plaintiff) on credit and, having sold the goods on credit in exchange
for payment in 360 days, the “LC” would be issued, it being a
payment commitment.
Dw-5 stated further that, since the Defendants were after cash
and not goods, those goods were bought back by the same
“Numora” on cash-basis. He reconfirmed to the Court that,
“Nomura” sold the goods to the 1st Plaintiff on credit and the title
to the goods passed but the goods did not move from the custody of
“Numora”, having been sold on credit and, that, later “Numora”
re-purchased the same goods. He told this Court, therefore, that,
“Numora” used the “LC” to raised funds and pay for the goods held
in their custody and, that, the transaction was structured as a “sale
and buy-back transaction” and the monies were sent to the client’s
account held at Equity Bank (K) Ltd.
Dw-5 admitted that, indeed the pay-slip has description of
purchase of goods but the reason why the funds came back were
that, they were tied to the loan facility. He stated, therefore, that,
that was the reasons why the amount is the same and the loan was
secured by “LC”. He admitted as well that, on one hand the transfer
was a buy-back of goods and on the other hand it was a loan facility
to the 1st Plaintiff.
When shown Exh.D-19, Dw-5 admitted that, it speaks about
the purchase of goods from “Lamar”. Dw-5 stressed, however, that,
the parties’ particular transaction was structured and it was just the
same. When asked whether “Nisk” knew of the assignment by
“Lamar”, Dw-5 denied stating that, they had to be informed of it.

Page 66 of 164
 During re-examination, Dw-5 stated that, for this particular
transaction, the “LC” could not have been issued to “Lamar”
because of the assignment to “Numora”, a decision reached out
between “Lamar” and “Numora”. He stated that, the transaction
was structured in such a way that physical goods need not move but
ownership did shift since there has to be legal ownership in any legal
transfer and the transfer took place, and, hence, the issuance of he
“LC.”
The last witness was Mr. Abdihakim Mahmud Roble Hawiye,
Kenyan citizen testifying as Dw-6. In his testimony in chief, Dw-6
stated that, he is a director and manager of Lamar Commodity
Trading DMCC (‘Lamar’). He is also a shareholder and director of
Numora Trading PTE Limited (“Numora”). According to Dw-6,
“Lamar” is primarily a commodities trader, trading in commodities
such as refined and unrefined sugar, cereals, legumes and beverages,
medical and pharmaceutical products and equipment, refined oils,
and building and construction materials, such as metal steel. He
stated that, “Lamar” does also provide for revolving finance
facilities to business entities to help them meet their cash flow
requirements.
Dw-6 told this Court further, that, “Numora” is as well a
global commodity trader with similar activities complementary to
“Lamar”, as it provides sourcing, transportation, storage, financing
and trade facilitation in the Eastern Africa, Southern Africa and
Asian markets. He told this Court that, sometime in early 2019,
“Nisk” approached “Lamar” on behalf of the 1st Plaintiff, seeking
for a revolving trade loan facility of US$ 16,275,000 to enable the
Page 67 of 164
Plaintiffs to extinguish their existing debts with financial
institutions.
He stated further that, in May 2019, “Lamar” and the 1st
Plaintiff executed a Revolving Trade Loan Facility Agreement (“Lamar
Facility”- earlier received in Court as Exh.P-7) of US$ 16,275,000
repayable within 360 days. According to Dw-6, the 1st Plaintiff’s
repayment obligations under Exh.P-7 were secured by inter alia, an
unconditional and irrevocable “LC” in form and substance
satisfactory to “Lamar”, issued by the 2nd Defendant in favour of
“Lamar”, securing “Lamar” for all amounts repayable by the 1st
Plaintiff to “Lamar” under the Exh.P-7.
Dw-6 told this Court further that, on the 24 th May 2019,
“Lamar” assigned in writing to “Numora” all her rights and
interests in the “Lamar Facility”. The assignment was copied to the
2nd Defendant and a notification to that effect was made to “Nisk”
on the 27th May 2019. He tendered the assignment and notices
thereto and these were received in evidence as Exh.D-21. He stated
that, later on 29th May 2019, the 2nd Defendant issued “LC” in
favour of “Numora” for a total of US$ 16,275,000 transmitted
through Standard Chartered Bank Malaysia as the banker of
“Nomura.”
Dw-6 went on to state that, on or about the 31 st day of May
2019, the 1st Plaintiff signed and stamped a delivery note confirming
that goods have been delivered to them in good order and condition
as per the proforma invoice. He made reference to the delivery note
and commercial invoice, stating that, the original copies were

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submitted to the 1st Plaintiff and copied to Standard Chartered Bank
Malaysia. These documents were earlier received in Court as Exh.D-
14.
Dw-6 told this Court that, since “Numora” had received the
‘LC’ that was satisfactory in form and substance as required under
the “Lamar Facility”, on the 04th day of June 2019, having received
the particulars of the bank account for the 1 st Plaintiff through
“Nisk”, she disbursed the sum of US$ 14,123,527.50 through
Standard Chartered Bank Malaysia, being the total loan amount less
one year’s advance interest to the 1st Plaintiff’s escrow account
No.0810265750193, held with the 2nd Defendant. He tendered in
Court an e-mail communication between “Numora” and “Nisk”
which was admitted in Court as Exh.D-22.
Dw-6 testified further that, Standard Chartered Bank Malaysia
transmitted the ‘LC complying documents’, commercial invoice and
delivery note to the 2nd Defendant who, having received them, gave
authorization to Standard Chartered Bank Malaysia to claim
reimbursement from corresponding bank, Citibank of New York
upon maturity of the “LC” on 27th May 2020 for amount of
US$16,275,000 as per the terms and conditions of the “LC”. He
relied on Exh.D-12 already received in Court. He told this Court
further that, upon maturity of the “LC” on 27th May 2020,
“Numora”, through the Standard Chartered Bank Malaysia received
payment of US$ 16,275,000 from the 2nd Defendant through
Citibank New York. He stated that, “Lamar” did not negotiate any
other loan with the 1st Plaintiff other than the one secured by the
“LC.”
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 During cross-examination, Dw-6 told this Court that, he was
aware of the sale and buy-back transaction which he referred to as
“re-ball transaction agreement” or “re-purchase agreement” – “I sell to you
and re-buy from you”. He told this Court that, in that structure,
“Numora” would sale equipment and will re-buy the same
equipment. He confirmed that, the equipment sold were those
mentioned in the “LC” and, that, such equipment were sold to the
1st Plaintiff by “Numora” who, later re-purchased or re-bought them
back from the 1st Plaintiff.
Dw-6 confirmed to this Court that, in the said transaction,
there was no movement of goods but “Numora” was paid under the
“LC” because it was assigned the obligation under the Lamar
Facility Agreement (Exh.P-7). He told the Court that, it is the “LC”
(Exh.D-10) which confirms the obligation of the 1 st Plaintiff as its
applicant to pay “Nomura” on future date- the date on the last of
360 days. He stated further that, what “Numora” did was to use the
“LC” to raise its funds and, that, the market at that time the LC was,
in his view, discounted by 4.5%.
Upon further questioning, Dw-6 told this Court that, the re-
purchase agreement between the 1 st Plaintiff and “Numora” was
indeed executed. However, Dw-6 did not tender the said “Re-
purchase Agreement” in Court although he confirmed that, as a
standard procedure, there must be a repurchase agreement in such
kind of transactions.
When asked as to how much time he would need to bring it
to the Court if allowed, Dw-6 was unwilling to respond. When
shown Exh.D-14 and asked which was the port of delivery of the
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goods, Dw-6 confirmed that the port of delivery of goods was the
Port of Dar-es-Salaam.
Dw-6 responded further that, although the cargo was destined
there, it was, however, sold on the high seas and the cargo was re-
purchased back from the 1st Plaintiff. He stated that, in the “re-ball
agreement” (re-purchase agreement) there was no exchange of goods
but the goods did exist and were loaded in China. He also told the
Court that, what was exchanged on the high seas was the
documents and there was a re-buying of the same cargo by the client
(the 1st Plaintiff).
However, when Dw-6 was further asked whether Exh.D-14
was only issued for convenience purpose, Dw-6 did confirm that, it
was indeed so, with a view to show in the delivery note that,
ownership of goods had changed from “Numora” to the 1st Plaintiff
but the good were not in Dar-es-Salaam physically but only the legal
documents changed hands.
In his further responses while under cross-examination, Dw-
6 confirmed that, there were indeed two different contracts: the
Lamar facility agreement (Exh.P-7) and Re-purchase Agreement. He told
the Court that the “LC” summarized the Repurchase
transaction/contract and without the agreement there could be no
“LC”.
Dw-6 confirmed further that, no “LC” could have been issued
without there being an underlying agreement and that, the
underlying agreement here was the Re-purchase Agreement. He stated,
however, that, the first agreement (Exh.P-7) was an important one

Page 71 of 164
as it specified what was agreed and the second was the “LC”
instrument/ the Repurchase Agreement which is reflected in the “LC”.
When asked what was assigned to “Numora”, under the
notice of assignment (Exh.D-21), Dw-6 told this Court that, it was
the loan agreement but it was only part of it. He stated that, what
was assigned is the beneficiary of the SBLC/LC and was now to be
“Numora” instead of “Lamar.” However, when shown Exh.D-21,
Dw-6 stated that it was drafted by the lawyers and he assumed that,
“Numora” had to pay the loaned amount to the 1st Plaintiff and,
that, as Exh.D-21 says it could be that all rights of “Lamar” were
assigned.
As regards the reasons why “Lamar” assigned the
transaction, Dw-6 told this Court that, “Lamar” did not have a
confirmation line from Equity Bank(K). He stated that, for “LC” to
be accepted there has to be a confirmation line from another bank.
So, according to Dw-6, “Lamar” assigned the deal for being unable
to get the best out. Dw-6 admitted, however, that, technically, the
transaction ought not to have been done in the way it as done. He
stated, however, that, the figures have only one description “loan
agreement” and the rest are only transaction modalities, i.e., the
way it was structured, and the clients are the same and the loan is
US$ 16,275,000.
When asked about the payee advice (Exh.D-19), Dw-6 stated
that, it was an internal reference only but the crucial thing was that,
money went to the account of the client. When shown Exh.D-19, he
admitted that, the reference description was crucial, that is to say, it
was made “against purchase of goods from Lamar”. He stated,
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however, that, when one makes payment there are many references
to use and, this was ‘against purchase of goods” but the in truth it did
not translate to that, as it was for a loan agreement.
When asked why it was not direct as such, Dw-6 responded
that, it was because the “LC” had mentioned an invoice. He stated
that the 1st Plaintiff issue “LC” and “Numora” issued Invoice, and
where “Namura” has to pay the 1st Plaintiff under the “Re-purchase
Agreement”, the 1st Plaintiff has to issue a similar Invoice referencing
the same transaction since this was a re-purchase transaction.
He told the Court that, the 1 st Plaintiff was issuing an Invoice
to “Numora” on a cash basis and the buy-back structure was due to
the fact that, this is a commodity trading so the only way was for
the client to enter into agreement of sale of goods to each other. He
told the Court that, “Numora” has never recalled the payments.
According to Dw-6 the moment the 1st Plaintiff issued the
“LC” in favour of “Numora” and the issuing bank of the “LC”
accepted the “LC”, “Numora” was considered paid even if the
payment due date was 360 days afterwards. He stated, therefore,
that, that is the reason why “Numora” disbursed the monies to the
1st Plaintiff’s escrow account.
Dw-6 stated further that, if, upon maturity of the “LC” the
issuing bank does not renew the “LC” then, it cannot revolve as
renewal of the “LC” meant that, one pays the obligation of maturity
and, the next day the same transaction will revolve. If no payments
are done, the transaction stops. He told this Court further, that, for
the renewal of the “LC” to take place, the first “LC” has to be paid
on an “X” amount date. He admitted that, it is the interest that has
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to be paid for the LC to be renewed but as for “Lamar”, the renewal
was subject to full payment of the previous transaction.
When asked if the 2nd Defendant was to issues SBLC/LC, as
per Exh.P-7, to secure a “loan” from “Lamar” and not “goods”, Dw-
6 confirmed that fact. He also confirmed that, the 2nd Defendant
issued “LC” to secure “trade goods” and not “trade loan.” He
clarified that, a trade loan is taken alone when the liquidity is
derived from trade activities, or that, the loan has to relate to a
trading activity.
Since there was no re-examination of this witness, that ending
marked the closure of the defense case. The parties were granted
opportunity to file their closing submissions which they did file. I
will consider their submissions as well as the testimonies of the
witnesses in the course of addressing the issues which were agreed
upon and recorded by this Court. Before I embark on that noble
duty, however, it is pertinent to state, as a matter of principle, that,
unlike proof in criminal case which demands a beyond reasonable
doubt threshold, the threshold of proving all civil suits like the one
at hand rests on a preponderance of probability.
In law, the duty of proving any alleged fact lays upon the
person who alleges. It is said, in short, that, he who alleges must
prove. Section 110 to 112 of the Evidence Act, Cap.6 R.E 2020 and
the cases of Anthony M. Massanga vs. Penina (Mama Mgesi) and
Another, Civil Appeal No.118 of 2014 (unreported) and that of the
Registered Trustees of Joy in the Harvest vs. Hamza K. Sungura,
Civil Appeal No.149 of 2017 (unreported) are all alive to that settled
legal position.
Page 74 of 164
 In this case, six (6) issues were agreed to and recorded by this
Court, and the first one was:
Whether the 2nd Defendant availed
to the Plaintiffs a banking facility
for Stand-by-Letter-of-Credit/
Letter of Credit (SBLC/LC) of
USD 16,275,000 to secure the loan
facility from Lamar Commodity
Trading DMCC.
This first issue revolves around the issuance of a banking facility
for a SBLC/LC.
Essentially, a SBLC stands as a legal document issued by
a bank or a lending institution promising its commitment to
pay, any demand for payment by the beneficiary only upon
default by the bank customer to execute his obligations under
the underlying agreement provided the beneficiary fulfills the
terms and conditions of the underlying contract. On the other
hand, a Letter of Credit, is a letter/notice addressed by the issuer
to a beneficiary setting out an undertaking to honour a specified
demand for payment made by the beneficiary.
In this present suit, and, as it may be observed from the
testimony of the witnesses from both parties as well as their
pleadings, (see paragraph 7 of the Plaint and paragraph 7 of the two
WSDs filed by the Defendants), it is an undisputed fact that, on
22nd May 2019, the Plaintiffs and Defendants in the main suit,
executed a banking facility for a Standby Letter of Credit/Letter of

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Credit (SBLC/LC) of US$16,275,000 upon terms and
conditions of that Banking Facility, with a tenor of 12 months
(renewable annually for up to 5 years).
Under Clause 1.3 of Exh.P-3, the three Plaintiffs herein
were designated as the borrowers while the 2nd Defendant, as
per clause 1.2 of Exh.P-3, was designated as the “lender” or
“financier” and the 1st Defendant as “the Bank”. It is also an
undisputed fact and, as per its clause 2.0 of Exh.P-3, that, the
purpose of Exh.P-3 was “to secure borrowing from Lamar
Commodity Trading to liquidate the existing group exposure at the
Bank, offer additional working capital and settle transaction costs.”
What seems to be disputed between the parties, therefore,
is whether the event which was to be secured, i.e., the borrowing
by the three plaintiffs (who are “the Borrowers as per Exh.P-3), took
place in the manner contemplated by Exh.P-3 or never took
place and, if it did, whether a Letter of Credit (SBLC/LC) was
thereby issued to secure it in terms of what was agreed under
Exh.P-3. Did Exh.P-3 materialize as anticipated or it did not?
According to the Plaintiffs’ pleadings (see paragraph 9 of the
Plaint), the Plaintiffs contend and, their counsel have so
submitted, that, Exh.P-3 did not materialize in the sense that,
the secured event, which is the loan facility which was
anticipated from “Lamar”, was never issued to the Plaintiffs. It
has been submitted, in its place, and relying on the testimony

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of Pw-1, that, it is the 1st Plaintiff who, alone, negotiated and
entered into a facility agreement with “Lamar”.
I have looked at the testimony of Pw-1 and that is what
he told this Court. The question that follows, therefore is: is that
a credible fact? If so, how is it connected to or disconnected from
the Exh.P-3 and the SBLC/LC which was contemplated under
it? In his submissions, the learned counsel for the Plaintiffs has
argued, relying on the pleadings of the Defendants, that, there
is an outright admission by the Defendants that, it is the 1st
Plaintiff (and not with the 2nd and 3rd Plaintiffs), who entered into
an agreement with “Lamar” for a loan of US$ 16,275,000.
Certainly, that is what Pw-1 told this Court and to back it up
with evidence, he tendered in Court Exh.P-7.
It is also correct that, in paragraph 15 of the amended
WSD filed by the 1st Defendant and paragraph 16 of the 2nd
Defendant’s amended WSD, there is an admission by the
Defendants that, the 1st Plaintiff did alone negotiate with
“Lamar” for the “Lamar Facility” of US$16,275,000.
However, is that all that the Defendants stated in paragraphs 15
and 16 of their WSDs? Why did the 1st Plaintiff negotiate Exh.P-
7 alone? Was he acting for and on behalf of the other
Defendants? If he was acting solo, as so contended, what is the
implication of that?
These questions have considerably exercised my mental
faculty and I, as well, find it necessary to have them examined
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from the context of the pleadings filed by the parties and the
testimonies of the witnesses for each of them before coming in
to a conclusion regarding the first issue, and, indeed, the rest of
the issues as well. In the meantime, however, I may not address
all of them at once, but they definitely need to be addressed in
this judgement in the course of my discussion and
considerations.
Essentially, paragraphs 15 and 16 of the respective
Defendants’ WSDs referred to hereabove, seem to partially
respond to the question why the 1st Respondent negotiated the
Exh.P-7. The Defendants have stated that, the facility availed to
the 1st Plaintiff was availed for “the specific purpose of repayment
of Plaintiffs outstanding liabilities to the Defendants amongst other”.
In that regard, the Defendants seem to be linking that “Lamar
Facility” (Exh.P-7), which was negotiated between the 1st
Plaintiff and “Lamar”, to the SBLC/LC (Exh.P-3).
The Defendants’ learned counsels have submitted,
therefore, that, since the Plaintiffs have admitted that the 2nd
Defendant issued them the SBLC/LC marked Exh.P-3, and,
that, the same was signed before issuing a Letter of Credit (LC)
in favour of “Lamar”, this Court should make an affirmative
finding regarding the first agreed issue. Reliance was placed on
section 60 of the Evidence Act, Cap.6 R.E2020.
While I am, indeed, alive to what section 60 of the
Evidence Act, Cap. 6 R.E 2020 provides in relation to admitted
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facts, whether there was an issuing of an LC or not is an issue
to be looked at later below and this Court cannot pre-empty that
issue by making summary conclusions.
In my view, as a matter of principle, before one arrives to
any of such a conclusion, some few questions need to
responded to, which are as follows: is the linkage between Exh.P-
3 and Exh.P-7 which the Defendants seem to infer in their pleadings,
a fact, a plausible fact or a mere plausible argument? In other words,
does it exist at all?
Exh.P-7 is a foreign agreement (a Revolving Trade Loan
Facility Agreement) entered between the 1st Plaintiff and
“Lamar” who is not a party to this case, for US$ 16,275,000
which is the revolving loan amount. Although the outside cover
of Exh.P-7 indicates the year 2019 as its year of its making, its
first inner page (page 1) does show or refer to the year 2018.
Be that as it may, the fact remains that, such an agreement
marked as Exh.P.7 was executed between the 1st Plaintiff (alone)
and “Lamar” for a credit facility of US$ 16,275,000. Besides,
Exh.P.7 does indicate that, the 1st Plaintiff is the “Borrower” and
“Lamar” as the “Lender”. It means, therefore, that, the loan
amount was advanced to the 1st Plaintiff alone, him being a
party to Exh.P-7.
Further, in its recitals, Exh.P-7 refers to the total amount
payable by the borrower to the 1st Defendant under the existing
loan facility with Equity Bank (T) Ltd (the 1st Defendant herein),
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the total amount of it being US$ 8,057,613. In addition, under
clause 1 and 3 of Exh.P-7, the limit of the facility borrowed by
the 1st Plaintiff from “Lamar” is said to be US$ 16,275,000/
to be applied towards repayment in full of the Borrower’s
obligation under the “Existing Equity Bank Facility.”
Under Clause 3 of Exh.P-7, it was agreed that the Lender
(Lamar) was “to lend to the borrower US$ 16,275,000 (…), which
shall be applied towards repayment in full of the Borrower’s obligations
under the Existing Equity Bank Facility.’ It also worth noting, as I
stated earlier, that, under Exh.P-7 reference to ‘Equity Bank’
therein is meant to be refence to the 1st Defendant. That means,
therefore, that, the 2nd Defendant is not a party to Exh.P-7, and
this fact was well acknowledged by Dw-4.
In their closing submission, the Plaintiffs have argued
that, Exh.P-7, did not at any rate include the rest of the Plaintiffs
herein (i.e., the 2nd and 3rd Plaintiffs) and, that, since there is no
other foreign facility agreement which was ever tendered in
Court involving “the three Plaintiffs” and “Lamar”, and
which was intended to be secured by SBLC/LC to be issued
under Exh.P-3, then, even if Exh.P-3 was executed, subsequently
nothing was done regarding its performance and nothing is on
record to prove that there was performance. Reliance has been
placed on section 55 of the Law of Contract, Act, Cap.345 R.E
2019.

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 Agreeably, and, as correctly argued by the Plaintiffs’
learned counsel, the making of Exh.P-7 did not in any manner
possible include in its fold the 2nd and 3rd Plaintiffs. In fact,
there is, as well, no any indication that, the 1st Plaintiff was
acting for or on behalf of the 2nd and 3rd Plaintiffs. Now, if
Exh.P-7 did not include the 2nd and 3rd Plaintiffs in its fold as
parties to it, how comes the Defendants link it to Exh.P.3? Is
that linkage a fact, a presumed fact or just mere plausible
argument?
As it may be note in their testimonies, Dw-3 and Dw-4
have endeavored to link Exh.P-3 to Exh.P-7 as well as Exh.D10.
In particular, Dw-3 told this Court that, Exh.P3 was for the
purpose of securing the borrowing from “Lamar”. He also told
this Court that, Exh.D-10, which is a Letter of Credit, was issued
on the basis of Exh.P-3. He even told this Court further that, the
“LC” (Exh.D-10) is the same as the one contemplated in Exh.P-
3 (i.e., as SBLC/LC). For the time being, however, I will not
consider the details of the LC (Exh.D-10) but will definitely do
so afterwards when addressing the rest of the agreed issues. I
will, therefore confine my discussion to the showing of why and
how the Defendants are linking Exh.P3 and Exh.P-7.
From the reading of the testimonies by the witnesses for
the Defendants and looking at the Exh.P-7 and Exh.P-3, what
may be gathered from them as reason for their attempt to link
the two documents as if they are talking about one and the same
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thing, is the fact that, under clause 5 of Exh.P-7, it was a
condition precedent that, any drawing from the credit facility
to be issued under Exh.P-7, could not be made possible before
the lender (“Lamar”) receives an Irrevocable Unconditional Letter
of Credit or Letter of Credit (LC) in form and substance
satisfactory to her.
However, in my humble view, I do not think it is proper
to link the two documents (i.e., Exh.P-7 and Exh.P-3) as if they
are talking to each other. They are not and I will account for
the reasons why I find them to be separate and asymmetric
transactions. In the first place, and as I mindfully stated earlier
here above, it is clear to me that, Exh.P-3 was negotiated
between the “three Plaintiffs” and “the Defendants” and, in
its purpose was ‘to secure, by way of SBLC/LC, a borrowing from
“Lamar”,’ (which borrowing was for all three Plaintiffs). On
the other hand, Exh.P-7 was executed between the “1st
Plaintiff” (alone) (as a Borrower from “Lamar”) and the
lender- being “Lamar”, to be applied towards repayment in full
of the Borrower’s (i.e., the 1st Plaintiff’s) obligations under the
existing Equity Bank Facility (i.e., the 1st Defendant).
Based on what Exh.P-7 provides glaringly, it means,
therefore, that, Exh.P-7 was not a document concluded to
govern relationship between the “three Plaintiffs” (herein)
and “Lamar” but between the 1st Plaintiff and “Lamar”.
Secondly, the “LC” which was contemplated for issuance under
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Exh.P-7, was to be issued by “Equity Bank” to the “Lender”
(“Lamar”) as a beneficiary of it, and was to cover, on demand,
all amounts payable under that facility. However, as I stated
here before, reference to “Equity Bank” under the Exh.P-7, was
meant to be “Equity Bank (T) Limited” (the 1st Defendant) and
not Equity Bank (K) Limited (the second Defendant).
From the above consideration, it will be noted, therefore,
that, the linking of Exh.P-3 and Exh.P-7 does not add-up
congruently. The parties involved in both of them are different
and the issuers of the envisaged SBLC/LCs under the two
documents are as well different. Their nexus is, therefore, a
missing link.
From that understanding, although the learned counsel
for the Defendants strived to state in his submission that, Exh.P-
7 was executed by the 1st Plaintiff for herself and “on behalf of
other two Plaintiffs”, Exh.P-7 does not have such an indication
and speaks for itself. It follows, therefore, that, the purported
linkage between Exh.P-3 and Exh.P-7 which the Defendants
seem to infer in their pleadings and submission is neither a fact,
a plausible fact nor a plausible argument. Simply, such a
conclusion or inference does not exist.
All said and done, what then is the implication of that
lack of nexus between Exh.P-3 and Exh.P-7? As it may as well
be noted from the above discussion and the testimony of Pw-1,
Exh.P-3 was executed in anticipation that, the three Plaintiffs
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would obtain a loan from “Lamar”. However, as correctly
submitted by the Plaintiffs’ learned counsel, no Loan Facility
Agreement was ever signed between the “three Plaintiffs” and
“Lamar”. As I stated herein earlier, Exh.P-7 was not between
the “three Plaintiffs” and “Lamar” but between the “1st
Plaintiff” (alone) (as a borrower of US$ 16,275,000) and
“Lamar” (as a lender).
Whether the loan advanced by “Lamar” to the 1st Plaintiff
was secured or not, that it not an issue which I need to look at
for now, although I will, definitely, look at it herein afterwards.
What I am in agreement with, therefore, is that, although
Exh.P-3 was executed, the secured event or transaction, which
is ‘a foreign loan facility between the three (3) Plaintiffs herein and the
foreign lender (“Lamar”)’ did not happen as no evidence was
tendered to show that the parties executed any loan facility
agreement.
As I noted earlier, in his submissions, the learned counsel
for the Plaintiffs placed reliance on section 55 of the Contract
Act, Cap.345 R.E 2019 to buttress his point that, although
Exh.P-3 was executed, what the 2nd Defendant was to secure by
way of issuing “LC”, did not happen until Exh.P-3 expired. In
my view, what the learned counsel for the Plaintiffs seems to
question is the validity of Exh.P-3 and that is a correct approach.
I find it to be so because, in law, the validity of an agreement,
can essentially be questioned, even if it befits all essentials of an
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enforceable agreement, if the agreement is not fulfilled in due
time and, in the manner prescribed in the contract.
Section 55 (1) of the Contract Act, Cap.345 R.E 2019 is a
section which deals with the consequences of failure to perform
an executory contract, i.e., a contract that has not yet been fully
performed or fully executed. The section provides as follows:
“55.-(1) When a party to a
contract promises to do a certain
thing at or before a specified
time, or certain things at or
before specified times, and fails
to do any such thing at or before
the specified time, the contract or
so much of it as has not been
performed, becomes voidable at
the option of the promisee, if the
intention of the parties was that
time should be of the essence of
the contract.”
Under this provision, there is an issue of something being
promised to be done at or before a specified time. However, for
the sake of bringing clarity to its application within the context
of the facts in this case, I find it pertinent to refer to the decision
of the Supreme Court of India in the Indian case of
Gomathinayagam Pillai and Ors vs. Pallaniswami
Nadar (1967) SCR (1) 227, which, though a merely persuasive
decision, has authoritatively discussed section 55 of the Indian
Page 85 of 164
Act, 1872 which is in pari materia to our section 55 of the
Contract Act, Cap.345 R.E 2019. In that decision the Court
stated that:
“It is not merely because of
specification of time at or before
which the thing to be done under
the contract is promised to be
done and default in compliance
therewith, that the other party
may avoid the contract. Such an
option arises only if it is
intended by the parties that time
is of the essence of the contract.
Intention to make time of the
essence, if expressed in writing,
must be in language which is
unmistakable: it may also be
inferred from the … conduct of
the parties and the surrounding
circumstances at or before the
contract.” (Emphasis added).
Back to our discussion in respect of the suit at hand, it was
the contention of the learned counsel for the Plaintiffs that, the
2nd Defendant was to issue a Letter of Credit to secure a foreign
loan from “Lamar” a fact which never happened until after the
Exh.P-3 expired and, thus, becoming voidable. As it may be
noted from the case of Gomathinayagam Pillai and Ors

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(supra) where time was a matter of essence in Exh.P-3, one may
indeed void the agreement. The question that follows is
whether time was of essence under Exh.P-3 or not.
In principle, I do not think I need to respond to this
question now or expound any further on the section 55 of the
Contract Act at the moment. In my view, the applicability of
the above cited provision would better be discussed in relation
to the second and the third issues and not in this first issue.
However, as regards the 1st issue, in view of the
considerations and discussions made herein, it follows,
therefore, that, although Exh.P-3 was executed by the three
Plaintiff and the Defendants herein, and, hence, the first issue
is, indeed, to be responded to in the affirmative, it
nevertheless remains that, the intended event for which Exh.P-
3 was executed did not materialize as no loan facility from
“Lamar” was issued to the three Plaintiffs who signed Exh.P-
3. I will expound further on that point in the next issues, but
what has been stated herein suffices for the first issue.
The second issue agreed upon and framed by this Court
is:
Whether the 2nd Defendant issued
the Standby-Letter-of-Credit/Letter
of Credit (SBLC/LC) in favour of
Numora Trading PTE Limited,
being the assignee of Lamar
Commodity Trading DMCC, to

Page 87 of 164
 secure the Loan Facility from
Lamar Commodity Trading
DMCC.
In the course of addressing the earlier issue, I made a
conclusion to the effect that, Exh.P-3 was indeed executed by
the three Plaintiffs and the Defendants herein. However, I did
state and agree to the submissions that, the intended event
which was to be secured by it, i.e., one for which Exh.P-3 was
executed by the parties, did not materialize. I neither examined
the implication of that nor expound my position any further. I
will hereafter expound on that position shortly because it has a
bearing as well in addressing the 2nd issue.
As I stated earlier herein and, as it might be gathered from
the testimony of Pw-1, the signing of Exh.P-3 was not an end in
itself. As it was testified by Pw-1 and well supported by Dw-1’s
testimony, Exh.P-3 was signed in anticipation that “Lamar”
would issue a loan to the three Plaintiffs who, according to
Exh.P-3 are the ‘Borrowers” while the 2nd Defendant is the
“Financer/Lender”.
It is worth being reminded, however, that, the rationale
for Exh.P-3 was to solely secure the “Lamar’s loan”, which
loan was being negotiated by “Nisk” for and on behalf of the
three Plaintiffs. That fact was readily admitted and supported
by Dw-1, Dw-3, Dw-4 while under cross-examination.

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 In his testimony, Dw-1 did testify that, it was “Nisk” who
negotiated with “Lamar” for the issuance of a “Lamar
Facility” of US$ 16,275,000 to the three Plaintiffs, the tenor of
which was for a period of 360 days. Dw-1 told this Court that,
the issuance of the loan amount was conditional as the loan
needed to be secured by SBLC/LC and, that, in order to secure
the said loan, and prior even to its issuance, the three Plaintiffs
and the Defendants signed Exh.P-3 on 22nd May 2019 whereby
the 2nd Defendant agreed to issue SBLC/LC to secure the
expected loan which was to be issued to the three Plaintiffs.
In my humbled view, however, given that Exh.P-3 was
signed in anticipation that a loan would be issued from ‘Lamar’
to the three Plaintiffs and, taking into account as Dw-1 stated,
that, before the issuance of such loan it was supposed to have
been secured by the SBLC/LC contemplated under Exh.P-3,
there still remains a question begging for clarity. In particular,
that question is: was the loan said to have been negotiated from
“Lamar” ever advanced to the “three Plaintiffs” as contemplated?
Although I partly addressed this question when dealing
with the first issue, as I stated earlier hereabove, I will further
clarify my earlier position here below as it has a bearing to the
2nd issue as well. On the one hand, the Plaintiffs have
maintained a view that, the anticipated foreign facility from
“Lamar” was never issued to the three Plaintiffs and, that, no
“LC” was ever given to secure it. Instead, it has been the
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Plaintiffs’ stance, that, it is the 1st Plaintiff alone who negotiated
with “Lamar” and obtained an unsecured loan therefrom.
On the other hand, however, the Defendants maintained
that, the anticipated loan from “Lamar” was issued and, that,
a Letter of Credit from the 2nd Defendant secured it.
Essentially, it is a cardinal principal of law, as per section
110 (1) of the Evidence Act, that, whoever desires any Court to
give judgement as to any legal right or liability dependent on
existence of facts which he asserts, must prove that those facts
exist. The said provision provides further under sub-section 2
that, ‘when a person is bound to prove the existence of any fact,
it is said the burden lies on that person.’
It is also the law, as per section 111 of Cap.6 R.E 2020,
that, “the burden of proof in a suit proceeding lies on that
person who would fail if no evidence at all were given on either
side.” At it may be noted, both the Plaintiffs and the
Defendants herein and in the counter claim, have a duty to
discharge their requisite burdens in proving their cases.
In his testimony, Pw-1 relied on Exh.P-7 to establish that,
Exh.P-7 was solely negotiated by the 1st Plaintiff on her own
with “Lamar”. Indeed, as I stated earlier, Exh.P-7 is clear
regarding that fact and, that fact remains undisputed. That
finding means, therefore that, one cannot rely on Exh.P-7 as if
it was concluded by all three Plaintiffs. A different or separate

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evidence will be needed since, as I stated earlier hereabove, the
linkage between Exh.P-7 and Exh.P-3 is incongruent.
Unfortunately, however, in my earnest endeavors to
examine the testimonies of Dw-1, Dw-2, Dw-3, Dw-4, Dw-5 or
Dw-6 and documents availed to the Court, I find no evidence
to show that there was a negotiated loan facility agreement by
“Nisk” for the three Plaintiffs under which a credit facility was
ever issued in their favour and in the manner and in the context
of what Exh.P-3 (which the three Plaintiffs had signed),
contemplated or earlier understood from their arrangement
with the Defendants. I see no such evidence at all.
For sake of clarity, I will re-state that context here.
Initially, under Exh.P.3’s arrangements, (see Clauses 1.1- 1.3) the
2nd Defendant is defined as “the financier/lender” and the 1st
Defendant “the Bank” while the Plaintiffs are defined as “the
Borrower”. Further, under Clause 2, the SBLC/LC Facility was
for the purpose of or meant to “secure borrowing from Lamar
Commodity Trading DMCC”.
Clause 2 of Exh.P3 states further that, in event of default
and “the Financier effects payment pursuant to the SBLC/LC issued
on behalf of the Borrower under this Facility, the Borrower will be
liable for all the costs incurred by the Financier pursuant to the said
SBLC/LC and undertakes to reimburse the Financier such sum of
money together with interest accruing thereon….”

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 From that Exh.P-3’s context, it is apparent, and, as
correctly submitted by the learned counsel for the Plaintiffs,
that, the Plaintiffs (as Borrower) would only be liable in the
event the SBLC/LC to secure the loan from “Lamar” was, in
the first place, issued by the 2nd Defendant.
On the contrary, however, the evidence which comes to
the front establishes a different scenario which does not tally
with what was envisaged under Exh.P3. In particular, instead
of there being a negotiated facility for three Plaintiffs, Pw-1
testified, and it has been so admitted even by Dw-4, Dw-5, and
Dw-6 partly in their testimonies and while being cross-
examined, that, it was the 1st Plaintiff and “Lamar” who
negotiated for a loan and executed Exh.P-7 whereupon
“Lamar” agreed to grant to the 1st Plaintiff a revolving trade loan
facility amounting to US$ 16,275,000 repayable within 360 days.
That revelation raises an alarm and, hence, the question
regarding whether, in the first place, the foreign loan facility for
the three Plaintiffs, which was the transaction to be secured by
“SBLC/LC” issuable under the Exh.P3 was ever executed. In
the course of addressing the first issue, I did raise the questions
regarding why Exh.P-7 was only negotiated and signed by the
1st Plaintiff alone and if he was not acting for and on behalf of
the 2nd and 3rd Plaintiffs, what is the implication of that to the
case at hand. I did not address those questions but I did promise

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to address them at some point. I think this is an appropriate
moment to consider such questions as well.
In their submissions, the Defendants’ counsels have
argued that, the Plaintiff’s denial of the issuance of the “LC” is
based on, among other reasons, that, Exh.P-7 is signed by the
1st Plaintiff alone while Exh.P-3 is in respect of the three
Plaintiffs. It is a further argument that, Pw-1 admitted that, the
loan for the three was negotiated by “Nisk” on their behalf. As
such, the counsels for the Defendants have a conclusion that,
the 2nd and 3rd Plaintiffs are parties to Exh.P-7 by “implication”
and more, that, the two Plaintiffs “benefitted from the facility
issued under Exh.P-7.”
The Defendants’ learned counsels added, however, that,
Exh.P-7 does not, therefore, derive its validity from Exh.P-3 and,
that, through a Notice of Assignment (Exh.D-21), it was proved
that Exh.P-7 was executed on 25th March 2019 while the Exh.P-
3 was executed on May 2019.
I have looked and reflected on these submissions and the
piece of evidence referred to. In my view, the reasoning offered
by the Defendants’ learned counsels are in agreement that
Exh.P-7 is a distinct agreement from Exh.P-3 and, that is a
correct view as it tallies with what this Court stated earlier
herein above. However, much as it is true that “Nisk”
negotiated the Exh.P-7, I do not subscribe to the submissions
and conclusions regarding the lack of nexus between Exh.P-7
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and Exh.P-3 and effect which the absence of the three names of
the Plaintiffs in Exh.P-7 may have over Exh.P-3.
In my view, and considering the context under which this
suit is premised, the absence of the other two Plaintiffs as
parties to Exh.P-7, is not an issue to be taken lightly or be
disregarded as the Defendants’ counsels would like me to treat
it. Instead, and given the testimony of Pw-1 (which has been
supported by that of Dw-4, Dw-5, and Dw-6), that it was Pw-1
who solely negotiated Exh.P-7, I find that absence of the 2nd and
3rd Plaintiffs as parties to Exh.P-7 to be a material fact with far
reaching implication on the nexus between Exh.P-7 and Exh.P-
3.

In fact, although the Defendants’ learned counsels seem

to attempt to respond to the question which I raised earlier,
regarding why Exh.P-7 was signed by the 1st Plaintiff alone, the
responses given are themselves inexhaustive and have given
rise to more questions in my mind than answers to the earlier
one.
First, it should be noted that, neither the Dw-4, Dw-5,
Dw-6 nor any of the other witnesses for the Defendants stated,
gave reasons or explanation regarding why Exh.P-7 was
negotiated and executed by the 1st Plaintiff alone and not the
three Plaintiffs who executed Exh.P.3. Second, before linking
Exh.P-7 with Exh.P3, one should have at least established and

Page 94 of 164
perhaps with evidence that, “Nisk”, who negotiated Exh.P-7
and made it possible to be signed by the “1st Plaintiffs” and
“Lamar”, did so for and on-behalf of all Plaintiffs and more
importantly, that, the 1st Plaintiff did sign Exh.P-7 for and on
behalf of the 2nd and 3rd Plaintiffs.
Indeed, as I stated earlier, no witness was able to tender
neither oral not documentary evidence to that effect since
Exh.P-2, is equally not sufficiently responsive to the question
under inquiry. If, for instance, one takes a look at Exh.P-2 (the
Nisk’s Engagement Letter) dated 3rd September 2018, Clause
8.1 states very categorically that:
“The Client agrees and
understands that NISK Capital
has been engaged by the Client
and the Client alone and NISK
Capital’s engagement is not to be
deemed to be on behalf or nor is it
intended to confer rights upon any
other person or persons, including
any shareholder, partner or other
owner of the Client or any person not
a party to the agreement set out in
this Engagement Letter as against
NISK Capital or any Relevant
Person.”
I am indeed mindful as well of Clause 3 of Exh.P2 which
states that:
Page 95 of 164
 “The Client hereby engages
NISK Capital to provide the
Services to the Client and to the
other members of the Client Group
on an exclusive basis throughout
the term of this Engagement
Letter in the manner set out in
the Proposal and otherwise
subject to and in accordance with
the terms and conditions set out
in this Engagement Letter.”
In my considered opinion, a careful reading from what
Clause 8 and Clause 3 provide, does reveal that Clause 8 is very
categorical as to what were the responsibilities of “Nisk” and
for whom, under Exh.P-2, was “Nisk” specifically engaged to
render the services for which Exh.P-2 was executed. In my view,
Clause 3 is only permissive of a circumstance for which, but
under “exclusive engagements” by other members of the
Group, “Nisk” may provide advisory services.
It means, therefore, that, on their own other
arrangements but not on the basis of Exh.P-2 which was solely
between “Nisk” and the Client (1st Plaintiff herein), the rest of
the members in the Group may engage “Nisk”.
Consequently, even if it “Nisk” was approached by the
“Plaintiffs” as Dw-5 testified, Exh.P-2 only support a view that,
she was engaged by the 1st Plaintiff alone though could, but on

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exclusive basis only, provide services to the rest in the Group.
Indeed, that position is further bolstered by the testimonies of
Pw-1 and Dw-5 as well as Exh.P-2 and Exh.P-7 since it is only
the 1st Plaintiff who signed both Exh.P-2 and Exh.P-7.
In view of that fact, there cannot be an issue of implied-
fact-contract wherein one is to assume that the 2nd and 3rd
Plaintiff are parties to Exh.P-7. Besides, and, as I stated herein,
earlier, even Exh.P-7 does not have even any indication that it
was made for and on behalf of the 2nd and 3rd Plaintiffs although
the Defendants want me to believe so.
Third, although in their submission the learned counsel
for the Defendants have stated that Exh.P-3 does not derive its
validity from Exh.P-7, even so, nowhere has it been stated from
which evidence is the learned counsel’s validity argument is
drawn. In fact, even if this Court established under the first
issue that Exh.P-3 was indeed executed, that fact however, does
not mean that its validity cannot be questioned. As I stated
herein earlier, in law, validity of an agreement, can be
questioned. It is, indeed a trite principle, that validity
arguments must be premised or based on evidence. Since the
Defendant’s validity argument is premised on nothing, it loses
its strength.
With all these in mind, I find, therefore, that, there is a
hanging dark cloud which casts a nastily dangling shadowy
face over the validity of Exh.P-3, reminiscent of the dangling
Page 97 of 164
‘Sword of Damocles’. In my view, such a dark hanging cloud
needed to be dispelled so as to bring about clarity regarding the
necessary nexus between Exh.P-3 under which SBLC/LC was
to be issued, Exh.P-7 (which demanded existence of
SBLC/LC), Exh.D-10 (the LC), as well as Exh.D-21 and the rest
of other documents in which reference to SBLC/LC is made.
As regards the submissions that, Exh.P-7 was proved,
through a Notice of Assignment (Exh.D-21), that, it was
executed on 25th March 2019 while the Exh.P-3 was executed on
22nd May 2019, it is worth noting in the first place, that, Exh.D-
21 was tendered in Court by Dw-6. In his testimony, however,
Dw-6 stated that, Exh.P-7 was executed in May 2019. Exh.P-7
is itself silent on the specific date of its execution since, as I
pointed out earlier, it indicates the year 2019 and 2018.
However, while it is agreeable that, Exh.D-21 which is
dated 27th May 2019 refers to a “Facility Agreement” signed
between the 1st Plaintiff and “Lamar” on 25th March 2019 for
US$ 16,275,000, considering the testimony of Dw-6 and
looking at what Exh.D-21 and Exh.P-7 indicate, in as far as the
time when Exh.P-7 was executed, the derivable conclusion in
that context would be that, there is a material contraction
regarding the exact date at which Exh.P-7 was executed.

I am, however, alive to the fact that not every

contradiction is fatal to a particular case. In the case of

Page 98 of 164
Sylvester Stephano vs. R, Criminal Appeal No. 527 of 2016
(unreported) (citing the earlier case of Said Ally Ismail vs. R,
Criminal Appeal No. 249 of 2008 (unreported), the Court of
Appeal stated that:
“It is not every discrepancy in the …
case that will cause the… case to
flop. It is only where the gist of the
evidence is contradictory then the
… case will be dismantled.”

In that same case, the Court was of the view that:

“Where there are inconsistencies,
the Court’s duty is to consider them
and determine whether they are
minor not affecting the … case or
they go to the root of the matter.
That was said by the Court in the
case of Mohamed Said Matula vs.
R [1995] TLR. 3 in the following
words: “where the testimony by
witnesses contain inconsistencies
and contradictions, the Court has a
duty to address the inconsistencies
and try to resolve them where
possible, else the court has to decide
whether the inconsistencies and
contradictions are only minor or
whether they go to the root of the
matter.””

Page 99 of 164
 In my view, and being guided by the wisdom of the Court
of Appeal in the above cited decision, I do not think the
contradictions are material since the maker of Exh.D-21 testified
that Exh.P-7 was of May 2019. But whether it was of March or
May 2019, the fact remains that, Exh.P-7 was executed and so
executed as between the 1st Plaintiff and the Lender (“Lamar”).
The rest falls within the Latin Maxim de minimis non curat lex,
which means the law will not bother about trivial matters.
Consequently, since no other agreement was tendered which
was signed by the 1st Plaintiff and “Lamar”, I will comfortably
presume, therefore, that, the agreement referred therein is
Exh.P-7 and no other.
Having examined the context under which Exh.P-7 was
made and noting that it was not intended to cover the 2nd and
3rd Plaintiffs, what can be said of the 2nd issue which seeks to be
established whether or not the 2nd Defendant issued the Standby-
Letter-of-Credit/Letter of Credit (SBLC/LC) in favour of Numora
Trading PTE Limited, being the assignee of Lamar Commodity
Trading DMCC, to secure the Loan Facility from Lamar
Commodity Trading DMCC?
In my view, considering my earlier discussion as stated
herein above, this issue should be responded to in the negative.
I will further explain shortly here below why I am of that view.
I hold such a view because, as already discussed here above, it
has come out clearly that, although Exh.P-3 was executed with
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a view to provide SBLC/LC to secure a borrowing from
“Lamar”, no foreign facility by ‘Lamar’ was advanced to the
three Plaintiffs’ which would have warranted the issuance of
a SBLC/LC to secure it as envisaged under Exh.P-3. The only
loan advanced by “Lamar” based on the signing of Exh.P-7 was
not between ‘Lamar’ and the “three Plaintiffs” but between
‘Lamar’ and the “1st Plaintiff” who was not even acting for
and on behalf of the 2nd and 3rd Plaintiffs to warrant any
inference that the two Plaintiffs were part to Exh.P-7.
Besides, there being no loan facility which was issued to
the three Plaintiffs by “Lamar”, the implication of that finding
unquestionably translates into a conclusion that, the
Defendants could not have issued SBLC/LC of US$
16,275,000 since what was to be secured, i.e., the foreign facility
sought after by the three (3) Plaintiffs from “Lamar”, was never
issued as expected. In other words, there could not have been
SBLC/LC if there was nothing to secure.
It is also worth noting, however, that, that conclusion
cannot be left bare without being further cushioned by a further
detailed consideration regarding the assignment of rights and
liabilities arising from Exh.P-7 to “Numora” by “Lamar” which
was evidenced by Exh.D-21. As such, in attempt to respond
adequately to the agreed and recorded second issue, I find it
necessary, and for proper guidance to my reasoning, to devise
a framework of questions flowing from that 2nd issue which will
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guide my thinking and analysis regarding that point given the
enormity of the information availed to the Court in the course
of trial of this suit.
In particular, the guiding questions which I have asked
myself as I ponder on the mouthful materials placed before me
run as follows: firstly, what then can be said concerning the
assignment of rights and liabilities under Exh.P-7, which assignment
was made by “Lamar” to “Numora” as evidenced by Exh.D-21?
Secondly, under what circumstances was the “LC” (Exh.D-10) which
is tied to the said assignment issued? Thirdly, was the Exh.D-10 (the
LC) which was issued by the 2nd Defendant one and the same as that
which was contemplated under Exh.P.3? Fourthly, what were/was
the underlying transactions for which Exh.D10 was issued and how
valid were they?
In my deliberation, I will address these questions and
others that may surround the issuance of Exh.D-10 and its
underlying transactions.
(i) what then can be said concerning the
assignment of rights and liabilities
under Exh.P-7, which assignment was
made to “Lamar” to “Numora” as
evidenced by Exh.D-21?
By and large, both parties herein, the Plaintiffs and the
Defendants, through their witnesses and learned counsel’s
submissions, have relied on various exhibits tendered in Court

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to fortify their arguments and positions regarding whether the
2nd Defendant issued SBLC/LC in favour of “Numora”, the
assignee of “Lamar” or not.
Some of the documents relied upon include: the Notice of
Assignment (Exh.D-21), as well as Exh.D-7, Exh.D-9, Exh.D-10,
Exh.D-11, Exh.D-12, Exh.D-13, Exh.D-14, Exh.D-18 and Exh.D-
19, Exh.P4 to P-6 and Exh.D-3. I will again shortly revisit and
consider these documents as well as the testimonies of Pw-1,
Dw-3, Dw-4, Dw-5 and Dw-6 as I seek to address the very
questions raised hereabove, including the first one.
In my considered view, the genesis of the assignment
made by ‘Lamar’ to ‘Nomura’ can be traced better from the
engagement between ‘Lamar’ and the 1st Plaintiff. According
to Pw-1, in May 2019 the 1st Plaintiff concluded, a credit facility
agreement (Exh.P-7) with “Lamar” of US$ 16,275,000. The
same was for a duration of 360 days. According to Dw-4 and
Dw-6, Exh.P.7 was later, by a Notice of Assignment (Exh.P-21)
assigned to “Nomura”.
I have looked at the said Exh.D-21 and wish to reproduce
it here verbatim. It reads:
“To: Nomura Trading Pte Ltd (The “Assignee”)
From: Lamar Commodity Trading Kenya (the “Assignor”)
With Copy to: Equity Bank (Kenya) Limited (“Assignee”).
Dear Sirs,
RE: NOTICE OF ASSIGNMENT OF LETTER OF CREDIT

Page 103 of 164

We refer to the Facility Agreement entered into between
ourselves and NAS Hauliers Limited (“Borrower”) for a
Facility of US$ 16,275,000 (Sixteen million, Two
hundred and Seventy-Five Thousand United States
Dollars) on 25th March 2019 covered in full by a Stand-
By- Letter of Credit (“SBLC”) or Letter of Credit (“LC”)
issued in our favour as the Beneficiary on account of the
Borrower as the Applicant, by Equity (Bank Kenya)
Limited as the Issuing Bank in a form and substance
acceptable to us. We also make reference to the Banking
Facility advanced to NAS Hauliers Limited as a
Borrower vide Letter of Offer with reference number
EBTL/PRESTIGE/30062111613448 on 22nd May
2019, as contemplated by Lamar-NAS Hauliers
Agreement Clause 5, Condition Precedent, to cover all
amounts under the Facility Agreement in the event of
default by the Borrower.
In this regard, we hereby absolutely and
unequivocally sell, assign and transfer, all our rights,
title and interest of Lamar as an assignor in and under
the Facility Agreement including to proceeds of any
Demand (as defined in the Subject LC) made or to be
made under the Subject LC to yourselves. This Notice
and any dispute or claim arising out of or in connection
with it or its subject matter or formation (including non-
contractual disputes or claims) shall be governed and
construed in accordance with the laws of England and
Wales.
Signed
Abdihakin M.R. Hawiye,
Director, Lamar Commodity Trading DMCC.”

Page 104 of 164

The above noted ‘Notice of Assignment’, which forms part of
Exh.D-21, was accompanied with a latter from ‘Lamar” to
‘Nisk’ dated 27th May 2019, (attention: Irene Ndikumwenayo). I
will also reproduce it here below for clarity purposes. It reads:
“Dear Sir,
RE: NOTICE OF ASSIGNMENT OF LETTER OF CREDIT
We refer to the Facility Agreement entered into between
ourselves and your Client, NAS Hauliers Limited
(“Borrower”) for a Facility of US$ 16,275,000 (Sixteen
million, Two hundred and Seventy-Five Thousand United
States Dollars) on 25th March 2019 as well as the supporting
Banking Facility advanced to NAS Hauliers Limited as
Borrower vide Letter of Offer with reference number
EBTL/PRESTIGE/300611161348 on 22nd May 2019.
We note that, as per Clause 5 (Condition Precedent) of the
Facility Agreement, the Loan is covered in full by a Stand-
By Letter of Credit (“SBLC”) or Letter of Credit (“LC”)
issued in our favour as the Beneficiary on account of the
Borrower as an Applicant, By Equity Bank (Kenya) Limited
as the Issuing Bank, in form and substance acceptable to us.
In this regard, we would like to inform you that, we have
sold, assigned and transferred, all our rights, title and interest
of Lamar as an Assignor in and under the Facility
Agreement, including the proceeds of any Demand (as
defined in the Subject LC) made or to be made under the
Subject LC to Nomura Trading PTE Limited, a related
entity with the necessary lines to complete the transaction as
contemplated in the Facility Agreement in a timely manner.
Accordingly, please have the Borrower make the necessary
LC Application with Nomura Trading PTE as the
Beneficiary and Assignee of Lamar Commodity Trading
DMCC for all rights and responsibilities as per the assigned
Facility Agreement which shall remain valid and
unchanged.

Page 105 of 164

 Signed
Abdihakin M.R.Hawiye
Direcor,
Lamar Commodity Trading DMCC.”

I have as well given a careful look at the above Notice and

the Letter based on it, all of which forms what this Court
admitted into evidence collectively as Exh.D-21.
First, it will be noted that, both the “Notice” and the
“Letter about it” have made reference to Exh.P-7, the facility
agreement entered into between ‘Lamar’) and NAS Hauliers
(the 1st Plaintiff) the latter being recognized thereunder as
“Borrower” for a facility of US$ 16,275,000 on 25th March
2019.
Second, the two documents forming Exh.D-21 have made
reference to Exh.P-3 (the SBLC/LC Facility between the three
Plaintiffs and the Defendants herein).
Third, Exh.D-21, refers to Clause 5 of Exh.P7 (Condition
Precedent) that the loan is covered in full by a SBLC/LC issued
in favour of ‘Lamar’ as the Beneficiary by the 2nd Defendant
(Equity Bank (K) Ltd) in a form and substance acceptable to
‘Lamar’, thus linking Exh.P-7 to Exh.P-3.
Fourth, Exh.P21 does reveal that, “Lamar” assigned his
rights under Exh.P-7 to “Nomura” including the proceeds of
any Demand under the “LC”.

Page 106 of 164

 Fifth, “Lamar” intends that any dispute or claim arising
from or connected to the “Notice” (Exh.D-21) be governed and
construed by laws of England and Wales.
Finally, as per the Letter to “Nisk”, “Lamar” called
upon “Nisk” to have the Borrower (1st Plaintiff) make
necessary “LC” application with “Nomura” as Beneficiary and
Assignee as per Exh.P-7 which was to remain “valid and
unchanged”.
Let me infuse and envelope these observations with some
more detailed analysis. As regards the first observation arising
from Exh.D-21, it is of essence and worth noting, as I herein
observed in the earlier discussions regarding Exh.P-7, that,
Exh.D-21 is confirming the fact that, the ‘Lamar credit facility’
was only an arrangement between the “1st Plaintiff” as the
“Borrower”, and “Lamar”, and no other party.
That means, therefore, that, all such earlier discussions
regarding the making of Exh.P-7 will apply here as well in the
sense that, the 2nd and 3rd Plaintiffs are outside the realm of
consideration under that credit facility.
As regards the 2nd, 3rd and the 4th observations made from
Exh.D-21, there is an interesting twist worth noting as there is a
mentioning, reference to and reliance on Exh.P-3 and Clause 5
of Exh.P-7, as well as Exh.D-10 (the LC). As it may once more
be noted, this Court did, earlier herein, consider the nexus
between Exh.P3 and Exh.P7 at length and noted that, the two
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do not align congruently. The observations made earlier on
applies here as well although it will have an added dimension
given that, Exh.D-10 is herein brought to the light with an in-
depth analysis of it. I will shortly bring those added dimensions
to their fitted frame of discussion.
Essentially, this Court noted in the earlier considerations
made herein, that, the “LC” which was contemplated under
Exh.P-7 in favour of the “Lender” (“Lamar”) as a beneficiary
of it and covering, on demand, all amounts payable under
Exh.P-7, was a Letter of Credit issued by “Equity Bank
(Tanzania) Limited” and not “Equity Bank (Kenya) Limited”. This
is to be noted from Exh.P-7 which makes refence to “Equity
Bank” as meaning “Equity Bank (T) Limited” (the 1st Defendant)
and not Equity Bank (K) Ltd (the second Defendant). However,
that is not all which needs to be said. There is still more in store.
First, when Dw-6 who is the maker of Exh.D-21 testified
before this Court, nowhere did he state and no evidence
whatsoever was received to show that Exh.P-7 was ever
amended to substitute Equity Bank (T) Ltd for Equity Bank (K)
Ltd. This particular observation has some ramifications which
I will come to afterwards.
For the moment, it means, therefore, that, as regards the
issuance of “LC” in line with Clause 5 of Exh.P-7, the
appropriate person to have issued it was Equity Bank (T)

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Limited. However, Exh.D-10 was not issued by Equity Bank (T)
Limited but by Equity Bank (K) Ltd.
Secondly, the reference under Exh.D-21 to a “Banking
Facility advanced by Equity Bank (Kenya) Limited to NAS Hauliers
Limited as Borrower vide Letter of Offer with reference number
EBTL/PRESTIGE/30062111348 on 22nd May 2019” (which is
Exh.P-3), and the assertion in Exh.D-21 that, this Banking
Facility is “as contemplated by Lamar-NAS Hauliers Limited
Agreement Clause 5, Condition Precedent to cover all amounts under
the Facility Agreement in the event of default by the Borrower” is
absolutely fallacious.
I hold that view because, as already stated herein over and
again, there is no any congruent nexus between Exh.P-3 and
Exh.P-7 to warrant any reliance on Clause 5 when dealing with
matters touching on Exh.P-3. Besides, it is clear that, under
Exh.P-3, NAS Hauliers Limited (the 1st Plaintiff) is not the sole
Borrower as Exh.D-21 seems to depict to its readers. The
involved parties under Exh.P-3 (Letter of Offer with reference
number EBTL/PRESTIGE/30062111348 on 22nd May 2019) are
the “three Plaintiffs” and not “the 1st Plaintiff” alone.
Thirdly, the “LC” contemplated under Clause 5 of Exh.P-
7 was a Letter of Credit to be issued by Equity Bank (T) Ltd and
not otherwise. Interestingly, when Dw-2 was asked during
cross-examination, which Equity Bank between Equity Bank (T)

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Ltd and Equity Bank (K) Ltd was supposed to issue the
SBLC/LC, Dw-2 was unable to tell.
Fourthly, as regards the observation that “Lamar”
assigned her rights and liabilities to “Nomura”, although that
is not an issue which raises any ones’ eyebrows, it does raise
mine. In essence, ‘assignment’ as understood in law, means
transfer of contractual rights or liability by a party to the
contract to some other person who is not a party. Certainly,
there can be no doubt that, assignments of receivables out of
transactions are growing at an astronomical rate; and, in the
present world of increased financial dealings, the intricacies of
such transactions are of immense importance. For that reason,
therefore, my eyebrows have been raised high in relation to the
matter at hand as I get consumed and engulfed by a question
regarding: which rights/liabilities “Lamar” assigned and upon which
premise are they pegged?
In my humble view, for rights and liabilities whatsoever
which may be related or arising from Exh.P-7, I have no issue
at all. However, if they are rights or liabilities related to or
connected to SBLC/LC which Exh.D-21 associate with Exh.P-
3, that will be a questionable issue under the assignment as I
will further reveal in the subsequent discussion.
As regards the fifth observation, which touches on the
law chosen by “Lamar” in case Exh.D-21 is to be construed,
that does not pose a concern to me. The principles applied to
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construe documents are the same as those applied in this
jurisdiction, i.e., it is the duty of the Court to construe the
document according to the natural and ordinary grammatical
meaning of the words used therein, taking into account the
language used and the commercial context in which it was
made. See the case of Wood vs. Capita Insurance Services
Limited [2017] UKSC 24 and M/s Marine Services Ltd vs.
M/s GAS INTEC Company Ltd, Consolidated Comm. Case
No. 25 & 11 of 2021 [2021] TZHCComD 3337.
It does suffice here to note, therefore, that above stated
observations herein and reasons assigned to them, raise the
thresholds of doubt, not only about the validity of the “Notice of
Assignment” itself but also about the entire transaction, the
reason being that, there seems to be a murky atmospheric
condition surrounding it. This is indeed so when one considers
the other set of questions, which I raised earlier, including the
validity of the “LC” (Exh.D-10).
In essence, the last observation made from Exh.D-21 (the
Letter to Nisk advising that the “Borrower” should be made to make
necessary “LC” application with “Nomura”) does invite a close
scrutiny to understand under what underlying contract was the
said “LC” to be premised: is it on Exh.P-7 or Exh.P-3 or else? I
shall come to that point as well, but the point I wish to make
herein is that, Exh.D-21 leaves a number of questions
unanswered and itself becomes a cause for concern.
Page 111 of 164
 (ii) Under what circumstances was the “LC”
(Exh.D-10) (which is tied to the said
assignment) issued?
The above question goes to the analysis of the
circumstances under which the “LC” (Exh.D-10) was issued.
Reference to the “LC” and that it was issued by the 2nd
Defendant featured prominently in the testimonies of Dw-1,
Dw-3, Dw-4, Dw-5 and Dw-6. In his testimony Dw-1
attempted to link Exh.P-2 and Exh.P-7 with the signing of Exh.P-
3 and from that proceeded to state that, the Plaintiffs filled a
Documentary Credit Application Form on 29th May 2019 for
purposes of applying for a Letter of Credit in favour of
“Nomura”. He also stated, further, that, the “LC” applied for
(i.e., Exh.D-10) was made readily available on the same date.
From his testimony, one would observe that Dw-1 was
trying to insinuate that the three Plaintiffs herein were
involved in the filling of the Documentary application Form
(Exh.D-9). However, the facts as obtained from Exh.D-9 reveals
that, the Exh.D-9 was filled in by 1st Plaintiff alone for US$
16,275,000. Nowhere does Exh.D-9 indicate that it was applied
for and on behalf of the 2nd and 3rd Plaintiffs. This fact further
cements the earlier discussion I made herein regarding Exh.P-7
and the involvement of the 1st Plaintiff in absence of the 2nd and
the 3rd Plaintiffs.

Page 112 of 164

 As regards the testimony by Dw-3 in relation to the
issuance of the “LC” (Exh.D-10), although he, as well, premised
that issuance on Exh.P-3 and Exh.D-9, he was, however,
categorical that, Exh.D-9 was submitted by “the 1st Plaintiff
only”. Dw-3 admitted, during cross-examination, that, in
creating SBLC/LC there has to be a legal contract underlying
the transaction and that, there should have been a contract
between the parties before the issuance of the SBLC/LC.
As regards Dw-4’s testimony, he did also try to link Exh.P-
7 and Exh.P-3 stating that, when “the Plaintiffs” applied for
SBLC/LC, they accompanied the application with Exh.P-7 and
on 22nd May 2019 signed Exh.P-3. Likewise, he relied on Exh.D-
21 regarding the assignment made by “Lamar” to “Numora”.
But even if one was to attach Exh.P-7 to the application and the
signing of Exh.P-3, that does not and could not have made them
a party to Exh.P-7. If that attachment was there, then whoever
was responsible as the transaction advisor did not carrying his
or her job efficiently, effectively and professionally. Otherwise,
he ought to have pointed out the anomalies and the missing
links which I have endeavored to point out here.
For his part, Dw-5 laboured to linkup the “LC” issue with
Exh.P-7 (Clause 5-condition precedent) and informed the Court
that, it was “Nisk” who negotiated with the 2nd Defendant on
behalf of the Plaintiffs and, that, on 22nd May 2019 Exh.P-3 was
signed. During cross-examination he was, as well, emphatic
Page 113 of 164
that Exh.D-10 (the “LC”) was issued on the basis of Exh.P-7 (the
loan facility agreement between “Lamar” and the 1st Plaintiff).
As such, he tried to link the issuance of Exh.D-10 with Exh.P-7
and Exh.P-3. The Other witness who linked Exh.D10 to Exh.P-3
and Exh.P-7 is Dw-6.
In his testimony, Dw-6 testified that, the 1st Plaintiff’s
repayment obligations under Exh.P-7 were secured by inter alia,
an unconditional and irrevocable “LC” in form and substance
satisfactory to “Lamar”, issued by the 2nd Defendant in favour
of “Lamar”, securing “Lamar” for all amounts repayable by
the 1st Plaintiff to “Lamar” under the Exh.P-7. As earlier noted,
Exh.D-21 was authored by Dw-6 and tendered in Court by
himself and, it is clear that he tried to create a linkage between
Exh.P-7, Exh.P-3 and the 2nd Defendant’s issuance of Exh.D-10.
However, what then may be said of the attempts by Dw-
1, Dw-3, Dw-4, Dw-5 and Dw-6 to link the issuance of Exh.D-
10 with the underlying transactions evinced by Exh.P-7 and
Exh.P-3? My response to that question is an unwavering one.
All such attempts are a race in futility given the very reasons I
gave earlier herein concerning how incongruent it becomes
when one tries to draw a link between Exh.P-7 and Exh.P-3 and
more, when the discussion brings to its fold Exh.D-9, Exh.D-10
and Exh.D-21.
In fact, based on what I stated herein, when analyzing
Exh.D-21, and even what I stated much earlier in my discussion
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regarding any attempt to link Exh.P-7 to Exh.P-3 and the “LC”
purported to have been issued in line with those two exhibits,
there is no a congruent line that can be drawn to link the two
underlaying transactions evidenced by Exh.P-7, Exh.P-3 and
more so, with Exh.D-10. I will shortly discuss it further here
below.
In my view, it is not a straight forward and explainable
matter like a full mouth, thickly and glossily lip-sticked to
appropriately respond to the question regarding the
circumstances under which the “LC” (Exh.D-10) (which is tied
to the said assignment) was issued by “Lamar” to “Nomura”
and also how does it connect to Exh.P-3. Rather, how Exh.D-10
came into existence is a murky affair that leaves much to be
desired about its legitimacy as I shall demonstrate shortly
hereafter.
In fact, even when Dw-1, Dw-2, Dw-3 and Dw-5, were
asked repeatedly regarding what Exh.D-10 was securing, they
were unable to give a straight forward answer, it being an
indication that, for them to say it was issued under Exh.P-3 or
otherwise, was/is, but a guess work. However, as already
noted, it is an indisputable fact, as per Exh.P-3, that, the
SBLC/LC agreed by the parties, and which was to be issued by
the 2nd Defendant, was for purposes of securing the borrowing
from “Lamar”, which borrowing was being sourced by the
three Plaintiffs herein.
Page 115 of 164
 With the exception of Dw-5 who said that the basis of the
“LC” being issued was the loan agreement (Exh.P-7) between
“Lamar” and the 1st Plaintiff, Dw-1, Dw-3 and Dw-4 stated,
either in their testimonies in chief or during cross-examination,
that, the SBLC/LC was for the purpose of securing a borrowing
from “Lamar” by the three Plaintiffs.
It means, therefore, that, one would have expected to see
an SBLC/LC whose description fits the purpose for which
Exh.P-3 was made/executed, i.e., one that secures “Borrowing of
$16,275,000 from Lamar”. However, that is not the case. Instead,
and looking at paragraph 45A of Exh.D-10, one finds a
completely different description involving: “Truck Crane,
Crawler, Type Dozer, Excavator, Mechanical Loader, Caterpillar
Motor Grader, Road Mixer, Road Sprinkler, Crawler Excavator,
Mixer Trucks, Dump Trucks and Used Bulldozer.”
To me, such a marked departure is a puzzling revelation
like a “Gordian Knot”, much in need of wisdom to disentangled
it, like the wisdom exercised by the legendary King Alexander
the Great. Even so, it only a skimpy knowledge of how Exh.D-
10 came about trickled into the mind of this Court, at first when
Dw-5 was being cross-examined and later when Dw-6 was also
being cross-examined.
In particular, when Dw-5 was under cross-examination,
it was his responses which made the eyebrows of this Court to
be raised a bit higher, with its ears and eyes wider opened not
Page 116 of 164
to miss a point. Although in paragraph 5 of his witness
statement Dw-5 had told this Court that it was “Nisk” who
negotiated the “LC” (Exh.D-10) with the 2nd Defendant on
behalf of the Plaintiffs and, that, it was “Nisk” who advised the
“LC” route instead of SBLC, Dw-5 denied, while being cross-
examined, that he (as “Nisk”) ever advised the 2nd Defendant
to issue the “LC”. He even stated that, he did not happen to
even see the “LC”.
However, when Dw-5 was asked about the goods
described at paragraph 45A of the LC (Exh.D-10), Dw-5
admitted that, these were heavy equipment. He could not,
however, tell where they were procured from. It is also worth
noting, that, when Dw-5 was pressed more regarding why the
“LC” is about such heavy equipment and not about “securing
borrowing of US$ 16,275,000 from “Lamar”, Dw-5 responded that,
at some point in time, which, nevertheless, was not disclosed,
the parties ‘restructured the transaction’ and, that, through
that restructuring, came up with the description of such kind of
goods.
It is worth noting, however, that, this fact was not earlier
captured in his witness statement until when the Plaintiffs’
counsel extracted it in the course of cross-examination. It is also
worth noting that, Dw-5 did not tell with whom exactly the
restructuring was done and what effects, if any, it had on, let us
say, Exh.P-3, Exh.P-7 or to the original purpose for which the
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“LC” was meant to secure, whether that is to be considered
from the perspective of Exh.P-3 or even Exh.P-7.
That reasoning is appropriate, given the fact that, under
Exh.D-21 reference was made to Exh.P-7 and Exh.P-3, and,
under the Letter from “Lamar” to “Nisk”, which forms part of
Exh.D-21, it was stated categorially that, the Exh.P-7 was to
“remain valid and unchanged”. There are even more surprises
in relation to these transactions at hand, in my view, when one
considers further the testimony of Dw-5 and Dw-6 and their
responses while under cross-examination.
When they were being cross-examined, Dw-5 and Dw-6
disclosed more information to the Court regarding how the
restructuring of the underlying transactions and the ultimate
issuance of Exh.D-10, which, nevertheless, has nothing to do
with securing borrowing from “Lamar”, came about. In
particular, Dw-5, who was later supported by Dw-6, told this
Court that, there occurred a “Sale and Buy-back Transaction.”
According to Dw-5, because of the urgency under which
the matter was, since it was “Nomura” who had the “heavy
equipment goods”, to generate cash which “Nisk” needed,
“Nomura” sold such goods to the Client (1st Plaintiff) on credit
in exchange for payment in 360 days and, having sold such
goods on credit, the “LC” would be generated as a payment
commitment. Besides, and according to Dw-5, although title to
the goods sold was to pass hands, no physical movement of
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goods was occasioned, the goods having been sold on credit.
He added further that, since what was needed was cash and not
goods, goods sold on credit to the 1st Plaintiff would be bought
back by “Nomura” who retained their custody, on cash-basis.
Dw-5 stated, therefore, that, “Nomura” used the “LC” to
raise funds and pay for the “goods” (which goods are his own
goods held in his own custody) and, that, the cash was then
advanced as a loan which was deposited in the Client’s (1st
Plaintiff’s) account. The testimony of Dw-5 regarding the
restructuring of the transactions in the form of a “sale and buy-
back” was further supported by Dw-6 who defined the
arrangement as a “re-ball transaction” or “re-purchase agreement”
whereby “Nomura” would sale equipment to the 1st Plaintiff
and re-buy the same from the 1st Plaintiff. He did confirm that
the equipment sold were those listed in the “LC” (Exh.D-10).
When further cross-examined, Dw-6 told this Court that,
there was a ‘Re-purchase Agreement’ which was executed
between the parties and, that, it was under such arrangements
that the LC (Exh.D-10) got issued. However, Dw-6 did not
tender the said “Re-purchase Agreement” upon which Exh.D-10 is
purported to be anchored.
When Dw-6 was shown Exh.D-14 and asked which was
the Port of delivery of “goods” purported to be delivered to 1st
Plaintiff, he told this Court that, although the goods were
destined to Dar-es-Salaam Port as the delivery Port, and,
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indeed, Exh.D-10 so indicates, the goods “were sold while at the
High Seas and re-purchased back”. He stated that, “what was
exchanged at the High Seas was the documents only since in
the re-purchase transactions there was no exchange of goods,
though such goods were there having been sourced and loaded
in China. However, Dw-6 never tendered any document said
to be exchanged on the High Seas or proof of there being
evidence of shipment of goods at sea from China or elsewhere.
Now that we know about the restructuring issue, the
questions which flow from those illuminations are: first, was the
“LC” here issued to secure this business of sale-buy-back transaction or
to secure a burrowing from “Lamar”? Second, if Exh.D10 was issued
under a re-purchase agreement, why Dw-5 and Dw-6 failed to tender
such an agreement? Third, why was there not any document to evince
that the purported heavy equipment were shipped from China and
what were the documents exchanged at High Seas?
The above noted questions, point to matters or facts
within the knowledge of Dw-6, in particular, Dw-6 being the
Managing Director of both Lamar Commodity Trading
DMCC and Nomura Trading PTE Limited. Such questions,
however, cannot receive immediate answers because, those
who should have cleared the murky clouds hanging over the
circumstances under which the “LC” (Exh.D-10) was issued,
never took the liberty to place before this Court evidence which

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would have cleared doubts raised by such questions and satisfy
the mental curiosity of a truth-seeking Court.
I am, indeed, mindful of the trite legal principle that, the
basis of any sound decision of the Court should not be the
weakness of the defence but rather the strength of the case for
the prosecution/plaintiff, (see the case of Tanzania Cigarette
Co. Ltd vs. Mafia General Establishment, Civil Appeal
No.118 of 2017 (CAT) (unreported).
However, it is also a trite law, as per section 115 of the
Evidence Act, Cap.6 R.E 2020, that:

“In civil proceedings when any

fact is especially within the
knowledge of any person, the
burden of proving that fact is
upon him.”
Moreover, as this Court stated in the case of Issac & Sons
Co. Ltd vs. North Mara Gold Mine Ltd [2022] TZHCComD
163, the business of any Court is to ensure that truth is unveiled.
Citing what Hon. Mr. Justice J.R. Midha of the Delhi High
Court, India stated in the case of Ved Parkash Kharbanda vs.
Vimal Bindal (8 March, 2013), at paragraph 11), this Court
affirmed to the views that:

“Truth should be the Guiding

Star in the Entire Judicial
Process. Truth is the foundation

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 of justice. Dispensation of
justice, based on truth, is an
essential feature in the justice
delivery system...”
In essence, as far as the present suit is concerned, the
reading and analysis of the testimony of Dw-5 and Dw-6 tells
and confirms that, the circumstances under which Exh.D-10
was issued is questionable. That dilemma leads my analysis to
the third aspect within the framework analysis I earlier adopted
in the course of effectively addressing the 2nd issue. That third
aspect is:
(iii) was the Exh.D-10 ((the LC) which was
issued by the 2nd Defendant), one and the
same as that which was contemplated
under Exh.P.3?
In his closing submissions, the learned counsel for the
Plaintiffs was of the view that, looking at the testimony of Dw-
6, it is pretty clear that Exh.D-10 was issued for ulterior purposes
not disclosed to this Court by the Defendants.
In my view, I tend to be in agreement with that
submission. I do so, first, because, of the incongruent nature of
the attempted linkage between Exh.P-3, Exh.P-7 and Exh.D-10
(as already demonstrated herein) and, second, based on the
analysis I made regarding Exh.D21, Exh.D-9 and Exh.D-10 as
well as Exh.D-14 (the invoice and the delivery note), which analysis
revealed a murky circumstance under which the Exh.D-10 was
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issued. In that analysis regarding Exh.D-10 and, in relation to
the testimony of Dw-1, Dw-2, Dw-3, Dw-4, Dw-5 and Dw-6
(both made in-chief and during cross-examination), it was clear
that, the purpose for which Exh.D-10 was issued, was not the
same purpose disclosed under Exh.P-3.
As rightly submitted by the learned counsel for the
Plaintiffs, that undisclosed purpose for Exh.D-10 is tied to the
“Re-purchase Agreement” which, according to Dw-6, was the
basis for the issuance of Exh.D-10.
However, as I indicated herein, Dw-6 failed to submit
that vital document in Court. That failure to submit such a vital
document forming the basis of Exh.D-10, bring to light the
decision of this Court in the case of State Oil Tanzania
Limited vs. Equity Bank (T) Limited and Another [2021]
TZHCComD 3351 which was on a closely similar issue (i.e.,
whether SBLC/LC was issued or not). In that particular case,
this Court (Magoiga, J.) had the following to say, and I quote:

“… there were more transactions

between the parties herein as
testified by DW5 who said there
was more contracts which were
not tendered. In this transaction,
the Defendants seem to mix up
exhibits and this is supported by
the testimony of DW5 who told
the court that, there was
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 "Exclusive Sale and Purchase
Agreements" which was not
tendered. No reason was
advanced by Defendants not to
bring those structured trade
documents and as such denied
this court an opportunity to
know what exactly transpired.”
Essentially, when the above considerations are examined
within the context of this suit at hand, and, in particular the
issue which I am addressing, it is befitting to state, indeed, that,
even in this suit there is a deliberate mixing up of things and
non-disclosure of important matters such as the ‘Re-purchase
Agreement’. As a result, since the ‘Re-purchase Agreement’ which
is said to form the basis of Exh.D-10 was not tendered in Court,
it becomes difficult to state whether and to what extent the said
“Re-purchase Agreement” affected the arrangements between “the
three Plaintiffs and the Defendants” under Exh.P-3, as well as the
arrangement between “the 1st Plaintiff and “Lamar”’ as evinced
by Exh.P-7.
In principle, it is not a sound practice for any person
desiring to rely upon a certain state of facts to withhold from
the Court the best evidence which is in his/her possession
which could throw light upon the issues in controversy. This
means, therefore, that, even if the burden of proof does not lie
on a party who is in possession of a vital document, the Court
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may draw an adverse inference if he/she withholds an
important document in his possession which can throw light on
the facts at issue. See the decision of the Supreme Court of India
in Gopal, Krishnaji Ketkar vs Mahomed Haji Latif & Ors
(1968) AIR 1413.
On the other hand, and as I stated in respect of Exh.D-21,
itself is also a confusion since, although it seems to link Exh.P-
3 with Exh.P-7, a true analysis of the two documents tells a
different picture because, as already stated, while the parties
thereto are completely different, there was as well no clarity
given by the Defendants, regarding how fittingly it can be said
that, what was envisaged under Clause 2.0 of Exh.P-3 was the
same “LC” envisaged under Clause 5 (Condition Precedent)
under Exh.P-7, given that, Exh.P-3 was the making of three
Plaintiffs and the Defendant, while Exh.P-7 was the making of
the 1st Plaintiff and “Lamar”.
Moreover, Exh.D-10 (the LC) does not reflect what was
envisaged under Exh.P-3 (SBLC/LC) for purpose of securing a
borrowing from “Lamar”. What Exh.D10 deals with are
“goods” in the nature of ‘heavy equipment’ and, the two
documents forming Exh.D-14 support that fact. In addition, the
pay-advice (Exh.D-19), does also state at paragraph 70 thereto,
that, itself was issued “against purchase of goods for Lamar Kenya”.
In view of those considerations, and coupled with the fact
regarding there being a restructuring of the transactions and the
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entering into a “Re-purchase Agreement” under which the Exh.D-
10 was issued, which agreement was nevertheless not tendered
to show how and to what extent it is related to Exh.P-3 or how
it modified, in any manner possible, Exh.P-7, the only
conclusion which this Court can draw out is that, Exh.D-10,
which was issued by the 2nd Defendant was not one and the
same as the SBLC/LC which was contemplated under Exh.P.3.
With that in mind, let as look at the last (fourth) question
which I adopted to guide my thinking as I respond to the 2nd
issue. That fourth question was:
‘what were/was the underlying
transactions for which Exh.D10 was
issued and how valid were they?’
Essentially, this last question forming part of the
framework analysis questions I adopted to assist my thinking
as I tackle the second issue, is now simpler than when I earlier
conceived it. Its simplicity flows from the discussion already
made regarding Exh.D-10. But given what Dw-6 stated and
taking into account the failure on his part to tender before this
Court the Re-Purchase Agreement (himself being the beneficiary
of the “LC”), the only conclusion I can state is that, the whole
arrangement upon which Exh.D-10 was issued was a “sham” or
“a staged arrangement”.
It is my understanding, however, that, although the word
"sham" has often been used in judgments, there may be little or

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no explanation regarding its precise meaning or legal
consequences. What does a “sham” entails, as I have used it
here, I will indeed endeavor to explain it.
In Stroud’s Judicial Dictionary of Words and Phrases, Vol.3
Q-Z, 6th Edn., Sweet & Maxwell (2000), at page 2432, the
learned authors state, citing the decision of Diplock, LJ, in
Snook vs. London and West Riding Investments
[1967]2Q.B.786 who stated, in reference to the word “sham”
that:

“I apprehend that, if it has any

meaning in law, it means acts
done, or documents executed by
the parties to the ‘sham’ which
are intended by them to give to
the third parties or to the Court
the appearance of creating
between the parties’ legal rights
and obligations different from
the actual rights and obligations
(if any) which the parties intend
to create. [F]or acts or
documents to be a sham, with
whatever legal consequences
follow from this, all the parties
thereto must have a common
intention that the acts or
documents are not to create the

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 legal rights and obligations
which they give the appearance
of creating.”
In principle, and, as I extensively discussed earlier
herein, the confusion which has been perpetrated herein as
regards the common nexus between Exh.P-3, Exh.P-7, Exh.D-10,
Exh.D9, Exh.D-14 and Exh.D-19 and, the failure on the part of
Dw-1, Dw-2, Dw-3, Dw-4, Dw-5 to state what, exactly, was
Exh.D-10 meant to secure, coupled with the fact that Dw-6
withheld vital evidence in the form of the Re-purchase Agreement
which he said was the basis upon which the “LC” (Exh.D-10)
was issued, leaves, in the mind of any curious decision maker,
a conclusion that, the parties had in common an ulterior and
unexpressed intention or purpose other than what is purported
to have been evidenced in those documents.
In conclusion, therefore, taking into account the
testimony of Pw-1 who testified that, nothing materialized as
between the Plaintiffs and “Lamar”, which, in turn, would
have entitled the 2nd Defendant to issue the SBLC/LC, and,
given Pw-1’s testimony that, no such “LC” as envisaged under
Exh.P-3 was ever issued; and, further, coupled with the entire
discussion which I have carried out herein inclusive of the
analysis of the documents involved, it is my finding that, the
Defendants onus of proving that the 2nd Defendant indeed
issued the SBLC/LC under Exh.P-3, has not been discharged.

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 In view of the above finding, it follows, therefore, that,
the verdict which I can unwaveringly endorse regarding
‘whether the second Defendant issued the SBLC/LC in favour of
Nomura Trading PTE, the assignee of Lamar Commodity Trading
DMCC,’ is in the negative. The 2nd Defendant never issued such
SBLC/LC which the parties to Exhibit P-3 had agreed that it
would be issued. With that ending, let me look at the third
issue.
The third issue agreed upon and recorded by this Court
was as follows:
Whether the Plaintiffs are in breach
of the SBLC/LC Facility dated 22nd
May 2019, executed by the parties
for issuance of SBLC/LC to secure
the Loan from Lamar Commodity
Trading DMCC.
From a legal point of view, a breach of contract refers to
a material non-compliance with the terms of a legally binding
contract. A breach would occur where a party fails to perform
his/her obligation under the contract. However, from the look
of things in respect of the suit at hand as discussed in the course
of addressing the 2nd issue, the need to address the third issue
was to arise only is a positive response was made in respect of
the 2nd issue.
Since this Court has negatively responded to the 2nd issue,
i.e., that, the 2nd Defendant did not issue the SLBC/LC

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contemplated under Exh.P-3, it follows that, the 3rd issue is, as
well, responded to in the negative to mean that, the Plaintiffs
cannot be held to be in breach of the Exh.P-3. The reason for
such a conclusion is simple: no SBLC/LC was issued to secure
a loan from “Lamar” as earlier contemplated under Exh.P-3
and, the Plaintiffs’ obligation under the Exh.P-3 could have
arisen only if the SBLC/LC was issued to them as agreed.
Essentially, after the Plaintiffs and Defendants executed
Exh.P-3, the 2nd Defendant had a duty to issue SBLC/LC to
them but, as already pointed out hereabove, that duty was not
discharged. Under section 37 (1) of the Law of Contract Act,
Cap.345 R.E 2019, however, the law makes it clear and
mandatorily that:
“Parties to a contract must
perform their respective promises,
unless such performance is
dispensed with or excused under
the provisions of this Act or of any
other law”.
The situation does become ominous as well, where the
agreement between the parties creates reciprocal obligations
arising from reciprocal promises wherein the performance of
one party’s obligation is dependent on the other party’s
performance of his/her obligations. In his submissions, the
learned counsel for the Plaintiffs has referred this Court to
section 53 of the Law of Contract which provides that:
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 “When a contract contains
reciprocal promises, and one
party to the contract prevents the
other from performing his
promises, the contract becomes
voidable at the option of the
party so prevented; and he is
entitled to compensation from
the other party for any loss which
he may sustain in consequence of
the non-performance of the
contract.”
It was Mr. Mwalongo’s submission that, the failure on the
part of the 2nd Defendant to issue the SBLC/LC to secure a loan
from “Lamar”, prevented other obligations from being
performed and, the Plaintiff’s duty on Exh.P-3 could have arisen
only after the issuance of the SBLC/LC contemplated under
Exh.P-3 but which was never issued. Indeed, I do subscribe to
that view. The non-performance on the part of the 2nd
Defendant, therefore, prevented the Plaintiffs from performing
their obligation under Exh.P-3 as well.
In other words, no performance of Exh.P-3 ever took place
because no SBLC/LC was ever issued by the 2nd Defendant to
secure foreign loan facility from “Lamar” which the three
Plaintiffs had expected to receive, and, consequently, such non-

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performance on the part of the 2nd Defendant did affect what
the Plaintiffs were expected to perform under Exh.P-3.
In fact, instead of pointing fingers at the Plaintiffs, the
contrary view should stand with a label that, it is the
Defendants who breached Exh.P-3 by failing to adhere to its
terms of issuing a Letter of Credit to secure a borrowing from
“Lamar.” I consider that to be a reasonable conclusion given
that, Exh.D-10 is completely unrelated to what was envisaged
under Exh.P-3 as a Letter of Credit. I will, thus, proceed to
consider the fourth issue.
The fourth issue is:
Whether the First Defendant
was/is legally authorized to
become a security agent of the 2nd
Defendant.
In their pleadings, the Plaintiffs have sought to be
declared by this Court that, the 1st Defendant is not a security
agent of the 2nd Defendant and, that, the 1st Defendant, in
regard to the banking facility from “Lamar” is just a banker for
the transaction. On the other hand, the Defendants, through
their pleadings, have relied on the Syndicated Facility Agreement
and Security Trustee Agreement (Exh.D-3).
In their testimonies to the Court, likewise, Dw-1 and D-
4 have relied on Exh.D-3 to show that, as part of measures to
secure “LC” which was to be issued in favour of “Lamar”, the

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parties herein executed Exh.D-3 on 22nd June 2019 and, that, on
the basis of Exh.D-3, the 2nd Defendant appointed the 1st
Defendant to act as her “Security Agent” and “Trustee” while the
2nd Defendant remained a “Lender”.
Furthermore, according to Dw-4, on 30th May 2019 and
30th June 2019 the 1st Defendant (as security agent) and 2nd
Defendant (as lender) signed various deeds (Mortgage Deeds
(Exh.P-5) and later on 28th August 2019 signed Exh.P-4
(directors personal guarantee and indemnity). It is clear,
therefore, that, certain acts were done by the 1st Defendant as
security agent of the 2nd Defendant.
The question that arises for consideration, however, is
whether the first Defendant was/is legally authorized to
become a “security agent” of the 2nd Defendant. In other words:
is/was the arrangement between the 1st Defendant and the 2nd
Defendant legal? Before I address this question, it is worth
noting, as the facts indicate, that, Exh.D-3 (the Syndicated
Facility Agreement (SFA) and the Security Trustees Agreement
(STA)) raises the issue of loan syndication.
Loan syndication is a practice that forms part of the wider
concept of co-financing. A “syndicated bank facility” or loan,
refers to a financing arrangement offered by a group of
lenders—referred to as a syndicate—who work together to
provide funds for a single borrower.

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 Ordinarily, loan syndication occurs where one lender
cannot afford to issue the whole amount borrowed by a single
borrower due to single borrower’s limitations imposed by the
law. For instance, under regulation 37 of the Banking and
Financial Institutions (Mortgage Finance) Regulations, G.N.254 of
2015, the law provides that:
“The total amount of mortgages
which a housing finance
company may grant directly or
indirectly to any person and his
related parties shall not exceed
twenty five percent of its core
capital…”
Likewise, under the Banking and Financial Institutions
(Credit Concentration and Other Exposure Limits) Regulations, 2014,
GN.No.288 of 2014, regulation 6 and 7 thereto, make reference
to a single borrower limit requirement and its exception, the
purpose of all such requirements being to encourage risk
diversification and limit excessive concentration of risk by any
bank or financial institution. (See regulation 4 (1) of GN.No.288 of
2014). Under a syndicated transaction, the loan offered can be
in the form of a fixed amount of funds, a credit line, or a
combination.
Essentially, a syndicated facility arises when a project
requires too large a loan for a single lender or when a project
needs a specialized lender with expertise in a specific asset
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class. According to the Encyclopedia of Banking, Vol.2 (2001)
Butterworths, at page 1357, it is stated that:
“syndication is generally
initiated by the grant of a
mandate by the borrower to a
managing or arranging bank or
group of banks setting out the
financial terms of the proposed
loan and authorizing the
managing bank(s) to arrange
syndication. This mandate is (or
should be) expressed as a non-
legally binding commitment
which is subject to contract: it
operates as a commercial
understanding between the
parties until the formal loan
documentation is entered into.
On normal principles of contract
law, there is a presumption that
commercial arrangements are
intended to be legally binding
and hence, if the mandate were
not expressed to be subject to
contract, the managers would be
committed to its terms if
sufficiently precise.”

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 On the other hand, a Security Trustee Agreement (STA)
refers to a contractual arrangement amongst borrower, lenders
and “Security Trustee” materialized by executing a document
called Security Trustee Agreement (STA) wherein, the borrower,
settles a trust with the ‘Security Trustee’. Essentially, a ‘security
trustee’ stands as an entity which holds various security
interests created on trust for the various creditors in
transactions involving syndicate loans or securitization. The
duties of the security trustee are always carved out in the said
agreement.
Having explained, albeit in a nutshell, the aspect of loan
syndication and securitization, I find it apposite, before I
proceed any further, to point out that, earlier, before
commencement of hearing of this suit, this Court was
confronted with a preliminary objection which was determined
on the 24th March 2022 (See NAS Hauliers Ltd & 2Others vs.
Equity Bank (T) and Another, [2022] TZHCComD 302
(Ruling)), I made a finding, as demonstrated in that ruling, that,
Annexures NAS 10 and NAS 11 (which were appended in the
pleadings and which now forms Exh.D-3), are not subject of
intense scrutiny under the present suit because the filing of this
suit is not premised on them but on Annexure NAS-1 and NAS -
3 (which in the context of this hearing are Exh.P-1 and Exh.P3)
as well as Annex.NAS-7 (which translates to Exh.P-7).

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 The ruling made it clear that, “Lamar” is not a party to
this suit and, had she been made a party, that would have made
a different story. Since the current suit is not basically anchored
on Exh.D-3 but Exh.P-1, Exh.P-3 and Exh.P-7, my response to
the fourth issue will only be a limited one. This Court,
therefore, will not be drawn into a scrutiny of the validity or
otherwise of the Security Trustee Agreement (which is part of
Exh.D-3) because, the parties thereto chose a governing law and
a forum to deal with any dispute between themselves based on
the STA (Exh.D-3).
I will, therefore, confine myself only to the analysis of the
matters regarding compliance with the law governing the
industry of banking and whether there were any compliance
requirements not adhered to as contended by the Plaintiffs. As
I stated earlier, the Plaintiffs’ argument has been that, the 1st
Defendant is not legally authorized to be a security agent of the
2nd Defendant. However, as I stated, my assessment of legality
or otherwise of the 1st Defendant to act as a security agent for
the 2nd Defendant, is to be confined only to what the laws and
regulations governing the banking sector in Tanzania provide
and not on scrutinizing the legality or otherwise of Exh.D-2.
The Plaintiffs’ legal counsel has submitted that, there has
never been any agency agreement as between the 1st Defendant
and the 2nd Defendant or license, tendered before this Court,
not by Dw-1, Dw-2, Dw-3 or Dw-4, in support of the agency
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relationship between the 1st Defendant and the 2nd Defendant.
On their part, however, the learned counsels for the Defendants
have contended that, under Clause 3 of the SBLC/LC
Agreement (Exh.P-3), Clause 2.1 of the STA and the SFA
(Exh.D-3), the 1st Defendant was appointed as a “Security
Trustee” of the 2nd Defendant (Lender/Financier).
The Defendants submitted that, Dw-2 confirmed that, it
is not illegal for the 2nd Defendant to appoint the 1st Defendant
as its ‘Security Trustee’ because, that is a contractual
arrangement and there is no law which bars such arrangements.
The learned counsel for the Defendants contended, therefore,
that, since the Plaintiffs signed the Exh.D-2 on their volition,
they are, by virtue of the doctrine of sanctity of a contract,
bound by such a document.
To beef up that submission, reliance was placed on the
case of Harold Sekiete Levira and another vs. African Bank
Corporation Tanzania Ltd (Bank ABC) and Another, Civil
Appeal No.46 of 2022 and Simon Kichele Chacha vs. Aveline
M.Kilawe, Civil Appeal No.160 of 2018.
The learned counsels for the Defendants submitted
further, that, even if the same is to be responded to in the
negative, this would not disentitle the 2nd Defendant to
judgement on the counterclaim. Relying on the case of Patel
vs. Mirza (2016) UKS 42 and National Bank of Kenya Ltd vs.
Anaj Warehousing Limited, [2015] eKLR, the Defendants
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counsels contended that, it would be unjust enrichment to
allow the Plaintiffs keep the money they obtained.
As I stated herein above, my analysis of the agreed fourth
issue will be very limited to the law as it applies in this country
to the regulation of banking business only. In essence, the law
governing the banking industry in Tanzania is the Banking and
Financial Institutions Act, No.5 of 2006, Cap.342, R. E 2019. It
is, indeed, true that, section 3 of this Act defines the business of
banking and what it entails. The section provides that:
“Banking business” means the
business of receiving funds from
the general public through the
acceptance of deposits payable
upon demand or after a fixed
period or after notice, or any
similar operation through the
frequent sale or placement of
bonds, certificates, notes or other
securities, and to use such funds,
in whole or in part, for loans or
investments for the account of
and at the risk of the person
doing such business.”
As rightly submitted by the learned counsel for the
Plaintiffs, the above definition does not cover the component
of security agency. Section 71 of the Banking and Financial

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Institutions Act, 2006, Cap.342 R.E 2019, however, gives powers
to the Governor of the Bank of Tanzania (BOT) to:
“make regulations and issue
directives and circulars for
carrying out or giving effect to
the purposes and provisions of
this Act, which may include but
are not limited to additional
prudential guidelines or
requirements not expressly
mentioned in this Act.”
Under that provision, the BOT made and issued, in the
year 2017, Guidelines on Agent Banking for the Banking and
Financial Institutions (BOT-Guidelines). In my view, having
been made under section 71 of the Act, these guidelines have in
them a force of law and they are not mere guidelines. Under
Guideline No. 5.1, it is provided that, a bank or financial
institution may conduct banking business through an agent.
However, Guideline No.3 of such BOT Guidelines defines a
definition of agent banking as follows:
“the business of providing
banking services to the customer
of a bank or financial institution
on behalf of that particular bank
or financial institution under a
valid agency agreement as
prescribed in these guidelines”.

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 On the other hand, Guideline 10.1 of the BOT Guidelines
provides that:
“An approved bank or financial
institution shall enter into a
written agreement with an agent
for the provision of permissible
activities on its behalf as
specified in these Guidelines.”
Besides, according to Guideline 5.2 and 5.3 of the BOT
Guidelines, a banking institution intending to provide such
services must have sought and obtained a prior BOT written
approval. It is also provided that, where a banking institution is
permitted or approved by the BOT to carry out the services
Guideline No.6.1 provides as to what exactly is permitted. The
Guideline provides as follows:
“6.1 An approved bank or
financial institution may engage
in any or all of the following
activities, through an agent:- (a)
cash deposit and cash
withdrawal; (b) facilitating cash
disbursement and repayment of
loans (c) cash payment of utility
bills; (d) cash payment of
retirement and social benefits; (e)
transfer of funds; 5 (f) balance
inquiry; (g) generation and

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 issuance of mini bank
statements; (h) collection of
documents in relation to account
opening, loan application, credit
and debit card application; (i)
facilitation in account opening;
(j) Collection of bank
mail/correspondence for
customers; and (k) Any other
activity as the Bank may
approve.”
From the above set-up of legal requirements, it was Mr.
Mwalongo’s submission that, if the 1st Defendant is to be
recognized as a security agent of the 2nd Defendant, then
compliance with the above legal requirements is mandatory.
He has referred to this Court regulation 34 of the Banking and
Financial Institutions (Licensing) Regulations, G.N No.297 of 2014
and section 24 of the BAFIA, Cap.342 R.E 2019.
Specifically, Regulation 34 of GN.No.297 provides as
follows:
“A bank or financial institution
shall have powers necessary to
carry out the permitted activities
specified in section 24 of the Act
and the general powers vested in
companies incorporated under
the Companies Act.”

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 On the other hand, section 24 of the BAFIA, Cap.342
R.E 2019, provides a list of permissible activities which a
licensed Banking institution can provide. It was Mr.
Mwalongo’s submission, therefore, that, on the basis of rule 34
of the G.N No.297 of 2014 read together with section 24 of the
BAFIA, Cap.342 R.E 2019, the services of “security agency”
are not provided for and, that, any activity not listed under
section 24 of the BAFIA will require authorization from the
BOT.
Mr. Mwalongo contended that, regulation 37 (2) of
GN.297 of 2014 provides that, “where a bank or financial
institution intends to deal in securities, it shall form a subsidiary for
such purposes”. He contended that, section 4 of the Foreign
Exchange Act, No.1 of 1992, Cap.271 R.E 2019 defines
securities to mean:
''security'' means shares, stocks,
bonds, notes (other than
promissory notes), debentures,
debentures stock, units under a
unit trust scheme, share in any
royalty, any letter of rights, any
warrant conferring an option to
acquire a security, any deposit
certificate in respect of securities,
and any other document, other
than a bill of exchange or a
promissory note, whereby a
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 person recognizes the title of
another person to securities
issued or to be issued by the first-
mentioned person”.
In view of the above, Mr. Mwalongo submitted that, all
collaterals being held by the 1st Defendant as the security agent
of the 2nd Defendant are covered in the definition provided for
under section 4 of the Foreign Exchange Act, Cap.271 R.E 2019.
He contended further that, under rule 41 of GN. No. 297 of
2014, there must be an authorization from the BOT where one
intends to act as an agent and ‘shall account for and keep
money, securities and other valuables, which it has received in
such capacity, duly separated from its own assets and
liabilities’.
Referring further to section 3 (1) of the Business Licensing
Act, Cap. 208 R.E 2002, Mr. Mwalongo has argued that, it is a
legal requirement to get hold a license for any business
conducted in Tanzania failure of which is an offence under the
law. He relied on the case of Japhary Gasto Gwikoze vs.
Wamuhila Future Group, Civil Appeal No.22 of 2019
(unreported) as well as the case of Grofin Africa Fund and
Another vs. H. Future Electronics Limited & 3 Others,
Commercial Case No.81 of 2017.
He submitted, that, the 1st Defendant entered into a
contract for provision of the services of being a security agent

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of the 2nd Defendant without obtaining the necessary license
and approval and, for that matter, according to section 3 of the
Business Licensing Act, Cap.208 R.E 2012, any business
conducted without license was unlawful. He concluded,
therefore, that, the 1st Defendant was not authorize by the law
to act as a security agent for the 2nd Defendant and any
agreement entered for that purpose was void.
However, in my humble assessment of the Guidelines
relied upon by the Plaintiffs, I do not think that such apply to
this matter at hand. I hold it to be so because, firstly, the
Guidelines referred to befits a consideration in relation to
provision of agency for retail banking services which are often
provided in the local context, and which is now common
within our jurisdiction. Currently, for instance, an approved
individual who is under a contract with a bank, may provide
certain retail banking services customarily provided for by a
bank, such as receiving deposits or granting withdrawals.
It is my considered view, therefore, that, those Guidelines,
as one may read from the definition of who is an agent under
such Guidelines, do not apply to the kind of syndicated
transactions contemplated under Exh.D-3 (the SFA and STA).
For convenience purposes, Guideline 3 defines who is an agent
and it says that:
‘“agent” means a person
contracted by an approved bank

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 or financial institutions to carry
out agent banking business on
behalf of the approved bank or
financial institution in the
manner specified in these
Guidelines.’
Secondly, while I take note that regulation 41 of GN. No.
297 of 2014 makes it clear that, a “bank or financial institution
authorized by the Bank to act as an agent shall account for and keep
money, securities and other valuables, which it has received in such
capacity, duly separated from its own assets and liabilities”, I am of
the view, however, that, regulation 41 applies in a situation
where a third party, say the government, is issuing loans under
a special scheme and wants to channel such loans through a
bank.
Prudently, however, if the respective bank is approached
to act as an agent for the issuance of such loans, it will have to
inform the regulator for purposes of prudential regulation, since
it will be incurring additional capital and expenses which may
affect its liquidity. As such, where the regulator so approves
that arrangement, and in case that respective bank receives
securities from the borrowers, regulation 41 of GN. No. 297 of
2014 requires all securities so received to be kept off the
respective bank’s balance sheet.
Thirdly, the context under which the 1st Defendant is
regarded as a ‘security agent’ of the 2nd Defendant is premised on
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a loan syndication process evinced by the signing of Exh.D-3
(the STA and the SFA). This being a syndicated arrangement, the
1st Defendant is, under the SFA, regarded as the ‘Financial
Arranger, Facility Agent and Security Agent’.
Generally, while I find no specific provision in our laws
providing for or regulating facility syndication in this
jurisdiction which I could refer to, it is clear to me, however,
that, where borrowing requirements of businesses are
sometimes surpassed beyond the funding and credit risk
capacity of single lenders, syndication has been a common best
practice relied upon by lenders. The loan syndication market
all over the world, therefore, has played a significant role in
providing assistance to lending entities that are statutorily
regulated, like the 1st Defendant, from being overly exposed
beyond their statutory limit.
In my view, one may impliedly construe regulation 37 of
the Banking and Financial Institutions (Mortgage Finance)
Regulations, G.N.254 of 2015, or under regulation 6 of the
Banking and Financial Institutions (Credit Concentration and Other
Exposure Limits) Regulations, 2014, GN.No.288 of 2014, as the
triggers for syndication of loans. Regulation 6 of GN. No. 288
of 2014, limits the total amount of credit accommodation
which any bank or financial institution may, directly or
indirectly grant to any person and his related parties to 25% if

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fully secured or 10% if partly secured and 5% if not at all
secured.
Consequently, if a lender like the 1st Defendant exceeds
the exposure limits, the bank issuing the loan may, with the
mandate of the borrower, still have a fallback position of
turning to the market practice tool of syndication. That is what
the 1st Defendant did by making an arrangement with the 2nd
Defendant.
It is worth noting as well, that, where there is syndication
of loan and several banks or lenders take part in it, as a matter
of best practice and for administrative convenience purposes as
stated in the Encyclopedia of Banking, Vol.2 (2001)
Butterworths, at page 1357:
“one of the [participant] banks
will be appointed agent of the
syndicate through whom
payments and communications
are channeled. The agent is an
administrative agent and rarely
has significant management
functions…”
In essence, therefore, an agent in a syndicated loan serves
as a link between the borrower and the lenders and owes a
contractual obligation to both the borrower and the lenders.
Her role to the lenders is to provide them with information that

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allows them to exercise their rights under the syndicated loan
agreement.
In view of all that, it is my finding that, reference to
‘security agent’ as used in Exh.D-3 should be understood from
that context and not in the manner the learned counsel for the
Plaintiffs wants this Court to construe it. Perhaps the issue that
one may wish to be pursued further concerning the
arrangement between the Plaintiffs and 1st and 2nd Defendant,
is whether the 1st Defendant ever notified the regulator (the
BOT) about that arrangement, given that, such an arrangement
was still part of the 1st Defendant’s exposure to risk.
In my view, the response to that may be impliedly
obtained from the testimony of Dw-2. In his testimony, he
testified of attempts to register a foreign loan and emphasized
that, as per the Foreign Exchange Circular of 1998 which was
received in Court as Exh.P-8, together with a press release on
the same subject, foreign loan borrowing entities are required
to apply for a Debt Registration Number (DRN) from the BOT.
Even so, Dw-2 told this Court that, the disputed loan involved
in this suit was not subject to that compulsory
reporting/registration because it was a short-term loan of less
than 365 days. I do understand that currently there is a new
Foreign Exchange Regulation GN. No. 294 of 2022 but that, will not
apply to the facts in this case.

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 All in all, the issue of whether the regulator was fully
informed or not is, to me, insignificant to the determination of
the case at hand and could be relevant if the dispute was
between the 1st Defendant and the 2nd Defendant since that
would be squarely centered under the said Exh.D-3.
It follows; therefore, that, the fourth issue is responded to
affirmatively given the context under which the parties were
operating.
The fifth issue, agreed and recorded by this Court was:
Whether the Plaintiffs
(Defendants in the counterclaim)
owe the Defendants (Plaintiffs in
the counterclaim) a sum of USD
19,769,680 as claimed in the
counterclaim.
In their submissions, the Defendants in the counterclaim
(Plaintiffs) deny being indebted to the Plaintiffs in the
counterclaim to the tune of US$ 19,769,680. However, in
establishing the counterclaim, the Plaintiffs in the counter-
claim relied on a number of exhibits tendered including Exh.P-
3 (which they claim to be secured by Exh.P-4, Exh.P-5, Exh.P-6
and Exh.P-10), as well as Exh.D-2, Exh.D-4, Exh.D-5, Exh.D-6,
Exh.D-16, Exh.D-17, Exh.D-18 and Exh.D-19.
On the basis of such exhibits, it was contended that, the
Plaintiffs in the counterclaim (Defendants) fulfilled their
obligations under Exh.P-3 by issuing a Letter of Credit (Exh.D10)
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in favour of “Nomura”. Reliance was also placed on the
testimony of Dw-3 and Exh.D-16 and Exh.D-17 to prove that the
2nd Defendant sought confirmations regarding payments made
to “Nomura” upon crystallization of the “LC”. It was
submitted, further that, the Standard Chartered Bank Malyasia did
also confirm that, “Nomura” was paid by the 2nd Defendant
through Citi Bank, New York. To further strengthen their
position, reliance was placed on Exh.D-20, which is a bank
statement of the 1st Plaintiff’s loan account with the 2nd Defendant
to prove that there was an outstanding amount.
I have considered all such testimonies and the supporting
evidence relied upon by the Plaintiff’s in the counterclaim.
However, my take will be that, a proper response to the above
raised issue number five, cannot be arrived at in isolation from
the earlier discussions and responses which were exhaustively
provided for in respect of the 2nd and 3rd issues.
In particular, when this Court discussed the 2nd issue, it
was made clear that, although Exh.P-3 envisaged the issuance
of “SBLC/LC” ‘to secure a borrowing from “Lamar”,’ no such
“LC” was issued. It was also concluded that, Exh.D-10 was not
the “LC” envisaged under Exh.P-3. The non-issuance of the
envisaged “LC” translated as well to a conclusion that, the 2nd
Defendant did not discharge her obligations arising from Exh.P-
3 and, that, such inaction was, by itself, an act of breach.

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 In view of such conclusive findings made by this Court,
there is no point in referring to or even placing reliance on
Exh.P-3 to prove the counter-claims by the Defendants while
the object of its being signed was never materialized. In my
view, once Exh.P-3 is crippled as it has been shown, all other
exhibits referred to miss the basis upon which they can be
pegged and, that is a fatal blow to the counterclaims by the
Defendants. I will endeavor to demonstrate here below.
In their submissions, the Plaintiffs in the counterclaim
(Defendants) have contended, that, on 29th May 2019 the 2nd
Defendant issued Exh.D-10 in favour of “Nomura” the assignee
of “Lamar” and that, there has been evidence of disbursement
(as per Exh.D-18 and Exh.D-19). A further submission has been
that, the monies received were used to extinguish the Plaintiffs’
debts.
While it is indeed established that monies were disbursed
by “Lamar” and were deposited in the escrow account held at
Equity Bank (K) Ltd, the evidence shows that such disbursed
monies were disbursed into the escrow account of the 1st
Plaintiff (1st Defendant in the counter-claim). According to Pw-1,
the escrow account was opened and operated by the 2nd
Defendant (1st Plaintiff in the counterclaim) in the name of the 1st
Plaintiff ((1st Defendant in the counter-claim).
What needs to be noted here as well is that, the escrow
account referred to, was not one opened in the names of the
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three Plaintiffs (i.e., the 1st to 3rd Defendants in the counterclaim)
who, together with the Defendants (Plaintiffs in the counterclaim),
are the architects of Exh.P-3. As it should be remembered, Pw-
1 tendered Exh.P-2 and Exh.P-7 to show that, the 1st Plaintiff (1st
Defendant in the counterclaim) negotiated a credit facility from
“Lamar”, on her own.
When examined by this Court, Pw-1 did, as well, admit
that, there was a disbursement of funds from “Lamar” but that,
the said disbursement was made to the 1st Plaintiff and, that,
such was based on Exh.P-7, the agreement signed between
“Lamar” and the 1st Plaintiff only. He also told this Court that,
the disbursed amount was unsecured because no SBLC/LC
was ever issued, meaning that, the disbursement was done by
“Lamar” without there being first a Letter of Credit envisaged
under Clause 5 (Condition Precedent) of Exh.P-7. Dw-6, who is
the Director of “Lamar”, did not, as well, tell the Court how
Exh.P-7 was performed or how and why the 2nd and 3rd
Defendants should be bound by it.
However, as I stated herein earlier, even if one was to
argue that the “LC” under which the disbursement was based,
was the one issued by the 2nd Defendant (which fact is not that
way) and, that, it was issued by virtue of the requirement of
Clause 5 of Exh.P-7, that would as well raise eyebrows. The
reasons for that are, firstly, that, the LC envisaged under Exh.P-
7 was not one to be issued by the 2nd Defendant but the 1st
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Defendant. That is what was agreed between the 1st Plaintiff
and “Lamar” under Exh.P-7.
Secondly, and on a similar note, the “LC” would not have
been for the purpose of securing ‘purchase of heavy equipment’
since the subject matter of what was envisaged under Exh.P-7,
was ‘securing a borrowing from “Lamar”. It will mean,
therefore, that, the contemplated “LC” under Exh.P-7, and the
one upon which the disbursements were based are, therefore,
diametrically opposed.
Thirdly, and worse enough, the one issued by the 2nd
Defendant (Exh.D-10) is diametrically opposed to the one
envisaged under Exh.P-3. That is the reason why this Court
made a finding that the “LC” issued by the 2nd Defendant is not
one and the same as that which was envisaged under Exh.P-3.
The truth about that state of confusion, is best known to the
parties themselves and, for reasons which they never disclosed
to this Court.
As I noted earlier, however, it is important to bear in
mind that “Lamar” is not and was not made a party to this suit
from the beginning. However, she was made, through Dw-6 (its
managing director) a witness. Since “Lamar” is not a party, any
claims by “Lamar” based on the monies she disbursed to the
Plaintiff, cannot be a subject of scrutiny in this suit but a matter
to be dealt with by “Lamar” and the 1st Plaintiff as the two
thinks fit and as per their agreed arrangements.
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 In his testimony, as it might as well be remembered, Pw-
1 told this Court that the disbursed loan amount never came to
Equity Bank (T) Ltd (the 1st Defendant) but, that, immediately
after it was disbursed by “Lamar” and got deposited in the 1st
Plaintiff’s escrow account, the 2nd Defendant cleared the three
Plaintiffs’ outstanding debts. Pw-1 stated, therefore, that, the
debt (if any) is and should be as between the 1st Plaintiff and
“Lamar” and not as between the Plaintiffs and the 2nd
Defendant.
Certainly, taking into account the findings made by this
Court, I do as well find that to be a correct proposition. If there
be any claim regarding the disbursed amounts, it should be by
“Lamar” and that is when it will be demonstrated by her as to
whether the disbursed loan was secured or not. That cannot be
explored in this suit since “Lamar” is not a party to it.
Such observations and conclusions as well, stand as a
response to the submissions levelled by the learned counsels for
the Defendants who, relying on the persuasive decisions in the
cases of Patel vs. Mirza (2016) UKS 42 and National Bank of
Kenya Ltd vs. Anaj Warehousing Limited, [2015] eKLR,
contending that, it would be an unjust enrichment to allow the
Plaintiffs keep the money they obtained.
In my view, however, there can be no issue of an
unjustified enrichment worth being pursued by way of filing
this suit at hand since, as Pw-1 testified, the disbursed amounts
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were based on Exh.P-7 and, that fact, therefore, stands to be an
issue between the 1st Plaintiff and “Lamar” who is not a party
in this suit and need not be a matter for consideration in this
suit.
In his submission, the learned counsel for the Plaintiffs
raised the issue of lack of registration of the foreign loan facility
with the BOT and how “Nomura” vide Exh.P-19 distributed
US$ 14,123,587.50 being the loan amount. However, although
it is true that Dw-1 admitted that the SBLC/LC was a foreign
facility, and further, despite the fact that Dw-2 was of the view
that such foreign facility being of short-term nature was not
supposed to be registered with the BOT, it is also on record
from the testimony of Dw-2, that, since the monies were not
deposited in Tanzania by the lender, the regulator cannot allow
repayment without first being brought to light about the
underlying contract upon which the SBLC/LC is based as well
as proof of fulfillment of SBLC/LC of prior agreements. All
such concerns negatively impact on the Defendants, leave
alone the fact that the respective SBLC/LC was not, as stated
earlier, issued by the 2nd Defendant.
Besides, while it is indeed true that Dw-4 tendered in
Court Exh.D-19, it is also worth noting, as rightly pointed out
earlier herein, that, Clause 70 of Exh.D-19 described those
payments as payment made ‘against purchase of goods for Lamar
Kenya’. Exh.D-19 does not, in any manner possible, make
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reference to the trade loan between any of the Plaintiffs, a fact
which raises doubts as to the nexus which Exh.D-19 has with
Exh.P-3 or even Exh.P-7.
As I earlier stated, hereabove, such nexus was not
established, neither by Dw-4, Dw-5 nor Dw-6. In fact, Dw-5
and Dw-6 complicated the matter further when they revealed
to the Court that, a restructuring of the transactions took place
but failed to tender the underlying contractual documentations
as exhibit to evince how and why the restructuring took place,
who were involved and in what way it affected the earlier
arrangements under Exh.P3 and/or Exh.P-7.
I also find it necessary to comment on the submission by
the Defendants’ learned counsel that Exh.P-3 was secured by
collaterals marked Exh.P-4, P.5, P.6 and Exh.P-10. In his
testimony, however, although Pw-1 admitted that the Plaintiffs
signed the respective collaterals meant to secure Exh.P-3, Pw-1
was categorical that, the same were “executed in anticipation
of performance” of the banking facility dated 22nd May 2019
(i.e., Exh.P-3). In that regard, since the awaited foreign facility
did not materialize as no SBLC/LC was issued by the 2nd
Defendant as this Court has demonstrated herein, the
transactions evinced by the collaterals cannot as well hold.
Let me as well address the issue that the 2nd Defendant (1st
Plaintiff in counterclaim) cannot be secured by mortgage in
Tanzania. In his submission, Mr. Mwalongo raised that point
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in his submission making reference to section 113 (3) of the
Land Act, Cap.113 R.E 2019. Under that provision, the law
requires that, powers to create mortgage be exercised subject to
conditions and or limitations put in place by the law. He
contended, therefore, that, for the 2nd Defendant to be secured
by mortgage in Tanzania, there should be compliance with the
foreign lending requirements placed by the law, the failure of
which renders the mortgages unlawful.
Essentially, when Pw-1 testified before this Court, he
stated that, although the foreign facility from “Lamar” to the
three Plaintiffs did not materialize, the Defendants went ahead
with the perfection of documents and execution thereof,
between the Plaintiffs and the Defendants. He tendered in
Court as exhibit a letter from K& M Advocates, dated 19th June
2019 which this Court admitted as Exh.P-9. However, the
Defendants (Plaintiffs in the counterclaim) did not tender any
evidence to the Court to show that there was any further
compliance with section 120A (3) of the Land Act, Cap.113
R.E 2019.
In view of the above, it is clear, as correctly submitted by
Mr. Mwalongo, that, in the case of State Oil Tanzania Ltd vs.
Equity Bank Tanzania Ltd and Another, Comm. Case No.105
of 2020, this Court did state that, any perfection of mortgage
which bypasses mandatory requirements of the law will have

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no effect, meaning that the collaterals involved will be
discharged. Specifically, this Court stated as follows:
“As to the mortgagors, now is
mandatory requirement of the
law that, a mortgagor shall
within six months submit to the
Commissioner of Lands
information as to the manner in
which the money obtained from
the mortgage is invested to
develop the mortgaged land or
investments for that matter. This
is as per section 120 A (3) of the
Land Act. So, since perfection
did not follow the mandatory
laid down procedures it would
have no effect and the only order
was to discharge them.”
From the above legal position, I do find the submission
made by the learned counsel for the Plaintiffs to be valid. The
appropriate order in that regard is to have the mortgage deeds
discharged forthwith. From the totality of the underlying
considerations so far made herein, it is clear that the fifth issue
cannot stand. To be precise, the Plaintiffs (Defendants in the
counterclaim) owe nothing to the Defendants (Plaintiffs in the
counterclaim) and the counterclaim should fail and be
subjected to dismissal with costs.

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 The final agreed issue was: to what reliefs are the parties
entitled. From the analysis of the entire evidence and the
testimonies offered to the Court by the witnesses from both
parties, this Court is satisfied that, the Plaintiffs have fully
discharged their burden of proving their case and deserves to be
granted the reliefs they have sought. On the other hand, the
Defendants counterclaims have not been fully established
taking into account that no SBLC/LC was issued as per Exh.P-
3 and the one tendered in Court (Exh.D-10) lacked the contract
upon which it was based.
The failure to show how Exh.D-10 was connected to the
rest of the transactions based on Exh.P3 and/or Exh.P-7, and
more so, how and to what extent it is connected to Exh.P3 and
Exh.P7 to warrant the making of an inference that it is one and
the same as the “LCs” envisaged under those exhibits, is also
fatal to the counterclaims.
In the case of Joseph Constantine Steamship Line vs.
Imperial Smelting Corporation Limited [1942] A.C. 154,174,
it was established, as a cardinal rule that, the burden of proof
rests upon the party (the Plaintiff or the Defendant), who
substantially asserts the affirmative of the issue and, that, such
a burden remains fixed at the beginning of trial by the state of
the pleadings and, it is settled as a question of law remaining
unchanged throughout the trial exactly where the pleadings
place it and never shifts in any circumstances whatever.
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 In this suit, I did point out at the beginning, as well, that,
the standard required in civil cases is generally expressed as
proof on a balance of probabilities. In Miller vs. Minister of
Pensions [1947] AllE.R. 372; 373, 374, Lord Denning J (as he
then was) held a view regarding the discharge of such a burden
of proof, that:
"If the evidence is such that the
tribunal can say: We think it
more probable than not, the
burden is discharged, but if the
probabilities are equal, it is not."
In view of the above, it is my conclusion that, by all
standards, I do not find that the Plaintiffs in the counter claim
have been able to discharge their burden of proving their claims
to the requisite standards. On that account, and as I stated
earlier, their claims must, with no flicker of doubt be subjected
to a dismissal order.
From the foregoing and having been satisfied that the
Plaintiffs herein have discharged their burden while the
Defendants have failed to discharge theirs under the
counterclaim, this Court proceeds to grant judgement and
decree in favour of the Plaintiffs herein and (also the
Defendants in the counterclaim) as follows:
1. That, the Defendants in the main
suit are in breach of the credit
facility agreements executed

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 between themselves and the
Plaintiffs prior to the banking
facility of the 22nd May 2019;
2. That, the banking facility dated 22nd
May 2019 purporting to provide
Standby Letter of Credit (SBLC)
executed between the Plaintiffs and
the Defendants in the main suit, did
not take effect as no SBLC/LC was
issued by the 2nd Defendant;
3. That, First, Second and Third
Plaintiffs have fully paid and
satisfied the banking facility
agreement which the Defendants
advanced to them prior to the
facility agreement dated 22nd May
2019 and, that, they do not have
any outstanding loan with the
Defendants;

4. That, the Defendants in the main

suit breached the credit facility
agreements executed prior to the
banking facility with the Plaintiffs
by refusal to discharge and return to
the Plaintiffs all the collaterals
which were used to secure credit
facility agreements which were all
liquidated;
5. That, the 1st and 2nd Defendants in
the main suit, are not lenders of the

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 Loan Facility granted by Lamar
Commodity Trading DMCC/
Numora Trading PTE Limited;
6. That, the 1st and 2nd Defendants in
the main suit are not entitled to
recover any part or the whole of
credit facility advanced by Lamar
Commodity Trading DMCC/
Numora Trading PTE Limited to
the 1st Plaintiff;
7. That, the Defendants in the main
suit are hereby ordered to discharge
all Debentures registered in favour
of the 1st Defendant as security
trustees of the 2nd Defendant;
8. That, the Defendants in the main
suit are hereby ordered to discharge
the director’s personal guarantees
and indemnity executed by the
directors of the Plaintiffs;
9. That, all collaterals, including
chattel mortgage on vehicles/
trucks registered in favour of the
Defendants in the main suit to
secure the banking facility from
Lamar Commodity Trading
DMCC/ Numora Trading PTE
Limited in favour of the Defendants
as security trustees of the 2nd
Defendant are illegal and are hereby
discharged;

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 10. That, the three Plaintiffs herein are
entitled to payment of TZS
300,000,000 as General damages;
11. That, the Defendants in the main
suit are to pay the Plaintiffs Costs of
this suit, and;
12. That, the counterclaim brought by
the Defendants herein is hereby
dismissed with costs.

It is so ordered.
DATED AT DAR-ES-SALAAM ON THIS 19th DAY OF APRIL
2023

...................................
DEO JOHN NANGELA
JUDGE
RIGHT OF APPEAL EXPLAINED

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