IN THE HIGH COURT OF UNITED REPUBLIC OF

TANZANIA
(COMMERCIAL DIVISION)
AT DAR ES SALAAM
COMMERCIAL CASE NO. 68 OF 2022

HASS PETROLEUM (T) LIMITED…….……….....PLAINTIFF

VERSUS
UKOD INTERNATIONAL
COMPANY LIMITED……..……...……………...DEFENDANT

RULING
Last order: 13thday of December 2022
Ruling: 28th day of February2023

NANGELA, J.
This ruling is in respect of a Notice of Preliminary
Objection filed by the Defendant opposing the hearing and
determination of this suit on the ground that the Court:
1. Lacks jurisdiction to entertain the
suit; and/or
2. The suit is premature for deliberately
by-passing the parties’ agreed
dispute resolution mechanism.
Before I go to the nitty-gritty of the objections raised by the
Defendant, let me state the facts of this suit, albeit in short. The
Plaintiff carries out the business of petro-fuel supplyand
marketing. It is alleged that on diverse dates between 2 nd day of
April 2015 and 23rd August 2020, the Plaintiff supplied on credit

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and delivered on demand to the Defendant, petroleum goods of
respective varying values.
Initially, the supply arrangement was based on purchase
orders, delivery notes or invoices and, in all such occasions of
supply, the Defendant would acknowledge receipt upon
delivery/collection of the respective petroleum consignment.
On the 11th day of December 2018, the parties concluded a
formal agreement (Petroleum and Petroleum Products Supply
Agreement).It is averred that, although the parties signed that
agreement, their relationship continued to be anchored on the
initial modus operandi, whereby the supply was made on credit.
The Plaintiff alleges, therefore, that, the suit is based not just on
the partis agreement but on the totality of the transactions in the
subject matter.
It is further contended that, as of the 30thday of April 2020,
a total of TZS 689,044,603.84 remained outstanding and payable
as a result of goods collected from the Plaintiff’s depot located at
Vijibweni, Kigamboni Area in Dar-es-Salaam and supplied to the
Defendant. The Plaintiff has averred that, despite several
demands, the Defendant refused, neglected or failed to settle the
outstanding balance, and has, thence, remained in breach of the
contract.
It is on that account, that, the Plaintiff decided to file this
suit, prayingfor judgement and decree as follows:

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 1. Payment of TZS 689,044,603.84 (the
outstanding balance).
2. Payment of interest on the
outstanding balance at the
commercial rate of 25% from the 1 st
of May 2021 to the date of
judgement or sooner payment date;
3. Payment of further interest at the
Court’ rate of 12% from the date of
judgement to the date of judgement.
4. Payment of costs of this suit; and
5. Any other relief the Court deems fit
to grant.
On the 1st of August 2022, the Defendant filed her written
statement of defense disputing the Plaintiff’s claims and, as I
stated earlier hereabove, she further armed herself with
preliminary points of law which, as a matter of practice, needed
to be disposed of before this Court proceeds any further.
On the 03rd day of October 2022, this Court ordered the
parties to dispose of the said points of law by way of written
submissions. On the material date, the Plaintiff enjoyed the legal
services of Mr. Andronicus Byamungu, learned advocate while
Mr. Jimmy Mrosso, a learned advocate, appeared for the
Defendant. These learned counsels for the parties duly complied
with the Orders of this Court and filed their respective
submissions. This ruling, therefore,is meant to address their
submissions and dispose of the two preliminary objections.

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 Submitting in support of the first objections, it was Mr.
Mrosso’s submission that, the claims by the Plaintiff are
premised on breach of contract by the Defendant. However, as
per Clause 8 of the parties’agreement for the supply of petroleum
products, there is an agreement regarding how the parties are to
resolve their disputes.
He submitted that, their chosen modes are negotiation,
mediation and, finally arbitration. In view of that, he contended
that, on the strength of Clause 8 of their main Agreement
annexed to the Plaint as Annex HPTL-1, this Court’s jurisdiction
is expressly ousted. He contended further that, there is nowhere is
it stated that the Plaintiff has been faced with any difficulty in
implementing the chosen path by the parties to resolve their
dispute.
To support his submission, Mr. Mrosso has referred to this
Court the cases of Honda Motors Japan & Another vs. Quality
Motors Ltd, Misc. Commercial Case No.25 of 2019 (unreported)
and the case of Wembere Hunting Safaris Ltd vs. Registered
Trustees of Mbomipa Authorized Association, Commercial
Case No.40 of 2013 (unreported) regarding the need to resort to
arbitration, where the parties have so expressly agreed.
As regards the second objection, it was Mr.Mrosso’s
submission that, the suit is prematurely brought before this Court
for by-passing the pre-determined dispute resolution mechanism.
In his submission, Mr. Mrosso contended that, the same

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arguments used in disposing of the first limb of the objection
similarly applies to the second object as the two are inseparable.
He,therefore, urged this Court to struck out this suit with costs
because the Court lacks jurisdiction to entertain it.
Responding to the objections raised by the Defendant, the
learned counsel for the Plaintiff submitted that, the issue relating
to arbitration must be dealt with in accordance with the dictates
of the Arbitration Act, Cap.15 R.E 2020. He contended that, once
the Court notes that there is an arbitration clause to be adhered to,
the law has provided for a mechanism regarding what should be
done.
Mr. Byamungu contended, and correctly so, in my view,
that, under the Arbitration Act, any suit filed in contravention of
an arbitration clause is not void or defective but it is a competent
suit and the Court should employ certain considerations and order
appropriate remedies which are provided for under the law,
which are either to enforce the arbitration clause, if a test of a
valid arbitration agreement is met, or proceed with the suit.
He contended further, that, at best, the preliminary
objections should not have been raised by way of a separate
Notice of Preliminary Objection as done by the Defendant, but by
way of a Petition as per section 13(1) of the Arbitration Act. In
his views, petitioning the Court to enforce an arbitration
agreement is optional; meaning that, the party against whom the

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proceedings are brought may opt not to petition and continue
defending the suit.
Mr. Byamungu surmised, therefore, that, the suit at hand is
not incompetent because of mere presence of an arbitration
clause and the Court is not precluded from trying it in the absence
of a petition to enforce that arbitration agreement.
Mr. Byamungu contended further, that, the decision of this
Court in the case of Queensway Tanzania (EPZ) Ltd vs.
Tanzania Tooku Garments Co. Ltd, Misc. Commercial Cause
No.43 of 2020 (unreported) which upheld a preliminary objection
based on the Mukisa Biscuits vs. West End Distributors
Manufactiring Co. Ltd [1969] EA 696, was made per incuriam.
In his further submission, Mr. Byamungu contended that,
as per section 13(4) of the Arbitration Act, the Court must be
satisfied, apart from there being such an arbitration agreement,
that, the clause is not null and void or inoperative or incapable of
being performed. He held a view that, if any of such deficiencies
exists, the Court must proceed with the hearing of the case.
Referring this Court to the book by Alan Redfern & Martin
Hunter et al, Law and Practice of International Commercial
Arbitration, Sweet & Maxwell (2004), London, at pages 196-
199, he contended that, defective or pathological arbitration
clauses such as those which make reference to non-existent
arbitral institutions or rules or those referring to non-existent

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arbitrators, unworkable arbitration clauses, or which a vague
makes the arbitration clause incapable of enforcement.
He contended that, looking at the Clause 8 of the parties’
agreement which the Defendant’s legal counsel has relied on, that
clause is defective and incapable of being enforced. He argued,
however, that, the Court may sever the defective parts and
enforce the valid part of the agreement but he was of the view
that, this Court should not do so in this matter where the chosen
tribunal, law and venue are all non-existent.
He was of a further view that, even what is being claimed
by the Plaintiff is beyond monetary damages as the Plaintiff is
claiming for fulfillment of payment obligation by the Defendant
which is equivalent to specific performance expressly excluded
from arbitration according to the arbitration clause.
He contended further that, no party has even petitioned the
Court to make an order that the matter be referred to arbitration
as required by the Arbitration Act and, that, the raised
preliminary objection is not the legal mechanism upon which the
Court can shut out a litigant and order the parties to refer their
dispute to arbitration.
As regards the remedy of striking out the suit, he relied on
the case of Scova Engineering Sp.A & Another vs. Mtibwa
Sugar Estate Ltd and 3Others, Civil Appeal No.133 of 2017
(unreported) and contended that, the Court cannot struck out or
dismiss a suit based on objection on choice of forum. For him,

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existence of a choice of forum or arbitration clause does not oust
the Court’s jurisdiction.
To support his contention and urging this Court to dismiss
the objections with costs and proceed with the main case, Mr.
Byamungu relied on the decision of the Court of Appeal in
Scova’s case (supra) as well as the decision of the same Court in
the case of Sunshine Furniture Co.Ltd vs. Maersk (China)
Shipping Co.Ltd & Another, Civil Appeal No.98 of 2016
(CAT) (unreported).
In a brief rejoinder, the Defendant’s counsel rejoined that,
under section 12(1) of the Arbitration Act, Cap.15 R.E 2020, the
law empowers the Court to refer parties to arbitration where it is
found that there is an arbitration agreement provided the Plaintiff
applies not later than the date of submitting his first statement of
claim on the substance of the dispute. He contended that, the
Court can only refuse if there is no valid arbitration agreement,
arguing that, that is not the case as regards the present suit at
hand.
He further rejoined that, even under section 12(3) of the
Arbitration Act, Cap.15 R.E 2020, notwithstanding any
application under section 12(1) of the Act, still arbitration may be
commenced. He contended that, the parties consciously chose
their preferred mode of dispute resolution starting first with
negotiations and mediation stages and that cannot be bypassed.
He argued that, if arbitration was incapable of being pursued,

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what about the rest (negotiation and mediation?) Save for the
case of Queensway(supra), Mr. Mrosso distinguished all other
cases relied upon by the Plaintiff’s counsel and submitted that,
this Court is barred from entertaining the present suit.
I have carefully considered the rival submissions made by
the two opposing counsels. The issue which I am confronted with
is whether the objections raised by the Defendant are meritorious.
However, before I tackle that paramount issue, I find it apposite
to make some comments in respect of the submissions made by
Mr. Byamungu and those made by Mr.Mrosso.
In the first place, I wish to point out that, both counsels
have cited as reference supporting their submissions, provisions
of the Arbitration Act which do not support the version of their
submissions. For his part, for instance, Mr. Byamungu has relied
on section 13 of the Arbitration Act, Cap.15 R.E 2020 but that
section has nothing to do with what he stated. The section deals
with the effect of death on an arbitration agreement. Equally,
although Mr. Mrossorelied on section12 of the Act, my reading
of the section and his submission tells a different thing altogether
as the section deals with separability of an arbitration agreement
when it forms part of another agreement.
Secondly, I wish also to comment onMr. Byamungu’s
submission which was to the effect that the case of Queensway
Tanzania (EPZ) Ltd vs. Tanzania Tooku Garments Co. Ltd,

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Misc. Commercial Cause No.43 of 2020 (unreported) was held
per incuriam.
In my view, his submission is erroneous and lacks the
authoritative flavor. I hold it to be so because, he does not have
the mandate to denounce a decision of this Court since, that is the
mandate of either this Court on its own or of the Court of Appeal
in an appeal. Since the decision of this Court has never been
overturned by the Court of Appeal, Mr. Byamungu has no
mandate to denounce it as a decision made through lack of due
regard to the law or the facts.
Thirdly, the Queensway’s decision cannot be said to be
per incuriam merely because it was based on the principle
enunciated in the Mukisa Biscuits’ case (supra). As it is well
known in our jurisprudence, the Mukisa Biscuits’ case has been
relied upon authoritatively several timesas a reliable authority on
matters regarding preliminary objections, not only by this Court,
but also by the Court of Appeal.
In essence, therefore, a preliminary objection being a point
of law which has the effect of disposing of a matter, and
especially one touching on the jurisdiction of the Court, can be
raised at any time, even at an appellate stage. See the decision of
the Court of Appeal in the case of Mvita Construction
Company vs. Tanzania Harbours Authority, Civil Appeal
No.94 of 2001 (unreported). I

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 As such, a preliminary objection being a point of law, may
either be raised by a party or even by the Court itself suo motu.
Whether the same is raised by way of notice of objection or by
any other means prescribed, that makes no difference since the
effect, if the objection is meritorious, will be the same, i.e., the
matters before the Court will either be struck out or dismissed
depending on the circumstance for each case.
Let me now turn to the merits of the objections raised in
this Case. Mr. Mrosso has objected the suit from being
entertained on the ground that, this Court lacks the jurisdiction to
do so,given that, the parties have, on their own accord, chosen a
different mode of resolving any of their disputes.
In his submission, however, Mr. Byamungu has contended
otherwise citing the decision of the Court of Appeal in Scova
Engineering Sp.A & Another (supra). In my view, I tend to
agree with what Mr.Byamungu stated, i.e., this Court’s
jurisdiction cannot be ousted by the parties. They do not confer it
on the Court and cannot as well take it away by agreement.
In my view, the best way to make the point which Mr.
Mrosso seeks to make, when there is a jurisdictional question
touching on this Court, is that the Court’s jurisdiction can be
exercised over the matter laid before it. Exercise of a Court’s
jurisdiction is a different issue altogether as it may be impaired
by some factors, including where parties had, in exercise of their

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autonomy contracted not to submit their dispute to the Court but
to an arbitrator, mediator or any other forum of their choice.
In this instant case, the parties’ controversy is anchored on
Clause 8 of an agreement which governs their contractual
relationship. That particular Clause reads as follows:
SECTION 8: DISPUTE RESOLUTION
Should any dispute, claim or controversy
arise between the parties (hereafter referred
to as the “dispute”), concerning this
Agreement, the Parties shall attempt to
resolve the dispute by negotiation. This
entails that one party invites the other party
in writing to meet to resolve the dispute
within seven (7) days from the written
invitation.
If the dispute has not been resolved by such
negotiation within thirty (30) days or such
longer or shorter period as the Parties may
agree, the dispute shall then be resolved by a
single arbitrator to be appointed by
agreement between the Parties or in default
of such agreement within 14 days of
notification of a dispute, upon application of
either Party, by the Chairman of the time
being of the Tanzania Branch of
Chartered Institute of Arbitrator of the
United Kingdom. The Arbitration shall be
held in Dar-es-Salaam, the United Republic
of Tanzania in accordance with the Rules
of Arbitration Act 1995or any law
amending or replacing it and shall be
conducted in English. All arbitral awards in
relation to this Agreement shall be limited
to pecuniary damages and shall not
demand specific performance or lead to

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 the modification of the terms and/or
conditions of this Agreement. To the extent
permissible by law the arbitral award shall
be final.”

In his submission, Mr. Byamungu has faulted this Clause

contending that,it is vague and hence unenforceable for it makes
reference to a non-existing choice of law as well as arbitrator and,
that, the parties had agreed that the referred dispute should not be
on matters regarding specific performance.
Although Mr. Byamungu referred this Court to the book by
Alan Redfern & Martin Hunter et al, Law and Practice of
International Commercial Arbitration, Sweet & Maxwell
(2004), London, at pages 196-199, to support his submission,
unfortunately the relevant pages from such a book were not
attached to his submission for this Court’s reading.
Notwithstanding that fact, I think there is a point to note and look
at in his submissions.
According to section 15 of the Arbitration Act, Cap.15 R.E
2020, this Court has a discretion to stay a suit or proceedings
pending arbitration. However, if the Court is satisfied that the
arbitration agreement is null and void, inoperative or incapable of
being performed, the Court will not stay the suit. I wish also to
state, albeit in orbiter, that, the Court may even refuse a stay and
strike out the suit with leave to refile, especially when it is clear
to the Court that the suit will unnecessarily create a backlog of
cases.

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 In this present suit, however, the Defendant is not asking
for a stay of this suit but rather that, it be struck out and the
prayer to do so has come at the wake of a preliminary objection
touching on the jurisdiction of this Court. The question to ask,
therefore, is whether, the arbitration agreement (i.e., Clause 8 of
the Parties Main Agreement) is defective and inoperative or
incapable of being performed.
Mr. Byamungu has contended that it is while Mr. Mrosso
does not see it that way. In my own observations, save for the
phrases:
“…by the Chairman of the time being of
the Tanzania Branch of Chartered
Institute of Arbitrator of the United
Kingdom. The Arbitration shall be held in
Dar-es-Salaam, the United Republic of
Tanzania in accordance with the Rules of
Arbitration Act 1995or any law amending
or replacing it…”

the Clause 8 of the Agreement is indeed about referring the

parties dispute related to the agreement to alternative dispute
resolution mechanism other than the Court, commencing with

parties’ negotiation and where it fails, arbitration.

As such, even if one is to sever those words from the

agreement, an act which Mr. Byamungu concedes that the Court
can do, still, the agreement to resort to negotiation and arbitration
will still stand. If the agreement to resort to arbitration will still

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stand and the parties will be found to have not chosen the law,
their chosen arbitrator will have to make a ruling on such a point
and that will not be a matter for this Court to decide on.
However, in his submission, Mr. Byamunguhas contended
that, the parties have placed a limitation on the kind of dispute
will have jurisdiction to entertain. I have looked at the Clause
and, indeed, Clause 8 of the Parties’ main agreement to resort to
arbitration, limits the type of dispute for which an arbitral award
is to be issued in case a reference to arbitration is made.
According to the said Clause 8, such disputes are “limited to
pecuniary damages andshall not demand specific
performance”.
In his submission, Mr. Byamungu has contended that, the
gist of the matters inthe present suit is about specific performance
given that, the Plaintiff is claiming fulfillment of payment
obligations by the Defendant.
Looking at the Plaintiff’s claims and what the parties have
expressly said in Clause 8 of their Agreement, I tend to agree
with Mr. Byamungu that, the dispute at hand, even if referred to
an arbitrator will not be the dispute which the parties agreed
should be referred to an arbitrator. This is a kind of dispute which
the parties have, in exercise of their autonomy, decided that,
should not be subjected to arbitration.
It follows, therefore, that, the dispute at hand having been
removed from the ambit of what may be referred to arbitration,

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should only be resolved by the Court and not otherwise. That
means, the objections must fail.
In the upshot of the above foregone discussion, this Court
settles for the following orders:
1. That, the two preliminary objections
raised by the Defendant are devoid
of merits and are hereby dismissed
because, the parties’ agreement to
resort to arbitration does not include
matters forming the gist of this
present suit.
2. That, the dismissal of the two
preliminary objections is with costs
to the Plaintiff.
3. The parties are hereby directed to
proceed with the hearing of the main
suit on the date and time to be
notified by the Court.

It is so ordered.

DATED AT DAR-ES-SALAAM ON THIS 28thDAY OF

FEBRUARY 2023

...................................
DEO JOHN NANGELA
JUDGE

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