Yuetong Company Limited vs M/s Terro Construction & Trading Company Limited & Another (Civil Appeal No. 233 of 2023) [2026] TZCA 384 (1 April 2026)

IN THE COURT OF APPEAL OF TANZANIA PAR ES SALAAM fCORAM: SEHEL. J.A.. RUMANYIKA, J.A. And ISMAIL, J.A,) CIVIL APPEAL NO. 233 OF 2023 YUETONG COMPANY LIMITED APPELLANT VERSUS M/S TERRO CONSTRUCTION & TRADING COMPANY LIMITED . SALMAN BOU SALMANN ...... . ,1st RESPONDENT 2 n d RESPONDENT (Appeal from the decision of the High Court of Tanzania (Commercial 6th December, 2025 & 1st April, 2026 RUMANYIKA. J.A.: The dispute stems from breach of a sale agreement. It had been executed by the appellant on one side, and the first respondent company through the second respondent on 9th September, 2013 on the other side. It was for sale of a quarry site, together with the five corresponding mining licenses, buildings, machinery, vehicles, and some other related equipment (the property) found at Makombe, Lugoba area in Bagamoyo District. Of the agreed purchase price USD 1,850,000.00, the vendor received USD 600,000.00 in the year 2012, being non-refundable advance payment. That, Division) at Dar es Salaam) fSonaoro, J,) dated 15th day of August, 2016 in Commercial Case No. 100 of 2014 JUDGMENT OF THE COURT

USD 200,000.00 would be paid upon the signing of the agreement whilst the balance of USD 1,050,000.00 was to be paid in such instalments. Under Clause 5 of that agreement, the parties also covenanted that, in the event of the appellant's failure to pay, her 40% shares which is approximately USD 85.000.00 would be transferred to the second respondent, the Managing Director of the first respondent. Then the appellant took possession of the property and began to run the quarry. The said agreement also bore an arbitral clause. Nonetheless, for no apparent reasons, the parties skipped it, going for the trial straight. It is also noted that, the said agreement did not work out. The appellant is alleged to have paid USD 1,340,000.00 only, leaving a balance of USD 510.000.00, despite the respondents several and repeated demands. Consequently, the respondent instituted Commercial Case No. 100 of 2014 before the High Court of Tanzania (Land Division) (the trial court). The appellant, in her written statement of defence admitted to have defaulted to pay the purchase price in full. However, she raised a counter claim against the respondents for breach of a fundamental term of the agreement. After full trial, the appellant was condemned for breach of the sale agreement. She was ordered to surrender 40% of her shares to the second respondent, as agreed. The second respondent was also awarded some monetary compensation. Aggrieved by that decision, the appellant has

lodged the present appeal, with four points of grievance. They are paraphrased, thus; One, the respondents not being held liable for breach of a fundamental term of the contract; two, mishandling of the evidence, which was tainted with material irregularities; three, the decision being founded on extraneous evidence, without according the parties a hearing; four, the appellant's counter-claim was not considered. At the scheduled hearing of the appeal, Mr. Mafuru Mafuru, learned counsel appeared for the appellant. Though duly served by way of publication through alleged widely circulating local Daily News Paper, issues of 22n d October, 2025, the respondents entered no appearance. On that account, therefore, Mr. Mafuru successfully prayed for hearing of the appeal in the respondents' absence, in terms of rule 112(2) of the Tanzania Court of Appeal Rules, 2009. Before embarking on the merit or demerit of the appeal, we invited Mr. Mafuru to address us on the propriety or otherwise of the impugned proceedings and decision, with respect to the status of the respective witness statements. Our query concerned the statements of PW1 and PW2. Their statements appear on pages 75 to 82 and pages 100 to 105 of the record of appeal, respectively, pursuant to rule 48(2) of the High Court (Commercial Court) Rules, 2012 (the Rules). Similarly, we put a question on the validity of the witness statements of Manfred Crispin Lyoto (DW1)

and that of Wei Huayue (DW2), as they appear on pages 114 to 120 and pages 121 to 126 of the record of appeal, respectively. For avoidance of any doubt, the respective testimonies, notably run from pages 157 to 161 of the record of appeal. We thought this concern is solely decisive of the appeal. On what had transpired in the trial court, regarding testimonies of PW1, which features on pages 146 to 154 of the record of appeal, Mr. Mafuru was generous and mature enough. He acknowledged the procedure applicable for receiving and recording the evidence to have been flawed, rendering the respective evidence liable to be discounted. That, unless the evidence was tested in court and qualified as such, which is not forth coming, the witness' statement in itself constitutes no evidence. Further, it was contended that, it is not clear how did the said witness statements get into the court record. According to Mr. Mafuru, all was improper and irregularly done. He also contended that, there is nothing on record to show that the said witness statements and the corresponding attachments were tested and cleared before were admitted in evidence. It was also asserted that, makers of statements did not adopt them to express their authorship. Therefore, Mr. Mafuru wondered how could the learned trial Judge act on such wanting witness statements to arrive at his decision. To round up his point, Mr. Mafuru contended that, the said mishap rendered the witness statements infertile and thus, inconsequential. Therefore, he urged the Court to nullify

the respective proceedings, to quash the resultant decision and set aside the decree and orders, in terms of section 6(2) of the Appellate Jurisdiction Act Cap. 141 (the AJA). Upon hearing Mr. Mafuru's contention, having thoroughly reviewed the record and considered the authorities cited, the central issues for our determination are on how valid and effective were the said witness statements? Were they properly admitted in evidence for determination of the case? We note that the governing rule 49 of the Commercial Court Rules, GN No. 250 published on 13/07/2012 is couched in mandatory terms. It reads: 49.-(1) In any proceedings commenced by plaint, evidence-in-chiefsh all be given by a statem ent on oath or affirm atio rl'. It is gleaned from pages 144 of the record of appeal that on 15/07/2015 it was ordered for the witness statements to be served on the respective adverse parties. However, from 19/08/2015 when the plaintiff's case was called on for hearing, and later on for the defence case, as is appearing from pages 146 to 161 of the record of appeal, the issue of witness statement did not resurface. With respect, however, the learned trial Judge just took on board the witness statements (presumably those

previously exchanged between the parties), wholesale. Not only the statement makers do not seem to have adopted them, expressing the ownerships, but also they were not cleared for them to form part of the court record. This take was inconsonant with what we have observed, times and again, for instance in Total Tanzania Ltd. v. Samwel Mgonja (Civil Appeal 70 of 2018) [2021] TZCA 265 ) and Ms. Continental Services Ltd. v. Ms. China Railway Jianchang Engineering Company Ltd. (Civil Appeal 557 of 2022) [2025] TZCA 743.) In Total Tanzania Ltd. (supra), where it was held, among other things, that, for a person who seeks to rely on a witness statement as his evidence, has to be sworn-in or affirmed, first. Also, he has to identify and adopt the witness statement for its admissibility and endorsement by the presiding judge, in terms of sections 63 to 69 of the Evidence Act. We note, by analogy, therefore, that, endorsement of a witness statement and its admissibility before the trial court is done in more or less the same manner as it is for any other documentary evidence. See- our decision in Japan International Corporation Agency v. Khaki Complex Ltd. [2006] T.L.R 343, which we are bound to follow in the present appeal. Based on the legal principle referred above, therefore, we would increasingly remark that, in any judicial proceedings, admission of a witness statement in evidence under rule 48(2) of the Rules is such an essential step

to be taken. However, it is not a stand-alone phenomenon. It has to be preceded by an oath or affirmation by maker of that statement, whereby, also, the latter shall expressly adopt it exhibiting the authorship. It is unfortunate, in the present case, as observed above, that the witness statements of PW1, PW2 and DW1 did not pass this test. The witness statements got in the record quietly and casually, not reflecting authorship of the purported makers. Therefore, they fall short of any evidential touch for them to be relied upon and found any valid and just decision, to say the least. In other words, it was both improper and irregular for the trial Judge to act on such irregularly recorded witness statements prematurely. In fact the said mishap vitiated the proceedings and rendered the resultant decision inconsequential. In the upshot, therefore, in terms of section 6(2) of the AJA we nullify the impugned proceedings which appear on pages 146 to 161 of the record of appeal. In consequence of the said infraction, therefore, the witness statements of PW1, PW2 and DW1, and the respective attachments, are hereby expunged from the record. We also quash the resultant decision and for that reason, set aside the decree and orders. The record be remitted to the trial court with immediate dispatch, for determination of the case in accordance with the law, as soon as practicable. 7

No order is made as to costs, as the determinant issue was suo motu raised by the Court. DATED at DODOMA this 31st day of March, 2026. B. M. A. SEHEL JUSTICE OF APPEAL S. M. RUMANYIKA JUSTICE OF APPEAL M. K. ISMAIL JUSTICE OF APPEAL Judgment delivered this 1st day of April, 2026, virtually in the presence of Mr. Mafuru Majura, learned counsel for the appellant, Mr. Issa Issa, Court Clerk and in the absence of the respondents; is hereby certified as a true 8