Chenfeng Tian & Another vs Sisti Sylvester Mganga (Civil Appeal No. 184 of 2023) [2026] TZCA 390 (18 March 2026)
Judgment
IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM fCORAM: MWANPAMBO. J.A. MGONYA, 3.A. And FELESHI J.A.) CIVIL APPEAL NO. 184 OF 2023 CHENFENG TIAN ............. ...... ................................. ........ 1 st APPELLANT CHINA PRAGON INTERNATIONAL CO. L T P ........................... 2 nd APPELLANT VERSUS SISTI SYLVESTER MGANGA................... . ...............................RESPONPENT (Appeal from the Judgment and Pecree of the High Court of Tanzania Commercial Pivision at Par es Salaam) (Maqoiqa, J.) dated the 28th day of October, 2022 in Commercial Case No. 145 of 2021 JUDGMENT OF THE COURT 11th November, 2025 & 18th March, 2026 MWANPAMBO. J.A.: The appellants lost to the respondent in a suit tried before the High Court (Commercial Division) at Dar es Salaam involving breach of multiple agreements entered at different times between the parties. In a judgment entered on 28 October 2022, the appellants were adjudged to have been in breach of the agreements and condemned to pay the respondent TZS 30,000,000.00 as general damages and USD 2,000 per month from January 2014 to December 2020 and TZS 6,789,017.00 being outstanding
annual rent and penalties. Dissatisfied, the appellants have instituted the instant appeal in their quest to overturn the trial court's decision. The facts which triggered the institution of the suit before the trial court present a somewhat unsatisfactory state of affairs involving contractual relationship between the parties. The otherwise well- intentioned business plans turned out to be a failure resulting into termination of the agreements due to misunderstanding contributed partly by lack of proper professional legal advice. The relationship of the parties began with an agreement dubbed Stone Mining Contract made on 1 May 2013 between the respondent and the first appellant also a director of the second appellant. That contract admitted in evidence as exhibit PI (a) was for the mining of stones in Itiso Village, Chamwino District in Dodoma ("the project") in which the respondent had primary mining licences ("the PMLs"). The parties to that contract agreed that the first appellant would mine stones in the areas in which the respondent had mining licences through the second appellant which owned equipment, key technical staff and funds for the business. That contract was for two years meant for construction and development of the project to 31 December 2015 pending formation of a joint venture company which would later on takeover the project and run it. 2
Subsequently, the first appellant and the respondent executed a memorandum of understanding (Moll) for forming a joint venture and register a company. That Company; China Dragon Stone Company, once incorporated, would take over management and operation of the project by June 2016 at which time, the respondent would have transferred all mining rights in his Mining Licences to the said company. Nevertheless, the wishes of parties expressed in the MoU could not be realised as the JVC was not yet formed. All the same, on 31 May 2016, the respondent and the first appellant executed a Joint Venture Agreement ( the JVA) admitted in evidence as exhibit Pl(d)) for mining business by China Dragon International Company Limited (the second appellant). Through this agreement, the parties agreed to establish a joint company after which, the respondent undertook to apply and deal with mining licences and all necessary documents needed for mining and export. The financing was facilitated by the second appellant who was nonetheless, not a party to the contract. It was equally agreed that since the first appellant who is described as investor had injected substantial funds in the project with the attendant risks. The project was to be divided into two phases. The first one called the investing phase was scheduled to run from 2014 to 31 December 2018 while the second one, dubbed the recovery phase was to run for ten years commencing 1 January 2019 to 31 December 2028.
During both phases, the first appellant agreed to pay the respondent a monthly allowance of USD 2,000 each. Later, the respondent and the second appellant entered into two Joint Venture Agreements in succession. The first was executed on 16 December 2015 (exhibit Pl(d)) which was to be in force till January 2019 and the second one (exhibit Pl(e)) was executed on 1 February 2019 to be in force for ten years up to 2028. In both JVAs, the respondent and the second appellant executed a Joint Venture Agreement (JVA) (exhibit Pl(d)) for prospecting dimension stones quarrying through which, a company called Kingstone Tanzania Limited (KST) was formed. The respondent and the second appellant held 25% and 75% of the shares respectively. Parties had a number of obligations under the JVAs amongst others, the respondent undertook to ensure that all of his primary mining licences were converted into MLs and transferred them to the JVC; responsibility for any and all liaison activities with government and local village and ensuring that all the projects under KST observe all required laws and regulations of the country in relation to mining activities. On the other hand, the second appellant's obligations included; providing all initial operating fund, budget, equipment, tools, technology and technical
support; solely responsible for carrying out all mining, processing and marketing activities, and; maintenance of all books of accounts. After eight years of the contractual relationship through the aforementioned agreements, on 18 November 2020, to be exact, the respondent felt that he was being short changed by the appellants in that, while he had allegedly fully discharged his contractual obligations, the appellants had reneged from doing their part in breach of the signed agreements. In the amended plaint, the respondent cited instances, of breaches which included abandonment of the project and instead acquiring their own licences in new areas to which all tools and equipment were taken; stopping payment of monthly allowances, deliberately dishonouring invoices and other liabilities, specifically, from Government institutions that is; Tanzania Revenue Authority (TRA), National Environment Management Council (NEMC) and the Mining Commission. The respondent also complained of attempts by the appellants to remove him from the JVC through fraudulent share transfer documents. As there was no solution to the respondent's grievances, he instituted the suit in court claiming declaratory and monetary reliefs. The appellants resisted the suit and denied having breached any of the agreements. Instead, it was their case that it is the respondent who 5
was in breach of the agreements by failure to process the PMLs into MLs and transfer them to the JVC as agreed. They also contended that the respondent breached the agreements by writing letters stopping the second appellant from operating in the contracted area hence, the resort to looking for other areas through own acquired mining licences. Regarding payment of monthly allowances of USD 2,000 each, they contended that they no longer had an obligation to pay allegedly because the agreement creating such obligation had already been superseded by the JVA signed on 16 December 2015. In relation to the claim for the alleged share transfer, the appellants claimed that the respondent voluntarily exited from the JVC. Arising from the foregoing, the trial court framed three issues. The first and the main one was whether the appellants breached the terms and conditions executed in respect of Itiso project. The second was whether, if the first issue was answered affirmatively, the respondent suffered damages and to what extent and finally; the reliefs. From the evidence in chief through the witness statements for the parties, oral evidence in cross-examination and re-examination as well as documentary exhibits, the trial court found it proved on the required standard that the appellants were in breach of the agreements and thus
determined the first issue in the affirmative. Regarding the second issue, the trial court found no difficult in determining it in favour of the respondent and assessed general damages at T7S 30,000,000.00. In the end, the trial court granted the reliefs in favour of the respondent as mentioned earlier on. The appellant's dissatisfaction against the impugned decision is upon four grounds. Mr. Deogratias John Lyimo Kiritta learned advocate and his colleague, Mr. Benson Kitang'ita Kisamarwa, also learned advocate argued the 1s t and 3rd grounds conjointly in the same way they did in respect of the 2n d and 4th grounds in their written submissions lodged ahead of the hearing. It was Mr. Kiritta who addressed the Court orally on the date of the hearing highlighting on areas he considered worth doing so in addition to the already lodged written submissions. For clarity, after paraphrasing, the grounds of appeal run as follows:-
-
The trial judge erred in law and fact in finding that the 1st and 2n dAppellants breached the agreements executed between the respondent and the appellants.
-
The trial judge erred in law and fact in finding that the respondent was entitled to payment o f USD 2,000.00 after the respondent had become the shareholder o f the 2n d appellant. 7
-
The trial judge erred in iaw fact for not finding that the respondent had breached the terms and conditions o f the agreement between the parties to the suit in the High Court
-
That, the trialjudge erred in law and fact in finding that the respondent had suffered special damages in the unpaid wages o f USD 2,000.00 per month and unpaid sum o f Tshs. 6,789,017.00 as well as general damages in the sum o f Tshs. 30,000,000.00. The 1s t and 3r d grounds raise the issue whether the trial court was correct in its finding that the appellant breached the terms and conditions of the agreements between the parties. Inevitably, in addressing the Court, the learned advocates touched each agreement entered between the respondent and the first appellant and second appellant singularly at different times on which there is hardly any dispute. The gravamen of their complaint rested on the trial court's affirmative finding on the 1s t issue regardless of the fact that the respondent had not performed part of his bargain by converting the PMLs into MLs and transferring them into the second appellant's name. The learned advocates also pointed out that, the trial court's finding was erroneous considering the evidence that the respondent was in breach of the agreements by issuing a notice to the appellants on 18 November 2020 to stop mining, processing, transporting and selling stone products under his licence. According to the learned
advocates, this resulted into the second appellant looking for another site to continue with operations. To bolster their argument, they cited the Court's decision in Phillipo Joseph Lukonde v. Faraji Ally Said [2020] T.L.R. 556 to stress the principle on sanctity of contracts entailing parties to an agreement to honour their obligations. In his oral submission, Mr. Kiritta contended that, the trial court disregarded evidence that the respondent was in breach of the agreement (exhibit Pl(e)) which made it impracticable for the appellants to perform their contractual obligations. According to Mr. Kiritta, the trial court approached the issue subjectively, hence an erroneous finding that the appellants were in breach of the agreements. In his reply, M r. Mathew Yonika Ngaga, learned advocate who represented the respondent both at the trial and in this Court was in full support of the trial court's findings. Unlike the appellants' counsel, he argued the two grounds separately. In relation to the 1s t ground, the learned advocate was insistent that the appellants were in breach of the agreements with the respondent which warranted the affirmative finding on the issue. Counsel drew our attention to the Court's decision in Abualy Alibhai Azizi v. Bhatia Brothers Ltd [2000] T. L. R. 288 for the proposition that, sanctity of contracts admits no excuses for non performance of contracts except where it is established that the contract 9
was vitiated due to incapacity, fraud, misrepresentation or the enforcement of it is prohibited by public policy. That was all for the 1s t ground. In the 3r d ground, Mr. Ngaga argued that, contrary to the appellant's contention, the respondent performed his obligations under the respective agreements that is to say; making his PMLs available for the operation of mining and stone quarrying activities, converting his PMLs into MLs and acting as liaison officer between the Joint Venture and Government and local community. Counsel was resolute that, the appellants claim on the alleged failure to transfer the respondent's ML 572/17 to the second appellant is against the evidence on record through exhibit P ll which shows that the consent to the transfer of ML 572/2017 was made by the Mining Commission on 30 June 2020, Regarding notice to suspend operations, counsel discounted the claim that it amounted to breach other than the respondent asking the appellants to cooperate to resolve the issue, subject of the notice which they neglected to do. He thus invited the Court to dismiss both grounds. As hinted earlier on, the 1s t and 3r d grounds raise the issue on the correctness of the trial court's finding that the appellants breached the agreements with the respondent. The trial court found the respondent 10
discharged his burden of proof that the appellants were in breach of the agreements in exhibit PI (a) - (e). In support of the affirmative finding on the 1s t issue, the learned trial judge gave the following reasons: One, exhibits Pla-e are dear that parties herein signed a series o f contracts and Joint Venture Agreements o f which the defendants were obliged to perform some specific tasks in the execution o f the said agreements and JVAs and among the terms was payments o f [USD.2000] (as per exhibit Pic) to the plaintiff as allowance but no contrary evidence was tendered to negate this claim. This is [no] other than breach o f contract. Two f the argument that the plaintiff never transferred the mining licence to the 2n d defendant is negated by the admission by DW1 that, eventually the plaintiff upon getting the consent of the Mining Commission transferred the said mining license to the 2n d defendant in 2020. Three, the arguments by the defendant that the 2019 contract superseded all previous agreements is but without any supportive clause to [that] effect Even- going by exhibit Pl-d, it only superseded the previous contract which are exhibit Pla-c and the contents o f exhibit Pl-e is intact and should be respected by parties as to what they agreed." It is glaring from the above excerpt that the learned trial judge treated the agreements whole sale as if all parties were privy to each of
them and that all of them were in operation on the date of the alleged breaches. On the contrary, it is clear that the parties to exhibits PI (a), PI (b) and PI (c) were the respondent on the one part and first appellant on the other. The second appellant was only privy to exhibits PI (d) and PI (e). That is notwithstanding the indication in exhibit PI (a), PI (b) and PI (c) that the first appellant signed as an investor and director of the second appellant. It was thus incumbent on the part of the trial court to treat each contract on its own before concluding, as it did that the appellants were in breach of the agreements in answering the 1s t issue. In the circumstances, in determining the appeal, we shall re-appraise the evidence by treating contracts between the respondent and the first appellant separate from exhibit PI (d) and PI (e) between the respondent and second appellant taking into account that, for all intents and purposes, the only operative contract between the respondent and second appellant was exhibit PI (e). We shall begin with the contracts between the respondent and first appellant. Critical to the issue under consideration is exhibit PI (c) in which the respondent and the first appellant as the representative of the second appellant agreed to form a joint venture company. The respondent's obligation was to apply for licences and deal with all documentation necessary for mining and export financed by a budget 12
provided by the second appellant who was, nonetheless, not a party to exhibit PI (c). It was also agreed between the parties that, once the joint venture company is operational, there will be two phases of its operations, the initial investing phase running from 2014 to 2018 and cost recovery phase from January 2019 to 2028. It is in this agreement, whereby the first appellant agreed to pay the respondent USD 2,000 per month during both the investing and recovery phase. It is significant that, not only was the second appellant not a party to the agreement but also there is no indication that it assumed the obligation to pay the respondent the agreed amount. That means, unlike the trial court, it is not correct that both appellants breached the agreement in exhibit PI (c) for failure to pay the respondent USD 2,000 per month. In that regard, the party in breach was the first appellant regardless of any arrangement that the ultimate bearer of the liability was the second appellant. Next for our consideration on the same issue is whether there was indeed non-payment of the said amount as found by the trial court. The appellants' learned counsel has impressed upon the Court that the liability to pay the respondent ceased with the execution of the agreement dubbed Joint Venture Agreement between Eng. Sisti Sylvester Mganga and M/s. China Dragon International Co. Ltd (the respondent and 2n d appellant respectively) made on 16 December 2015 admitted in evidence
as exhibit PI (d). In doing so, counsel relied on the recitals to exhibit PI (d) stating that the agreement was a replacement of the previous two years contract for mining between March 2014 to 2016 (exhibit Pl(b)) and thus the appellants were under no further obligation to pay the said amount. M r. Ngaga argued that the replacement was limited to the specified exhibit PI (b) and not exhibit PI (c). Be it as it may, it is our view that the appellants cannot benefit from the recitals in exhibit PI (c) because, (1) the contract (exhibit PI (d)) was between the respondent and the second appellant who was not a party to exhibit PI (c); (2) it is trite that, recitals are not part of the operative terms of the contract which purportedly replaced a previous one; see: Johanna Else Astrid Van Beest v. Ayubu Mika Metili & Others [2025] TZCA 1303 and; (3) the replacement, if any, was in respect of exhibit PI (b) between the respondent and the first appellant running between 2014 and 2016. Consequently, the trial court's finding that the appellants breached the agreements by failure to pay the respondent USD 2,000 to the extent it relates to the first appellant cannot be disturbed. We shall now consider exhibit PI (e) which, as mentioned earlier on, was the only contract in force during the occurrence of the cause of 14
action leading to the institution of the suit. That is notwithstanding the general assertion by the respondent on the breach of multiple, agreements. Admittedly, the pleadings were not focused as they should. The learned authors of the Principles of Pleadings in India, P.C. Mogha, 14th edition have the following pertinent remarks: "...Jna suit brought on contract, the contract must first be alleged, and then its breach, then the damages. The actual contract which was in force between the parties should alone be alleged... "[bolding for emphasis - At page 269] It is glaring that the joint venture agreement between the second appellant and the respondent through exhibit PI (d) was for a fixed period of three years between December 2015 to January 2019 with no option for renewal. That explains why the parties thereto had to execute another agreement (exhibit PI (e)) on 1 February 2019 on more or less similar terms and conditions but with a duration of ten years. That is the contract which was in force between the respondent and the second appellant which should alone have been pleaded in the amended plaint. In this regard, to see whether the second appellant was in breach, the trial court ought to have focused its determination to that contract only to the extent it related to the alleged breaches of the joint venture agreement between the relevant parties. A generalised finding of breach as is evident in the 15
trial court's determination of the 1s t issue at page 717 of the record , was, with tremendous respect, uncalled for. Be it as it may, upon our re appraisal of the respondent's case pleaded in the amended plaint, we are inclined to concur with the trial court its finding that the second appellant was in breach of the joint venture agreement in exhibit PI (e). The second appellant's obligations in exhibit PI (e) included carrying out mining, processing and marketing activities and ensuring that the project under the Joint Venture Company observed all required laws and regulations of the country regarding mining activities. The respondent's claims in the amended plaint on breach included, abandonment of the project and removal of equipment without following the prescribed procedure. In his evidence, the respondent maintained that the appellants had absconded from the project and refused to cooperate with him in discharging statutory liabilities with the Mining Commission resulting into default notices against him despite him having performed his obligations under the contract in particular, transferring mineral rights to the second appellant. That evidence was not seriously controverted by the appellants. As found by the trial court, their claim that the respondent had breached the agreement by failure to transfer Mining licences to the second appellant fails on the face of evidence on the transfer of ML 512/2017 from the respondent to the second appellant. As to other PMLs which were 16
to be converted to MLs before being transferred to the JVC, the evidence by the respondent was that the process of doing so was cumbersome taking long time to be completed. That evidence was not controverted. Indeed, in view of the fact that there was no deadline set for completion of the transfer process in exhibit PI (e) executed on 1 February 2019, coupled with the fact that there is no evidence on record showing that the appellants had at any time complained of the breach, the appellants' complaint on this is, but an afterthought. Undeniably, the respondent's letter (exhibit P7) dated 18 November 2020 suspending operations at Itiso quarry remains unanswered by the appellants. Significantly, the appellants never seized the opportunity to invoke clause 7 of exhibit PI (e) by attempting to resolve the dispute, if any, through friendly consultation. In the upshot, unlike the contention by the appellant's learned advocate inciting us to disturb the trial court's finding on the breach, we are not prepared to do so in view of the evidence showing that the second appeiiant run by the first appellant as managing director acted contrary to the terms of exhibit PI (e). In the event, we find no merit in the 1s t and 3r d grounds and dismiss them. Next, we shall discuss the 2n d and 4th grounds faulting the trial court for finding that the respondent was entitled to USD 2,000 despite 17
becoming a shareholder of the second appellant on the one hand and holding that the respondent suffered special damages in the sum of USD 2,000 unpaid allowances per month and unpaid sum of TZS 6,789,017.00 as well as general damages in the sum of TZS 30,000,000.00. The submission by the appellants' counsel on this was fairly brief. In respect of the unpaid USD 2,000 per month, they contended in the first place that the obligation ceased with the execution of exhibit PI (d) on 16 December 2015. However, we have already held that, exhibit PI (c) could not have been superseded by exhibit PI (d) involving a party who was not privy to exhibit PI (c). We need not belabour anymore on this point and so we reject the argument. On the second, limb it is argued that, since the respondent never complained at any time on the non-payment that meant that he had already been paid the claimed amount. Mr. Ngaga for his part was adamant that it was the appellants' duty to prove payment rather than assuming that it was indeed paid. In any event, it was argued, the claim that payment could not be made on the basis of the respondent becoming a member of the second appellant is baseless in view of the fact that it was only in 2020 when he became a member. 18
With respect, while there is no dispute that prior to institution of the suit the respondent had not claimed non-payment of USD 2,000, it has not been suggested that he extinguished his right to claim that amount or that it amounted to estoppel. As rightly submitted by Mr. Ngaga, the duty to prove that the payment had been made was no other than the appellants who alleged so. We have no doubt the learned advocates for the appellant would be pretty aware of the time-honoured principle; a negative is incapable of proof- see for instance: Paulina Samson Ndawavya v. Theresia Thomas Madaha [2019] TZCA 453. That means that, since the respondent stated that he had not been paid and the appellants claimed that they had paid him till 2015, it was incumbent upon them to furnish proof of such payment and not simply claim as they did. As we have already held that the obligation to pay in exhibit PI (c) was not superseded by the joint venture agreement between the respondent and first appellant dated 16 December 2015 (exhibit PI (d), the appellants' alternative argument on the respondent's membership in the second appellant does not arise. That argument is equally rejected which takes us to the award of TZS 30,000,000.00 general damages for breach. The submission by the appellant's learned advocates is that the respondent was not entitled to award of TZS 30,000,000.00 general 19
damages or any part thereof. They have not gone further than that. It is implicit that their argument is anchored on the assumption, mistakenly though, that the Court would disturb the trial courts' finding on the 1s t issue which is not the case. Accordingly, without further ado, we respectfully endorse M r. Ngaga's submission premised on the Court's decision in Hotel Travertine Limited v. M/s Gailly Roberts Limited [2009] T. L. R. 158 quoting Lord Wilberforce's statement in Johnson and Another v. Agnew [1980] AC 367 thus; "The general principle for the assessment o f damages is compensatory i. e., the innocent party is to be placed so far as money can do so, in the same position as if the contract had been performed." Since it has not been suggested that the award of general damages is inordinately high we cannot, on the authority of The Coopers Motors Corporation LTD. v. Moshi/ Arusha Occupational Health Services [1990] TLR 96 and many others, we shall leave it intact. Finally, on the award of TZS 6,786,017.00 on account of annual rent and penalties levied by the mining commission on the respondent as a mineral licence holder. Apparently the appellants made no submission on it which presupposes that they abandoned their contest on it and so we need not belabour on it but uphold the trial court's award on it. The upshot 20
of the foregoing is that we find no merit in the 2n d and 4th grounds and dismiss them. The above said, the appeal lacks merit and we dismiss it in its entirety. The respondent shall have his costs in this appeal. DATED at DODOMA this 17th day of March, 2026. L. J. S. MWANDAMBO JUSTICE OF APPEAL L E. MGONYA JUSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL Judgment delivered this 18th day of March, 2026 via Virtual Court in the presence of Mr. Deogratias Lyimo Kirita, learned counsel for the Appellants, Mr. Mathew Ngaga, learned counsel for the Respondent and Mr. John Gervas, Court Clerk is hereby certified as a true copy of the j U m X- A. S. O^JGULU DEPUTY REGISTRAR COURT OF APPEAL 21