East African Development Bank vs Panache Limited & Others (Civil Appeal No. 254 of 2024) [2025] TZCA 1284 (15 December 2025)

IN THE COURT OF APPEAL OF TANZANIA AT MOROGORO fCORAM: LEVIRA. J.A., MASOUD, 3.A. And MLACHA, J.A.1 CIVIL APPEAL NO. 254 OF 2024 EAST AFRICAN DEVELOPMENT BANK ................................ APPELLANT VERSUS PANACHE LIMITED ............................................. . .........1 st RESPONDENT CLOTHILDA MONA PUNDUGU ......................................... 2 nd RESPONDENT PHONEX OF TANZANIA ASSURANCE COMPANY LIMITED.........................................................3 rd RESPONDENT TANZ INDIA ASSURANCE COMPANY LIMITED ...... . ....... 4 th RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Commercial Division, at Dar es Salaam) (Aqatho, J.) dated the 24th day of November, 2023 in Commercial Case No. 41 of 2023 JUDGMENT OF THE COURT 4th & 15th, December 2025 MLACHA. J.A.: The appellant, East African development Bank, sued Panache Limited, Clothilda Mona Pundugu, Phoenix of Tanzania Assurance Company Limited, Tanz India Assurance Company Limited, the first, second, third and fourth respondents, respectively seeking a declaratory order against the first and second respondents that, she is entitled to receive and be paid the decree amount to the tune of USD 608,491 in i

Commercial Case No. 67 of 2009 or such amount as may be adjudicated by the Court of Appeal in Civil Appeal No. I l l of 2020, now pending, plus interest; an order directing the third and fourth respondents jointly and together, to pay the insurance money involved in the case to the appellant; general damages and costs. The suit was heard and struck out at the preliminary stage; hence, the appeal now before the Court. Facts necessary for the disposal of this appeal may be presented as follows: The appellant and the first respondent had a business relationship based on two lease agreements entered on 27/8/2004 and 28/11/2005 respectively. The second respondent, the director of the first respondent, was also a guarantor of the first respondent. Under the lease agreements, the appellant purchased 28 tread steer bogie wagons and leased them to the first respondent. One of the key terms of the agreements was that the first respondent was to insure the wagons in favour of the appellant. This was done through the third and fourth respondents. The first respondent operated the wagons successfully up to June 2007 when 18 wagons were involved in an accident at Saranda area Dodoma. They were all damaged but 11 of them were damaged completely. The first respondent lodged a claim with the insurers who repudiated the claim leading to the filing of Commercial Case No. 67 of

2009 at the High Court (Commercial Division) Dar es Salaam (the High Court). The case was decided in favour of the first respondent who was awarded USD 508,481.83 as compensation for the damaged wagons with interest at the rate of 18% per annum, USD 100,000.00 as general damages for hardship suffered and interest at the rate of 7% from the date of judgment to the date of payment in full. The third and fourth respondents were aggrieved and filed Civil Appeal No. I l l of 2020 before the Court. The appeal is still pending before the Court. The appellant alleges that, while the case was still pending in the High Court, there were some discussions between her and the first respondent who accepted liability and promised to pay through the decretal sum in Civil Case No. 67 of 2009. She filed Commercial Case No. 41 of 2023, which is the subject of this appeal, as a means of enforcing the agreement between them. It is also worth noting that, the appellant had filed earlier, Commercial Case No. 35 of 2022 against the second respondent, as guarantor of the first respondent, trying to enforce the guarantee agreement but it was dismissed, for which she appeafed before the Court in Civil Appeal No. 192 of 2023. This appeal is also pending before the Court.

In disposing of the suit, Agatho 1 (as he then was), held among other things that, the suit could not legally exist before the High Court because of the pending appeal which rendered the High Court without jurisdiction. He cited our decision in Exaud Gabriel Mmari v. Yona Seti Akyo and 9 Others, Civil Appeal No. 91 of 2019 to support his position that, once a notice of appeal is lodged before this Court, the High Court ceases to have jurisdiction in the matter. He also had the view that, Commercial Case No. 41 of 2023 is not maintainable because the plaintiff (now the appellant) was not a party in Commercial Case No. 67 of 2009. Neither was there any evidence that the decree was assigned to him under rule 14 of Order XXI of the Civil Procedure Code, Cap 33 R.E. 2019 (the CPC). The appellant did not see justice in the decision of the High Court and presented nine grounds of appeal for consideration by the Court, which for reasons to be apparent soon, we will not reproduce them. Mr. Gabriel Simon Mnyele, learned advocate, appeared for the appellant, whereas the first and second respondents were represented by Mr. Simon Barlow Lyimo, also learned advocate. The third and fourth respondents were represented by Ms. Hamida Sheikh assisted by Mr. Odhiambo Kobas, both learned advocates.

On taking the floor, Mr. Mnyele adopted the contents of his written submissions filed earlier on in terms of rule 106 (1) of the Tanzania Court of Appeal Rules, 2009 and made a submission to amplify them. On being probed by the Court on the competency of the suit giving rise to this appeal, he had this to say. That, the appellant was faced with a difficult situation and had no means but to file a suit to ring fence and arrest the decree in Civil case No. 67 of 2009 for which she had an interest based on her earlier understanding with the first respondent. That, she could not risk to wait for the outcome of the appeal because the third and fourth respondents could misuse the money. Mr. Mnyele went on to submit that the appellant could not join the proceedings in the High court because she got knowledge of the existence of the suit after delivery of the judgement. He conceded that the suit was novel but insisted that the appellant had no other means but to file it to ring fence the decree. When he was pressed to show the legal base upon which the suit was based, he submitted that the suit was based on the Law of Limitation Act but could not cite any specific provision of the law allowing the appellant to file a suit of this nature. He insisted that there was an agreement between the appellant and the first respondent allowing the appellant to be a beneficiary of the decree but could not show the contract document. 5

On his part, Mr. Lyimo made reference to paragraph 10 of the plaint, appearing at page 9 of the record of appeal, where it is written, " While the suit was pending (Commercial case No, 67/2007) the first and second defendants acknowledged their liability upon demand and undertook to use the decree money to pay the said defaulted amount and contended that, the appellant was aware of the existence of the suit in the High Court but decided not to join. He was also aware of the appeal but decided to file the suit against the law and established principles. He submitted that the High Court lacked jurisdiction to hear the case in view of the existence of the appeal before the Court. He submitted further that, these proceedings will have no meaning if the appeal is allowed. He contended that, instead of filing the appeal, the appellant could have waited for the outcome of the appeal and make an application to attach the decree. He urged the Court to dismiss the appeal because it is based on misconceived proceedings. On her part, Ms. Shekh contended that the appellant was aware of the existence of Civil case No. 67 of 2009 but opted not to join in the suit. She instead filed the suit contrary to practice. She submitted that, there is a litany of authorities that, once a notice of appeal is lodged before the court, the High Court ceases to have jurisdiction in the matter making the proceedings and the decision of the High Court in this case a nullity. She 6

expressed her ill feelings on the trend of filings cases which have no legal base. She questioned the reason as to why the appellant filed this case in the High Court on top of Civil Case No. 35 of 2022 on the same subject matter. She also filed applications. Ms. Sheikh could not say so, but we could read from her face, a complaint that the appellant is abusing the court process. She urged the Court to dismiss the appeal. Mr. Kobas joined hands with Ms. Sheikh in all fours and added the following. That, the third and fourth respondents were not necessary parties in the suit because the appellant was not a party in the insurance contract. He cited our decision in Mexons Investment Limited v. CRDB Bank PLC, [2022] TZCA 297 on who is a necessary party and circumstances under which a necessary party can be joined. He submitted that, the appellant could file her case against the first and second respondents only and get what she wanted without involving the third and fourth respondents. He could also file a Miscellaneous Cause for orders of attaching the decree under the CPC or file a revision before the Court if he had anything to believe that the decision of the High Court in Civil Case No. 67 of 2009 was illegal. He urged the Court to dismiss the appeal. In rejoinder, Mr. Mnyele reiterated her earlier stance stressing to have a cause of action against the respondents. He submitted that if the

Court will find the suit to have been prematurely filed, it should return it to the High Court for a fresh hearing instead of dismissing the appeal. On our part, we had time to examine the record of the High Court and consider the submissions of the parties. As intimated above, the gist of the appellant's case is a desire to get hold of the proceeds of the decree of the High Court Commercial Case No. 67 of 2009. The case which was decided in favour of the first respondent but there is an appeal before the Court. Believing to be the owner of the wagons, and thus the ultimate beneficiary of the insurance money, the subject matter of the suit, the appellant decided to file the suit against all who were involved to ensure that the fruits of the decree fell into her hands. Two issues arise at this stage; to wit, whether there was cause of action against the respondents and whether the High Court had jurisdiction to entertain the matter. We will start with cause of action. The Civil Procedure Code does not define the phrase. We get a description of what it is through case law. In John M. Byombalirwa v. Agence Maritime Internationale (Tanzania) Ltd. [1983] TLR 1, the Court stated thus: "The expression "cause o f action" is not defined under the Code, but it may be taken to mean essentially facts which Itis necessary for the

plaintiff to prove before he can succeed on the suit" [Emphasis added] This makes reference to the essential set of facts and legal grounds (based on tort, contract e.t.c) that entitle the plaintiff to seek a remedy against the defendant. The plaint will usually show the legal basis for filing the suit detailing the wrong suffered and the relief sought. We get it upon a perusal of the plaint together with anything annexed to it and upon the assumption that any express or implied allegations of fact are true. See Jeraj Shariff and Company v. Chotai Fancy Stores [1960] E.A. 375. The plaint presented before the High Court gives a historical account of the dispute from the date of signing the lease agreements to the date of filing the suit. It shows the verdict of the High Court in Commercial Case No. 67 of 2020 and the existence of an appeal in respect of the decision. It also talks of Civil Case No. 35 of 2022 filed by the appellant whose appeal is also pending before the Court. It has the prayers of the appellant as intimated above but does not speak of any legal wrong, be it in contract or tort, done by the respondents to the appellant. It has no any attachment signed by the appellant and the first respondents giving right to the appellant to sue on the decree. It does not say why the third and fourth respondents were sent to court save for prayer that the money 9

should be paid to her. It appears that they were sued, to use the words of Mr. Mnyele, in a move "to ring fence the respondents"to ensure that the insurance money goes to the appellant. In total, our look at the plaint could not find any cause of action against the respondents. Mr. Mnyele contended that, the suit is based on a judgment of court which is regulated by item 16 of the Law of limitation Act. But apart from citing item 16 of the First Schedule which does not provide any legal right, but the limitation period, he could not cite a specific provision of the Law of Limitation Act giving right to the appellant to sue the respondents. Neither do we think that, there is any provision other than item 16 which prescribes a period of 12 years as the period in which one can sue on judgment of court. This Law of Limitation Act regulates the procedure. It does not provide any substantive rights capable of being enforced in a court of law. We agree that there are circumstances where a person can file a suit based on a judgement of court, but we have the view that, there must be a judgment of court giving rights to the plaintiff or touching his rights, which cannot be obtained otherwise than by filing a suit to obtain a decree to enforce it. The cause of action in such a case is the right contained or taken away by the judgment of court. The trial court upon proof of the 10

existence of the right can pronounce judgment for the plaintiff and extract a decree which can be enforced. Such situations are like what was before the High Court of Tanzania at Kigoma in Eva Daniel Mtasha v. Tanzania Wildlife Management Authority and Another, [2023] TZHC 22204 where the plaintiff filed a suit claiming a total of TZs. 15,000,000/= as compensation for 15 heads of cattle which could not be returned by the first respondent as ordered by the High Court in (DC) Criminal Appeal No. 64 of 2019. The criminal court had ordered return of 61 heads of cattle to the plaintiff but 15 heads of cattle could not be returned for a considerable period of time causing untold hardships to the plaintiff. As cattle, they could have given birth to numerous calves over the period increasing the number of cattle. The plaintiff could not get the cattle, their calves and general damages through the judgment in the criminal case hence right to file the suit. A person can also file a suit to recover a property which was taken wrongly by a judgment of court for example in probate cases, where a judgment can be made vesting an asset to an heir which does not belong to the deceased. A person who claims to be the owner can file a suit and if he will satisfy the court that he is the owner, the property can be returned to him. The emphasis here is that the plaintiff must have a right in the judgment which cannot be obtained otherwise but by filing a suit li

or his right which was taken by a judgment of court which cannot be obtained save for filing another suit. Looking at the plaint and the message it carries, we could not find anything in the judgment in Civil Case No. 67 of 2009 giving right to the plaintiff to sue any of the respondents. No wonder Mr. Mnyele admitted that, the suit is novel, meaning that it is new; a suit of its own kind. Next is jurisdiction. As intimated above, in a fit case, a person can file a suit based on a judgment of court and get a relief. But in our case, the appellant did not establish the right to sue the respondents based on the judgment of the High Court made in Civil case No. 67 of 2009. Further, as correctly pointed out by counsel for the respondents, even where she had such a right, the High Court had no jurisdiction to entertain the matter after lodging a notice of appeal to the Court. Its jurisdiction in the matter ceased after lodging the notice of appeal. Mr. Mnyele contended that, the appellant was not aware of the suit. This submission was defeated by Mr. Lyimo when he made reference to paragraph 10 of the plaint. She stated clearly that,s she was aware of the case. She was also aware of the appeal that is the reason she pleaded at paragraph 15 of the plaint that, "or such amount as may be adjudicated by the Court o f Appeal in Civil Appeal No. I l l o f2020. "The defence of 12

ignorance of the existence of the suit, raised by Mr. Mnyele, with respect, we find it to be baseless on the grounds stated. It is thus obvious that the High Court did not have jurisdiction to hear the case. In view of what we have demonstrated above, we find the suit filed before the High Court to have been misconceived and improperly before the court. That goes to the appeal which is dismissed with costs. DATED at DODOMA this 12th day of December, 2025. M. C. LEVIRA JUSTICE OF APPEAL B. S. MASOUD JUSTICE OF APPEAL L. M. MLACHA JUSTICE OF APPEAL The Judgment delivered this 15th day of December, 2025 in the presence of Mr. Gabriel Mnyele, learned counsel for the appellant and Mr. Simon Barlow Lyimo, learned counsel for the 1s t and 2n d respondents, Mr. Odhiambo Kobas, learned counsel for the 3r d and 4th respondents and Ms. Thabita Daniel, Court Clerk; both through Virtual Court is hereby certified as a true copy of the original. DEPUTY REGISTRAR COURT OF APPEAL D. P. KINYWAFU 13