Pan Oceanic Insurance Brokers Limited & Others vs Alliance Insurance Corporation Limited (Civil Appeal No. 251 of 2024) [2025] TZCA 1287 (15 December 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM (CORAM: NDIKA. J.A.. MASHAKA. 3.A. And NGWEMBE, J.A.T CIVIL APPEAL NO. 251 OF 2024 PAN OCEANIC INSURANCE BROKERS LIMITED ................ FIRST APPELLANT BASHIR GULAMMEHDI PIRMOHAMED...........................SECOND APPELLANT FAREED SHAABAN S E IF ......................................................THIRD APPELLANT VERSUS ALLIANCE INSURANCE CORPORATION LIMITED ................... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Commercial Division at Dar es Salaam) (Aaatho. 3.^ dated the 17th day of November 2023 in Commercial Case No. 126 of 2022 JUDGMENT OF THE COURT 4th & 15th December, 2025 NDIKA. J.A.: Pan Oceanic Insurance Brokers Limited, Bashir Gulammehdi Pirmohamed, and Fareed Shaaban Seif, referred to as the first, second, and third appellants respectively, faced an unfavourable outcome in a breach of contract lawsuit brought against them by Alliance Insurance Corporation Limited, hereafter known as the respondent. Displeased with the result, they seek recourse from this Court on four grounds, citing procedural and evidential grievances. i

The first appellant is an insurance brokerage entity located in Dar es Salaam. While the second appellant was one of the first appellant's directors, the third appellant was its Chief Executive Officer. It is common ground that the first appellant maintained a longstanding business relationship with the respondent, a licensed insurance company also based in Dar es Salaam. The respondent asserted that during that relationship, the first appellant placed clients for its insurance products and collected insurance premiums on its behalf for the insurance covers it issued. During that period, the law had not yet barred insurance brokers from receiving premiums upon the instruction of the insured. Certainly, pursuant to section 72 (4) of the Insurance Act, Cap. 394, as amended by section 39 of the Written Laws (Miscellaneous Amendments) Act, No. 7 of 2017, an insurance broker is now prohibited from accepting any premium from the insured for insurance coverage arranged at the insured's instruction. By 10th September 2020, the first appellant allegedly owed the respondent TZS. 485,883,890.00 in unremitted insurance premiums. In an effort towards recovery of the money, the respondent supposedly executed a contract for remittance of the money on 10th September 2020 with the first appellant. Under that contract, the first appellant not only acknowledged the said indebtedness but also undertook to settle it in

instalments within five years with effect from 15th September 2020 in accordance with the agreed terms. Besides, the respondent had each of the second and third appellants execute a personal guarantee and indemnity agreement on the same day to settle the said outstanding amount. To prop up its case, the respondent relied on the testimony of its Senior Executive - Legal and Claims (PW1 Jonas Joseph Rutabingwa). In essence, PW1 averred that the appellants acknowledged the indebtedness so unreservedly. He tendered in evidence the contract for remittance (exhibit P2) and the two personal guarantees (collectively admitted as exhibit P3). In their joint written statement of defence, the appellants not only denied liability, jointly and severally, but also disowned exhibits P2 and P3. Testifying for the appellants as DW1, the third appellant acknowledged that there were certain unsettled sums of money between the first appellant and the respondent for the period between 2014 and 2016. He averred further in his witness statement as follows: "5. That the defendants [now the appellants] knowing that the non-rem ittance was also due to their contributory negligence by not cancelling [the insurance] covers as required by law, [the

parties] agreed that in order to solve the problem [the respondent] w ill give [the appellants] extra commission o f 12.5% to service the outstanding premium. 6. [Further to Paragraph 5 above] we agreed to draft a 5-year agreem ent on m odality o f rem ittance based on the [understanding that the respondent] w ill pay extra 12.5% [as] commission, which was signed by the [appellants] and sent to the [respondent] for review and attestation before our lawyers. 7. That the [respondent] did not return the agreem ent to the [appellants] to be witnessed by our advocate." The above testimony clearly indicates that, although DW1 admitted that the first appellant owed an unspecified sum to the respondent as outstanding insurance premiums, he refuted the claim that exhibits P2 and P3 accurately reflected the account status between the parties. According to him, the accurate status should have been represented by their five-year plan outlined in the draft agreement; however, it was neither finalised nor executed. The trial judge resolved all four issues presented for trial in favour of the respondent. He regarded exhibits P2 and P3 as flawless evidence that the appellants owed TZS. 485,883,890.00 in unremitted insurance

premiums and that they were in breach of the terms of exhibit P2 for not settling the amount. Consequently, he rendered a judgment in favour of the respondent for the sum of TZS. 485,883,890.00, representing the outstanding insurance premiums. He awarded TZS. 10,000,000.00 as general damages, along with interest on the premiums due at the court rate of 7% from the date of judgment until full payment is made, as well as costs of the action. During the hearing of the appeal, the counsel for the appellants, Mr. Zidadi Mikidadi, was not present, even though he had been duly notified of the hearing. In accordance with rules 106 (12) (a) and (b) and 112 (4) of the Tanzania Court of Appeal Rules, 2009, we accepted the argument presented by Mr. Allen P. Nanyaro, counsel for the respondent, that the appellants, by submitting their written arguments in support of the appeal, should be considered to have participated in the hearing. This appeal is based on four grounds of complaint, with the first being the contention that the trial court made an error in both fact and law by allowing the trial to proceed ex parte against the second appellant. It is, indeed, on record that when the case came up on 5th October 2023 for re-examination of PW1, the court ordered the trial to proceed ex parte against the second appellant. That order was made after the 5

appellants' advocate, Mr. Mikidadi, moved the court for withdrawal of a witness statement made by a certain Mr. Hussein Muccadam for the appellants. Mr. Nanyaro, appearing for the respondent, had no objection to that prayer but he seized the moment by moving the court to order the trial to proceed ex parte against the second appellant on the reason that he had not filed any witness statement in support of his case. Mr. Mikidadi having conceded to Mr. Nanyaro's prayer, the learned trial judge granted the order sought: "... the prayer by the p la in tiff [now the respondent] to proceed ex parte against the second defendant [now the second appellant] who has failed to file his witness statement, which is tantam ount to non-appearance on hearing date is granted." Even though Mr. Mikidadi conceded to the ex parte hearing order at the trial, he now faults it for two reasons: first, that despite the second appellant not submitting a personal witness statement to bolster his case, he depended on the statement provided by DW1 (the third appellant), which was intended to support the appellants'joint case. Secondly, for an ex parte hearing to be lawful, it must comply with Order VIII, rule 14 (1) of the Civil Procedure Code, Cap. 33 R.E. 2023 ("the CPC"). The provision indicates that an ex parte hearing may be permitted if the defendant does

not submit their written statement of defence within the designated timeframe. It was argued that in this case, the second appellant submitted his written statement of defence, making Order VII, rule 14 (1) of the CPC not applicable, hence no ex parte hearing should have been ordered. Mr. Nanyaro argues on behalf of the respondent, first and foremost, that the appellants were not in a legal standing to contest the ex parte hearing order issued against the second appellant, as the law mandated that the second appellant must first seek to have the ex parte decree set aside. Reliance was placed on Pangea Minerals Ltd v. Petrofuei (T) Limited & 2 Others [2020] TZCA 1959 and Jaffari Sanya Jussa and Another v. Saleh Sadiq Osman [2001] TZCA 65 for the principle that the jurisdiction to set aside an ex parte judgment is solely vested in the trial court. That such a decision cannot be challenged directly on appeal. Alternatively, Mr. Nanyaro contends that it is undisputed that the second appellant did not adhere to rule 49 (1) of the High Court Commercial Division Procedure Rules, 2012, Government Notice No. 250 of 2012 ("the Commercial Court Rules") by failing to submit his evidence in chief through witness statements by the deadline of 29th August 2023, as mandated by the trial court. He emphasises that the lack of witness statements supporting the second appellant's case represents a failure to adequately defend his case. The learned counsel firmly asserted that the

second appellant could not depend on the witness statement of the third appellant to bolster his case, as both were individually named as defendants, each bearing a unique responsibility to personally appear and testify in their defence. Additionally, Mr. Nanyaro argues that Order VIII, rule 14 (1) of the CPC referenced by his learned colleague was not applicable, as the second appellant did not fail to file his written statement of defence. Since the ex parte hearing was mandated due to his failure to submit witness statements, the trial proceedings continued without his presence as he was considered as having not appeared. In light of this, Mr. Nanyaro asserts that Order IX, rule 8 of the CPC serves as the relevant provision to address the lacuna in accordance with rule 2 (2) of the Commercial Court Rules. First of all, we concur with Mr. Nanyaro that the trial in this matter proceeded ex parte against the second appellant because he failed to lodge any witness statements to bolster his case, not because he did not submit a written statement of defence. Therefore, it is undeniable that the current dispute is not covered by Order VIII, rule 14 (1) of the CPC, which governs the failure to offer a written statement of defence. As Mr. Nanyaro correctly asserted, his failure or neglect to file any witness

statement amounted to his non-appearance, which in turn triggers the application of Order IX, rule 8 of the CPC. Additionally, we uphold Mr. Nanyaro's argument that it is improper for the second appellant (or all the appellants) to challenge the ex parte hearing order against the second appellant at this appellate stage without first attempting to set aside the ex parte decree, as required by Order IX, rule 9 of the CPC. Following its earlier decisions in Mic Tanzania Ltd v. Kijitonyama Lutheran Church Choir [2019] TZCA 78, Government of Vietnam v. Mohamed Enterprises (T) Ltd [2006] TZCA 95, and Jaffari Sanya Jussa {supra), this Court held in Pangea Minerals Ltd {supra) that if a defendant against whom an ex parte judgment was rendered wishes to have that judgment set aside, he should apply to the court that entered the judgment to that effect. It is apt to reiterate that an ex parte judgment cannot be directly contested on appeal and that the trial court alone has the authority, in the first place, to set it aside. Inevitably, the first ground of appeal falls by the wayside. We will momentarily bypass the second ground of appeal and focus on the third ground, which requires us to interrogate whether the trial court correctly determined that the appellants were in breach of contract.

We do not believe that the current complaint presents any challenges. The trial court correctly concluded that the respondent's claim was firmly founded on PWl's indisputable evidence, which was bolstered by exhibits P2 and P3. Regarding exhibit P2, the first appellant acknowledged owing TZS. 485,883,890.00 in premiums and committed to paying the debt in instalments over a five-year period beginning on 15th September 2020. Furthermore, exhibit P3 proves that the second and third appellants each signed an indemnity and personal guarantee agreement to pay the aforementioned outstanding sum. The evidence was deemed uncontested and reliable by the trial court. We do not see any grounds for disagreement with the court. It is irrefutable that the appellants failed to fulfil their commitments under exhibits P2 and P3. They never made an effort to make the payment. As a result, the trial court correctly determined that they had broken their commitments. Accordingly, the third ground of appeal fails. Turning to the second and fourth grounds, we note that they share a common theme: a challenge against the legality and validity of the award of TZS. 485,883,890.00 as payment to the respondent. Mr. Mikidadi submits, in support of the aforementioned grounds, that the respondent has failed to demonstrate that the appellants owed it 10

the purported sum of money. He asserts that the claimed sum of money represented special damages for breach of contract and that the respondent was required to prove this specifically in accordance with the principle established in Stanbic Bank Tanzania Limited v. Abercrombie & Kent (T) Limited [2006] TZCA7, which mandates that special damages must be specifically pleaded and strictly proven. It is evident that the aforementioned assertion lacks any substantive merit. The respondent's claim against the appellants was for the payment of premiums that had not been remitted. As previously stated, the evidence conclusively demonstrates that the first appellant collected premiums from clients on behalf of the respondent for the insurance policies issued by the respondent. At that time, the legislation had not yet prohibited insurance brokers from collecting premiums directly from the insured. By 10th September 2020, the first appellant owed the respondent an outstanding debt of TZS. 485,883,890.00, which the first appellant acknowledged as evidenced by exhibit P2. The debt was also accepted by the second and third appellants in their respective indemnity and personal guarantee (exhibit P3). Therefore, referring to the aforementioned debt as "special damages" that must be proven in accordance with the principle established in Stanbic Bank Tanzania Limited {supra) constitutes a ii

misinterpretation of the law. The second and fourth grounds of appeal must fail. Ultimately, we conclude that the appeal lacks merit and dismiss it with costs. DATED at DAR ES SALAAM this 15th day of December 2025. G. A. M. NDIKA JUSTICE OF APPEAL L. L. MASHAKA JUSTICE OF APPEAL P. J. NGWEMBE JUSTICE OF APPEAL Judgment delivered virtually, this 15th day of December, 2025 in the presence of Mr. Allen Nanyaro, learned counsel for the Respondent, also holding brief for Mr. Zidadi Mikidadi, learned counsel for the Appellant as a true copy DEPUTY REGISTRAR COURT OF APPEAL 12