NMB Bank PLC vs Shimilangwada Estate Company Limited & Others (Civil Appeal No. 709 of 2024) [2025] TZCA 1218 (26 November 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PQDQMA (CQRAM; KEREf U, 3.A., MDEMU, 3.A, AnjLMANSQQR, l,A .) CIVIL APPEAL NO. 709 OF 2024 NMB BANK PLC....................................................................APPELLANT VERSUS SHIMILANGWADA ESTATE COMPANY LIMITED ................ 1 st RESPONDNET GEORGE HERMAN NZUNDA............................................ 2 nd RESPONDENT SUZY GEORGE NZUNDA ................................................. 3 rd RESPONDENT GHN ENTERPRISES LIMITED..........................................4 th RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania at Mbeya) W unguru, 3.) Dated the 7th day of November, 2023 in Civil CitfQ Np, |3 pf m i JUDGMENT OF THE COURT l l lh & 26th November 202S M ANS8QRi.3.tAi. The appellant, NMB Bank PLC, (hereinafter referred to as "the bank") appeals against the decision of the High Court, Mbeya Registry in Civil Case No. 13 of 2021, delivered on 7th November 2023. Initially, the bank raised five grounds, but during the hearing of the appeal, with the leave of the Court, one more ground was added. The following are therefore the six grounds of appeal paraphrased as hereunder: i 1. The High Court Mbeya erred in iaw when it entertained the suit while parties in their agreement preferred the dispute to be entertained by the High Court Commercial Division, Dar es Salmm, 2. The Wtai Court erred in law and fact when it decided that the amount o f TZS 4,668,000,000/= applied by the 1st respondent was approved but not all disbursed. 3. The Trial Court erred in iaw and in fact when it decided that it was the appellant who breached the terms o f the loan agreement; 4. The Trial Court erred in law and in fact when it decided that the 1st respondent is entitled to TZS 1,037,104,372/=, as special damages; 5. The Trial Court erred in iaw and in fact when it awarded the 1st respondent excessive and unreasonable amount o f TZS 4,500,000,000/=, as general damages; 6. The Trial Court erred in iaw and in fact when it dismissed the appellant's suit and allowed the respondent's counter claim. Briefly, the facts of the ease leading to the appeal as depicted from the pleadings of the parties are that, on 5th May, 2018, the 1s t respondent applied for a loan of TZS 4,668,000,000/= from the bank, consisting of TZS 523,600,000/= as short-term working capital, TZS 804,693,000/= as medium-term loan and TZS 3,340, 375,000/= as long-term loan, all to be repaid within a period of ten years. The purpose of the loan was for agricultural activities, specifically for 2 production of coffee in Mbozi, Songwe Region, The loan amount was to be expended for purchase and acquisition of Kamaro Coffee Estate in Mbozi, purchase of a Drip Irrigation System from NaanDanJai of Israel and installation of Drip Irrigation infrastructure, construction of a strategic warehouse from Ametan Contractors, construction of water storage pond infrastructure for harvesting, drilling of three boreholes for rain water and underground water harvesting, establishment of a new coffee factory and processing facility, purchase of farm machinery and equipment such as tractors, vehicles and excavator, and working capital. The bank reviewed the project but claimed to have approved only TZS 1,562,000,000/=. The decision was communicated to the 1s t respondent, henceforth, on 12th October, 2018, an offer for a term loan facility of TZS 1,562,000,000/= was made to the 1s t respondent who accepted it and duly executed it through its directors. In the facility letter executed by both parties on 12th October 2018, the term loan was divided into two parts, term loan 1, for TZS 912.000.000/=, repayable in five years, and term loan II, for TZS 650.000.000/=, repayable in four years. The facility was guaranteed by George Herman Nzunda, Suzy Gorge Nzunda, GHN Enterprises Limited and Private Agriculture Sector Support Trust (PASS). The securities for the loan were a first ranking legal mortgage over coffee estate located on Plot No. 1456 Block S, Mbozi District in Songwe Region with CT No. 3194 - DLR registered in the name of Kamaro Farm Limited, directors' personal guarantees and indemnity, PASS credit guarantee covering 30% of the facility, first ranking debenture over all assets of the 1s t respondent to cover the facility by 125 %, and a corporate guarantee and indemnity by GHN Enterprises Limited. On 18th December 2018, the 1s t respondent applied for rescheduling of the facility, the bank accepted the request, consequently, on 10th April 2019, a revised offer was issued for a total of TZS 1,751,000,000, and a letter of offer was amended and signed by the bank and the 1s t respondent on 17th January 2020. The 1s t respondent did not repay the loan as agreed in the facility letter, as a result, the bank issued a default notice recalling the entire loan amount and interest, the total of the outstanding loan and interests as of 15th March 2021 was TZS 2,640,455,550/=. After receiving the notice of default, the 1s t respondent applied for waiver of the notice on 16th April 2021, the request which was rejected by the bank by a letter of 15th June 2021. Since the 1s t respondent did not repay the amount demanded in the notice of default, the bank instituted a suit against the four respondents herein, as borrowers and guarantors, respectively, praying for a declaration that, the 1s t respondent had breached the terms of the loan agreement, and an order against all the respondents jointly and severally to pay the outstanding amount of TZS 2,640,455, 550/=. The bank prayed for interests, an order for vacant possession of the mortgaged properties, general damages, costs of the suit and any other relief deemed fit and just to grant. All the respondents filed a joint written statement of defence resisting the suit, insisting that the entire amount of TZS 4,668,000,000/=, as applied, was approved but it was to be disbursed in phases. That, the bank disbursed two term loans on 28th September 2018. Term (I) loan was TZS 912,000,000/=, for purchase of the coffee farm in Mbozi, Songwe Region and Term (II) loan, was TZS 650,000,000/=, for purchase of farm equipment and machinery, and that the third disbursements was TZS 189,000,000/= offered on 9th April 2019. The respondents refuted asking for rescheduling of the term loan and claimed that, the bank only disbursed TZS 1,751,000,000/= instead of the whole amount of the approved loan of TZS 4,668,000,000/=. The respondents claimed that, it was the bank that failed to honour the agreement as it failed to fund the project as agreed. 5 The respondents claimed further that, as the bank failed to fund the entire project by itself, it had tried to get a co- financer, namely, United Nations Capital Development Fund (UNCD Fund), but the co- financer did not fund the project, which led to the collapse of the project, resulting to tremendous loss to the 1s t respondent. The respondents prayed for the dismissal of the suit. On the other hand, the 1s t respondent filed a counterclaim praying for a declaration that, the bank breached the loan agreement causing a tremendous loss to it, and a declaration that the notice of default issued by the bank on 5th June 2021 is null and void for being issued prematurely. The 1s t respondent prayed for special damages to the tune of TZS 7,790,599,234/=, general damages and costs of the suit. The facts that led to the reliefs claimed and granted in the counter claim are the same as those stated in the written statement of defence, that the bank agreed to fund the entire project worthy TZS 4,668,000,000/=, but did not disburse the entire sum. The bank also found a co-financier who agreed to finance the project, but the co financier also failed, as a result the project was frustrated by the bank leading to financial loss to the 1s t respondent. In order to mitigate the situation, the 1s t respondent claimed to have sought approval from the bank to borrow from other sources, and the approval was not forthcoming. In paragraph 20 of the counterclaim, the 1s t respondent admitted to have requested the bank to reschedule the loan, and to approve for additional funds, and that, the bank agreed to reschedule the loan, but remained silent on a request for additional fund. That, the 1s t respondent applied for a loan of TZS 2,379,759,000/= from Tanzania Agriculture Development Bank (TADB), but since the bank did not approve, the TADB did not disburse the approved amount. In paragraph 22 of the counterclaim, the 1s t respondent stated that the specific damages suffered was to the tune of TZS 7,790,599,234/= based on cash flow projection as per the business plan presented to the bank, and for failure on the part of the bank to approve co-financing of the project. Relying on exhibit D6, which is an email dated 26th June, 2018 from an officer of the bank to the 1s t respondent, the 1s t respondent insisted that, the bank had agreed to finance the entire project and the amount approved was TZS 4,668,000,000/=, which ought to have been disbursed in phases. That, the bank disbursed only TZS 912,000,000/= for the purchase of the coffee farm, TZS 650,000,000/=, for purchase of farm equipment and machinery, and TZS 189,000,000/= as working capital, and neglected to finance the entire project as agreed causing the entire project to fail, and causing financial hardship to the 1s t respondent. That, the additional amount of TZS 189,000,000/=, according to the 1s t respondent, was disbursed without a request from the 1s t respondent, the act which signified that, the bank was making a third instalments towards the approved amount of TZS 4,668,000,000/=. After a full-blown trial, the High Court, Mbeya, allowed the counter claim and dismissed the plaint in the main suit. The Trial Judge reasoned at page 39 of the Judgment, found at page 3403 of the record that, the bank approved the entire amount of TZS 4,668,000,000/=, and not TZS 1,751,000,000/=, only. That, the disbursed amount shown in the facility letter (Exhibit PE1-A), and the revised Facility Letter (Exhibit PE2 and PE3B), were the first three instalments towards the approved amount of TZS 4,668,000,000/=. That, the correspondences between the bank and the 1s t respondent prior to the signing of the first facility (Exhibit PE1-A) formed part of the agreement between the parties, and that parties were bound by the correspondences; the trial Judge stated at page 3403 of the record, the following: "As to the contention that the Plaintiff approved only TZS 1.751.000.000/= is not a true account. I have intensively read exhibit PEI-A, PE1-B, PE2 and PE3-B nothing contained therein can be construed to mean that the Plaintiff approved only the amount i.e., TZS 1.751.000.000/= which she granted to the 1st defendant from the applied amount. Also, in the defendant ' 8 acceptance nowhere she stated that she accepted the offer o f the issued loan as the only amount from that applied by the 1st defendant" Referring to Exhibit D6, which is an email from the officer of the bank to the 1s t respondent in which the bank had said that, "the entire requested amount may not be feasible to start with, however it can be considered by phases" the learned Trial Judge concluded that, those words in the email meant that, the entire amount requested by the 1s t respondent was approved, and that the disbursement of the same would be in phases. The Judge stated at pages 3403-3404 of the record: "I have also read and considered exhibit D6, specifically a clause which reads: It was seen that, the entire requested amount may not be feasible to start with, however it can be considered by phases. Before making decision on the same, the bank requires to see the following from your side which will assist us to make informed decisions on the request; . Management accounts for the Hotel and trading business up to 3rdMay 2018; . Projections for the existing businesses (Hotel and Trading); . Projections for the Coffee Business (Estate) for our sensitivity analysis'. The Triai Judge concluded at page 3404 of the record, that: 'looking at the foregone clause, it may not be confidently held that it is certain approval o f the applied loan. In the same path, it may not be held that the Plaintiff declined the applied loan," The trial Judge also reasoned that, since the bank-imposed conditions in exhibit D6, and since the 1s t respondent complied with those conditions and kept waiting for the decision of the bank as promised in exhibit D6, and since the decision was never given, instead the bank started issuing the loan in phases, the trial Judge concluded that, the silence by the bank and the issuance of the loan in three tranches was proof that the entire loan amount was approved, and was going to be issued in phases, he said at page 3406 of the record that:- "Having stated so, the Plaintiff gave some conditions for the 1stdefendant to furnish so as to make informed decision. Uncontroverted evidence is that the 1st defendant fulfilled the requested conditions. Then it followed the Plaintiff to grant two term loan without firstly giving any concern about the informed decision which the defendant was waiting for. In my considered view, the act o f the Plaintiff to remain mute after DW1 furnished her with the requested information while proceeded to grant the loan, it is my interpretation as also was the defendants understanding that the Plaintiff approved the whole requested amount Had the Plaintiff intended differently, 10 and for certainty o f purpose would have expressly informed the defendant about her decision." Apart from the above, the trial Judge also referred to the conduct of the bank of visiting the coffee farm and making some suggestions for installation of electricity for irrigation, the expansion of the coffee nursery to 600 acres, the disbursement of TZS 189,000,000/= without a formal request from the 1s t respondent and the introduction of a co- financer to the project, was an indication that the entire loan amount was approved, and that it was the bank that had breached the loan agreement, as it failed to disburse the entire sum of the approved loan, causing the project to collapse. He said at pages 3408 and 3409 of the record: "In the event, as much the evidence is dear that there was no any other request o f loan facility by the 1st defendant than exhibit D2. And that, there was no express approval or denial o f the requested amount by the Plaintiff. The conducts by the Plaintiff as ascribed above are held in favor o f the defendants/Plaintiffs in the counterclaim that the Plaintiff approved the applied loan. The argument by Mr. Mbwiio that the Plaintiff countered the offer through exhibits PE1-A, PE1-B, PE2 and PE3-B and that the 1st defendant accepted the counter offer through exhibits PE1-C, PE1-D and by endorsing all these exhibits is unmaintainable. As / am o f the decided view that those were for specific loan which was to be granted by phases. The 1st issue is therefore answered that the applied loan i.e,, TZS 4,668,000,000/- was approved in total but, was not granted as per approval, just a part o f it i.e., TZS 1,751,000,000/= was granted* The trial court, therefore, granted the following reliefs in the counterclaim in favour of the 1s t respondent: I. The defendant in the counterclaim breached a loan agreement and caused the plaintiff to suffer loss. Thus, the issued notice o f default dated 5th June, 2021 is hereby declared null and void; II. The plaintiff in the counterclaim shall repay to the defendant the loaned amount disbursed to her with all interests as per the loan agreement without any penalty thereof; III. The defendant in the counterclaim is hereby ordered to pay the plaintiff a total o f TZS 1,037,104,372/= being specific damages suffered by the plaintiff. IV. The defendant in the counterclaim is hereby ordered to pay to the plaintiff a total o f TZS 4,500,000,000 being genera! damages; V . The defendant in the counterclaim is hereby ordered to pay the plaintiff interests on the amount per item (Hi) above at the rate o f 20% per annum, from the date o f filing the suit to the date o fjudgment; VI. The defendant in the counterclaim is hereby ordered to pay the plaintiff interests on the decretal amount at the court's rate o f 7% from the date o f thejudgment until full payment; 12 VII. The main suit against the defendant/plaintiff in the counterclaim is hereby dismissed; VIII. The defendant in the counter claim is liable to pay costs of this suit The judgment of the trial court is quoted extensively hereinabove for the purposes of answering the 2n d and 3r d grounds of appeal on whether the bank had approved the entire amount of TZS 4,668,000,000/= as applied by the 1s t respondent but failed to disburse it, hence in breach of the loan agreement. If the 2n d and 3r d grounds shall be decided in favor of the respondents, then we shall determine grounds 4, and 5 since these two grounds are consequential. Ground 6 of the appeal will be covered when tackling grounds 2 and 3. Before we embark into determining grounds 2 and 3 of the appeal, we shall first determine ground 1, which is on the choice of forum by the parties. Arguing in support of the first ground, Mr. Baraka Mbwilo, learned advocate, who appeared for the appellant, together with Mr. Nuhu Mkumbukwa, Mr. Steward Ngwale and Mr. Matunda Mpogole, learned advocates, prayed and was granted leave to add an additional ground of appeal. Mr. Mbwilo argued that, in the loan agreement i.e. Exhibit PE1-A, the bank and the 1s t respondent submitted themselves to the jurisdiction of the High Court, Commercial Division, Dar es Salaam, and this is 13 expressly provided in the standard terms and conditions applicable to the loan facilities contained in Clause 26.3 of exhibit PE1-A. Mr. Mbwilo submitted that in Clause 26.3 of exhibit PE1-A, parties agreed that disputes between them are to be resolved by the High Court, Commercial Division, and those wishes of the party must be respected. He submitted further that, when parties agree to a forum, they are bound thereto until they agree otherwise or one of the parties waives its right under that clause. To buttress his arguments, he made reference to the decision in Mashishanga Salum Mashishanga vs CRDB Bank PLC and 2 others (Civil Appeal No. 535 of 2021) [2024] TZCA 203 (19 March 2024), in which the case of Scova Engineering S.P.A & Another vs Mtibwa Estates Ltd & Others (Civil Appeal No. 133 of 2017) [2021] TZCA 74 (12 March 2021) (Scova Engineering ),was quoted with approval, we held that: "The choice o f law and forum clauses are binding and they are not contrary to public policy nor would it be a contravention o f section 28 o f the Law o f Contract Act, Cap 345 R: E 2002. In cementing the above position, the Court subscribed to the commentary by Pollock and Mullah in Indian Contract and Specific Reliefs Act, 11th Ed, at page 454, where it is observed that: "Where two or more courts have jurisdiction to try a suit, the agreement between the parties limiting the jurisdiction 14 to one court is neither opposed to public policy nor a contravention o f s. 28 o f the Contract Act So long as the parties to a contract do not oust the jurisdiction o f all courts which would otherwise have jurisdiction to decide the cause o f action under the law, it cannot be said that the parties have by their contract ousted the jurisdiction o f the court and where the parties to a contact agree to a particular jurisdiction which would otherwise also be a proper jurisdiction under the law, their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as against public policy". Mr. Mbwilo prayed for nullification of the proceedings and the judgment of the High Court, Mbeya Registry and prayed for the matter to be filed at the Commercial Division of the High Court as per Clause 26.3 of the Facility Letter. Mr. Mbwilo intimated his willingness to forgo the costs, if this ground would be allowed. Mr. Daniel Ngudungi, learned advocate, who appeared for the respondents opposed the added ground for the reasons that, it has been raised to attack the appellant's own action. That, it was the appellant who filed the suit at the High Court, Mbeya Registry, against the respondents. Thus, on the principles of equity, the party cannot benefit from his own wrongs. Secondly, Mr. Ngudungi submitted that, the Commercial Court is a registry of the High Court, the choice of forum found in Exhibit PE1-A, is a choice of registry and parties cannot choose is the registries. He argued further that, the High Court Mbeya has jurisdiction, and in terms of order 4 rule 1 (2) of the Commercial Court Rules, Commercial Court does not have exclusivity to determine cases of commercial nature. Again, submitted by Mr. Ngudungi that, the filing fees at the Commercial Court are high and parties cannot be forced to file their case by paying high fees, while they could still file cases in other High Court registries on lower costs. He argued further that, parties cannot contract on illegalities. Mr. Ngudungi distinguished the holding in the Mashishanga, arguing that in Mashishanga, two courts had concurrent jurisdiction i.e. the Land Court and the Commercial Court, thus, in such cases parties are allowed to choose either court but they are not allowed to choose registries. Having heard the counsel" rival submissions, the starting point would be Clause 26.3 of the loan agreement, to see whether parties had agreed on a specific forum for determination of the disputes arising from the loan agreement. In clause 26.3 of the standard terms and conditions of the loan agreement (exhibit PE1-A) parties agreed as follows; "The borrower irrevocably waives any objection which it may have now or in the future to the High Court o f Tanzania Commercial Division being nominated for the purpose o f this clause or any ground;" 16 Clause 26.3 cannot be interpreted to mean that, parties had agreed on a specific forum, but it was the waiver given by the borrower (the 1s t respondent) that in case the bank would file a case at the High Court, Commercial Division, the borrower would not object to have the dispute determined by that Court. In fact, parties in clause 26.2 of the loan agreement submitted themselves to non-exclusive jurisdiction of the Tanzanian Courts, to hear and determine any suit, and did not specify the forum. Thus, the relevant clause in which parties had submitted to jurisdiction of the court, is clause 26.2, which reads as follows: "The borrower irrevocably submits to the non-exclusive jurisdiction o f the Tanzanian courts, to hear and determine any suit, action or proceedings and to settle any dispute which may arise out o f or in connection with this Agreement or any other document relating to or incidental herein." As correctly submitted by Mr. Ngudungi, it was the appellant who had instituted a case at the High Court, Mbeya Registry, since the parties in clause 26.2 of the loan agreement, had submitted to the non exclusive jurisdiction of the Tanzanian Courts as long as the court is vested with competent jurisdictions. It is not in dispute that the High Court, Mbeya Registry had the jurisdiction to hear and determine the 17 suit of commercial nature since the Commercial Court no longer enjoys the exclusive jurisdiction over commercial matters, Currently, the powers and jurisdiction to hear these cases have been vested to other courts including the District Courts, Resident Magistrates' Courts and the High Court, depending on various factors such as the value of the subject matter, where the defendants reside, and the place at which the contract was concluded. Again, as correctly submitted by Mr. Ngudungi, parties cannot agree on illegalities, and definitely choosing a registry of the High Court, would amount to forum shopping, a deliberate manipulation of a more favourable registry. Allowing this trend of excessive and unjustified use of choice of forum to the extent of allowing parties to prefer one registry over the other of the same court would lead to abusive practices that can create inequalities and unfairness between the parties in a dispute. This is different from what was discussed by the courts in the cases referred to by Mr. Mbwilo, as definitely, parties are allowed by an agreement to choose a specialised court such as the Commercial Court, or Land Court, if those courts enjoy the exclusivity of jurisdiction in their specific field. Since now, all High Court registries have the jurisdiction to hear and determine cases of commercial nature, filing a case at the High Court Mbeya Registry where the subject matter of the suit is situated, and where the defendants/respondents reside, was within the ambit of the jurisdictional clause in the loan agreement. Apart from the fact that, it was the bank who waived any right of choice of forum, if any, as agreed in clause 26.3, the choice of law and forum in clause 26. 2 and 26.3 of the agreement is totally distinguishable from the decision in Mashishanga, in which parties expressly chose the High Court Commercial Division as their preferrable forum, whereas, in the case at hand, the borrower simply gave its waiver to the choice of forum by the bank. Since the bank had decided to institute a suit in another registry, in line with clause 26.2 of the agreement, and since the High Court Mbeya had jurisdiction to entertain the suit, we think that clause 26.3 is not about the choice of forum, but a clause in which the borrower agrees to whatever forum preferred by the bank and expressly stated that, the borrower waives its right to object to the choice of forum preferred by the bank as long as it is the courts in Tanzania with jurisdiction. In any case, in the Mashishanga, we made reference to our earlier decision in Sunshine Furniture Co. Ltd vs Maersk (China) Shipping Co. Ltd and Nyota Tanzania Limited Civil Appeal No. 98 of 2016, (Sunshine Furniture's), and Scova Engineering, and insisted that, parties cannot by an agreement confer jurisdiction to 19 courts or oust jurisdiction of the courts but such clauses on choice of law and forum only allows parties to choose a forum out of competent courts to determine their disputes. We did not pronounce in those cases that, parties in an agreement can chose the registry or a judge or magistrate to preside over their cases. In the cases cited by the appellant including the Mashishanga, we emphasized that since the jurisdiction of the courts is conferred by statute or law, it can only be ousted by a statute or law in explicit terms. In principle, we underscored the principle that the court's jurisdiction is not capable of being ousted or conferred by an agreement of the parties. We stated in Sunshine Furniture (supra) that: - it is also settled that parties cannot by agreement confer jurisdiction to a court which otherwise does not havejurisdiction to deal with a matter" In Sunshine Furniture's as well as in Scova Engineering's, parties in Tanzania were forced to take up their cases in the High Court of Justice of England in London, and parties who are based in Tanzanian were forced to have their cases determined by the Italian courts, while their counterparts are based in Tanzania with all their assets in Tanzania. Although, that appeared unfair to the parties in Tanzania but we emphasised on the importance of sanctity of contract, that when parties agree to a forum, they are bound thereto until they agree otherwise or 20 one of the parties waives its right under that clause, In the case at hand, the borrower was ready to submit to Commercial Court had the bank filed the case there, but since the bank decided to file the case at the High Court, Mbeya Registry, the 1s t respondent did not have any objection to the choice of forum preferred by the bank, and the case was therefore determined by a court with competent jurisdiction, a court in Tanzania as agreed by the parties In clause 26.2 of the Agreement. Based on the above, the first ground, which was added during the hearing of the appeal is unmeritorious, hence dismissed. Now on the 2n d and 3r d grounds of appeal, the issue is whether the bank had agreed to lend to the 1s t respondent the entire sum of TZS 4,668,000,000/=. It is not in dispute that, on 8th May 2018, the 1s t respondent applied to the bank for a loan of TZS 4,668,000,000/=. It is also not in dispute that the bank and the 1s t respondent never signed any agreement in which the bank had agreed to lend to the 1s t respondent an amount of TZS 4,668,000,000/=. It is also not in dispute that, the 1s t respondent was issued with an offer of TZS 1,562,000,000/= through exhibit PE1-A, it accepted it and its directors signed it. It is also not in dispute that, the bank and the 1s t respondent executed an amended loan agreement, exhibit PE2 and PE3, in which the amount of loan granted was amended 21 from TZS 1,562,000,000/= to TZS 1,751,000,000/=, as there was an additional amount of TZS 189,000,000/= granted. The trial judge held that although the above is true, but from the following factors, the bank impliedly approved the entire amount: 1. There was an email from the bank (Exh D6) dated 26 June 2018, in which the bank expressed that "the entire requested amount may not be feasible to start with, however it may be considered in phases" 2. The bank visiting the farm and made recommendations on electricity installation for irrigation, and increase o f a nursery farm to 600 acres; 3. Granting o f an additional amount o f loan o f TZS 189,000,000/= without a formal request; 4. Introduction o f UN CP Fund as the co financier, 5. Refusal o f the bank to approve the application o f the loan from Tanzania Agricultural Development Bank (TADB) by the 1st respondent. Before deciding on whether the bank had agreed to lend the entire requested sum of TZS 4,668,000,000/= based on the pre negotiations communications and conducts of the bank, we think that the trial Judge missed the concept of lending, thinking that the bank had agreed to finance the project or the negotiations between the 22 parties were for financing the coffee farm project. There is a difference between project financing and term loan lending. In essence, project financing is when the financier or the bank agrees to a long-term venture of financing the project, where the project itself acts as the primary security, whereas a term loan is a corporate debt instrument based on the borrower's overall financial strength and general ability of the borrower to repay the loan. In Project financing, the financer or the bank recovers the finances from the cash flows of a specific project. The financer becomes part of the project, manages it for making sure the project generates income for recovery of the money injected in the project, while a term loan relies on the overall creditworthiness and balance sheet of the borrower, and this is why securities for the term loan may not necessarily be the project itself. In project financing, if the project owner defaults, the lenders' recourse is limited primarily or entirely to the project's assets. In project financing comprehensive sets of documents are executed to allocate risk and define the rights and obligations of all parties involved in the project, including completion and performance guarantees and bonds, such that, if either party fails to honour the agreements, the other party can cash the bond, or sue on the 23 performance guarantees, or insist the lender or financer to complete the project. On the contrary, the record shows that the 1s t respondent applied for a term loan, it never applied for project financing. The 1s t respondent applied for a term loan of TZS 4,668,000,000/= but was granted a term loan of the amount of TZS 1,751,000,000/=, less from what it requested. It is trite law, and general banking policies and practices that, the bank is not legally obliged to give the entire loan requested. The bank has the discretion whether to lend or not to lend, as well it has the discretion on what amount to lend. Banks are not mandated by law to give loans or to give specific amounts of loans to either corporates or individuals. Before advancing loans, it is common banking practice, and common banking policies to consider factors such as the borrower's income, the purpose of the loan, the viability of the purpose of the loan, creditworthiness and the ability to repay the loan, and this is done before the bank agrees to lend. If the banks grants less than what was requested, it is up to the borrower to accept the offer or to reject it. In the case at hand, the email dated 26 June 2018 was a pre- contractual correspondence between the bank and the borrower. The 24 bank expressly stated that "the amount requested may not be feasible" and had requested for further information and documentation so as to study the creditworthiness of the borrower and to help the bank to make an informed decision. In fact, the email said specifically that 'before making decision on the same, the bank requires to see the following from your side which will assist us to make informed decisions on the request../' By the wording of the email, the bank wanted to know the viability of the project, the purpose of the loan, and the creditworthiness of the 1s t respondent. By the time the email was sent, the bank had not yet made any decision. It had not made a decision to lend or what amount to lend. It was therefore, improper for the trial Judge to rely on the said email as an acceptance of the request made by the 1s t respondent to lend the whole of the requested amount of the loan. The request for a huge amount of loan was never accepted either orally, in writing or impliedly to constitute a binding agreement between the parties. As held in Joseph F Mbwiliza vs Kobwa Mohamed Lyeseelo Msukuma and others (Civil appeal No. 227 of 2019) 2022 TZCA 699 (10 November 2022), that once there is a written agreement, the agreement prevail in 25 terms of section 101 (now section 108 in R.E 2023) of the Evidence Act, Cap 6 R. E 2019. Apart from the fact that, exhibit D6 did not expressly state or impliedly be interpreted as the acceptance by the bank to issue to the 1s t respondent the loan of TZS 4,668,000,000/= as requested, the parol evidence rule, contained in section 107 of the Evidence Act makes pre-contractual negotiations inadmissible to add to, vary, or contradict the terms of a written contract. When parties have reduced their agreement to a final writing, that document is considered the sole memorial of their agreement. Extrinsic evidence (whether oral or in writing,) is generally excluded. Since the bank offered only TZS 1,751,000,000/=, and the 1s t respondent accepted the offer by signing the formal written agreements, the pre contractual negotiations cannot be applied to vary or contradict the terms in the written agreement. In any case, the 1s t respondent was at liberty to reject the offer made by the bank and was also free to refuse to sign the written agreement for it contained the lesser amount than the amount requested. It is also incorrect to hold that, the bank offered the additional loan of TZS 189,000,000/= without any formal application. It is in paragraph 20 of the counterclaim as well as exhibit PE5-A and exhibit 26 PE5-B, which are the 1s t respondent's board resolutions, in which it is expressly stated that, the 1s t respondent had requested for the variation or rescheduling of the loan and had applied for the additional loan. Contrary to what was decided by the trial Judge, that, the amount of TZS 189,000,000/= was the third disbursement of the loan towards the approved loan of TZS 4,668,000,000/=, the evidence on record shows that the 1s t respondent had requested for the additional loan, his request was granted by the bank, consequently, Exhibit PE2 and PE3 was executed to show that the amount of loan was increased from TZS 1,562,000,000/= to TZS 1,751,000,000/=. The terms for the repayment of the entire loan amount were also revised. On whether, the bank had fetched a consortium financing through UNCD Fund, it is clear from the record that the bank has an understanding with UNCD Fund, and under the understanding, the bank can introduce clients to UNCD Fund for finances or for provision of loans. Contrary to the findings of the trial Judge, we find no such evidence from the 1st respondent for proving that there was an agreement reached and concluded between UNCD Fund and the bank in which the UNCD Fund had agreed to co-finance the project of the 1s t respondent. What is in the evidence was that the bank had 27 introduced UNCD Fund to the 1s t respondent, and what transpired between UNCD Fund and the 1s t respondent was not made known to the bank. Introduction of a financer or lender to a client cannot be said to be a breach of the loan agreement or a promise by the bank to issue the entire requested amount of the loan or to finance the project or a breach of banker's duty of secrecy between the bank and the borrower. On whether the bank refused to give an approval on the 1s t respondent request of a loan from TADB, we also disagree with the findings of the trial court as this issue is answered in Clause 13 (iv) of the Loan Agreement. Clause 13 (iv) of the loan agreement (exhibit PE1-A), required the 1s t respondent to get the consent of the bank before borrowing from another bank. It is from the testimony of DW1 that, the 1s t respondent applied for a loan from TADB without submitting a commitment letter to the bank for a prior consent as agreed in clause 13 (iv) of the loan agreement. It is also from the evidence of DW1 through exhibit D4, dated 22n d May 2020, when the 1s t respondent requested for a letter of comfort from the bank to TADB that, the 1s t respondent had processed the loan from TADB without first seeking approval from the bank as agreed in the loan agreement. Clause 13 (iv) obliged the 1s t respondent to seek and get 28 a letter of consent which is a written authorisation from the bank authorising the 1s t respondent to borrow from another bank. The consent was supposed to be sought before the 1s t respondent started the processes of borrowing from another bank. The evidence on record shows that, the 1s t respondent requested for a letter of comfort after the loan at TADB was already requested and on the stage of approval. That, TADB wanted a letter of comfort for guaranteeing the financial stability of the 1s t respondent. We therefore do not agree with the findings of the trial court that, a request for letter of comfort amounts to request for consent, as consent is obtained before commencing the lending processes. Thus, contrary to the findings of the trial court that, the bank unreasonably withheld the consent, it was the 1s t respondent who was in breach of clause 13(iv) of the loan agreement, as it did not seek for the consent of the bank before it started the process of borrowing from TADB. In totality of the evaluation of the evidence presented by all parties during trial, and after revisiting and re-evaluating the evidence on record as the first appellate court, and being mindful of our duty to re-evaluate the evidence and subject them to critical scrutiny, and arrive at our own conclusion of fact, as stated in the case of Afriq Engineering and Construction Company Limited vs the 29 Registered Trustees of the Diocese of Central Tanganyika, Civil appeal No. 574 of 2021, we disagree with the findings reached by the trial Judge. We hold therefore that, contrary to the decision of the trial Court, there was conclusive binding loan agreement between the parties herein which was reduced in writing and executed by the parties. The binding loan agreement is Exhibit PE1-A, as amended in PE2 and PE3, in which, the 1s t respondent was offered a loan of TZS 1.751.000.000/=, and had accepted the offer through various board resolution and eventually signed the written agreements signifying the acceptance of the offer. There was also overwhelming undisputed evidence that the bank disbursed the total sum of 1.751.000.000/=, out of which TZS 912,000,000 /=and TZS 650.000.000/= were disbursed after signing the first loan agreement on 28 June 2018, and TZS 189,000,000/= was disbursed in the amended loan agreement which was signed by the parties on 17t h January 2020. We find that, there is undisputed evidence that the facility was guaranteed by the 2n d respondent namely George Herman Nzunda, the 3r d respondent, Suzy George Nzunda, and the 4th respondent GHN Enterprises Limited, as such, contrary to what was decided by the trial Judge, the guarantors are also in breach of the loan agreement as the 30 loan they secured and guaranteed was not repaid. We also find as correctly found by the trial Judge that, there was undisputed and uncontroverted evidence that, the 1s t respondent who is the borrower failed to repay the loan within the time frame agreed in the agreement. Contrary to what was decided by the trial Judge, we find that, the notice of default was issued in accordance to section 135 of the Land Act. Despite the notice, the respondents, as borrower and guarantors, respectively, failed to pay the loan amount and interests. As at the date of filing the suit in 2021, the outstanding unpaid amount inclusive of interests was TZS 2,640,455, 550/=. Again, contrary to the findings of the trial court, we find that, there is sufficient evidence on the record to prove on the balance of probabilities that it was the 1s t respondent as the borrower and the 2n d , 3r d and 4th respondents as guarantors, who breached the term loan facility (the loan agreement as amended), for it failed to pay back the loan within the time frame agreed in the loan agreement, thus the case of the appellant who was the plaintiff in the main suit filed before the trial court was proved to the required standards. On the other hand, contrary to what was decided by the trial court, the 1s t respondent who was the plaintiff in the counter claim before the trial court, failed to give sufficient evidence on the allegations that the appellant had approved the entire 31 amount of the requested loan of TZS 4,668,000,000/=. Based on our discussions hereinabove, we think that it was improper for the trial judge to allow the counterclaim and dismiss the main suit. The counterclaim ought to have been dismissed for lacking sufficient evidence to prove the allegations therein. The Trial Judge ought to have allowed the main suit. Since grounds four and five were dependant on the outcome of the decision in grounds two and three, and since we found that the counter claim was not proved by the first respondent and the trial court ought to have dismissed it, as we hereby do, we see no reasons to discuss on the specific damages and general damages awarded to the 1s t respondent by the trial court, since these were consequential. As the counter claim stands dismissed for failure to prove the claims therein, naturally, there shall not be any entitlements of either specific damages or general damages, or any other remedies awarded by the trial court to the 1s t respondent. Based on the above, the appeal is allowed, the relief sought in the plaint of the main suit are allowed. The counter claim is dismissed in its entirety. It is declared that, the 1s t respondent breached the terms of the term loan agreement, consequently, we order all the respondents jointly and severally to pay the outstanding amount of the loan to the tune of 32 TZS 2,640,455,550/=. We also order respondents, jointly and severally to pay interests and penalties accrued in the outstanding unpaid balance of TZS 2,640,455,550/=, as at the date of this Judgment, failure of which, the 1s t respondent is ordered to yield vacant possession of the mortgaged properties. The respondents are also ordered jointly and severally to pay the appellant TZS 500,000,000 as general damages. The respondents shall also be liable for costs of the suit and this appeal. Resultantly, appeal is allowed with costs. DATED at DODOMA this 25th day of November, 2025. R. J. KEREFU JUSTICE OF APPEAL G. J. MDEMU, JUSTICE OF APPEAL L. A. MANSOOR JUSTICE OF APPEAL The Judgment delivered virtually this 26th day of November, 2025 in the presence of Mr. Nuhu Mkumbukwa, assisted by Mr. Baraka Mbwilo learned counsels for the Appellant, together with Mr. Daniel Ngudungi, learned counsel for the Respondent and Mr. Leopard Mabugo, Court Clerk; is hereby certified as a true copy of the original. F . 1 DEPUTY REGISTRAR COURT OF APPEAL