Olympic Petroleum Tanzania Limited vs Stanbic Bank Tanzania Limited (Civil Appeal No. 755 of 2023) [2025] TZCA 1196 (14 November 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM (CORAM: MWANPAMBO, J.A., MGONYA. 3.A. And FELESHI. J.A.^ CIVIL APPEAL NO. 755 OF 2023 OLYMPIC PETROLEUM TANZANIA LIMITEP ................................ APPELLANT VERSUS STANBIC BANK TANZANIA LIMITEP........................................RESPONPENT (Appeal from the Ruling and Prawn Order of the High Court of Tanzania, Par es Salaam Sub-registry at Par es Salaam) (Nkwabi. J.1 dated the 29th day of March, 2023 in Civil Case No. 90 of 2021 JUDGMENT OF THE COURT 6th & 14th November, 2025 FELESHI. J.A.: Olympic Petroleum (T) LTD (the appellant), preferred this appeal to impugn the ruling of the High Court (the trial court) which struck out its suit in Civil Case No. 90 of 2021, upholding a preliminary objection raised by the respondent (Stanbic Bank Tanzania Limited) that it failed to join a necessary party. In her suit, the appellant had, amongst other reliefs, prayed for an order compelling the respondent to cancel her i Letter of Credit (LC) No. IL21055TZ0100834 issued in favour of M/S Alchemist Energy Trading DMCC of the United Arab Emirates (the supplier) as payment security for 2,700 metric tons of MOGAS valued at USD 1,450,068.75 it was required to supply to the appellant. Upon service, the respondent denied the appellant's claims and raised a preliminary objection on two points: one, the suit was bad in law for seeking orders against a stranger; and, two, the suit contravened Order VII rule 1 (f) (i) of the Civil Procedure Code, Chapter 33 (the CPC). Submitting on the first point, her counsel argued that, no cause of action was disclosed against the respondent who was neither a necessary party nor had interest in the subject matter to warrant the sought orders to be granted against her. In reply, the appellant's counsel vehemently opposed it, arguing that, the entire plaint, specifically paragraphs 3, 6, 8, 15, 16 and 17 of the plaint disclosed the cause of action against the respondent. After hearing the parties, while the trial court overruled the second ground of objection, as aforesaid, it upheld the first ground of objection and struck out the suit. According to the trial court (Nkwabi, J.), it was clear that the contract for the purchase of fuel was between the appellant and the supplier who was not sued and could not be 2 condemned unheard. It thus held that the supplier was a necessary party and there could not be valid decree without her involvement in the suit. Dissatisfied, the appellant appealed to this Court on six grounds which boil down to one dispositive issue to wit, whether the trial court properly struck out the suit on the ground o f failure to join a necessary party. At the hearing before us, Mr. Jovin M. Ndungi, learned counsel, represented the appellant, whereas Mr. Shita Gerald Nangi, also learned advocate, represented the respondent. Premising his submission on the appellant's written submission filed under rule 106 (1) of the Tanzania Court Appeal Rules, 2009 (the Rules), Mr. Ndungi faulted the trial court for misapprehending the nature of the suit. He contended that the appellant's cause of action was not founded on the supply contract with the supplier but rather, on the respondent's breach of duty as a banker, for not complying with the customer's instructions to cancel the LC. He emphasized that the prayers in the plaint sought no relief against the supplier and that, the trial court erred in holding that the supplier was a necessary party. 3 In the alternative, counsel argued that, even if the supplier was found to be a necessary party, the proper cause was not to strike out the suit but to order its joinder under Order I rule 10 (2) of the CPC. To buttress his argument, Mr. Ndungi cited the Court's decisions in Farida Mbaraka and Farid Ahmed Mbaraka v. Domina Kagaruki [2006] TZCA 257 and Abdulatif Mohamed Hamis v. Mehboob Yusuf Othman & Another [2018] TZCA 25. In reply, M r. Nangi, supported the decision of the trial court arguing that, the reliefs sought were intertwined with the supplier's obligations under the LC. According to him, the supplier's interests would be directly affected by any decree made, hence its presence was indispensable. He referred us to the prayers in the appellant's plaint which he contended were mounted against a stranger and could not be determined and granted in the absence of the supplier. In sum, he urged the Court to uphold the trial court's decision and dismiss this appeal. In his rejoinder submission, counsel for the appellant reiterated that the prayers in the plaint based on the respondent's failure to abide by the appellant's instructions under the bank-customer relationship. That, alternatively, per its decision that the supplier was a necessary party, the trial court was required to invoke the provisions of Order I rule 4 9 and 10 (2) of the CPC to order the appellant to amend the plaint and join the supplier in the suit as it was the case in Abdulatif Mohamed Hamis (supra). In the end, he urged the Court to allow the appeal. We have carefully examined the record and the parties' rival submissions. It is not in dispute that the trial court struck out the suit after finding that the supplier was a necessary party. The issues for our determination thus are: one, whether the supplier was a necessary party; and two, whether striking out the suit was a proper cause. We begin by restating the settled principle on necessary parties in suits. A necessary party is one without whose presence the court cannot effectively and completely adjudicate the matter in controversy. This Court reiterated that stance in Tang Gas Distributors Ltd v. Mohamed Salim Said & 2 Others [2011] TZCA 583 and more recently in Seko Jihadhali Kingo (as Administrator of the Estate of Jihadhali Khalfan Kingo) v. Msasani Apartment Hotel [2025] TZCA 122. As was observed in those decisions, joinder becomes necessary to prevent condemning a person unheard and to avoid multiplicity of suits. In the instant case, the appellant prayers were as follows: 5 "(s) an order compelling the defendant to cancel the letter o f credit referenced 250 1L21055TZ0100834 Dollars One Million issued Four Hundred by the defendant Fifty Thousand to secure Sixty payment Eight and o f United Seventy States Five Cents only ($1,450,068.75) being the purchase price o f 2,700 metric tons o f MOGAS which were to be supplied to the Plaintiff by M/S ALCHEMIST ENERGY TRADING DMCC (supplier/beneficiary) but have not been delivered contrary to the terms o f the Provisional Invoice, the Letter o f Credit and the Shipping and Supply Contract between the Supplier and the PBPA; (b) an order restraining and prohibiting the defendant from effecting payment and transferring any money to the supplier/beneficiary or any other agent o f the supplier/beneficiary on the pretext that such payment is a purchase price of the goods which have not been delivered by the supplier; (c) an order relieving and discharging the Plaintiff from an obligation to repay the defendant for any amount illegally transferred or paid to the 6 supplier in breach o f the Plaintiff's instructions and/or; (d) an order for the refund o f the amount debited by the defendant from the account of the Plaintiff to pay the supplier contrary to the agreed terms and conditions o f the letter o f credit; (e) N/A (f) /^"[Emphasis added]. As the above prayers vividly state, specifically the bolded parts, we are unable to accede to the appellant's counsel's contention that they did not involve a third party. Besides, from the correspondence and meetings pleaded in the plaint that involved the appellant, respondent, supplier and Petroleum Bulk Procurement Agency (PBPA) we disagree with him that the appellant's suit against the respondent can be practicably be finally determined and prevent further litigation concerning them without impleading the supplier. We are of further unfeigned view that, the issue/claim that payment of a purchase price was effected to the goods which have not been delivered, the supplier had not delivered the contracted goods contrary to the Provisional Invoice, status of the LC, and the Shipping and Supply Contract between the Supplier and the PBPA, cannot be ascertained and warrant fair trial by the trial court in the absence of the supplier. Moreover, because the LC was issued for the supplier's benefit, any order compelling its cancellation or restraining payment under it could affect the supplier's rights whose determination warrant its participation in the trial. That being the case, we thus uphold the trial court's finding that the supplier was indeed a necessary party. This settles the first issue in the affirmative. On whether the striking out of the suit was a proper remedy upon discovering a non-joinder of the supplier, Order I rule 10 (2) of the CPC is instructive and provides a clear mechanism on what ought to be done by the trial court under the circumstances. The provisions of the law enjoin trial courts, at any stage of the proceedings, to add any person whose presence is necessary for effective resolution of issues. This Court in Tanzania Railways Corporation (TRC) v. GBP (T) Ltd [2021] TZCA 198 emphatically stated that, where a trial court notices that certain issues cannot be effectively resolved without a particular party, it cannot fold its arms and assume a role of an onlooker. It must take an active role and add such a party. 8 Conversely, in Abdulatif Mohamed Hamis v. Mehboob Yusuf Othman & Another (supra) cited by the appellant's counsel, we had this to say relevant to the remedy for non-joinder of a necessary party: "To say the least, the plaint was incurably defective for the non-joinder o f the legal representative o f the deceased who was, so to speak, a necessary party. The joinder o f a necessary party to a suit is procedural in nature and, accordingly, the same ought to have been done at the time o f trial, through the application o f Order 1 Rule 10 (2) which goes thus:-....Since, as we have just remarked, the legal representative o f the deceased was a necessary party, her non-joinder was fatal and the trial court, either on its own accord, or upon a direction to the 1st respondent, was enjoined to strike out the name o f the 1st respondent and substitute to it her name with the caption: "the legal representative o f the deceased .," during the initial stages o f the ^/."[Emphasis supplied] As correctly, alternatively argued by the appellant's counsel, the trial court having held that there was a need to join the supplier, according to the decision we have quoted above, it was mandated to 9 invoke the provision of Order I rule 10 (2) of the CPC to order joinder of the said supplier rather than striking out the suit. We think we should remark here that, although we have occasionally been nullifying the lower courts' proceedings for failure to join a necessary party, we have been doing so because the matter before the Court had been on the appeal stage, in which the invocation of Order I Rule 10 (2) of the CPC is impracticable. Unlike when the non joinder is detected by a trial court, the available option under the dictates of the above provision is to direct a responsible party to amend the plaint to have the necessary party joined rather than striking out the relevant suit. In the light of the foregoing, we hold that, while the supplier, M/S Alchemist Energy Trading DMCC, was indeed a necessary party, the trial court erred in striking out the suit instead of ordering its joinder under Order I rule 10 (2) of the CPC. Consequently, we allow the appeal to the extent discussed above. We hereby quash the order of the High Court dated 29.3.2023 striking out the suit and substitute it with an order for joinder of the necessary party that is, the supplier. For that reason, we direct that Civil Case No. 10 90 of 2021 be remitted to the High Court for hearing on merits in accordance with the law. We issue no order as to costs. DATED at DAR ES SALAAM this 14th day of November, 2025. L. J. S. MWANDAMBO JUSTICE OF APPEAL L. E. MGONYA JUSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL Judgment delivered this 14th day of November, 2025 in the presence of Mr. Jovin M. Ndungi, learned counsel for the Appellant, M r. Shita Gerald Nangi learned counsel for the Respondent and Regina Komba, Court Clerk; is hereby certified as a true copy of the original. D. P . KINYWAFU DEPUTY REGISTRAR COURT OF APPEAL li