Power Roads Tanzania Limited vs Bank of Africa Tanzania Limited (Civil Appeal No. 429 of 2020) [2023] TZCA 18028 (7 September 2023)

POWER ROADS TANZANIA LIMITED VS BANK OF AFRICA TANZANIA LIMITED COURT OF APPEAL TANZANIA ( CORAM: NDIKA, J.A., SEHEL, J.A., KHAMIS, J.A. ) CIVIL APPEAL NO.429 OF 2020 (Appeal from the Judgment of the High Court of Tanzania at Dar es Salaam dated the 27th day of November, 2019 in Civil Case No. 163 of 2016 ) Banking law – Suspicious transactions – Compliance with Anti - Money Laundering Act – Reporting obligations and good faith T he appellant challenged the High Court's decision dismissing its claim against the respondent for unlawfully withholding funds transferred by the Tanzania Revenue Authority. The transfer was deemed suspicious by the respondent due to the account being mostly dormant, the large amount involved, and lack of prior notification or supporting documents. Subsequently, the transaction was reported to the Financial Intelligence Unit ( FIU) and the funds were temporarily withheld, with the account later being frozen by a court order. The Court of Appeal agreed that the initial suspicion was justified and found that while the report to the FIU slightly delayed beyond the 24 - hour requirement, it did not amount to malicious conduct or expose the respondent to liability. The plea of bad fa ith was not adequately pleaded or proven by the appellant. Held: (i) The Court of Appeal held that the respondent had legitimate grounds to consider the transaction suspicious due to various factors, including the long

dormancy of the account and the transfer’s substantial amount without prior notice or supporting documentation. (ii) The Court found that the respondent reported the transaction to the Financial Intelligence Unit after forming a suspicion but delayed for 48 hours, which did not fully comply with the Anti - Money Laundering Act's requirements. (iii) Although the funds were withheld and the account was later frozen, the respondent could not be held liable for the appellant's alleged losses because there was no demonstrated malice or bad faith in compliance with statutory obligations. The appeal is dismissed in its entirety with costs awarded to the respondent. Statutory Provisions referred to: Section 3 , Section 6 , Section 17 (1), (2), (3), (4) , Section 22 (1) of the Anti - Money Laundering Act, Cap. 423 (AMLA) Regulation 23 of the Anti - Money Laundering Regulations, 2012, GN No. 286 of 2012 Anti - Money Laundering Regulations, 2022, GN No. 397 of 2022 (not applied, referenced as replacement) Order VI, Rule 10 , Rule 17, Order XIV, Order XX, Rule 5 of the Civil Procedure Code, Cap. 33 Companies Act, Cap. 212 Rule 90 (1), (3) Tanzania Court of Appeal Rules, 2009 Cases referred to : Makubi Dogani v. Ngodongo Maganga, Civil Appeal No. 45 of 2017 [2020] TZCA 1741 Njake Enterprises Limited v. Blue Rock Limited & Another, Civil Appeal No. 69 of 2017 [2018] TZCA 304 Public Protector v. South African Reserve Bank [2019] ZACC 29 Puma Energy Tanzania Limited v. Diamond Trust Bank Tanzania Ltd., Civil Appeal No. 54 of 2016 [2020] TZCA 263