Simba Motors (T) Limited vs Tanzania Automobile Manufacturing Co. Ltd and Another (Civil Appeal No. 264 of 2018) [2022] TZCA 3121 (3 October 2022)

SIMBA MOTORS (T) LIMITED VERSUS TANZANIA AUTOMOBILE MANUFACTURING CO. LTD AND OTHER COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM (CORAM: MWAMPASHI J.A., LEVIRA J.A., MUGASHA J.A.) CIVIL APPEAL NO. 264 OF 2018 (Appeal from the decision of the High Court of Tanzania at Dar es Salaam] dated the 16 th day of August, 2004 in Civil Case No. 441 of 2001) Corporate Laws- Appeal – Jurisdiction -Whether or not, the High Court had jurisdiction to entertain the suit in which one of the parties and particularly, TAMCO, was a specified Public Corporation The appellant, Simba Motors (T) Limited, appealed against the decision of the High Court of Tanzania at Dar es Salaam in Civil Case No. 441 of 2001. The appellant’s suit against Tanzania Automobile Manufacturing Co. Ltd (TAMCO) and Sweya Auction Mart & Court Brokers (2nd respondent) was dismissed, while TAMCO’s counterclaim was allowed. The dispute arose from a 1993 agreement whereby the appellant acted as TAMCO’s local sales agent for 40 imported TATA trucks on a commission basis for three years. By 2001, TAMCO claimed that TZS 225,740,000/= remained unpaid. Consequently, TAMCO engaged the 2nd respondent to collect the debt, prompting the appellant to sue for a declaration that it was not indebted and for an injunction restraining threats to dispose of its property. In its defense, TAMCO resisted the claim and filed a counterclaim for the unpaid sum. The High Court dismissed the appellant’s suit with costs and allowed TAMCO’s counterclaim for TZS 194,340,000/= plus interest.

During the appeal, both parties agreed that the High Court lacked jurisdiction to entertain the suit or the counterclaim because at the time of filing, TAMCO had already been declared a specified public corporation (SPC), and the appellant had not sought leave from the High Court as required by law. The Court had to decide on whether the High Court had jurisdiction to entertain a suit in which one of the parties, particularly TAMCO, was a specified public corporation. Held: (i) The Court held that since TAMCO had been declared a specified public corporation at the time the suit was instituted, the appellant was required to obtain leave from the High Court before filing the suit. (ii) Further, TAMCO had no locus standi to file a counterclaim without involving its receiver, the Public Service Regulatory Corporation (now Treasury Registrar). (iii) Further, the Court ruled that as no leave was sought or obtained, the High Court lacked jurisdiction to hear Civil Case No. 441 of 2001. The High Court proceedings and the resulting judgment were nullified and quashed. Statutory Provisions referred to: (i) Rule 102(1) of the Tanzania Court of Appeal Rules, 2009. (ii) Section 2, 21, 43 (1) (a) and (b) of the Public Corporation Act, 1992. (iii) Public Corporation (Specified Corporations Declaration) Order 1997, GN No. 33 of 1997 dated 24.01.1997. (iv) Section 9 (1) , 97 of the Bankruptcy Act, [Cap. 25 R.E. 2002 now R.E. 2019]. (v) Section 4 (2) of the Appellate Jurisdiction Act, Cap. 141 R.E. 2002.

Caselaw referred to: (i) Mathias Eusebi Soka v. The Registered Trustees of Mama Clementina Foundation and Others, Civil Appeal No. 40 of 2001 (unreported). (ii) Abubakar S. Marwilo and 172 Others v. National Insurance Corporation and 2 Others, Civil Appeal No. 13 of 2019 (unreported). (iii) Mwananchi Engineering and Contracting Co. Ltd v. Ahmed Mbaraka, Civil Appeal No. 96 of 2016 (unreported). Mr. Richard Rweyongeza for the Appelant. Ms. Mercy Kyamba, Ms. Happiness Nyabunya, both learned Principal State Attorneys and Mr. Boaz Msoffe, learned State Attorney for 1 st Respondent.