Citibank Tanzania Limited vs Gapco Tanzania Limited (Civil Appeal No. 238 of 2023) [2025] TZCA 991 (24 September 2025)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA fCORAM: SEHEl, J.A., KHAMIS, J.A., And FELESHI, 3.A.) CIVIL APPEAL NO. 238 OF 2023 CITIBANK TANZANIA LIMITED........................................................ APPELLANT VERSUS GAPCO TANZANIA LIMITED ............. . ....................................... ..RESPONDENT (Appeal from the decision of the High Court of Tanzania, Commercial Division, at Dar es Salaam) (Maruma. 3.1 dated the 29th day of August, 2022 in Commercial Case No. 107 of 2021 JUDGMENT OF THE COURT 16th May, & 24th September, 2025 SEHEL. 3.A.: The appeal before us is against a decision of the High Court of Tanzania, Commercial Division (the High Court) that declared Citibank Tanzania Limited, the appellant, in breach of an irrevocable Letter of Credit number 5279600195 (the LC) and ordered her to refund GAPCO Tanzania Limited, the respondent, USD 816,335. It further awarded the respondent interest at the rate of 23% per annum on the sum of USD 816, 335; i

general damages to the tune of USD 200,000; interest at court's rate of 7% per annum and costs of the suit. The appellant was aggrieved with that decision, hence, the present appeal. The brief facts of the case are that: the respondent ordered Alchemist Energy Trading DMCC, the beneficiary of the LC, to supply 500 Metric Tons of petroleum products (the goods) worth USD 816,335 to be delivered at Dar es Salaam port between 3rd and 5th March, 2021. It then applied to the appellant for a LC to finance the supply of the goods. On 1st March, 2021, the appellant issued the requested LC and undertook to pay the beneficiary's invoice up to the sum of USD 816,335 for the goods to be supplied to the respondent upon presentation of the following four documents listed under Field 46A of the LC; one, signed commercial invoice (email pdf/fax copy); two, certificate of origin (copy/photocopy/email pdf/fax copy); three, certificate of quality to be issued on arrival on ships tank certifying composite quality at disport, Dar es Sataam, issued by an independent inspector (copy/photocopy/emaii pdf/fax copy) and four, certificate of quantity issued on vessel arrival, quantity at Dar es Salaam issued by an independent inspector (email pdf/fax copy).

The LC further provided that, in case the four listed documents were not available at the time of utilization, payment could be made against presentation of a signed commercial invoice (email pdf/ fax copy) and a seller's letter of indemnity issued by the beneficiary in a format set out in the LC. It happened that the beneficiary delayed to deliver the goods on the agreed date thus necessitated the postponement of the delivery date to 14th March, 2021 and between 15th and 17th May, 2021. Notwithstanding the extensions of time, the beneficiary failed to honour its obligation. Accordingly, the respondent terminated the supply agreement. On 9th April, 2021, the respondent requested the appellant not to make any payment against the LC but the appellant refused and on 13th July, 2021, debited the total sum of USD 816,335 in order to reimburse Citibank Pic, upon presentation of a provisional invoice and a seller's letter of indemnity. Following that payment, the respondent filed a suit against the appellant alleging breach of the terms of the LC by honouring payment without being issued with a signed commercial invoice (email pdf/fax copy). It thus sought for the following reliefs: one, a declaratory order that 3

the appellant breached the terms of the LC by debiting a total of USD 816,335 without being issued with the signed commercial invoice as required under the LC; two, an order compelling the appellant to refund the respondent USD 816,335 which was negligently debited from the respondent's account; three, interest at the rate of 23% per annum from the date of filing the suit to date of judgment; four, general damages to be assessed by the court; five, interest on decretal sum at the court's rate of 7% per annum and six, costs of the suit. On the other hand, the appellant denied the allegations. She averred that payment was made pursuant to Field 47A (8) of the LC which permitted the beneficiary to use a signed provisional invoice where the arrival quantity and arrival price of the goods were not known at the time of utilization of the LC. As per rule 49 (1) and 50 (1) of the High Court (Commercial Division Procedures) Rules of 2012, each party presented and filed one witness statement. The statements were of Getrude Mpangile (PW1) and Michael Mungure (DW1), for the respondent and the appellant respectively. PWl's evidence was that, the appellant negligently made payment to the beneficiary while knowing that the documents presented did not 4

comply with the terms of the LC. She said that payment was made against a seller's letter of indemnity and a provisional invoice instead of a commercial invoice. It was her evidence further that, when requested not to make payment, the appellant refused alleging that the presentation had been done by the beneficiary and the LC being an irrevocable in nature cannot be unilaterally cancelled unless consented by all parties. It was also the evidence of PW1 that despite of an injunctive order issued by the High Court in Miscellaneous Commercial Application No. 82 of 2021, the appellant negligently proceeded to debit a total sum of USD 816,335 from the respondent's account, thus, causing huge loss in her business. When cross examined, PW1 admitted that under Field 47A (8), the beneficiary was permitted to use the provisional invoice in case the arrival quantity or price is not known but was consistent that the respondent was disputing the use of Field 47A (8) of the LC in effecting payment to the beneficiary as the arrival quantity and price were stated in the LC. The case for the defence was that, upon issuance of the LC, the appellant nominated Citibank Europe Public Limited Company (Citibank Pic) for the beneficiary to present the documents required by the LC and

confirm to the issuing bank for payment. That, according to Field 47A (8) of the LC, the beneficiary may present a provisional invoice where the arrival quality and/or price was not known at the time of LC's utilization. Further, under Field 47A (7) of the LC, the appellant was allowed to discount any document at the beneficiary's request and expense. It was therefore the evidence of DW1 that the appellant made payment to the beneficiary on 5th March 2021 in strict compliance with the terms and conditions of the LC. It was also his evidence that, on maturity of the LC on 13th July 2021, the appellant debited the total sum of USD 816,335 in order to reimburse Citibank Pic, the nominated bank as per Field 78 of the LC. Regarding failure to cancel payment as requested by the respondent, DW1 said that, in terms of Field 40A, the LC was irrevocable and the respondent agreed the LC would be subject to the latest versions of the Uniform Customs and Practice for Documentary Credit (UCP) which is UCP 600. Since the LC was irrevocable, the appellant could not suspend payment because, pursuant to Article 10b of UCP 600, cancelling the LC requires consent of all parties; the appellant, the respondent and the beneficiary. 6

When cross examined, DW1 admitted that payment was made against a provisional invoice and a seller's letter of indemnity. Nonetheless, he said the bank invoked Field 47A to make payment because the quantity and price were not known. Having heard the parties' evidence, the High Court observed that the LC allowed a beneficiary to utilize it in two ways; namely, under Field 46A or Field 47A (8). If utilised under Field 47A (8), there is a further condition that a provisional invoice will be paid first at 60 calendar days from the first day of delivery, and the differential payment will be made against a final invoice after presentation of final commercial invoice at the nominated bank. The High Court further held that for the LC to be utilised under Field 47A (8) there was a conditional precedent which was that, the goods must be delivered at Dar es Saiaam's port and the transportation documents must be attached to the documents presented to the confirming bank as required by Article 14 (c) of UCP 600. In that respect, the High Court was not convinced with DWl's evidence that there was complying presentation. It therefore held that the confirming and issuing banks failed to carefully examine a presentation to determine whether or not the documents appeared on their face to constitute a complying presentation. It also held 7

that the appellant had no excuse to accept Article 47A (8) of the LC as the price and quantity of goods were shown in the LC. The High Court further found the appellant to have breached Article 47A (8) of the LC by accepting payment in full while the invoiced amount was to be paid into two stages. In the end, it entered judgment in favour of the respondent and decreed as earlier on stated. In the appeal at hand, the appellant raised the following ten grounds of appeal: '7. The learned tria l Judge erred in law and fact in holding that the bank was in breach o f the terms o f the LC by paying before the arrival o f goods at the port o f destination. In doing so, the learned Judge erred in law in failing to note that under Article 5 o f the UCP 600 the bank was only obliged to deal with the documents mentioned in the LC and not the performance or otherwise o f the underlying contract. 2. The learned tria l Judge erred in law and fact in holding that the Appellant had breached the terms o f the LC by negligently debiting the respondent account to honour the LC No. 527600195 without being issued with a signed Commercial Invoice. 8

3. The learned trial Judge erred in law and fact in holding that a signed Commercial invoice was required before the Appellant could honour the LC No. 5272600195,

4. The learned tria l Judge misconstrued the evidence o f DW1 and Field 47A (8) o f the LC in holding that the Appellant had breached the terms o f the LC by paying the amount subject o f the LC in fu ll using a provisional invoice.

5. The learned trial judge erred in holding that the 'arrival quantity' o f the mogas was known. In doing so the learned trial Judge erred in failing to note the difference between the \quantity' provided in the provisional invoice which is a provisional quantity and arrival quantity as defined in exhibit D6.

6. The (earned tria l Judge erred in law and fact in holding that it is the duty o f both the issuing bank and the confirm ing bank to be satisfied that delivery o f the goods is done at the port o f destination before honouring any payment under the LC.

7. The learned tria l Judge erred in law and fact in holding that a complying presentation include transportation documents. 9

8. The learned trial Judge erred in law and fact in awarding damages to the tune o f USD 200,000 without there being evidence that the respondent has suffered generally a t the hands o f the appellant

9. The learned tria l Judge erred in law in awarding interest at the rate o f twenty three percent per annum from the date o f filing the suit to the date o f judgm ent without any evidence justifying such award.

10. The evidence on record does not support the findings o f the Trial Judge." At the hearing of the appeal, Mr. Gasper Nyika, learned counsel, appeared for the appellant, whereas, Mr. Ramadhani Karume, learned Counsel, appeared for the respondent. Both parties filed their written submissions in terms of rule 106 (1) and (7) of the Tanzania Court of Appeal Rules (the Rules), in support of their respective positions. At the outset, we wish to point out that Mr. Nyika conjointly argued the second and third grounds while all other grounds were separately argued. On our part, we find it conveniently to jointly address the first, second, third, fourth, fifth and sixth grounds of appeal as they centre on the issue of the utilization of the LC. 10

In the first ground of appeal, Mr. Nyika submitted that parties agreed to be governed by UCP 600 as per Field 40E of the LC. That, pursuant to Article 5 of UCP 600, banks are required to deal with the documents presented before the confirming bank to see whether they are in compliance presentation and not the performance of the underlying contract between the supplier and customer. He referred us to a Kenyan High Court decision in the case of SAJ Ceramics Limited v. HMS Bergbau AG & Another [2021] KEHC 12944 (KLR) and an English Case of Ian Stach Limited v. Baker Bosley Limited [1958] 2 Q.B, 130, 139 to support his assertion that the LCs are built upon two main principles, the doctrine of strict compliance and the autonomy principle where banks strictly deal with documents and not the goods or services to which the documents relate and that, if the documents tendered appear on their face to be in strict compliance with the terms and conditions stipulated in the LC, the issuer must make payment, irrespective of any disputes or claims with regard to other related transactions. It was his preposition that, if there was no performance in the underlying contract, it was up to the respondent to bring an action against the supplier, Alchemist Trading DMCC, for failure to perform the supply l i

contract and seek recovery of the money or funds already paid. In the end, he concluded the High Court misconstrued the terms of the LC in its conclusion that the appellant was in breach of the LC when she paid the beneficiary before arrival of goods at the port of Dar es Salaam. On the second and third grounds of appeal, Mr. Nyika faulted the High Court for its failure to take into consideration that the arrival quantity and price would be established by the Weights and Measures Authority (WMA) as stipulated in the Shipping and Supply Contract, exhibit D6. He asserted that the actual price would be known after making a comparison between paid amount as per the provisional invoice and unpaid amount, if there would be an increase in the final invoice, and that, the final payment would be made on the fifth bank working day after presentation of final commercial invoice at the nominated bank. To fortify his assertion, he referred us at pages 283 and 284 of the record of appeal where DW1 told the trial court that payment for a provisional invoice is first made at 60 calendar days from the first day of delivery laycan (first day of delivery laycan to count as day one) based on provisional invoice and second payment, that is, the difference on the final invoice would be made on the 12

fifth bank working day after presentation of final commercial invoice at the nominated bank. Mr. Nyika reiterated that Field 47A (8) of the LC allowed the beneficiary to present a provisional invoice when the arrival quantity or price was not known for payment. In that respect, he contended that the appellant was not in breach of the terms of LC by debiting the respondent's account to honour the LC. To support his argument, he referred us to a decision of the Privy Council Appeal in the case of Commercial Banking Company of Sydney Limited v. Trading Company (New South Wales) Privy Council Appeal No. 29 of 1971, where it was held that where the commercial credits give ambiguous instruction to the banker, the banker is not in default of the acts upon a reasonable meaning of the ambiguous expression or accepts any kind of documents which fairly falls within the wide description used. In the fourth ground of appeal, Mr. Nyika argued that the High Court misconstrued the evidence of DW1 and Field 47A (8) of the LC when it held that payment for provisional invoice should be half or quarter of the LC amount of USD 816,335 whereas the LC provided that the parties would reconcile the differential payment when the cargo arrives at the destination 13

and final quantity is established, thereafter a final invoice would be raised and issued to the nominated bank for any payment. He stressed that it is the difference between the provisional invoice and final amount which would be paid in the second phase. Submitting on the fifth ground of appeal, Mr. Nyika argued the High Court erred in holding that the arrival quantity of mogas was known while the quantity and price stated in the LC was not stated whether it was final or provisional and the LC does not define what arrival quantity and price entails. He went on to submit that, parties agreed the arrival quantity would be established after the WMA has measured and established the arrival quantity and price. He referred us to Clause 7.8 of the Shipping and Supply Contract, exhibit D6. Mr. Nyika suggested that the arrival quantity and price referred to the quantity and price of goods arrived at the port and not the ones stated in the LC. In that regard, he argued that there was basis on the High Court's finding that the arrival quantity and price was known. Submitting on the sixth ground of appeal, Mr. Nyika stressed on the settled position governing LCs that they are independent agreements from underlying contract between the supplier and the customer as clearly 14

provided under Article 5 of the UCP 600. He pointed out that, in the present appeal, the underlying contract is the Shipping and Supply Contract between Petroleum Bulk Procurement Agency and Alchemist Energy Trading DMCC, exhibit PI. It was his further submission that, when presentation is made and such presentation is compliant in accordance with the terms of the provisions of the LC, the bank is under obligation to pay based on the LC regardless of the performance of exhibit, PI. To buttress his preposition that LCs are separate from any other agreements, he referred us to the decision of the Court of Appeal of Kenya in Scope Telematics International Sales Limited v. Stoic Company Limited and Cooperative Bank of Kenya [2017] KECA 545 (KLR). In reply, Mr. Karume adopted the respondent's written arguments filed in Court and highlighted few matters pertaining to the grounds of appeal. On the first ground of appeal, he conceded that, according to Field 40E of the LC, parties agreed to subject the terms and conditions of the LC to UCP 600 and added that Articles 7 and 8 of the UCP 600 require both the issuing bank and confirming bank to honour the LC against the documents constituting a complying presentation. He pointed out that, under Article 2 of UCP 600 complying presentation was defined to mean a 15

presentation that is in accordance with the terms and conditions of the credit. He concurred with the High Court findings that complying presentation for the utilization of the LC was either through Field 46A or Field 47A (8) of the LC. That, payment can be under Field 47A (8) only where arrival quantity and or the price was not known at the time of LC utilization. He added that Field 47A (8) imposed two further conditions that, after presentation of the provisional invoice, provisional payment should be made at 60 calendar days from the first day of delivery laycan (first day of 60 calendar days from the first day of delivery to count as day one) based on provisional invoice and differential payment against final invoice to be made on the fifth bank working days after presentation of the final invoice at the nominated bank with the LC. In that regard, he argued, delivery or arrival of goods is a precondition for making payment to the beneficiary. Mr. Karume asserted that the appellant negligently paid the beneficiary under Field 47A (8) while the price and quantity of the goods were known and provided for under Fields 32B and 45A and there was no 16

delivery or arrival of goods which was a preconditional requirement under Field 47A (8) of the LC. Responding to the second and third grounds of appeal, Mr. Karume reiterated that, the terms of the LC were clear since the amount and the quantity of the goods were known and effectively provided for under Fields 32B and 45A of the LC and there was no delivery or arrival of goods to trigger presentation of a provisional invoice under Field 47A (8) of the LC. He acknowledged the settled principle governing the LC that the duty of the court was to interpret the agreement to reflect the party's intention and not to make reasonable terms for the parties. He cited the case of Simon Kichele Chacha v. Aveline M. Kilawe (Civil Appeal No. 160 of 2018) [2021] TZCA 43 to fortify his preposition that parties are bound by the agreements they freely entered into as the principle of sanctity of contract requires. Mr. Karume supported the findings of the High Court by arguing that DW1 failed to give reason why utilization was not done under Field 46A of the LC since the price and quantity of the goods were known and also did not produce any evidence to prove delivery of goods which was a pre condition for utilization of LC under Field 47A (8) of the LC. 17

On the fifth ground of appeal, Mr. Karume supported the High Court's decision that it was the correct position of the law as it was consistent with the terms of the LC and UCP 600. He pointed out that the LC stipulated the quantity and price of the goods but the appellant invoked Field 47A (8) of the LC alleging the stipulated quantity and price was not conclusive. He therefore stressed that parties are bound by their agreement, and that, the court's duty is to interpret the parties' agreement of which the High Court rightly did so. He strongly opposed the sixth ground of appeal by arguing that Field 47A (8) of the LC imposed a condition that it is applicable only where the arrival quantity and or price is not known and that, in the event, a provisional invoice is raised, there must be ascertainment of delivery laycan. He asserted that the LC was not in compliant presentation because the appellant paid the beneficiary in full while the goods were not delivered at Dar es Salaam port as required by Field 47A (8) of the LC. In rejoinder submission, Mr. Nyika reiterated his earlier submission that the High Court came up with a totally new issue of arrival of the cargo while parties were contending on the use of a provisional invoice. He also responded to the issue of complying presentation that the appellant 18

complied with Field 47A (8) of the LC which allowed payment to be made against a provisional invoice, and such payment was in respect of the provisionally invoiced amount and not against the whole amount. From the parties' submissions, the issue arising from the first, second, third, fourth, fifth and sixth grounds of appeal is whether there was a compliance presentation of the LC and whether the appellant breached the terms and conditions of the LC. Inorder to fully grasp the issue, we wish to start with thedefinition of LC as provided for in the Black's Law Dictionary, 9th Editionat page 987 that: "An instrum ent under which the issuer (usually a bank), at a customer's request, agrees to honour a draft or other demand for payment made by a third party (the beneficiary), as long as the draft or demand complies with specified conditions, and regardless o f whether any underlying agreement between the customer and the beneficiary is satisfied.... A credit may be either revocable or irrevocable...letters o f credit are intended generally to facilitate purchase and sale o f goods by providing assurance to the seller o f prom pt payment upon 19

compliance with specified conditions or presentation o f stipulated documents without the sellers having to rely upon the solvency or good faith o f the buyer" Further, the Halsbury's Laws of England, 4th Edition (Reissue), Vol. 3 (1), at Para 252, explained the nature of LC as follows: ".„/5 an undertaking by a banker to m eet drafts drawn under the credit by the beneficiary o f the credit in accordance with the conditions laid down therein...," It should be kept in mind that there are several types of the LCs, among them is an irrevocable letter of credit that cannot be altered without the consent of all parties. This type of a letter of credit is more common in international trade and in the case of United City Merchants (Investments) Ltd & others v. Royal Bank of Canada & others [1982] 2 ALL ER 72, the House of Lords explained the purpose of using irrevocable LCs that: "The whole commercial purpose for which the system o f confirm ed irrevocable documentary credits had been developed in international trade was to give the seller o f goods an assured right to be paid before he parted with control o f the goods 20

without risk o f the payment being refused, reduced or deferred because o f a dispute with the buyer." In a nutshell, LC is an important commercial means of payment in international trade as it provides security in transactions where buyers and sellers are unfamiliar with each other and operate under different legal systems and trade customs. Typically, the terms of LC spell out the circumstances in which the beneficiary, the seller, is entitled to draw down payment and may include presentation to the bank of specified shipping and insurance documents and the like. By guaranteeing payment upon presentation of agreed-upon documents, LC mitigates the seller's risk, ensuring they receive funds from a bank rather than relying on the buyer's creditworthiness. Therefore, irrevocable LC fosters trust by making global trade smoother and more reliable. To avoid ambiguity which may arise from interpretating the terms and conditions of LC, the International Chamber of Commerce (ICC) developed the Uniform Customs and Practice for Documentary Credits (UCP) to standardize and provide a set of internationally recognized rules to govern the issuance and handling of documentary credits. The latest version is UCP 600 issued in 2007. Therefore, in case there is ambiguity as 21

to the meaning of the provisions in the LC, such ambiguity is resolved by looking at the definition provided in the UCP 600. To this proposition we find inspiration from an English case of Forestal Mimosa Ltd v. Oriental Credit Ltd [1982] 2 ALL ER 400 where it was held that: "The terms o f the letters o f credit were to be construed by reference to the terms o f the Uniform Customs and Practice because those terms formed part o f the contract and there was no express provision excluding any relevant part o f those term s." In the present appeal, we have shown that the appellant issued an irrevocable LC to the respondent in favour of Alchemist Energy Trading DMCC, the seller and supplier of petroleum products to the respondent. According to Field 40E of the LC, parties agreed to subject the terms and conditions of the LC to UCP latest version, which is, UCP 600. In that respect, we will be guided by UCP 600 in interpreting the terms and conditions of the LC. We have shown that Mr. Nyika relied on Field 47A (7) and (8) of the LC to assert that the appellant acted within the confines of the LC when making payment to the beneficiary. The said Field provides: 22

"Z Documents under this LC may be discounted at beneficiary's request and expense. 8. In case arrival quantity and or price is not known a t the time o f LC utilization, beneficiary is allowed to present a provisional invoice under this LC with provisional price and provisional quantity, In the event a provisional invoice is raised, the letter o f credit should be available a t two stages, i.e. provisional payment at 60 calendars days from the first day o f delivery iaycan (first day o f delivery laycan to count as day one) based on provisional invoice and differential payment against final invoice shall be made on the fifth bank working day after presentation o f final commercial invoice at the nominated bank within the LC. In case any amount in favour o f the applicant, such amount w ill be settled outside o f the LC." Whereas, Field 46A relied upon by the respondent provides: "46A; Documents required; Following documents in one original and one copy/ photocopy, unless otherwise stated: 1) commercial invoice (em ail pdf/ fax copy acceptable) 2) certificate o f quality issued on arrival on ships tank composite quality a t disport Dar es Salaam issued 23

by independent inspector (copy/ photocopy/ em ail pdf/ fax copy acceptable) 3) certificate o f quantity issued on vessels arrival quantity at Dar es Saiaam issued by independent inspector (copy/ photocopy/ fax copy acceptable) 4) certificate o f origin (copy/ photocopy/ em ail pdf/ fax copy acceptable). In the event the above-mentioned documents are not available a t the time o f LC utilization , then payment is to be made against presentation o f a) commercial invoice (em ail pdf/ fax copy acceptable) and b) seller's letter o f indem nity issued by the beneficiary in the form at beiow (em ail pdf/ fax copy acceptable)." From the above extract it is evident that, as correctly held by the High Court, the beneficiary was allowed to utilize the LC in two ways either under Field 46A or Field 47A (8). At this juncture, we wish to put it clear that from the start, the appellant's case was all along that, she paid the beneficiary under Field 47A (8) and not Field 46A and the reason she gave was that, at the time of LC utilization, the arrival quantity and arrival price of the goods were not known. Now did the appellant comply with the compliance presentation of the documents presented by the beneficiary. 24

Article 2 of UCP 600 defined complying presentation to mean a presentation that is in accordance with the terms and conditions of the credit, the applicable provisions of the UCP rules and international standard banking practice. This means that, when a seller presents documents under the LC, the bank must meticulously review them to ensure, on their face value, they conform precisely to the terms and conditions specified in the LC, as well as the provisions of UCP 600 and international standard banking practice. As such, Banks play a crucial role in ensuring the integrity of LC transactions by adhering to the principle of ' strict compliance. This rigorous document verification process protects all parties involved and ensures that international trade remains secure and reliable. As correctly submitted by Mr. Nyika, banks are not required to investigate beyond the documents presented; they only assess whether, on the face of it, the documents presented comply with LC requirements. This is clearly provided under Article 5 of the LC that banks deal with documents only and not goods or services or performance to which the documents relate. If documents fail to meet strict compliance, banks have the right to reject them, potentially delaying or preventing payment to the seller. But, if they find that the documents are in compliance presentation, 25

the banks are under contractual obligation to the seller to honour the LC. This is sometimes known a s 'autonomy principle 'which states that financial transaction is essentially separate and independent from the underlying sale contract. Therefore, any dispute in the framework of contract between the parties should be separately treated from issues related to the LC - see: the cases of SAJ Ceramics Limited v. HMS Bergbau AG & Another (supra) and Ian Stach Limited v. Baker Bosley Limited (supra). In this appeal, the LC allowed the beneficiary to utilize it where the arrival quantity and/or arrival price is not known at the time of utilization. Although we agree with Mr. Nyika that the LC did not define the words the arrival quantity and/or arrival price, Field 32B of the LC mentioned the price of USD 816,335 and Field 45A mentioned the quantity of 1,520 Metric Tons plus or minus five per cent to be delivered at Dar es Salaam (DAP, Dar es Salaam). In DOCDEX decision no. 393, the expert opined that the quantity of metric tons indicated under Field 45A was ordered quantity and not necessarily the quantity that would be delivered. Mr. Nyika stressed in his submission that arrival quantity was not known because the actual volume to be delivered has to be confirmed by WMA and that is why 26

the ordered quantity had plus minus five per cent. With due respect we are not persuaded by the expert's opinion and Mr. Nyika's submission because Article 30 of UCP 600 provides guidance on quantity and price tolerances in LC as this is particularly relevant when dealing with commodities or goods where precise measurement is challenging, such as, petroleum products which has a tendency of evaporating or expending. It be noted that Article 30 (a) of UCP 600 allows for a ten percent tolerance in quantity or unit price unless the LC specifies otherwise. However, this tolerance does not apply when the LC states the quantity in terms of a specific number of packing units or individual items. Additionally, Article 30(b) allows for a five percent tolerance in quantity, provided the LC does not specify the quantity in packing units or individual items, and the total drawing amount does not exceed the credit amount. As stated earlier, the LC specified the exact quantity to be delivered and parties being aware of the challenges associated with petroleum products allowed for a tolerance of plus or minus five percent. Therefore, it is not true that the arrival quantity and/or price was not known. We understand that banks are not supposed to deal with the goods or services and that they are strictly supposed to deal with documents and in dealing 27

with documents, they are supposed to scrutinize with meticulous care to see whether they are in exact compliance with the terms of the LC.We believe that had the appellant meticulously scrutinize the LC, she would not have allowed the beneficiary to utilize the LC under Field 47A (8) because the quantity and price were specifically stated in the LC under Field 45A and 32B respectively. Here, we wish also to briefly address the issue of payment made under Field 47A (8) of the LC that having ruled that the appellantwas not entitled to invoke Field 47A (8) of the LC as the price and quantity of the goods were stipulated in the LC, we find theissue of payment under Field 47A (8) of the LC dies a natural death. In Equitable Trust Co of New York v. Dawson Partners Ltd (1926) 27 Lloyd LR 49, Lord Sumner said this, at pg. 52: "It is both common ground and common sense that in such a transaction the accepting bank can only claim indem nity if the conditions on which it is authorised to accept are in the m atter o f the accompanying documents strictly observed. There is no room fo r docum ents w hich are a lm o st th e sam e, o r w hich w iil do ju s t a s w ell. B u sin ess co u ld n o t p ro ceed se cu re ly on an y o th e r lin e s. The b an k's branch abroad, w hich 28

kn ow s n o th in g o ffic ia lly o f the d e ta ils o f the tran sactio n th u s financed, can n ot take upon its e lf to d ecid e w hat w ill do w e ll enough an d w hat w ill n o t I f it does a s it is to ld , it is sa fe ; ... if it d ep arts from the co n d itio n s la id dow n, it a cts a t its ow n ris k ." [Emphasis added]. We firmly associate with the above holding because the appellant was not entitled to take a provisional invoice was in compliance presentation on account that the arrival quantity and/or price was not known. We strongly believe that the excuse given by the appellant that the arrival quantity and/or price was not known was a fact which came from the beneficiary and not from the terms of the LC. The LC did provide the quantity and price of the goods. Therefore, the act of the appellant to presume that the arrival quantity and/or price was not stated in the LC was against the usual mercantile principle of the LCs. That, the maxim de minimis non curat lex (literally "the law does not concern itse lf with trifles') does not apply in LCs because the Banks know nothing of the details of the transaction between the parties. They are supposed to deal with the documents presented before them but in the appeal before us, it seems that the appellant went beyond than the documents presented. 29

Mr. Nyika referred us to the case of Commercial Banking Company of Sydney Limited v. Trading Company (New South Wales) (supra) contending that the appellant was not in default. The facts in the cited case are distinguishable with the present appeal. In that case, the contentious issue was on the document titled "inspection report" which was to be presented together with the LC for the bank to authorise payment. In addition to the usual documents and inspection report, the seller was required to submit a packaging list and certify on the invoices that each box contained ten (10) pieces and that, each export case contained twelve (12) dozen boxes. It happened that, the seller presented two international inspectors' reports. Each report certified that the inspector had inspected the packing of boxes by checking the quantity and condition of the contents but there was no express statements on the standard of the packed goods. It was contended before the Privy Council that the reports were not inspection reports as they lacked inspector's opinion on whether the goods were of an acceptable standard. The Privy Council was satisfied that there was compliance presentation of the LC. It reasoned that the LC did not specifically stipulate that the inspectors had to specify the standard of the goods. 30

Whereas, in the appeal before us, the LC was specific and clear that the beneficiary has to present four documents and in absence of such four documents, it may present a commercial invoice and a seller's letter of indemnity. The appellant presented only a seller's letter of indemnity with a provisional invoice instead of a commercial invoice. In that respect, we find that the High Court correctly held that the appellant breached the terms and conditions of LC and UCP 600 by allowing payment to the beneficiary while the documents presented were non-compliant. We dismiss the first, second, third, fourth, fifth and sixth grounds of appeal. In the eighth ground of appeal, Mr. Nyika faulted the High Court in awarding the general damages to the tune of USD 200,000 while there was no evidence to support the award and no reason was given for granting the same, He referred us to principles stated in the cases of Reliance Insurance Company (T) Ltd & 2 Others v. Festo Mgomapayo, Civil Appeal No, 23 of 2019 [2019] TZCA 323 and Anthony Ngoo & Another v. Kitinda Kimaro (Civil Appeal No. 25 of 2014) [2013] TZCA 233 that courts have discretion to award the quantum of general damages but such award must base upon consideration and deliberation on the evidence on the record to justify it. He therefore urged us to interfere with the award of 31

the general damages as he claimed that the High Court considered and applied wrong principle of law in assessing and awarding the same, Mr. Karume briefly responded to the eighth ground of appeal that, it is true, in the case of Anthony Ngoo & Another v. Kitinda Kimaro (supra), cited by Mr. Nyika, the Court held that the court is vested with a discretionary power to award general damages and there must be justification in awarding it. He contended that, in its plaint, the respondent pleaded for payment of general damages and the High Court used its discretionary power to award USD 200,000 after considering that the appellant's act of negligently paying the beneficiary caused anxiety to the respondent. To support his assertion, he referred us to page 538 of the record of appeal where the High Court gave its reason in awarding general damages. On our part, this issue should not detain us much because it is settled law that general damages need not be pleaded and courts have discretion on the quantum of damages - see the case of Reliance Insurance Company (T) & 2 Others v. Festo Mgomapayo (supra). Yet, in the case of Anthony Ngoo & Another v. Kitinda Kimaro

(supra), we stressed that the trial court has to assign reasons when exercising its discretion in awarding the quantum of damages. Having revisited the record of appeal, we observed that, one of the reliefs requested by the respondent was general damages to be assessed by the trial court. After hearing both parties' evidence, the High Court correctly observed that following the breach of LC, the respondent suffered loss. We thus do not find any justifiable reason to interfere with the award of general damages let alone the quantum. We say so because, given the nature of the respondent's business the payment of money made to the beneficiary from the respondent's account denied it to use that same money for purposes it intended to be used. Therefore, the award of USD 200,000 to the respondent was justified. We thus find the eighth ground of appeal devoid of merits and we accordingly dismiss it. In the nineth ground of appeal, Mr. Nyika contended that although it is in the discretion of the court to award interest before judgment but the same must be pleaded and proven. He argued that the appellant pleaded for twenty three percent interest but there was no material evidence to prove and justify the award. 33

Replying, Mr. Karume argued that the trial court has discretion to award interest pleaded and proved on special damages before delivery of judgment. To substantiate his submission, he cited the case of Kibwana & Another v. Jumbe [1990-1994] 1 E.A. 223. He submitted, in the present matter, the respondent pleaded for 23% interest on special damages and the High Court correctly applied the principle of law in awarding interest of 23% per annum from the date when the case was filed to the date of the judgment Having considered the rival arguments of the counsel for the parties, we find it apposite to state that the law is settled on the award of interest on special damages. As rightly submitted by Mr. Karume, the trial court has discretion to award interest on special damages so long as it was pleaded and proved. In the case of National Insurance Corporation (T) Limited v. China Civil Engineering Construction Corporation (Civil Appeal No. 119 of 2004) [2010] TZCA 4, this Court was faced with akin situation and observed thus: "Upon dose scrutiny o f the pleadings in their totality, we would agree with Mr. Mbamba that the 34

claim for the interest in controversy in this appeal was not particularised in the body o f the plaint The pleadings did not contain any m aterial facts on which the respondent relied upon for claim ing that interest as a relief. Moreover, as we shall highlight, the foundation on which the claim for interest ought to have stood was also not laid down in the pleadings." The Court further stated that: as a m atter o f substantive law, interest for the period prior to the date o f the suit may be awarded if there is agreement, express or im plied for payment o f such interest, or it is payable by the usage o f trade ...or provided for under a statutory provision o f the law entitling the p lain tiff to recover interest, or arises out o f a rule o f equity.... With no foundation on m aterial facts having been laid by the respondent in the pleadings to establish the existence o f any o f the above state o f circumstances which would have attracted a re lie f in the award o f interest for the period up to the date o f the suit, with respect, we do not see how the same could have been awarded by the High Court." 35

In the appeal before us, the respondent prayed for interest of 23% per annum under item c) of the reliefs sought but it did not particularize it in the body of the plaint as to why she was entitled that interest. Neither did it give evidence to that effect to show in its witness statement of Getrude Mpangile. Since the respondent did not plead and prove the claimed interest, we find merit to the nineth ground of appeal. We allow it by setting aside the award of 23% interest on special damages. On the tenth ground of appeal, Mr. Nyika submitted that the High Court made findings which were not supported by evidence on record as it framed and determined its own case and not the case that was brought by the respondent. Responding to the tenth ground of appeal, Mr. Karume briefly argued that the High Court considered all facts of the case and conclusively determined it on merit basing on all material evidence including LC which was pleaded and admitted as exhibit Pla-b. On this ground, we briefly wish to state that, from what we have endevours to explain, we find that the High Court considered all material facts and its decision was supported by the evidence on record. Accordingly, we dismiss this ground of appeal. 36

In the end, we dismiss the appeal save for the nineth ground of appeal which we allowed and set aside the order for payment of interest of 23% on special damages. As costs follow the event, we grant costs to the respondent. It is so ordered. DATED at DODOMA this 24thday of September, 2025. B. M. A. SEHEL JUSTICE OF APPEAL A. S. KHAMIS JUSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL The Judgement delivered this 24th day of September, 2025 in the presence of Ms. Faiza Salah, learned counsel for the Appellant, and Mr. Ramadhani Karume, learned counsel for the Respondent via virtual Court and Regina Komba, Court Clerk; is hereby certified as a true copy of the original. 37