AFRISCAN Group (T) Limited vs David Joseph Mahende (Civil Application No. 561 of 2025) [2025] TZCA 873 (22 August 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM ( CORAM: LILA. J.A., MASOUD, 3.A. And AGATHO, J.A/1 CIVIL APPLICATION NO, 561 OF 2025 AFRISCAN GROUP (T) LIMITED., ............................................... APPLICANT VERSUS DAVID JOSEPH MAHENDE............... ...................................... RESPONDENT (Application for review of the Judgment of the Court) (Kerefu. J.A.. Fikirini. J.A. And Masoud. J.A.1 ) dated the 18th day of February, 2025 in Civil Appeal No. 200 of 2016 RULING OF THE COURT 1s t & 22n dAugust ., 2025 AGATHO, J.A.: This is an application for review arising from the judgment and decree of this Court in Civil Appeal No. 200 of 2016, wherein the Court entered judgment in favour of the respondent. The genesis of the dispute lies in the shareholding structure and governance of Afriscan Construction Company Ltd, a private company incorporated in 1990 by three founding members: the applicant, Afriscan Group (T) Ltd (40 shares); David Joseph Mahende (40 shares); and Saidi Abdallah Msangi (20 shares). The company engaged in various government and public works projects. In 1991, Afriscan Group (T) Ltd

allegedly transferred its 40 shares to one Farida Nilsson, effectively ceasing to be a shareholder. Years later, amidst financial constraints, it was claimed that the respondent agreed to sell and transfer 10 of his shares to Afriscan Group (T) Ltd as part of a capital restructuring effort. This transaction was purportedly deliberated and approved at a shareholders' meeting held on 15th September 2000 at the company's offices in Kamata. The applicant relied on minutes of the meeting (Exhibit P5) and a forensic handwriting report (Exhibit P6) to establish the validity of the alleged sale and transfer. The respondent, however, vehemently denied the occurrence of such a meeting or the sale of his shares. He maintained that, he remained the lawful owner of all 40 shares as initially allotted, as confirmed by records from the Business Registration and Licensing Agency (BRELA). He further contended that, his signature in Exhibit P5 was forged, rendering the documents relied upon by the applicant to be fraudulent. Following the respondent's continued refusal to recognize the purported sale and the delays in enforcing an arbitral award, the applicant instituted Commercial Case No. 86 of 2013, seeking declaratory orders, general damages, and interest. The trial court ruled in favour of the applicant, holding that the sale and transfer of shares was valid, albeit

not strictly compliant with the company's Articles of Association. Dissatisfied, the respondent appealed to this Court. Upon a comprehensive re-evaluation of the evidence and careful consideration of the law governing corporate governance and share transfers, this Court allowed the appeal. It held that the meeting of 15th September 2000 was convened and chaired by PW1 (Ulf Nilsson), a person who lacked the legal authority to do so, having relinquished all his shares in 1991. The Court further found that, mandatory procedures for share transfers, including notice requirements and the right of first refusal under the Articles of Association, were not observed. Consequently, the purported transfer was declared invalid, and the respondent's appeal was allowed with costs. Aggrieved by that decision, the applicant has now lodged this review application, relying on four grounds anchored under Rule 66(l)(a) and (b) of the Tanzania Court of Appeal Rules, 2009 (the Rules) asserting that there are manifest errors on the face of the record and that she was deprived of the right to be heard. The four grounds for review are:

1. The applicant contends that the Court wrongly recorded that PW1 (Ulf Nilsson) admitted transferring all his shares to Farida Nilsson in 1991, yet there is no such statement in his testimony. It is argued

that PW1 was never a shareholder o f the company, and both the handwritten and electronic proceedings confirm this fact. 2. Another complaint is that PW1 did not cease to be a director in 1991, neither by resignation nor removal. Further, there was no evidence that the company had any share qualification for directorship as per Article 7 o f the company's Articles o f Association (Exhibit PI). Therefore, PW1 remained a director o f Afriscan Construction Company Ltd. 3. The applicant contends that PW1 confirmed in his testimony that the meeting o f 15th September 2000 was properly convened, attended by members and directors, and that proper notice was issued in accordance with Article 5 o f Exhibit PI. 4. The applicant argues that the requirement o f a 21 -day written notice to directors (allegedly based on Articles 4(b) and 4(c) o f Exhibit PI and Article 40 o f Table A to the Companies Act) was neither raised during trial nor pleaded by the parties. It is contended that this issue was raised suo motu by the Court at the judgment stage, without affording the parties an opportunity to address it, thus violating the right to be heard. At the hearing of application, Mr. Joseph Rutabingwa, learned advocate appeared for the applicant, while Mr. Samson Mbamba, learned advocate, represented the respondent. Both sides intimated their readiness for the hearing. They subsequently made their rival submissions which we shall refer to in this ruling.

Respectfully, Mr. Rutabingwa's submissions on the first to the third grounds were rather mundane. He attacked the affidavit in reply which in our view was an unconventional approach. He protested the contents of paragraph 9 of the affidavit in reply averring that the impugned judgment was based on other grounds including procedure of calling the meeting, sale of shares, including notice as required by table A under the Companies Act (Cap. 212). He disputed the Court's stance that PW1 was not qualified to chair the meeting for he was neither a shareholder nor a director of the applicant. A similar criticism was directed towards paragraph 12 of the respondent's affidavit in reply which averred that PW1 has never been the shareholder nor the director of the applicant. Mr. Rutabingwa then pointed out a contradiction in the respondent's testimony at the trial court where he referred PW1 as a director or Managing Director because he did not know if he had ceased. Elaborating further on shareholding, Mr. Rutabingwa submitted that one may be a shareholder, or he was a shareholder and ceased after selling his shares as the situation at hand where the trial court held that PW1 ceased to be a shareholder after selling his shares. In a contrasting view, the applicant's counsel contended that PW1 has never been a shareholder of the company.

It was his argument that the Court held that PW1 was a director but in the applicant's company there was no shareholding requirement for one to be a director. He contended that table A of the Companies Act article 45 was not violated and it gives wide powers and avenues for one to be a director. He contended that PW1 never had shares in the applicant company and hence he never ceased to be its director. The learned counsel touched also upon the proceedings of High Court Commercial Division, recorded electronically versus the handwritten ones with the aim of imputing the Court's finding. On this, we agree with Mr. Mbamba that this Court cannot examine those proceedings of the High Court in the review application. Therefore, the issues of which one is used between the two serves no useful purpose here. It was Mr. Rutabingwa's submission that the issue before the trial court was on transfer of shares and whether the documents were signed by the responsible persons. In support, he referred us to the case of Chandrakant Joshubhai Patel v. Republic [2004] T.L.R. 218. That prompted the Court to probe the parties as to what should be corrected after faulting the decision that PW1 ceased to be a member, and he had no power to transfer the shares. 6

Mr. Rutabingwa was of the view that the issue of lawfulness of transfer or sale of shares was not determined by the Court, hence should be considered in this review application. On the scope for review under rule 66(1) of the Rules and Order XLII rule (1) and (2) of the Civil Procedure Code, Cap, 33 (the CPC), he suggested that the scope of these rules is similar. We think that is wrong because rule 66(1) of the Rules has a more limited scope compared to order XLII of the CPC. The applicant's counsel contended that the Court could go beyond the impugned judgment itself in the review process. He added that, the Court can peruse the proceedings. He insisted that in an allegation of the manifest error on the face of record, the Court can go beyond the judgment. Mr. Mbamba disagreed. On our part, we noted a serious misconception in Mr. Rutabingwa's viewpoint. We shall explain shortly. Understandably, Mr. Mbamba was dismayed with the applicant's complaints which sounded more of an appeal than review. According to him for a review, rule 66(1) of the Rules requires that there must be an error on the face of record which occasioned miscarriage of justice. He submitted that probably the appellate Court might have erred, but that error must have occasioned miscarriage of justice. We subscribe to this view as the law is settled that the powers of review must be used very sparingly as held in Osward Masatu Mwizarubi v. Tanzania Fish 7

Processors Ltd [2012] TZCA 450, at pages 10-11 at 11 citing Mark Muhango and Others v. Tanzania Shoe Company and Another [2003] TZCA 78. We are in fours with his rejection of the applicant's quest to the Court to go back and look at the sale of shares and see if it was proper and examine what the other panel decided to see if they were right or wrong because in his view and rightly so that is not review. As regards to the issue of electronic and handwritten proceedings at the High Court which the parties submitted at a considerable length, the same will not detain us because it really does not have any bearing on review. We decline to examine the record of appeal because this is not an appeal. In the application for review the focus should be on the impugned judgment and not otherwise. If an error or issue was never captured in the appeal judgment, the Court is precluded to examine it With due respect to Mr. Rutabingwa, his submission was not directed towards showing errors on the impugned judgment itself which is cardinal in review application. The Court is not expected to examine the record of appeal to make sense of the purported errors. He protested the holding that PW1 was a shareholder but ceased after transferring his shares. In his view, the issue of transfer/sale of shares ought to have 8

been determined by the Court. We are settled in our view that this issue is about evidence which should be on appeal not review. Otherwise, the application will become an appeal in disguise. We are alive to the case of OTTU on behalf of Assenga and 109 Others v. AMI (Tanzania) Ltd [2013] TZCA 474 which Mr. Rutabingwa's referred to us, holding that the Court could entertain review where there is an apparent error on the face of record. However, in the case at hand there is no apparent error in the impugned judgment. The issue of whether there was sale/transfer of shares or not appears to be a ground of appeal and not review. It requires re-evaluation of evidence on record. We cannot do that because this is not an appeal. At most, we will have to examine testimonies of witnesses on that issue. In Maulid Juma Bakari @Damu Mbaya v. Republic [2021] TZCA 334 we held that: " The issue regarding witnesses cannot be raised as grounds for review as they require going back to the record to re-evaluate their testimonies which does not fall within the confines o f rule 66(1) o f the Ruletf'. Briefly, in assessing the merit of the application, we shall revisit the law on review as stipulated under rule 66(1) of the Rules and Order XLII

rule 1 and 2 of the CPC as well as case law parallel with the pleadings and submissions of the parties. The law on review is settled as provided for under rule 66(1) of the Rules that a review should limit itself to the impugned judgment/ruling or order. For clarity the rule states: The Court may review its judgment or order, but no application for review shall be entertained except on the following grounds; (a) The decision was based on a manifest error on the face o f the record resulting in the miscarriage o fjustice; (b) a party was wrongly deprived o f an opportunity to be heard; (c) the court's decision is a nullity; or (d) the court had no jurisdiction to entertain the case; (e) the judgment was procured illegally\ or by fraud or perjury. Looking at the Notice of Motion, the application at hand seeks review of Court's judgment under the provision of rule 66(1) (a) of the Rules, that is, the decision was based on a manifest error on the face o f the record resulting in the miscarriage o fjustice. We shall thus examine the application in the lens of this rule. We ask whether the judgment of the Court dated 18th February 2025 contains any manifest error on its face that resulted in miscarriage of justice? The answer will be given in due course. 10

To begin with the first complaint, the alleged manifest errors. Upon scrutiny of the alleged "errors," that Complaints in the first, second and third grounds revolves around share transfer, 21 days' notice of the meeting and the meeting itself. It also centres on the contention that PW1

• Ulf Nilsson was neither a shareholder nor the director. But all these require the Court to delve into the record of appeal and evidence at the trial court. This Court finds that these grounds do not constitute manifest errors on the face of the record. Rather, they reflect the applicant's dissatisfaction with the conclusions reached by the Court, which is not ground for review. There is a plethora of authorities as to what amounts to manifest errors apparent on record, in African Marble Company Limited (AMC) v. Tanzania Saraju Corporation TSC [2005] TZCA 79, we defined it thus: "An error apparent on the face o f the record must be such as can be seen by one who writes and reads, that is, an obvious and patent mistake and not something which can be established by a long- drawn process o f reasoning on points on which there may conceivably be two opinions..." That echoes the position in Chandrakant Joshubhai Patel v. Republic [2004] TLR 218, a manifest error under Rule 66(l)(a) must be obvious, self-evident, and discernible without extensive argument or li

reasoning. For instance, the issue of proceedings in electronic or handwritten form at the High Court is in our view non-issue for review. We cannot extend our analysis to that. Indeed, the applicant's grounds, which largely involve disputing factual findings and evidence evaluation, are unsuitable for review as they require a re-hearing of the appeal, which is beyond the scope of Rule 66. The second complaint is about right to be heard, which arises from the fourth ground, where the applicant asserts that the Court raised the issue of 21-day notice requirements without affording the parties an opportunity to address it which would have fallen squarely in the ambit of rule 66(1) of the Rules and the case of OTTU on behalf of Assenga and 109 Others (supra) would have applied. But a careful reading of the impugned judgment (pages 8-11) reveals that the Court's deliberation on the validity of the share transfer was firmly anchored in the parties' submissions and the Articles of Association (Exhibit PI). Generally, the Articles of Association form the legal framework governing the company's operations. In this case, the Court was entitled, and indeed obliged, to interpret and apply those provisions in assessing the validity of the alleged share transfer particularly on the written notice 12

and proceedings at the meeting. Therefore, the applicant's claim of being denied the right to be heard is unfounded, and we proceed to reject it. In lieu of the foregoing, the application lacks merit and it is dismissed with costs. DATED at DAR ES SALAAM this 20th day of August 2025. S. A. LILA JUSTICE OF APPEAL B. S. MASOUD JUSTICE OF APPEAL U. J. AGATHO JUSTICE OF APPEAL Judgment delivered this 22n d day of August, 2025 in the presence of the Mr. Evodius Rutabingwa, learned counsel for the Appellant and Ms. Aziza Msangi, learned counsel for the respondent, through virtual court is hereby certified as a true copy of the original. 13