Mbasira Food Industries Limited vs Rama and Salum Engineering Group (R.S.E.G.) Limited (Civil Application No. 585/01 of 2024) [2024] TZCA 973 (17 October 2024)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM CIVIL APPLICATION NO. 585/01 OF 2024 MBASIRA FOOD INDUSTRIES LIMITED......................................... APPLICANT VERSUS RAMA AND SALUM ENGINEERING GROUP (R.S.E.G.) LIM ITED .................................. ...... ............................ RESPONDENT (Application for stay of execution of the Judgment and Decree of the High Court of Tanzania at Dar es Salaam) fDvansobera. 3 .^ dated the 26th day of June, 2024 in Misc. Application No. 610 of 2023 RULING 12th September & 17th October, 2024 MGONYA. J.A.: The applicant, Mbasira Food Industries Limited, seeks an order to stay execution of the decree arising out of the judgment of the High Court of Tanzania at Dar es Salaam Sub-Registry (Ndyansobera, J.), in Misc. Application No. 610 of 2023 delivered on 26th June, 2024. The Notice of Motion is supported by an affidavit duly sworn by Elipidius Philemon, the applicant's counsel.

At the hearing of the application, Mr. Elipidius Philemon, learned advocate appeared for the applicant, whereas Messrs. Emmanuel Kessy and AbdulAzizi Baisi represented the respondent. Having adopted the Notice of Motion and the supported affidavit, Mr. Philemon argued that, this application is made pursuant to rule 11 (3) (4) (5) and (7) and 48 of the Tanzania Court of Appeal Rules, 2009 as amended (the Rules). That, the same has been brought within the prescribed time. He went on to submit that, the Notice of Motion was accompanied with all necessary documents as provided under rule 11 (7) (a) (b) (c) and (d) of the Rules. On the substantial loss, he referred to paragraph 10 of the supporting affidavit where it is deponed that, the mode of execution prayed by the respondent, is the arrest and detention of the applicant's Director. Hence, upon detention, the company will suffer substantial loss for failing to do its activities. Submitting on the security for the due performance of a decree, he stated that, since the mode which was granted by the High Court in Civil Application No. 610/2023, is the arrest and detention of Ramadhani Sigwa

Balikuli, a firm undertaking to furnish security ts not necessary because the applicant is available in case the Court decides otherwise. In response, Mr. Kessy declared that, they strongly contest the application. He argued that, the execution before the lower court is in respect of the settlement of the consent judgment entered between the parties herein. That, in the said judgment the parties agreed to settle Civil Case No. 40 of 2022 whereby, the applicant was supposed to pay the decretal sum of USD 151,000.0. That there was neither appeal nor any notice of appeal has been filed in respect of the said judgment. That the Notice of appeal filed by the applicant is in respect of the ruling of Hon. Ndyansobera Judge, in Application No. 610 of 2023 dated 26th June,2014. By referring me to rule 11(3) of the Rules, Mr. Kessy stressed that, the Court can only stay a Decree or judgment of the High Court only if it is a subject of the intended appeal. To bolster his argument, he relied on the decision made in Mica Elifuraha Mrindoko t/a New Bp Kilwa Road Services Station v. Bank of Africa Tanzania Limited, Civil Application No. 211/16 of 2022. Adding to the above, Mr. Kessy contended that, the settlement deed which is subject to stay is not even attached to this application contrary to the law.

Responding on the issue of security, Mr. Kessy submitted that, furnishing security for the due performance of the decree, is the requirement of the law. He stated that, the execution pending before the High Court is in respect of the payment of the Decretal sum and not detention. That in the affidavit in support of the application, nothing was deponed on the issue of security. According to Mr. Kessy, in absence of the security for the due performance of the decree, it is clear that, the applicant is not ready to pay the decretal sum. Mr. Kessy disputed the counsel's submission that, security is not necessary because the Managing Director will be available. He contended that, nothing has been deponed in the affidavit on the availability of the Managing Director although the same could also not suffice to serve as security. In regard to the alleged substantial loss, Mr. Kessy contended that, it is not true that in the event the Managing Director is detained the applicant will suffer any substantial loss. He argued that, the applicant is a legal entity which can be operated by any other person in absence of the Managing Director. Hence, the company's activities will not be affected. Basing on what he submitted, the respondent's counsel prayed the application be dismissed as it intends to delay the respondent's enjoyment of the settlement deed.

In his rejoinder, Mr. Philemon reiterated his earlier submission and stated further that, what he intends to stay is the mode of execution and not the execution itself. Having heard the rival submissions from the both counsel, I find the main issue is; whether the applicant fulfilled all the conditions for me to grant an order to stay execution of the decree. Generally, the Court's power to grant a stay of execution of the decree is derived under rule 11 (3) (4) (5) and (7) of the Rules. Before granting an order for stay, it is mandatory to be satisfied that, the applicant has cumulatively fulfilled all the conditions stipulated under sub-rule (4) (5) and (7) of rule 11 of the Rules. See. Mabrouk Mengele v. Vernon David Law and Another, Civil Application No. 87 of 2004, Therod Fredrick v. Abdul Samudu Salim, Civil Application No. 7 of 2012, Geita Gold Mining Ltd v. Twahib Ally, Civil Application No. 14 of 2012 and Joramu Biswalo v. Hamis Rashid, Civil Application No. 11 of 2013 (all unreported). From the counsel's submission, I find the simmering issue is on the tenability of this application. It was Mr. Kessy's submission that, the application is not tenable as the decree thought to be stayed is not the

decree subject of the appeal, and that the applicant failed to furnish security for the due performance of the decree. To start with the issue of security, as rightly argued by the respondent's counsel, the applicant did not offer any security for the due performance of the decree. It was the applicant's counsel submission that, issuing of security is not necessary in this application due to the nature of the dispute subject to intended appeal. With due respect, I disagree with argument made by the applicant's learned counsel on this respect. The reasons for my stance are not far to fetch. To start with, rule 11 (5) (b) of the Rules which provides for the mandatory requirement of furnishing security. The same provides: "(5) No order for stay of execution shall be made under this rule unless the Court is satisfied that- (b) security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him." From the above quoted provisions, it is clear that, the Court will make an order for stay of execution once it is satisfied that the security has been given by the applicant. From the above provision, furnishing of the security

is not a matter of choice. Hence, there is no any exceptional circumstances provided where the order to stay the execution could be granted, without there being any security furnished by the applicant. Hence, the applicant's counsel submission that, the circumstances of this application does not require any security to be furnished is baseless and misconceived. Secondly, it is deponed by the applicant's counsel under paragraph 3, 4 and 5 of the supporting affidavits that: 3. That the applicant and the respondent entered into a Consent Settlement Agreement whereby it was agreed for the applicant to pay the respondent sum of United States Dollars One Hundred and Fifty-one Thousand (USD 151,000.0) in respect of respondent's claims in Civil Case No. 40 of 2022. 4. That with the intention to execute the decree in respect of Civil Application No. 20 of 2022, the respondent filed a Misc. Civil Application No. 610 of 2023 praying for the Honourable Court to Lift a Corporate Veil of the Applicant and allow arrest and detention of the Principal Officer and Managing Director thereof, named Ramadhani Sigwa Balukuli to be committed as Civil Prisoner.

5. That on 26thJune 2024, the Court issued the judgment in favour of the respondent whereby it was ordered that Ramadhani Sigwa Balukuli be arrested and detained as Civil Prisoner." Undeniably, from the above paragraph, it is clear that, the instant application resulted from the failure of the applicant to honor the Consent Settlement Agreement entered in 2022, which emanated from Civil Case No. 40 of 2022, where the applicant was supposed to pay the respondent USD 151,000.0 as they agreed. Knowing that the Company is a separate entity, the applicant did not pay the agreed sum and there is no any record to show that the applicant did challenge the said Settlement before any forum. The High Court in its effort to make sure that, the respondent is paid the decretal amount, lifted the Corporate Veil so that, the Managing Director of the Company could be responsible to realize the decree, the decision which is subject to the intended appeal. Therefore, basing on the respondent's counsel's arguments which I concur with, and the record of this application, where it is evidenced that the execution involves payment of the principal sum of USD 151,000.0 originating from a consent settlement, I am of the firm view that, failure to

show willingness to furnish security for the due performance of the decree if fatal and vitiate the application. It is settled that, in dealing with the question of security for the due performance, the Court has to balance the interests of the applicant who is seeking the order for stay and those of the respondent who is required to be paid his money in the event the decree becomes binding. That, the important thing is the fact that the respondent should not find it difficult to realize the decree incase the intended appeal fails. See. Africhick Hatchers Limited v. CRDB Bank, Civil Application No. 98 of 2016 (unreported). In the application at hand, it was submitted by the respondent's counsel that, the decree subject to the execution originated from the consent settlement entered in 2022. That the applicant was supposed to pay the respondent USD 151,000.0 but she did not pay the same to date. Instantly, the applicant is seeking an order to stay the execution which is not subject to the intended appeal and she is not ready to furnish security for the due performance of the decree. It is settled that, where the security is not furnished and in absence of any such firm undertaking, the application for stay of execution cannot be granted.

Being guided with the principle mentioned earlier that, all conditions must be cumulatively complied with for an order of stay to be granted, in absence of any security or promise or commitment for the due performance of the decree, the above raised issue is answered in the negative that the applicant failed to meet the stipulated conditions cumulatively. Having said so, I find no merit in this application and I procced to dismiss it with costs. DATED at DAR ES SALAAM this 24th day of September, 2024. The Ruling delivered this 17th day of October, 2024 in the presence of Mr. Abdulaziz S. Baisi, learned counsel for the Respondent and in the absence of the Respondent, is hereby certified as a true copy of the original. L. E. MGONYA JUSTICE OF APPEAL