IN THE HIGH COURT OF TANZANIA

COMMERCIAL DIVISION
AT DAR ES SALAAM
COMMERCIAL CASE NO.159 OF 2013
ISLAM ALLY SALEH BALHABOU

PLAINTIFF

VERSUS
LATIF NASHER NUMAN

DEFENDANT

Date of last Order: 11. 02.2014

Date of ruling.' 02.05.2014

This is a ruling on a preliminary objection that this Court does not

have territorial jurisdiction to entertain this suit. The facts briefly are that,
the Plaintiff, ISLAM ALLY SALEH BALHABOU, who is a natural person
and businessman resident in Msasani, Dar es Salaam lodged a suit in this
Court on the 11th November,
NASHER NUMAN,

2013

against the Defendant, LATIF

a Kenyan citizen, resident in Dubai and carrying on

businessin Dubai and Luanda, Angola.

The Defendant raised through his Written Statement of Defence a
point of preliminary objection that this Court lacks jurisdiction to entertain
the suit and sought this Court to strike it out. The preliminary point of
objection by consent of the learned Counselsfor the parties was disposed
of by way of written submissions, Mr. Kilindu, Advocate for the Defendant
in support and Mr. Mwakajinga, Advocate for the Plaintiff in rival.

In the suit, the subject of the preliminary objection, the Plaintiff

claims from the Defendant for the payment of USD 600,000.00 among
other things, being a refund for the sum the Defendant was supposed to
pay the Plaintiff's Company but did not pay. The Plaintiff is also claiming
for the payment of USD 1,500,000.00

being for building a wheat

processing factory in Luanda, Angola, the Defendant was supposed to build

but which has not.
Mr. Kilindu for the Defendant premised his submissions on section 18
of the Civil Procedure Code, Cap.33 R.E. 2002, which he argues that it is in
pari materia to section 20(a), (b) and (c) of the Indian Civil Procedure
Code. In this regard Mr. Kilindu resorted to the commentary by the learned
author of Mulla the Indian Civil Procedure Code, 15th Ed, on the
principle underlying section section 20(a) and Section (b) as being, "that
the suit is to be instituted at the place where the defendant can defend the
suit without undue trouble." In light of section 18 of our Civil Procedure
Code, Mr. Kilindu further submitted, the suit against the Defendant should
have been filed in Dubai where the Defendant not only voluntarily resides
but carries on business. Mr. Kilindu emphasized that as the learned author
of Mulla the Indian Civil Procedure Code, 15th Ed noted, the suit
should have been filed in Dubai, which is "the place where the defendant
can defend the suit without undue trouble."

The demand notice, Mr.

Kilindu further submitted, was sent to the Defendant in Dubai where the
Defendant's contacts are undoubtedly known to the Plaintiff and his lawyer
as well. Mr. Kilindu submitted further that in terms of section 18 (c) of the

Civil Procedure Code, the Plaintiff has a right to file a suit where the cause
of action arose wholly or in part.
It is quite evident from paragraphs 3, 4, 5 and 6 of the Plaint, Mr.
Kilindu further submitted, that, the parties to the contract, which is the
foundation of this suit, formed a company in Luanda, Angola for
investing in a project which had to be implemented in Angola. The
parties have even rented an office in Luanda, Angola in furtherance of their
investment objective, Mr. Kilindu pointed out. Even the documents
attached to the Plaint relating to the incorporation of the company,
including the investment contract and other documents were made in
Angola and are in Portuguese language, Mr. Kilindu further elaborated.
This shows that parties had in mind of subjecting themselves to the
jurisdiction of Courts of Angola in interpreting those documents, should the
need to do so arise, Mr. Kilindu suggested. Mr. Kilindu sought refuge in
Black's Law Dictionary, 8th Ed. at page 930 wherein to the effect that
"the law of the place where a contract is executed or to be performed or
the lex loci contractus (in LatinJ is often the proper law by which to
decide contractual disputes."
Mr. Kilindu buttressed his argument on the validity of the law of the
place where the contract was entered into by referring to the decision of
the Court of Appeal in the case of GHARIB ABDALLAH JUMA VERSUS
KAY MLINGA [2004] T.L.R. 74 where the Court had this to say:

"...the validity of a contract depends on the law of the place where

the contract was entered into - ''lex loci contractus" and there was no

evidence that the marriage settlement was illegal under Danish law,
the High Court in Zanzibar had no option but to accept it in evidence
for what it was, a marriage settlement. "

Mr. Kilindu emphasized that, the validity or otherwise of the

contract in issue must depend on the law of the place where it was entered
into and in this case, Luanda, Angola. Mr. Kilindu added that even the
cause of action arose in Angola and the law applicable to determine the
validity or otherwise of the contract must therefore be Angolan Law. In
such instance, Mr. Kilindu was of the view that, this Court does not have
jurisdiction to determine a suit founded on an investment contract, which is
in the Portuguese language, and which was entered into in Luanda,
Angola.
Making reference to Order VII Rule l(e) and (f) of the Civil Procedure
Code, which is to the effect that "the plaint shall contain the facts
constituting the cause of action and when it arose and the facts showing
that the Court has jurisdiction', Mr. Kilindu, submitted that, in the present
suit, it is simply stated in paragraph 10 of the Plaint that the parties held
meetings in Dar es Salaam with a view of investing in Luanda. Those
meetings cannot constitute grounds to confer jurisdiction to this Court to
adjudicate this suit, Mr. Kilindu observed and referred this Court to the
learned author

of

Mogha's Law of Pleadings in India

with

Precedents,15th Ed, commenting on the necessity of showing that the

Court has jurisdiction. According to Mr. Kilindu, the Plaintiff has miserably
failed to provide the required facts showing that this Court has jurisdiction

to try a suit which is founded on a contract which was signed in Angola,

Luanda. Mr. Kilindu further argued that, the meetings the parties held in
Dar es Salaam with a view of investing in Luanda did not constitute
formation of contract in law. In the first place, Mr. Kilindu further observed,
even the minutes of the said meetings, if any took place, were not
attached to the Plaint to confirm having been held and to convince the
Court that they could constitute facts showing that the Court had
jurisdiction to try the suit. According to Mr. Kilindu, in the absence of the
minutes there is nothing before the Court to satisfy itself that the meetings
were held in Dare s salaam.
Mr. Kilindu concluded his submissions by referring this Court to the
commentary by the learned author of Nulla Code of Civil Procedure, at
page 253 thus:

''In a suit for damages for breach of contract, the cause of action
consists of the making of the contract, and of its breach, so that the
suit may be filed either at the place where the contract was
made

or at the place where it should have been performed

and the breach occurred. ..But making of an offer on a particular

place does not from cause of action in a suit for damages for breach
of contract. "

Mr. Mwakajinga replied by submitting that, the provisions of section

20(a) and 20(b) of the Indian Civil Procedure Code are not applicable in
Tanzania. Mr. Mwakajinga proposed that, this Court has to look at the
~

provisions of section 98 (1) of the Civil Procedure Code, Cap.33 R.E. 2002
instead.
Mr. Mwakajinga submitted further that, the preliminaries of forming a
company in Luanda by the parties was done by the shareholders in Dar es
Salaam, Tanzania. According to Mr. Mwakajinga, the present dispute is all
about the preliminaries of forming a company in Luanda and therefore it
constitutes jurisdiction of this Court under section 18(c) of the Civil
Procedure Code. According to Mr. Mwakajinga, the present dispute is not
between the companies but between the shareholders. Mr. Mwakajinga
referred this Court to a copy of Police Clearance Certificate for the
Defendant from the Ministry of Home Affairs of the United Republic of
Tanzania in Dar es Salaam to emphasis his point that the cause of action
arose in Dar es Salaam, Tanzania. Mr. Mwakajinga submitted further that,
all the agreements, including the allotment and payment of shares was
done in Dar es Salaam and therefore any breach of the agreements made
in Dar es Salaam constitute a cause of action in Dar es Salaam.
Mr. Kilindu maintained in rejoinder that, the Plaintiff can file a suit
where the Defendant resides. In this case the Defendant neither resides in
nor works for gain in Dar es Salaam. According to Mr. Kilindu, the question
whether the cause of action arose in Dar es Salaam is discernible from the
Plaint itself. Mr. Kilindu added that, shareholders and allotment of shares
are not mentioned in the Plaint. Mr. Kilindu therefore invited this Court to
ignore the comments of Mr. Mwakajinga in that regard and also to ignore
annexture "A" to the submissionsof Mr. Mwakajinga.

Mr Kilindu noted that, the learned Counsel for the Plaintiff has not
commented on the doctrine of "lex loci contractus." Mr. Kilindu reiterated
that this suit is not maintainable in this Court and it should therefore be
struck out with costs.
In the present matter, the learned Counsels for the parties have
flexed their muscles on the reach and import of section 18 of the Civil
Procedure Code, Cap.33 R.E. 2002, which provides as follows:

"Subject to the limitations aforesaid, every suit shall be instituted in a

court within the local limits of whosejurisdiction-

(a)

the defendant

or each of the defendants where there are

more than one, at the time of the commencement of the

suit, actuallv and voluntarily resides, or carries on
business, or personally works for gain;

(b)

any of the defendants, where there are more than one, at the
time of the commencement of the suit, actually and voluntarily
resides, or carries on business, or personally works for gain,
prOVidedthat in such case either the leave of the court is given
or the defendants who do not reside or carry on business, or
personally work for gain, as aforesaid, acquiesce in such
institution;

or

(c)

the cause of action, wholly or part, arises. (the emphasis

is of this Court).

The general principle enshrined under section 18 of the Civil

Procedure Code is that "every suit shall be instituted in a court
within the local limits of whose jurisdiction'; in either the situations
adumbrated in section 18(a) to (c) of the Civil Procedure Code are present.
This particular legal position has been emphasized in the case of AHMED
MOHAMED SIWlI
SIWlI,

VERSUS NBC LIMITED AND AMIN AHMED

Commercial Case No.96 of 2010, (High Court of Tanzania)

(Commercial Division), (unreported) in the ruling of Makaramba J., dated

5th August, 2011 at page 6. If either one or all of the situations stipulated
under section 18 of the Civil Procedure Code are present, the requirement
for filing of a suit within the local limits of the court is therefore mandatory.
As per the ruling of Dr. Bwana, J. as he then was, in IPP LIMITED
VERSUS ERNESTCOOVI ADlOVI AND KORA ENTERTAINMENT S.A
{PTY) LTD, Commercial Case No. 66 of 2002, (High Court of
Tanzania) (Commercial Division), (unreported) at page 3, jurisdiction
means:

"...the authority, competence and powers of the Court of law to

conduct given proceedings. Competence entails territorial coverage
and/or pecuniary limits plus kind of casesa given court may handle. "

The provIsions of section 18(a), (b) and (c) are couched in the
alternative by the use of the word "or." This means that either one or all of
the situations stated under that section may be present in determining
were a suit should be instituted. I should point out here that jurisdictional
limitation can be either by subject matter of the suit, the nature of the
dispute, the value of the subject matter of the suit (pecuniary), territorial
(spatial), or personal.
The provisions of section 18(a) and (b) of the Civil Procedure Code
concern the personal jurisdiction in the sense of where the defendant,

or

each of the defendants (if more than one), at the time of the
commencement of the suit, actually and voluntarily resides, or
carries on business, or personallY works for gain. In order for the
provisions of section 18(a) and (b) to come into play it must be established
that at the at the time of the commencement of the suit, the
defendant actually and voluntarily resides, or carries on business,
or personallY works for gain within the local limits of the Court and in
this regard we mean the Commercial Division of the High Court of
Tanzania.
A closer look at paragraph 2 of the Plaint reveals that, the Defendant
actually and voluntarily resides in Dubai and his address for purposes of
summons is that of Dubai, which means that that is where the Defendant
carries on business or personally works for gain. This is buttressed further
by the paragraph 8 of the Plaint which shows that, the Plaintiff's lawyer
travelled from Luanda, Angola to Dubai to see and claim the necessary
money from the Defendant, which money, the subject of the pending suit,

was supposed to be paid by the Defendant but the Defendant did not
respond. This fact much as it emphasizes the residency of the Defendant
also shows that the cause of action arose in Luanda, Angola and in Dubai,
United Arab Emirates.
This brings us to the other alternative for filing a suit, which is found
under section 18C c) of the Civil ProcedureCode, that is, where" the cause
of action,

wholly or part,

arose." In his reply submissions Mr.

Mwakajinga suggested that, the decision by the parties to invest in Luanda

and the majority of their meetings were held in Dar es Salaam, Tanzania,
thus clothing this Court with jurisdiction to entertain the suit. I am of the
considered view and as Mulla Code of Civil Procedure observes at page
253, the "making of an offer on a particular place does not from
cause of action in a suit for damages for breach of contract" I am
of the firm view that the decision by the parties to invest in Luanda and by
holding the majority of their meetings in Dar es Salaam Tanzania, this
constituted an offer and does not therefore constitute a cause of action in
a suit for damages for breach of contract because at that stage the parties
had not created an intention to have a binding legal relationship capable of
being enforced by court action.
The present suit is in the nature of claiming damages arising out of an
alleged breach of a contract. As I intimated to above no such contract ever
came to fruition and thus giving rise to a cause of action for its breach. I
am of the considered view, and as Mr. Kilindu rightly submitted, merely by
the parties deciding to invest in Luanda, Angola, and by holding their
meetings in Dar es Salaam this alone did not constitute an intention to

create binding legal relationship enforceable by action for damages of

breach of contract and thus confer this Court with any jurisdiction. It is
pertinent to note here that jurisdiction is a statutory creature and section
18 of the Civil Procedure Code emphasizes this legal position by stating
clearly under what circumstances a court may assume jurisdiction. As Mr.
Kilindu rightly submitted and as could be gathered from the Plaint, there is
no where it is established that, the parties met and/or convened any
meetings in Dare s Salaam. As such no minutes of any of the alleged
meeting is annexed to the Plaint to prove the allegation.
In any event even if we were to argue for the sake of argument that
there the meeting of the parties constituted a contract, which is not, still
the suit was to have filed either at the place where the contract was
made or at the place where it should have been performed and the breach
occurred. However, section 18 of the Civil Procedure which clothes this
court with jurisdiction stipulates very clearly that, the suit shall be
instituted in a Court within the local limits of whose jurisdiction the
Defendant actually and voluntarily resides or carries on business or
personally works for gain or where the cause of action wholly or part
arises. The word "actually' has received judicial interpretation by Katiti,

J., as he then was in the case of K.N. MAFOLE AND OTHERS VERSUS
TANZANIA

PYRETHRUM BOARD, Civil Cause No.62

(unreported),

of 1998,

which was quoted with approval by Dr. Bwana J. as he

then was, in his ruling in the case of IPP LIMITED VERSUS ERNEST
COOVI ADlOVI

(above).

AND KORA ENTERTAINMENT S.A (PTY)

LTD

In K.N. Nafole And Others Versus Tanzania Pyrethrum

Board, Katiti, J, defined the term "actually" as meaning that, "the

Defendant shall not be put to trouble and probably expenses travelling long
distances in order to defend himself. .. " This fact is emphasized by Mr.

Kilindu when insisting that the suit should have been filed in Dubai or
Luanda Angola and cited the learned author of Mulla the Indian Civil
Procedure Code, 15th Ed, for the reason that that is "the place where
the defendant can defend the suit without undue trouble. "

The undisputed facts in this case are that the Defendant, who is a
Kenyan citizen, has his place of residence in Dubai and actually works for
gain in Dubai and Luanda, Angola. The parties formed a company in
Luanda, Angola for investing in a project which had to be
implemented

in Angola. The parties have even rented an office in

Luanda, Angola in furtherance of their investment objective. Even the

documents attached to the Plaint relating to the incorporation of the
company, including the investment contract and other documents were
made in Angola and are in Portuguese language. On these facts clearly the
parties did not intend that any dispute arising from this contract should be
subject to the jurisdiction of a foreign country and in this regard the United
Republic of Tanzania, where clearly there is connection with the contract
which gave rise to the present suit.
I should point out here that in terms of section 3 of the Civil
Procedure Code, a "Court" is defined except where the expression "foreign
court" is made, to mean the High Court of the United Republic, a court
of a resident magistrate or a district court presided over by a civil
magistrate and references to a district court are references to a district

court presided over by a civil magistrate. Article 108.-(1) of the

Constitution of the United Republic of Tanzania, 1977 also provides for the
existence of of "a High Court of the United Republic to be referred to
in short as "the High Court", the jurisdiction of which shall be as
specified in this Constitution or in any other law. It is only safe to conclude
therefore that the Civil Procedure Code [Cap.33 R.E. 2002] which governs
the conduct of civil proceedings in the High Court of Tanzania and the
subordinate courts of District and Resident Magistrates' Courts is therefore
the other law apart from the Constitution which confers jurisdiction on
court in this country over civil suits. This being the case therefore,
Tanzania not being neither the place where the contract was made
(Iexi loci contractus)

nor at the place where it should have been

performed and the breach occurred, and the Defendant who actually
resides and works for gain in Dubai and Luanda, Angola, clearly this Court
has no jurisdiction in the suit.
In the whole and for the foregoing reasons the preliminary objection
raised by the Defendant that this Court lacks jurisdiction to entertain the
suit is hereby upheld. Accordingly the suit is hereby struck out with costs.

R.V. MAKARA

JUDGE
02/05/2014

Ruling delivered this 02nd day of May 2014 in the presence of:

For the Plaintiff:

For the Defendant:

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R.V. MAKARAMBA
JUDGE
02/05/2014

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