IN THE COURT OF APPEAL OF TANZANIA

AT PAR ES SALAAM

(CORAM: LILA, J.A., MWANDAMBO, J.A. And KAIRO, J.A.^

CIVIL APPEAL NO. 292 OF 2022

DANGOTE INDUSTRIES LTD. TANZANIA.................................... APPELLANT

VERSUS
WARNERCOM (T) LIMITED........ .......................................... RESPONDENT

[Appeal from the judgment and decree of the High Court of

Tanzania (Commercial Division) at Dar es Salaam]

(Maqoiaa, JM

dated the 29thday of April, 2022

in
Commercial Appeal No. 1 of 2Q20

JUDGMENT OF THE COURT

29th April & 14th May, 2024

MWANDAMBO. J.A.:

The respondent, Warnercom Tanzania Limited successfully sued

the appellant Dangote Industries Limited Tanzania before the Resident

Magistrates' Court of Kinondoni for, amongst others, a declaration that

the appellant breached an agreement for transportation services for

which she claimed special and general damages and other ancillary

reliefs. In an ex parte judgment made on 2 January 2020, the trial court

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awarded the respondent TZS 200,000,000.00 and TZS 150,000,000.00 in

special and general damages respectively upon finding the appellant

breached the said agreement. The appellant was aggrieved and

appealed to the High Court (Commercial Division) in Commercial Appeal

No. 1 of 2020 but her appeal was dismissed. Still aggrieved, she has

preferred the instant appeal predicated on 10 grounds of appeai. As it

will become apparent shortly,the determination of the appeal turns on

the first two grounds premised on the jurisdiction of the trial court.

The facts from which the suit before the trial court was instituted

and ultimately the instant appeal are, by and large, common ground.

According to the plaint, the appellant engaged the respondent for

transportation of its goods from Songea to Mtwara and Mtwara to Dar es

Salaam sometime between October and December 2015. The plaint

alleged further that, despite the respondent performing its obligations

under the contracts, the appellants failed to pay for the contracted

services which triggered in the suit founded on breach of contract. The

respondent prayed forassortment of reliefs, including a declaration that

the appellant was in breach of the contract and a claim for TZS
200,000,000.00 each in special and general damages plus interest and

costs.

Instead of filing a written statement of defence, the appellant

challenged the suit by way of a preliminary objection contending that the

trial court had no pecuniary jurisdiction to entertain the suit on the

strength of section 40 (3) (b) of the Magistrates' Court Act (henceforth

the MCA). Nevertheless, the trial court struck out the objection for being

improperly raised. Consequently, in the absence of a written statement

of defence, the trial court proceeded with ex parte hearing under Order

VIII rule 14 (1) of the Civil Procedure Code (the CPC).

After the ex parte hearing, the trial court found the suit proved on

the required standard and entered judgment for the respondent as

alluded to earlier. Dissatisfied, the appellant preferred an appeal before

the Commercial Court in Commercial Appeal No. 1 of 2020 (the

Commercial Appeal) upon 11 grounds of appeal. Ground one faulted the

trial court for entertaining the suit in which it had no jurisdiction.

Initially, the Commercial Court struck out the Commercial Appeal for
being incompetent. Nevertheless, on appeal in Civil Appeal No. 13 of

2021, the Court vacated the order striking out the Commercial Appeal

and ordered hearing of the said appeal on merit.

The first appellate court dismissed the first ground on lack of

jurisdiction being satisfied that the suit before the trial court was an

ordinary civil suit with no commercial significance and therefore falling

outside the ambit of section 40 (3) (b) of the MCA. That

notwithstanding, the learned first appellate judge proceeded with the

determination of the rest of the grounds on merit which he dismissed

sustaining the trial court's decision. For reasons which will come to light

later, the determination of the appeal turns on grounds 1 and 2 which,

after paraphrasing them run as under: -

1. That the High Court judge erred in law and fact in holding that the
Resident Magistrates' Court acted within its pecuniary jurisdiction
by entertaining the suit which was commercial in nature and the
claim exceeded its pecuniary jurisdiction contrary to section 40 (3)
(b) o f the Magistrates'Court Act;

2. That the High Court judge erred in law and in fact in holding that
the contractual relationship between the appellant and respondent
 did not meet the threshold o f being a civil case with commercial
significance while the same falls within the meaning o f a
commercial case as defined under section 2 o f the Magistrates'
Court Act.

At the hearing of the appeal, Mr. Luka Elingaya, learned advocate

who appeared for the appellant stood by the written submissions he filed

earlier on and addressed the Court orally on a few aspects. So, did Mr.

Alex Mashamba Balomi, learned advocate representing the respondent.

It is remarkable that, the two grounds are akin to two sides of the

same coin which justified the approach taken by the appellant's learned

counsel arguing them conjointly. We shall follow the same path in our

discussion. The first appellate court is faulted for holding that the suit

before the trial court did not meet the threshold of a suit with

commercial significance and thus determined as an ordinary civil suit.

The learned counsel for the appellant has gone at great length to

demonstrate that what was before the trial court was not an ordinary

civil suit but a matter with commercial significance. This was so because

it was founded on a dispute from a contractual relationship between the

parties involving payment obligations by the appellant for transportation

services rendered to her by the respondent. It was his further

submission that, contrary to the reasoning of the first appellate court,

the nature of the suit fell squarely in the definition of a commercial case

prescribed under section 2 of the MCA. Counsel pointed out that, the

suit ought to have been determined as such as required by section 40

(3) (b) of the MCA considering that the amount claimed was above TZS

70,000,000.00 triable by a District or Resident Magistrates' Court in

commercial cases. It was argued further that, the learned first appellate

judge made an erroneous interpretation of the definition of a commercial

case under section 2 of the MCA by resorting to the meaning of trade

and commerce from Black's Law Dictionary to justify that the suit

had no commercial significance because it did not arise out of a

transaction of trade or commerce as defined by rule 3 of the High Court

(Commercial Division) (Procedure) Rules, G.N No. 250 of 2012,

henceforth, the Commercial Court Rules.

The learned advocate pointed out further that, since the definition

of a commercial case under section 2 of the MCA was clear, it was not
open to the court to engage into interpretation of an obvious consistent

with the Court's decision in Republic v. Mwesige Geofrey &

Another, Criminal Appeal No. 355 of 2014 (unreported) referred

subsequently in Serengeti Breweries Ltd. v. Joseph Boniface, Civil

Appeal No. 150 of 2015 (unreported). The Court was also referred to a

decision of the High Court in African Wheels and Tires Ltd. v.

Transec Limited, Misc. Civil Revision No. 11 of 2020 (unreported) on

the jurisdiction of the District and Resident Magistrates' Courts under

section 40 (3) (b) of the MCA in relation to commercial cases.

In the course of his oral submission, counsel brought to our

attention two of the Court's recent decisions on what it takes for a suit to

be treated as a commercial case; Maduhu Sang'udi Investment v.

Kasonzo Car Hire Co., Civil Appeal No. 148 of 2021 and National

Bank of Commerce Ltd. v. Maisha Musa Uledi (Life Business

Centre), Civil Appeal No. 501 of 2022 (both unreported). With the

foregoing, counsel urged the Court to uphold grounds 1 and 2 and hold

that the first appellate court strayed into an error in not holding that the

7
suit before the trial court was a commercial case on which the trial court

had no pecuniary jurisdiction.

Responding to a question posed by the Court, Mr. Elingaya argued

that, having dismissed the first ground and held that the suit before the

trial court was not a commercial case, the first appellate court erred in

determining the Commercial Appeal on merit. This is so, he argued, no

appeal lies to the Commercial Court from the decisions of the District and

Resident Magistrates' Courts in ordinary civil cases and so the first

appellate court indulged itself in a nullity.

Going forward, counsel invited the Court to nullify the proceedings

and quash the decision of the first appellate court for being a nullity on

account of lack of jurisdiction in the event it will be found that the suit

before the trial court was, but an ordinary suit. Otherwise, counsel

maintained his stance that since the suit was a commercial case, the trial

court wrongly assumed jurisdiction to entertain it because it was beyond

its pecuniary jurisdiction. Accordingly, the Commercial Court ought to

have nullified the trial, quashed the judgment and set aside the decree.

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 For his part, Mr. Balomi was in support of the first appellate judge's

interpretation of a commercial case in the light of the definition under

rule 3 of the Commercial Court Rules which the learned judge held to be

wider than the one in section 2 of the MCA. However, counsel was quick

to concede in his oral address that, since the suit before the trial court

was an ordinary suit, the Commercial Court lacked jurisdiction to

determine an appeal against the trial court's decision. Neither was the

Commercial Court right in determining the merits of the appeal after it

had held that the said suit was not a commercial case. Nevertheless, the

learned counsel concluded by urging the Court to dismiss the appeal.

Upon our examination of the two grounds under consideration, two

but related issues arise for determination. The first relates to the nature

of the suit before the trial court and the second is whether the trial court

acted within its jurisdiction in determining the suit.

As of necessity, the first issue calls for our examination of the

plaint in the light of the provisions section 40 (3) (b) of the MCA which

stipulates:
 "(3) Notwithstanding subsection (2), the jurisdiction o f
the District Court shall, in relation to commercial cases
be Umited-

(a) in proceedings for the recovery o f possession of

immovable property, to proceedings in which the
value o f the property does not exceed one hundred
million shillings; and

(b) in the proceedings where the subject matter is

capable o f being estimated at money value, to
proceedings in which the value o f the subject matter
does not exceed seventy million shillings".

Section 2 of the MCA defines a commercial case to include; the

contractual relationship of a business or commercial organisation with

other bodies or persons outside the business or commercial organization;

the liability of a business or commercial or official of the business or

commercial organisation arising out of its commercial or business

activities; or the liabilities of a business or commercial person arising out

of that person's business or commercial activities. Apparently, the list of

cases considered to be of commercial significance in section 2 of the

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MCA is not exhaustive just as it is in rule 3 of the Commercial Court

Rules.

There is hardly any dispute that the suit before the trial court

related to a contractual relationship between two commercial

organisations which related to a liability of one commercial organization

(the appellant) with another one (the respondent) arising from a claim

for sums of money. The liability involved in particular, TZS

200,000,000.00 allegedly due for transportation services claimed to have

been rendered by the respondent to the appellant. Indeed, counsel for

the parties do not appear to be in disagreement on this. The learned first

appellate judge went at great lengths in an attempt to define the phrase

commercial case and preferred the definition of commercial case in

section 2 of the MCA to the definition in rule 3 of the Commercial Court

Rules which he found to be wider than the former. The opening

sentence in the definition of commercial case in rule 3 of the Commercial

Court Rules runs:

"Means a civil case invoiving a matter considered by

the Court to be o f commercial significance, including

ii
 any claim or application arising out of a
transaction of trade of commerce but not
limited to ... [Emphasis added].

On the other hand, section 2 of the MCA defines a commercial case

to mean a civil case considered to be of commercial significance but not

limited to the 11 categories listed therein. According to the first appellate

court, the suit before the trial court was not a commercial case with

commercial significance because it did not arise out of a "transaction o f

trade or commerce" With respect, the learned first appellate judge

strayed into an error in his interpretation of the phrase commercial case

in relation to the Resident Magistrates' Court and District Courts.

To begin with, the Commercial Court Rules which influenced the

impugned decision are not applicable to the District Courts and Courts of

Resident Magistrates but to the Commercial Court itself as clearly

provided for under rule 2 (1) of the said rules. Indeed, the citation of the

rules is too clear to require any interpretation; they are rules of

procedure applicable to the Commercial Division of the High Court.

Naturally, such Rules could not be said to be extending to any other

12
court than the Commercial Division itself. Secondly, the rules are part of

a subsidiary legislation. They could not override the provisions of section

2 of the MCA assuming they were applicable to the subordinate courts.

Thirdly and most importantly, it is clear that, unlike rule 3 of the

Commercial Court Rules, section 2 of the MCA defines a commercial case

as a civil case considered to be of commercial significance without the

words Including any claim or application arising out o f trade or

commerce"featuring in the said Rules.

Consistent with the Court's holding in Mwesige's case (supra),

where a statute is clear, it is not open for the court to engage into

interpretation lest it interferes with the function of another arm of the

state; legislature. In this case, the legislature in its wisdom saw it fit to

define a commercial case as it is in section 2 of the MCA without more.

It was thus not open for the first appellate court to attempt to interpret

it in the manner it did by reference to rule 3 of the Commercial Court

Rules.

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 Apparently, as recent 2023, the Court dealt with a similar issue

involving a definition of a commercial case in NBC Ltd. v. Musa Uledi

(supra). Like here, the appeal in that decision originated from a Resident

Magistrates' Court concerning a dispute over a return of a certificate of

occupancy to the respondent which had been used as security for the

loan advanced by the appellant NBC Limited. The Court held in that

decision that the suit had a commercial significance in terms of section 2

of the MCA since it arose from a contractual or business relationship

between the parties; lender and borrower relationship. Consequently,

the discharge of the mortgage and release of the certificate of

occupancy was well within the ambit of that relationship. The Court took

a similar path in Maduhu Sang'udi Investment (supra). It is

significant that, in African Wheels Tyres Limited (supra) Ismail, 1 (as

he then was) with whom we respectfully agree, dealing with revision

application stated the following:

"....From the quoted definition, there can hardly be a

dispute that the transaction between the parties
herein was a business transaction and the liability that

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 emanated therefrom is a commercial liability, perfectly
fitting in the mould o f a commercial case. It follows,
therefore, that what was preferred in the trial court
was, true to its designation in the pleading, a
commerciai case for which section 40 (3) (b) o f Cap.
11 is applicable. Its institution ought to have
conformed to the pecuniary limit set by law. In this
case, this limit was flouted, and the trial court was
lured into 'punching above its weight', by entertaining
a case in respect o f which it did not have any powers
to adjudicate..." [ at page 9].

With the foregoing, we endorse the submission by the appellant's

counsel and hold that, the first appellate court made an error in holding

that the suit was an ordinary civil case not covered by section 2 and 40

(3) (b) of the MCA. On the contrary, we are satisfied that the suit had

commercial significance involving an amount of more than TZS

70,000,000.00 which was beyond the pecuniary limit of the trial Resident

Magistrates' Court in terms of section 40 (3) (b) of the MCA.

At any rate, as both learned advocates agree, having held that the

suit was not a commercial case, the first appellate court appears to have

15
been eluded by the old adage: you cant eat a cake and remain with it.

We shall explain. After dismissing ground one on jurisdiction, the first

appellate court proceeded with the determination of the merits in the

Commercial Appeal notwithstanding the fact that, no appeal lies to the

Commercial Court from a decision of a subordinate court in an ordinary

suit. Had the learned first appellate judge had regard to rule 69 (1) of

the Commercial Court Rules, he could not have proceeded in the manner

he did.

Be it as it may, as we have held that the suit before the trial court

was a commercial case involving a sum of T2S. 200,000,000.00 beyond

its pecuniary jurisdiction, the course open to the first appellate court was

to quash the trial court's decision and the proceedings for being a nullity.

Accordingly, we set aside the first appellate court's decision in ground

one and substitute it with an order sustaining that ground; the trial court

had no jurisdiction to try the suit with the net effect that, the trial and

the resultant judgment and decree were all a nullity. Stepping into the

shoes of the first appellate court on the authority of section 4 (1) of the

Appellate Jurisdiction Act (the AJA), we hereby declare the trial before

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the trial Resident Magistrates' Court at Kinondoni in Civil Case No. 176 of

2019 a nullity and quash the judgment and set aside the resultant

decree.

In the event, we allow grounds one and two which are sufficient to

dispose the appeal which is hereby allowed with costs.

DATED at DAR ES SALAAM this 10th day of May, 2024.

S. A. LILA
JUSTICE OF APPEAL

L. J. S. MWANDAMBO
JUSTICE OF APPEAL

L. G. KAIRO
JUSTICE OF APPEAL

The Judgment delivered this 14th day of May, 2024 in the presence

of the Mr. Peter Clavery, learned counsel for the appellant and Mr, Alex

Balomi, learned counsel for the respondent, is hereby certified as a true

copy of the original.