IN THE COURT OF APPEAL OF TANZANIA

AT DAR-ES-SALAAM

fCORAM: MBAROUK, 3.A., MUGASHA. 3.A. And MWAMBEGELE, J.A.^

CIVIL APPLICATION NO. 336/ 01 OF 2017

AIRTEL TANZANIA LIMITED.......................................................APPLICANT

VERSUS

OSE POWER SOLUTIONS.................................................... RESPONDENT

(Application for Stay of Execution of the Decree from the judgment of the
High Court of Tanzania at Dar es Salaam)

(Teemba, 3.1

dated the 14thday of 3uly, 2017

in
Civil Case No. 40 of 2012

RULING OF THE COURT

11th & 20thOctober, 2017

MUGASHA, J.A.:

The respondent successfully sued the applicant for the alleged

breach of contract of supply of goods and services. The claim constituted

Tshs. 1,920,998,317.79 and USD 143,484.72 being cost of goods

supplied and services rendered and damages at a tune of

Tshs.300,000,000/= for the alleged breach of contract. The applicant's

counterclaim raised in the Written Statement of Defence was dismissed

for alleged lack of proof and thus, judgment was entered in favour of the

respondent who was granted Tshs. 1,920,473,771.79 and USD

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143,484.72 being costs of goods and services supplied and Tshs.

20,000,000/= as general damages.

The applicant was aggrieved by the judgment and decree of the

High Court (Teemba, J.) dated the 14th July, 2017 in Civil Case No. 20 of

2011. She filed a Notice of Appeal on 21st July, 2017 and on 31st July,

2017, and, in order to forestall the execution of the decree, the applicant

is presently seeking an order of this Court for stay of the execution

pending the hearing and determination of the intended appeal.

The application is by notice of motion under certificate of urgency

brought under Rule 11 (2) (b), (c), (d) and 48(1) and (2) of the

Tanzania Court of Appeal Rules, 2009 (the Rules). The grounds stated in

the notice of motion are as follows:

1. That applicant has already filed a Notice of Appeal against

the decision of the High Court in Civil Case No. 40 of 2012.

2. The amount involved in the process is in excess of Tanzania

4,000,000,000 (Tshs, 4 Billion) which is a colossal sum hence

substantial loss will be incurred if execution will not be

stayed.

3. The applicant is committing itself that it has willingness to

---- ‘furnish any such non-cash security as may be ordered by the

 Court in the form of a bank guarantee or any other form o f

security as may be ordered by the Court to guarantee due

performance of the Decree sought to be stayed.

4. That in case execution is left to take place and the Applicant

wins the appeal, it will be impossible for the applicant to

recover the decretal amount from the respondent, because

the respondent company does not have any capital, it has

suffered massive losses and it does not have any business.

5. The application has been filed without undue delay the

application having been filed within time.

The application is supported by the affidavit of DAVID MARCO

LEMA. Documents accompanying the application comprise of a copy of

impugned judgment, the decree intended to be appealed against, the

notice of appeal and the applicant's letter addressed to the Deputy

Registrar of High Court sec’ i; i to be supplied with certified copies of the

proceedings, judgment and the decree for the purposes of the appeal.

The application is opposed through the affidavit in reply of TITO

ELISANTE KINGU, the Managing Director of the Respondent Company.

Parties filed written submissions as required by Rule 106 (1) of the

Rules to support arguments for and against the application.

 At the hearing of the application, the applicant was represented by

Dr. Alex Nguluma and Mr. Zephrine Galeba learned counsel whereas the

respondent had the services of Mr. Francis Mgare, learned counsel.

The application was confronted by the preliminary point of

objection which was however; withdrawn by the respondent's counsel

who urged us to dispense with costs because intention to withdraw was

prior brought to the attention of the applicant's counsel. As the

withdrawal was not objected by the applicant, we acceded to it and

marked the application withdrawn with an order that, costs abide in the

resultant main cause.

In support of the application, Dr. Nguluma fully adopted the notice

of motion, the accompanying affidavit as well as the written submissions.

He submitted that, the applicant is entitled to the relief sought as it

stands to suffer substantial loss if stay to execute a sum of Tshs.

4,000,000,000/= is not granted. He pointed out that, the applicant will

be forced to sell its properties including: leases, communication towers

and equipment and other machineries to be able to pay the decretal

amount. He added that, the application was made without delay meeting

the requirements of the law. Besides, the applicant is willing to furnish

non-cash security in the form of bank or insurance guarantee for the due
performance of the decree. It was further submitted that, the financia i

capability of the respondent company is in doldrums having failed to get

other businesses and it would thus be difficult to recover the decretal

amount if the appeal sails through. To back his propositions the learned

counsel relied on the cases of n a t i o n a l h o u s in g c o r p o r a t i o n vs a c

gomes, Civil Application No. 133 of 2009 and i n t e r g r a t e d p r o p e r t y

in v e s tm e n ts (T) lim it e d a n d t w o o t h e r s vs t h e com pany f o r

h a b it a t a n d h o u s in g in a f r i c a s h e t r e a f r iq u e , Civil Application No.

162 of 2015 (both unreported).

On the other hand, Mr. Mgare submitted that, apart from the

application meeting the test stated under Rule 11(2) (d) (i) to (iii) of the

Rules, the applicant has not paraded good cause as required under Rule

11(2) (b) and (c) of the Rules. As such, the learned counsel viewed the

balance of convenience to tilt in favour of the respondent. He added

that, even if the applicant will be forced to sell its assets to satisfy the

court decree that is an obvious consequence to befall the judgment

debtor for failure to honour contractual obligations. Finally, the learned

counsel challenged the applicant's attack on the respondent's financial

capability arguing the same is not backed by tangible evidence. Thus,

the learned counsel argued, the respondent is entitled to enjoy the fruits

of the decree. To back his propositions, he cited to us the cases of

MANTRAC TANZANIA LTD VS RAYMOND COSTA , Civil Application No. 11

of 2010, TANZANIA FISHING PROCESSOR LTD VS CHRISTOPHER

lu h a n y ik a , Civil Application No. 13 of 2003 which was cited in the case

of UNIVERSITY COMPUTING CENTRE LTD VS OYSTERBAY HOSPITAL LTD,

Civil Application No. 106 of 2007( all unreported).

We have given due consideration to the arguments for and against

the application. At the outset, we wish to point out that, the mandate o f

the Court to grant stay of execution of a decree or order upon good

cause being shown is articulated under Rule 11(2) of the Rules which

provides:

"11 (2) Subject to the provisions o f sub-rule 1 the

institution o f an appeal shall not operate to
suspend any sentence or to stay execution but
may-

(a) ... (Notrelevant)

(b) In any civil proceedings, where a notice o f

appeal has been lodged in accordance with
rule 83, an appeal shall not operate as a
stay o f execution o f the decree or order
appealed from except so far as the High
Court or tribunal may order, nor shall
execution o f a decree be stayed by reason

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 only o f an appeal having been preferred
from the decree or order; but the Court,
may upon good cause shown', order stay o f
execution o f such decree or order.

(c) Where an application is made for stay o f

execution o f an appealable decree or order
before the expiration o f the time allowed
for appealing there from; the Court, may
upon good cause shown, order the
execution to be stayed.

(d) No order for stay o f execution shall be

made under this rule unless the Court is
satisfied:-

(i) That substantial loss may result to the party

applying for stay o f execution unless the
order is made;

(ii) That the application has been made

without unreasonable delay; and

(Hi) That security has been given by the

applicant for the due performance o f
such a decree or order as may
ultimately be binding upon him."

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 This current position of the law has been clearly stated in

numerous decisions of this Court. For the purposes of the present matter

we need to recite some of those decisions. In the case of t h e r o d

FREDRICK vs abdusam adu s a lim Civil Application No. 7 of 2012

(unreported) we said:

" On the terms o f the present Rules, the

Court no longer has the luxury o f granting an
order o f stay o f execution on such terms as the
Court may think just; rather; the Court must be
satisfied, just as the applicant will be required to
fulfill the following cumulative requirements:-
1. Lodging a Notice o f Appeal in accordance
with Rule 83;

2. Showing good cause; and

3. Complying with the requirements o f item d

(i) (ii) and (Hi)."

The essence of an application for stay to meet all the laid down

conditions was emphasized in the case of m ta k u ja k o n d o a n d o t h e r s

vs w e n d o m a lik i, Civil Application No. 74 of 2013 (unreported) in

which we said:

" ... The conditions which applicants have to

satisfy so as to be granted the order for stay o f

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 the execution arc laid out in Rule 11(2) (b) (c)
and (d). A ll conditions must be satisfied. The
applicant must show the following: a notice of
appeal was given; they have sufficient
cause for praying for the order for stay, the
application was filed within time; they will
suffer substantial loss if the order is not
granted; and they have furnished security."

[Emphasis supplied.]

The manner of furnishing security was addressed by the Court in

m a n tra c T a n z a n ia l t d vs Raym ond c o s t a (supra) where this Court

said:

" That■ the other condition is that the applicant for

stay order must give security for due
performance o f the decree against him. To meet
this condition, the law does not strictly demand
the said security must be given prior to the grant
o f stay order. To us, a firm undertaking by
the applicant to provide security might
prove sufficient to move the Court, all
things being equal\ to grant a stay order,
provided the Court sets a reasonable time limit
within which the applicant should give the same."

[Emphasis supplied]

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 Where security is not furnished and in the absence of any such

firm undertaking, settled law requires the Court not to grant stay of

execution sought. (See jo ra m u b is w a lo vs h am is r i c h a r d , Civil

Application No. 11 of 2013 (unreported).

We fully subscribe to the foregoing position. We further clarify

that, the three conditions stipulated under Rule 11(2) (d) (i) to (iii)

of the Rules must be conjunctively not disjunctively satisfied before

and order of stay is granted.( See a r u s h a h a r d w a r e t r a d e r s

LIMITED AND TWO OTHERS VS M/S EXIM BANK OF TANZANIA

lim it e d , Civil Application No. 38 of 2015 (unreported).

We shall be guided by the stated principles in determining this

application.

In view of the respective settled position of the law, the

rivaling contentions basically hinge on whether or not the applicant

has shown good cause to be entitled to what is sought.

In the motion at hand, the application for stay of execution was

lodged without unreasonable delay on 31st July, 2017 that is, ten days

after the notice of appeal was filed on 21st July, 2017. In paragraphs 6, 7

and 9 of the affidavit, the applicant has deposed among other things
that, if stay is not granted the respondent will execute the decretal

amount of Tshs. 4 billion which is colossal and as such, the applicant will

suffer substantial loss and be compelled to sell its assets to pay the

decretal sum. Besides, the applicant is desirous of inquiring into the

propriety or otherwise of the impugned decision. Moreover, in paragraph

11 of the affidavit, the applicant undertakes to deposit security in the

form of Bank guarantee or insurance for the due performance of the

decree as the Court may deem fit to order.

Apart from the respondent opposing the decretal sum not colossal

because the respondent is entitled to enjoy the fruits of the decree, she

has not contested the mode of security to be furnished by the applicant

having deposed in the affidavit in reply that, cash or bank guarantee

would be appropriate in case stay is granted. The respondent as well

argued on the balance of convenience tilting in favour of the

respondent and relied on T a n z a n ia f i s h i n g p r o c e s s o r s l t d vs

C h r is t o p h e r l u h a n y i l a (supra). With respect, this is no longer a

condition under the Rules whereby the manner of protecting the rights of

the decree holder and the judgment debtor is the condition requiring the

applicant to furnish security for the due performance of the decree as

may ultimately be binding upon him. This has been sufficiently

addressed by the applicant and it was not seriously contested by the

respondent. While we are aware that the respondent is entitled to enjoy

the fruits of its decree; however, the applicant has a statutory right of

appeal towards which she has already commenced the process through

the lodged notice of appeal which in our considered view constitutes

good cause.

On the cumulative requirements of Rule 11(2) (d) (i) to (iii) of the

Rules, we are satisfied that the decretal sum is colossal and loss may

result if stay is not granted. On account of the fact that this application

was lodged only ten days from lodging the notice of appeal, it is beyond

question that it was instituted without delay. Finally, in the absence of

any serious contest by the respondent, we are satisfied with the security

given by the applicant for the due performance of the decree as may be

ultimately binding on her.

In view of the aforesaid, the application is merited and it is hereby

granted. We therefore, order stay of execution of the decree of Hon.

Teemba, J. dated 14th July, 2017 in Civil Case No. 40 of 2012 on

condition that, the applicant provides security by depositing in Court the

bank guarantee at a sum of Tshs. 4,000,000,000/= within thirty (30)

days from the date of this Ruling so as to assure the satisfaction of the
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judgment and the decree in the event the appeal fails. We order costs be

in the main cause.

DATED at DAR-ES-SALAAM this 18th day of October, 2017.

M. S. MBAROUK
JUSTICE OF APPEAL

S. E. A. MUGASHA
JUSTICE OF APPEAL

1 C. M. MWAMBEGELE
JUSTICE OF APPEAL

I certify that this is a true copy of the original.

DEPUTY REGISTRAR
COURT OF APPEAL

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