IN THE HIGH COURT OF UNITED REPUBLIC OF THE

TANZANIA
COMMERCIAL DIVISION
AT DAR-ES-SALAAM

COMMERCIAL CASE NO.07 OF 2022

KILIMANJARO OIL COMPANY LTD..................PLAINTIFF

VERSUS

KCB BANK TANZANIA LIMITED ..............1ST DEFENDANT

KCB KENYA LIMITED ................................2ND DEFENDANT

JUDGEMENT
Date of Last Order: 09/02/2023
Date of Judgement: 18/04/2023

NANGELA, J.:
1. The Plaintiff’s Claims/Prayers:

This suit was filed by the Plaintiff, a company incorporated

under the laws of Tanzania. The Plaintiff prays for the following
reliefs:

1. A declaration that, the 1st Defendant is in

breach of banker’s duties towards the
Plaintiff.
2. A declaration that the Plaintiff has fully paid
all loan facilities advanced to her by the
Defendants and, that, the Plaintiff does not
have any liability towards any liability
towards any of the Defendants.
3. A declaration that all mortgages, debenture,
corporate guarantee, personal guarantee and
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 all other securities issued by the Plaintiff or
Guarantors of the Plaintiff’s liability towards
the Defendants to secure the facilities
granted by the Defendants are null and void
4. An Order to discharge the Mortgages,
debenture, corporate guarantee, personal
guarantee and all other securities issued by
the Plaintiff’s Guarantors to secure the
Plaintiff’s liabilities towards the Plaintiff.
5. A declaration that the 2nd Defendant is not
licensed to carry banking business or any
business in Tanzania and is trading
unlawfully, illegally and contrary to the rules
and regulations governing the business of
banking and business in Tanzania.
6. A declaration that all facilities provided to
the Plaintiff by the 2nd Defendant are
unlawful, illegal, null and void for non-
compliance with laws, rules and regulations
governing the issuance of foreign loans and
conduct of business in Tanzania.
7. A declaration that all credit facilities
provided to the Plaintiff by the 2nd Defendant
are unlawful, illegal, null and void for non-
compliance with the laws, rules and
regulations governing issuance of foreign
loans and the conduct of business in
Tanzania;
8. A declaration and an order that demand
issued by the Defendants are ill-motivated,
unlawful, unwarranted and of no effect;

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 9. A declaration that the 1st and 2nd Defendants
are not entitled to TZS 1,307,902,894.82 and
US$ 3,471,034.02 respectively, claimed in
the 14 days’ demand notice of 6th December
2021.
10. General damages to be assessed by the
Court.
11. Costs of this suit
12. Any other relief the Court deem proper to
grant.
2. The Defendants Statement of Defense/ Counterclaim:
On the 27th June 2022, the Defendants filed an amended
written statement of defense (WSD) and raised therein a counter
claim. In their Counter Claim the Defendants herein sued not only
the Plaintiff but also the Mortgagor and Guarantors, thereby
praying for judgement and decree against them, jointly and
severally, as follows:
1. For payment of a total sums of TZS
839,311,887.54, herein described as Term
Loan III as from May 2021 until the date of
full payment. The said loan was advanced by
the 1st Plaintiff to the 1st Defendants and duly
secured by the 2nd, 3rd and 4th Defendants;
2. For payment of a total sums of US$ 225,642.25
herein described as Term Loan I as of 25th
February 2022 until the date of full payment.
The said loan was advanced by the 2nd
Plaintiff to the 1st Defendant and duly secured
by the 2nd, 3rd, and 4th Defendants.

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 3. For payment of a total sum of US$
1,637,170.30 herein described as Term Loan II
from 25th February 2022 until date of full
payment. The said loan was advanced by the
2nd Plaintiff to the 1st Defendant and duly
secured by the 2nd, 3rd and 4th Defendants.
4. That, the Defendants pay interest of 17% p.a.,
for TZS account and 9.725% for US$ account
from the date hereof (i.e., 27th June 2022) until
the date of full payment.
5. That, the Defendant pay interests at Court’s
rate of 7% from the date of pronouncement of
judgment and decree until date of full
settlement.
6. For payment of the costs of the case.
7. Any other reliefs the Court shall deem just and
fit to grant.
3. The Agreed Issues
Having undergone the preliminary hearing stages, the suit
came to the stage of final pre-trial conference where in the following
seven issues were agreed upon and recorded by the Court:
1. Whether the Defendants are in breach of
banker’s duties to the customer by
mismanaging the Plaintiff’s bank account.
2. Whether the 2nd Defendant is legally licensed
to carry out business in Tanzania.
3. Whether the credit facilities executed between
the Plaintiff and the 2nd Defendant are valid,
lawful and enforceable in Tanzania.
4. Whether the Plaintiff has paid her loan
liabilities with the Defendants in a full and is
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 no longer indebted to the Defendants and the
Defendants are bound to discharge securities
pledged.
5. Whether the Plaintiff’s loan liabilities with the
Defendants were fully taken over by Camel Oil
Limited and discharged the Plaintiff from loan
liabilities with the Defendants.
6. Whether the Defendants (in the counterclaim)
are liable to the Plaintiffs in the Counterclaim.
7. To what reliefs are the parties entitled.
4. The Parties’ Appearances
On the date of hearing, the Plaintiff enjoyed the legal services
of Mr. Frank Mwalongo, learned Advocate, while Mr. Abel Msuya
and Ms. Regina Kiumba, learned advocates, appeared for the
Defendants. The Plaintiff called 3 witnesses who filed witness
statements and tendered in Court, a total of nineteen (19)
documents. The Defendants called only one witness.
5. The Plaintiff’s Case
The first witness for the Plaintiff’s case was Mr. Davis Elias
Mosha who testified as Pw-1. In his testimony, he told this Court
that, he is the Director, Chairperson, a majority shareholder of the
Plaintiff, as well as a Director and Chairperson of the 1 st and the 4th
Defendants in the counterclaim.
He also told this Court that, the 1st Defendant herein has been
a banker to the Plaintiff since 2013 and, that, the Plaintiff has been
able to access various credit facilities from the 1 st Defendant Bank.
Credit facilities agreements executed between the 1st, 2nd Defendant
and the Plaintiff included an agreement dated 20th May 2015 for a

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sum of US$ 15,000,000.00, a sum which comprised of an advance
payment bank guarantee of US$ 5,000,000.00, a term loan of US$
7,000,000.00 and US$ 3,000,000.00 as letter of credit/post import
loan.
Pw-1 tendered in Court three documents: - a Facility Agreement
dated the 20th of May 2015; its addendum and a Facility Agreement
dated the 4th day of August 2016. All these were collectively
received and admitted by this Court as Exh.P.1. Pw-1 referred to this
Court Clause 4.1.3 of the May 20th 2015-Facility Agreement which
provided that, the facility, though being a facility, was subject to
availability of funds.
According to Pw-1, such a clause made it very uncertain
regarding when funds were to be disbursed to the Plaintiff and
whether it was disbursed. Pw-1 testified that, if funds were to be
available, there would be performance and if funds were not
available the facility would not be performed. He also testified that,
Clause 4.1.3 of the 20th May 2015-Facility Agreement, shows and
means that the facilities could or could not have been granted.
Besides, he told this Court that, while Clause 4.1.4 of the 20th May
2015 Facility Agreement is about force majeure, part of the clause is not.
It was Pw-1’s testimony that, Clause 4.2 of the Agreement,
allowed the lenders to book the loan either with the 1st or 2nd
Defendant as the single borrower’s limit could have allowed. As
regard the availability of US$ 15,000,000.00, it was his testimony
that, the US$ 5,000,000.00 which formed its part was an advance
payment and, consequently, was not a term loan but tied to a
guaranteed amount. He told this Court that, once the guarantee was
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cancelled, it ended there as there were no allegations of calling the
guarantee, hence, this amount is not outstanding as there was no
movement of funds regarding the guarantee of US$ 5,000,000/-.
As regards the US$ 7,000,000, Pw-1 told this Court that such
were a Term Loan but that, this amount is stated as the limit but not
the amount availed. He told this Court, referring to clauses 12.7.1
and 4.1.3 of the 20th May 2015 Facility Agreement, that, such provided
that, upon perfection of collaterals phase-1, US$ 4,500,000 were to
be paid and, further, that, Clause 12.7.2 stated that, upon perfection
of collaterals phase 2, US$ 2,500,000 were to be paid. Pw-1 further
stated, that, the US$ 3,000,000.00 were an LC (Letter of
Credit)/post import loan, which is also a form of payment
guarantee, which does not become due until utilized and/or
recalled in case of default.
As regards the 4th August 2016 Facility Agreement, Pw-1 stated
that, the total facilities amount was US$ 10,000,000 out of which
amount designated as a Short-Term Loan was US$ 3,000,000; Term
Loan Kobil Congo was US$ 4,500,000; and Term Loan of US$
2,500,000. He told this Court that, that particular facility had similar
options under Clauses 4.1.3, 4.1.4 and 4.2 and restated the facilities
which are in the banking facilities of 20 th May 2015, i.e., the US$
7,000,000 appears in the 4th August 2015 facility as US$ 4,500,000
and US$ 2,500,000 payable to Kenokobil and, the US$ 3,000,000
appears in the 4th August 2015 facility as short-term loan/LC cum
PIF/Bank guarantee/Overdraft. He told this Court that, it is not
clear which is the same facility appearing in Exh.P1 but cited a
confusing mix and lack of linkages.
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 According to his testimony, the US$ 10,000,000 mentioned
in the agreement dated 04th August 2016, is part of the US$
15,000,000.00 facility Agreement dated 20 th May 2015. Pw-1 told
this Court further that, in both facility letters (Exh.P-1), the
Defendants were at liberty to book the facility either in the 1st
Defendant or in the 2nd Defendant without regard to who had
advanced the facility to the Plaintiff. He testified that; the clauses
referred to earlier hereabove were worded in a manner that would
make it possible to circumvent the regulations of the Bank of
Tanzania (BOT). Pw-1 stated further that, in his understanding, the
Defendants have been mismanaging the facilities of the Plaintiff by
having liberty to book them anyhow and by circumventing the BOT
regulations.
According to Pw-1, the facilities advanced in the year
2014/2015 were secured by five mortgages on landed properties. He
tendered in Court five mortgage deeds which were admitted as
Exh.P-2. He testified and stated, however, that, the mortgages and
the other related securities registered to secure the credit facilities
advanced by the 2nd Defendant are in contravention of the laws of
Tanzania. He told this Court that, to mortgage a plot of land to
secure a foreign lender, there has to be consent/ approval from the
Commissioner for Lands, a fact which, in this matter, was missing.
It was a further testimony of Pw-1 that, the Plaintiff used to
service the credit facilities in accordance with their terms and
conditions and, that, towards the end of 2017, the Plaintiff entered
into arrangements to dispose-off its properties to Camel Oil (T) Ltd in

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order to allow Camel Oil (T) Ltd to take over its debt which were
arose from the credit facilities advanced to her by the Defendants.
Pw-1 told this Court that, the Plaintiff did write to the 1 st
Defendant to that effect and that, it was made clear that, after the
takeover, the account of the Plaintiff would be freed and, the
Plaintiff will withdraw all collateral securities in the custody of the
1st Defendant. He tendered in Court two (2) letters dated 21st
December 2017 and 28th December 2017 and these were admitted
as Exh.P-3.
Pw-1 told this Court that, upon the 1 st Defendant’s receipt of
the payment of US$ 5,700,000.00 from Camel Oil (T) Ltd, the
Plaintiff’s outstanding facilities were fully cleared and the 1 st
Defendant recorded that the Plaintiff’s loan facilities had been taken
over by Camel Oil (T) Ltd. He referred to this Court a letter dated 31st
October 2018 which was between the Plaintiff’s guarantor (the 4 th
Defendant in the Counterclaim) and the 1 st Defendant herein.
Pw-1 testified that, after clearing the outstanding facility
through the loan takeover by Camel Oil (T) Ltd, the 1st Defendant
Bank requested the Plaintiff for the return of the Bank Guarantees
it had issued to Puma Energy (T) Ltd and Dalbit Petroleum(T) Ltd in
order to discharge all collaterals and return them to the Plaintiff and
the Plaintiff’s guarantors.
He told this Court that, the Plaintiff returned the bank
guarantees and the 1st Defendant commenced the dischargement of
the collaterals, in particular, the Mortgage for Plot No.363 Chalinze
Kibaha, Coastal Region; Plot No.1 Block “C” Sinza Industrial
Area, Dsm and Plot No.177 Block “A” CBA Kibaha, Coastal
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Region were discharged. He stated, however, that, the 1st Defendant
did not discharge two other plots which were part of the collaterals
offered by the Plaintiff as security for the loans. Pw-1 referred to this
Court other correspondences (letters) dated 12 th March 2019, 17th
March 2019 and 18th March 2019 and 20th March 2019 which he
tendered and all admitted collectively into evidence as Exh.P-4. He
also tendered in Court discharge forms which were admitted as
Exh.P-5.
Besides, Pw-1 tendered a letter dated 11th July 2018 and told
the Court that, the Defendants had all along been referring to the
transaction with Camel Oil (T) Ltd as a “loan takeover” and, that,
through a letter, the Plaintiff requested and obtained a copy of the
facility agreement dated 14th June 2018 between Camel Oil (T) Ltd
and the 1st Defendant from Camel Oil (T) Ltd via e-mail. According
to Pw-1, Clause 3 stated the purpose of the Camel Oil (T) Ltd.’s facility
agreement as a “takeover” of the Plaintiff’s term loan facility. The
letter was admitted as Exh.P-6 as well as a letter dated 03 rd
September 2019 which was admitted as Exh.P-7.
He told this Court that, even after payment of all the
outstanding debts, the Defendants have continued holding some of
the Plaintiff’s collaterals and have further breached the credit
facilities by coming up with fictitious and non-existent outstanding
debts. In particular, Pw-1stated that, the 1st Defendant indicated
that, the Plaintiff’s loan amount (purchase guarantee) was still
uncleared but its clarity was unknown. He told this Court that, the
Defendants have also been purposely mismanaging the loan, have
been unfair, have been indulging in predatory lending practices,
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have been deceptive or fraudulent, have always failed to act in a
transparent manner, and the booking of the loans have been placed
at the liberty of the 1st Defendant who could book them in the 2 nd
Defendant in whom the Plaintiff has no access.
Pw-1 testified further that, through the assistance of the 1 st
Defendant, the 2nd Defendant has been providing banking services
to the Plaintiff without a banking license from the Bank of Tanzania
and, that, she has been doing business without valid business
license. He told this Court that, the 2 nd Defendant has not complied
with the foreign loans’ registration requirements in Tanzania. He
testified that, in spite of the 2 nd Defendant being a party to the two
facility agreements and their addenda executed in Tanzania and to
which the applicable law is that of Tanzania, the 2 nd Defendant is
not registered in Tanzania or hold a valid business license and/or
Tax Identification Number (TIN) from the Tanzania Revenues Authority
(TRA).
According to Pw-1, since the loan by the 2nd Defendant had
to be processed as a foreign loan. He stated, however, that,
unfortunately it was not even registered with the Bank of Tanzania
(BOT). He told this Court that, in the absence of such registration
with the BOT, the 2nd Defendant has no right to claim the illegal
loan it purports to have advanced to the Plaintiff and, the Plaintiff
has never effected any loan repayment to the 2 nd Defendant at any
point.
Pw-1 told this Court further that, while the Plaintiff is certain
that the loans were cleared in full, the Defendants are uncertain as
to what is outstanding. Even so, Pw-1 testified that, the Defendants
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sent Demand Notices to the Plaintiff dated 15th June 2021 stating that,
the outstanding amount due and payable to the 2 nd Defendant is
US$ 1,379,482.30 and US$ 225,643.25, while the 1st Defendant
demands TZS 1,349,963,447.18.
He stated further that, in the Demand Notice dated 11th May
2021, and 6th December 2021, the Defendants claim that TZS
1,307,902,894.82 is due and payable to the 2nd Defendant. He stated
that, the outstanding claims from the respective Defendants
between May, June and December 2021 vary by over US$
2,000,000. He tendered in Court the Demand Notices and two letters
and these were admitted collectively as Exh.P-8.
He also tendered in Court a Notice of Default issued by the
Defendants intending to dispose of Plot No.22 Industrial Area
Mkuza, Kibaha, Coastal Region in the name of Delina General
Enterprises Ltd, which notice indicates that, the outstanding amount
being TZS 1,307,902,84.82 and US$ 3,487,206.32. He stated
further, that, the Default Notice for Plot No.1 Mkuza Kibaha,
Coastal Region in the name of Delina General Enterprises Ltd shows
an outstanding amount of TZS1,307,902,84.82 and US$
3,487,206.32. The two Notices were received in Court as Exh.P-9.
He also tendered a Board resolution which was admitted as Exh.P-
10.
During cross-examination, Pw-1 admitted that, in 2015, the
Plaintiff was granted a Term Loan of US$ 7,000,000. He also
admitted that, the addendum thereto shows a mix with other loans
amounting to US$ 15,000,000.00. He also admitted that, the US$
7000,000 were to be issued in two tranches of US$ 4.5 million to
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purchase Kobil -Congo and US$ 2.5 Million to purchase Kobil (T). He
told this Court that, the Plaintiff was indebted until 4th August 2015
and that, the dispute is about the payments made by Camel Oil (T)
Ltd amounting to US$5.7million.
Pw-1 told this Court further that, when the Plaintiff sought to
be bailed out by Camel Oil (T) Ltd, the discussions that ensued were
tripartite in nature involving the Plaintiff, Camel Oil and the KCB (T)
Bank. He stated that, although the 1 st Defendant was not a party to
the agreements, due to the interest she wielded, she was present
during the discussions. When asked, he admitted that, the assets
purchase amount was about US$ 6.5 million (Plus), hence, it was
more than the US$ 5.7 million.
When asked about the deal with Camel Oil (T) Ltd, Pw-1 told
this Court that, it was for US$ 6.3million but the amount which
Camel Oil (T) Ltd paid was US$ 5.7 million and, that, that amount
was paid directly to the 1st Defendant Bank. He admitted that, there
were securities issued for the loan but denied to have borrowed from
KCB-Kenya. He admitted, however, that, Exh.P-1 shows the loan
was from KCB- Kenya and that, the KCB-Tanzania was designated
as the security agent with a duty to perfect the loan documents.
However, he maintained that, the Plaintiff never borrowed from
KCB-Kenya but from KCB-Tanzania.
When asked if there was any problem with loan syndication,
Pw-1 stated that, there is no problem only that, procedures ought to
have been followed, including there being an agreement with the
Plaintiff that she was borrowing from KCB-Kenya. Pw-1 told this
Court that, syndication agreement, if any, was between the two
Page 13 of 110
banks since the Plaintiff had borrowed not from KCB-Kenya but
from KCB-Tanzania and, that, the arrangements by the two banks
were, by the time, unknown to the Plaintiff.
He told this Court that, the Plaintiff was not made aware of
the procedures to sign any agreement with KCB-Kenya and that,
such came to be known in December 2017 upon discussions with
the 1st Defendant bank and, that, the Plaintiff was told the money
was to be paid in Tanzania because the KCB-Tanzania was the one
which issued the loan since KCB-Kenya was out of the picture. He
admitted, however, that, KCB-Kenya does feature in the Exh.P-1.
When asked about Exh.P-2, Pw-1 told this Court that, the
original was misplaced but it was signed by both parties and the
Mortgage Deed is with KCB-Tanzania. Pw-1 admitted that, the
amount deposited by Camel Oil (T) Ltd was US$ 5.7 million. He
admitted that, by the time, (March 2018) US$ 2.26 million was
being claimed from the Plaintiff as such amount was outstanding.
Pw-1 admitted further that, by that time the total outstanding
was US$ 7.363million. He, however, told this Court that, the
Plaintiff held a discussion with the 1st Defendant’s Director of
Operations and agreed that since the Plaintiff was not servicing the
loan sufficiently, the Plaintiff dispose of some assets and the
proceeds be directly deposited as US$ 5.7 million.
Further upon being cross-examined, Pw-1 told this Court
that, the discussions ended with an agreement that the Plaintiff
should write to the Defendants as she was even asking for more
discount. When asked about Exh.P-4, Pw-1admitted that, it was a
letter addressed to the Chairman of Delina General Enterprises Ltd
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regarding the existing Kobil-Congo’s balance. He admitted that,
“Delina” was the guarant and, that, she was notified that, the whole
loan for Kobil-Congo -US$ 5.7 million was settled. He told this Court
that, the letter dated 7th March 2019 asked for the release of the Title
Deeds and cancellation of the existing Bank guarantee.
Pw-1 admitted further to have a balance of guarantee of US$
500,000 which was turned into a Term Loan. He, however, told this
Court that, the loan amounting to US$ 7,000,000 which the Plaintiff
repaid was discounted and the Plaintiff had to pay only US$
5.7million. He admitted to have signed a qua-tripartite agreement
between the KCB, the Plaintiff, Delina and Oryx about the securities
which were left but the debt of US$ 7,000,000 was settled except
that, what was left was the Overdraft which was transformed into a
Term Loan.
When shown Exh.P-6, Pw-1 acknowledged that, it was giving
explanations as to how the loan amount was to be used. He
admitted that, as per Exh.P-6, it stated that, the Plaintiff was
indebted and it shows how the US$ 5.7 million were to be utilized.
He admitted that, as per Exh.P-7 it was shown that, the Plaintiff was
still indebted, however, that, after their discussions and agreements,
he maintained that the Plaintiff was no longer indebted. He told the
Court that, Ms. Suzan Mayala was in the meeting but the Plaintiff
did not know why Exh.P-7 was written after there being a waiver.
Pw-1 told this Court that, the Plaintiff had written his letter
dated 21st December 2017 before Camel Oil (T) Ltd took over and so,
Exh.P-7 came later and afterwards the Plaintiff wrote a demand
letter to the Defendants. He told this Court that, he had asked for a
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waiver and such was granted by the Defendants. Pw-1 stated further
that, the issue that the 1st Defendant was awaiting the blessings of
the Board or whoever else, was not communicated to the Plaintiff
since such were internal matters of the Bank. He maintained that,
as for the Plaintiff, what had been known was that the Plaintiff had
negotiated the discount with a person vested with mandate since
such persons were the very ones also signing all letters.
Pw-1 insisted that, the loan was invalid because the Plaintiff
was told by one Ms. Suzan Mayala that, it was to be given by KCB-
(T) and further that, the loan was not registered. He admitted to
have written a letter to the effect that the facility be converted to
Term Loan and it was about TZS 1bilion plus but stated that all such
amount was repaid through Oryx. He insisted that, the Term Loan -
III was also fully repaid. When further cross-examined, Pw-1 stated
that, Exh.P-1 is a facility letter dated 04th August 2016 wherein the
borrower is Kilimanjaro Oil Ltd and the lenders are KCB-(T) Ltd and
KCB-(K) Ltd. He stated further that, KCB-(T) Ltd is a security agent
but that, the Plaintiff got the loan from KCB-(T) Ltd.
When asked by the Court, Pw-1 stated that, in the year 2016,
the Plaintiff obtained a credit facility from 1 st Defendant (KCB-(T)
Ltd) to acquire Kobil (T) Ltd.’s assets. The amount borrowed was
US$ 2.5 million. The Plaintiff did also acquire Kobil (Congo) assets
for US$ 4.5 million. He also told this Court that, the Plaintiff
serviced the loan for about two years, paying about US$ 1.7 million,
including interests. Pw-1 stated further that, in 2017, the Plaintiff
was overburdened having acquired Kobil (Congo) assets as she had
to be servicing the whole amount loaned.
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 Pw-1 told the Court further that, since repayments were
irregular, the 1st Defendant sent a demand and the Plaintiff
negotiated with the Bank, whereupon he was advised to look for an
alternative and the Bank would also assist to do so. He told this
Court that, later he was called by the Bank and got informed that,
two companies were interested to take-over the loan. The two
companied were Mount Meru Oil and Camel Oil (T) Ltd but the
Plaintiff went for Camel Oil (T) Ltd’s offer which was US$ 6.5
million. He told the Court that, the parties made calculations from
the time of borrowing to the date of their meeting and it was agreed
that the Plaintiff had already repaid US$ 1.7 million.
Pw-1 stated further that, since the loan was US$ 7million and
was for a period of 15years, the Plaintiff had asked to pay in a
lumpsum. He told the Court that, due to that fact, the Plaintiff asked
for a waiver that she be allowed to pay only US$ 5million and was
told that, the 1st Defendant’s management team was to consult the
bank committee. Pw-1 told this Court as well that, the 1st
Defendant’s management team told the Plaintiff that they were
ready to clear the loan for US$ 5.7 million instead.
He told the Court that, on that account, the parties signed the
minutes of the meeting dated 18/12/2017 and, that, the Plaintiff
allowed the Bank to proceed negotiating a facility agreement with
Camel Oil (T) Ltd. He further told this Court that, later, the Plaintiff
wrote a letter after Camel Oil (T) Ltd has taken over the loans asking
the Bank to return the securities, which letter he said the Bank
received, proceeded to issue a loan to Camel Oil (T) Ltd and the

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Plaintiff moved on, as there were no more claims on the Plaintiff’s
side. That was all from Pw-1.
The second witness who testified in favour of the Plaintiff is
Mr. Yuda Peniel Mosha who testified as Pw-2. In his testimony in
chief, Pw-2, who is also a Director of Finance in the Plaintiff’s
service, told this Court that, he has been serving the Plaintiff since
2017 and does also serve the 4th Defendant in the Counterclaim. He
told this Court that, on the 20th May 2015 and 4th August 2016, the
Plaintiff did execute a facility agreement with the 1 st Defendant and
the 2nd Defendant.
Pw-2 stated that, the facility executed on the 20th May 2015
was for US$ 15,000,000/-which included an advance payment of
US$ 5,000,000, a Term Loan of US$ 7,000,000 and US$ 3000,000
for LC/Post import loan. He testified further that; the facility issued
on the 4th of August 2016 was for US$ 10,000,000 out of which Short
Term Loan was for US$ 3,000,000/-; Term Loan (Kobil Congo) was
US$ 4,000,000 and Term Loan of US$ 2,500,000/-.
He told the Court that, both facilities had similar clauses on
availability and options available within the facility. The clauses
were Clause 4.1.3 and Clause 4.1.4 and, that, such clauses made
disbursement of funds an issues dependent upon availability of
funds. According to Pw-2, out of the facility dated 04th August 2016,
the Plaintiff was availed via e-mail, with five payment schedules, to
wit:
(a) The 1st Payment schedule was for US$
2,500,000 from October 2016 to November
2018;

Page 18 of 110
 (b) The 2nd schedule was for US$ 4,500,000
from October 2016 to August 2018;
(c) the 3rd payment schedule was for
TZS1,056,252,441.0 from August 2018 to
August 2020; and
(d) the 4th payment schedule was for US$
600,000.

The four payment schedules prepared before the receipt of the

facility in question were admitted as Exh.P-11.
It was a further testimony of Pw-2 that, in a letter dated 3rd of
September 2019, (which was earlier on received in Court as Exh.P-
7) the 1st Defendant had indicated that, the 1 st Facility of US$
2,500,000/- was cleared; the 2nd Facility of US$4,500,000 was
cleared; and the 3rd Facility of US$ 600,000/- was cleared and, that,
the Term Loan IV was still pending. He told this Court that, Exh.P-
7 was received after the Defendants had discharged three collaterals
in March 2019.
Pw-2 testified that, the Plaintiff did service the credit facilities
in accordance with their agreed terms and conditions. Further, that,
towards the end of 2017, the Plaintiff entered into arrangements to
dispose of its properties to Camel Oil (T) Ltd in order to enable M/s
Camel Oil (T) Ltd to take-over its debt pending with the Defendants.
He tendered in Court minutes of the takeover discussions which this
Court admitted as Exh.P-12. He testified further that, the 1st
Defendant received US$ 5,700,000 from Camel Oil (T) Ltd and,
stated that, upon such receipt, the Plaintiff’s outstanding facilities

Page 19 of 110
were fully cleared and, the 1st Defendant was on record that, the
Plaintiff’s loan facility had been taken over by Camel Oil (T) Ltd.
Pw-2 told this Court that, after such clearance and takeover
by Camel Oil (T) Ltd, the 1st Defendant requested the Plaintiff to
return the guarantees it had issued to PUMA ENERGY and DALBIT
in order to discharge all collateral and return them to the Plaintiff
and the Plaintiff’s guarantors. He told this Court that, the Plaintiff
returned the bank guarantees and the 1 st Defendant commenced
dischargement of the collaterals- i.e., Mortgage for Plot No. 363
Chalinze, Kibaha Coastal Region, Plot No. 1 Block “C” – Sinza
Industrial Area, DSM and Plot. N.177 Block “A” CBA, Kibaha,
Costal Region- which were discharged and handed over to the
Plaintiff and the Plaintiff’s Guarantors.
According to Pw-2, the 1st Defendant did not discharge and
return the Deeds for Plot No. 22 Industrial Area, Mkuza, Kibaha
Coastal Region as well as Plot.No.1, Mkuza Area Kibaha Coastal
Region, all in the name of Delina General Enterprises Ltd. A letter
dated 30th January 2019 requesting for the release of all five title
deeds was tendered in Court and was received as Exh.P-13. It was
his testimony, therefore, that, the Plaintiff had cleared all her loan
liability in full but it is the Defendants are who, if one looks at their
demand notices, are themselves uncertain of what is outstanding.
Pw-2 stated that, the Demand Notice from the Defendants
Advocate dated 15th June 2021 states that the outstanding amount
due and payable is US$ 1,379,482.30 and US$ 225,643.25 while the
1st Defendant states the outstanding amount is TZS
1,349,963,447.18. He noted as well, that, in the Demand Notices
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dated 11th May 2021 and 6th December 2021, the Defendants’ claim
which was due and payable to the 1st Defendant was for TZS
1,307,902,894.82 and US$ 3,471,034.02 was due and payable to the
2nd Defendant, thus, making the claims between May, June and
December to vary by over 2million US$.
Pw-2 testified, regarding the US$ 500,000 (equivalent of
TZS1.06 billion) and which was converted from guarantee to a
Term Loan, that, under the Quadripartite Agreement dated 30th
August 2018, the same was agreed to be liquidated through
transport services that Delina General Enterprises Limited was
providing to Oryx Oil Co. Ltd and, in turn, Oryx was paying by routing
the amount to clear the debts of the Plaintiff which arose from the
guarantee that was converted into a Term Loan. He tendered in
Court the Quadripartite Agreement and this was received in Court as
Exh.P-14.
As per his testimony, Clause 1 of Exh.P-14 made the
continuation of the Agreement dependent upon continuation of
business between Delina and Oryx and, that, Oryx undertook to effect
all payment through Delina or the Plaintiff at the 1st Defendant’s
Bank so that, the said funds made payable are routed to clear the
debt arising from the converted bank guarantee. He pointed out
Clause 7 of Exh.P-14 which stated that:
“Oryx will continue to use Delina as its
transporter of its fuel and lubricants until
Delina’s/Kili Oil’s outstanding facility in relation
to settlement of the loan with KCB to be advanced
in terms of Clause 10, had been liquidated
provided that, there should be such need for
Page 21 of 110
 services and Delina should meet all the
requirements as set out in the transport Agreement
between Delina and Oryx”.
According to Pw-2, Clause 10 under reference provided that:
“To provide facilities to Kili Oil, for purposes of clearing outstanding
invoices that Kili Oil has with Oryx, up to a maximum amount of TZS
1.06 billion and subsequently replacing the cancelled guarantee as
mentioned in Clause 9.” Pw-2 stated, therefore, that, as such, under
Clause 7, Oryx committed to continue using the services of Delina
up and until the outstanding debt of Delina/Kili Oil which is
provided for under Clause 10 of the Exh.P.14 (i.e., the TZS
1.06billion) was fully liquidated.
It was a further testimony of Pw-2 that, in order to
operationalize Exh.P-14, and for the sake of the 1st Defendant’s
assurance and control of all the funds from Oryx, the 1st Defendant
opened a “liquidation account business” and the same was notified to
the Plaintiff as an account dedicated for receipt of all funds from
Oryx. It was his testimony that, in an e-mail dated 3rd of September
2018, Ms. Suzan Mayalla communicated to Delina an account to be
used for the receipt of all payments from Oryx under Exh.P-14 and,
in turn, a staff of Delina communicated via email dated 3rd
September 2018 to Oryx Staff named Jacqueline Kisoka on the
account to be used for all payments under Exh.P-14. The email
printouts were admitted into evidence as Exh.P-15.
Pw-2 testified further that, on the basis of Exh.P-14 and the
instructions regarding the use of the liquidation account business (as
per Exh.P15), Oryx effected all payments after 30th August 2018 into

Page 22 of 110
the “liquidation account business. He listed the following payment
transactions as being made or effected by Oryx through the
“liquidation account business”-:
(i) US$ 49,824.78 - paid by Oryx to the liquidation
account business No. 3300584280, on 12th September
2018;
(ii) US$ 54,454.90 - paid by Oryx to the liquidation
account business No. 3300584280, on 24th September
2018;
(iii)US$ 40,000 - paid by Oryx to the liquidation account
business No. 3300584280, on 14th November 2018;
(iv) US$ 61,123.24 - paid by Oryx to the liquidation
account business No. 3300584280, on 07th December
2018;
(v) US$ 85,004.85 - paid by Oryx to the liquidation
account business No. 3300584280, on 09th January
2019;
(vi) US$ 53,028.67- paid by Oryx to the liquidation account
business No. 3300584280, on 05th February 2019;
(vii) US$ 95,115.45 - paid by Oryx to the liquidation
account business No. 3300584280, on 05th March 2019;
(viii) US$ 23,000.00 - paid by Oryx to the liquidation
account business No. 3300584280, on 17th April 2019;
(ix) US$ 75,001.47 - paid by Oryx to the liquidation
account business No. 3300584280, on 18th June 2019;
(x) US$ 8,788.61- paid by Oryx to the liquidation account
business No. 3300584280, on 15th July 2019;
(xi) US$ 8,979.00 - paid by Oryx to the liquidation account
business No. 3300584280, on 08th December 2019;

Page 23 of 110
According to Pw-2’s testimony, the total amount deposited in the
liquidation account as per the above computation summary was US$
552,320.99. He told this Court further, that, neither the Plaintiff nor
Delina General Enterprises Ltd had access to the liquidation account
business in which case whatever was deposited into the liquidation
bank account was in 100% full control of the 1 st Defendant.
Pw-2 tendered in Court copies of 11 email printouts and 11
payment advice which were collectively admitted as Exh.P-16. He
further stated that, on the 14th day of August 2019, a bank statement
of the liquidation account was requested from Ms. Susan Mayalla, an
officer of the 1st Defendant, which contains the Oryx payments. He
tendered into evidence other copies of emails, an affidavit and the
statement of the liquidation account, all of which were admitted as
Exh.P-17.
Furthermore, Pw-2 told this Court that, the Plaintiff has all
along demanded the Defendants to acknowledge that the credit
facilities were all cleared and there is nothing outstanding and has
requested for the discharge of two remaining title deeds, but all in
vain. He tendered in Court demand letters from Epikaizo Attorneys
and two letters from the Plaintiff all of which were collectively
received as Exh.P-18. In addition, Pw-2 asserted that, through the
assistance of the 1st Defendant, the 2nd Defendant has been
providing banking services to the Plaintiff without there being a
valid banking license from the BOT and, that, through the same
assistance of the 1st Defendant, the 2nd Defendant has been doing
business in Tanzania without license and failed to comply with

Page 24 of 110
foreign loan registration requirements in Tanzania. He also urged
this Court to dismiss the counter claims.
During cross-examination, Pw-2 stated that, the repayment
schedule issued was for the two facilities issued. He admitted that,
the issue at hand is whether the US$ 5.7 million were used to clear
the debt or not. He admitted, as well, that, there was a meeting
which discussed about the payment of the US$ 5.7 million and, that,
the minutes were created and signed by attendants of the 18th
December 2017 meeting. He stated that, the negotiations started
sometime in December 2017 and payments were effected in 2018.
He admitted, however, that, it was not stated how much was to be
paid by Camel Oil (T) Ltd at page 2, bullet No.2 of the minutes
(Exh.P-12)) though it was stated that, all the proceeds shall be used.
Pw-2 responded further that, at that particular time, what the
Plaintiff demanded from the 1st Defendant was that, the proceeds
shall set-off all encumbrances. He stated that, the Bank was in
agreement that the proceeds would constitute a final settlement and,
that, on such an account, the Bank was, on the 18th December 2017
meeting, after the Plaintiff knew how much was to be paid as
takeover amount, and, as per the discussions, made aware, and the
Plaintiff, notified the 1st Defendant on 21st December 2017, that, the
amount shall be a settlement amount and, so the takeover business
proceeded.
When asked why the Plaintiff did not pay the whole amount
received as proceeds of the takeover by Camel Oil (T) Ltd but retained
some, Pw-2 responded that, that was an arrangement between the
parties. He maintained, however, that, the US$ 5.7 million
Page 25 of 110
deposited with the 1st Defendant, was the agreed amount meant to
settle the bank’s debts, otherwise the bank would have complained.
He insisted that, the 1st Defendant was notified of the US$
5.7million as the amount to be used to clear the debts.
He stated further that, after the Bank was told that US$ 5.7
million were to be used to clear the debts, the Bank proceeded with
the deal it had with Camel Oil (T) Ltd meaning that, the Bank was
satisfied with the settlement as Camel Oil (T) Ltd did takeover the
assets of the Plaintiff. He stressed, therefore, that, the US$ 5.7
million was the amount agreed to satisfy the debt. Pw-2 did admit;
however, that, the US$ 5.7 million loan takeover amount was to be
deliberated by the 1st Defendant’s Board of Directors and the
process did not end with the minutes of 18th December 2017
(Exh.P12).
Even so, he told this Court, that, no deliberations were made
known to the Plaintiff regarding either an agreement or rejection of
the proposed US$ 5.7 million payment, and, so, to him, the silence
meant that the 1st Defendant’s Board had consented. When shown
Exh.P-3, he told this Court that, it refers to Exh.P-12 and, that, the
takeover amount having been agreed between Camel Oil (T) Ltd and
Kili-Oil (the Plaintiff), Kili-Oil was now informing the Bank that,
subject to the meeting held on the 18 th December 2017, an amount
of US$ 5.7 million was to be paid to satisfy the loan demands at the
bank.
Pw-2 stated further that, after the Plaintiff and Camel Oil (T)
Ltd agreed on the price of the assets taken over, the Plaintiff
informed the 1st Defendant that, the mount was US$ 5.7 million and
Page 26 of 110
was to be the final and due payment of the debts which the Plaintiff
had with the bank as per the 2nd and 3rd paragraphs in Exh.P-3 and,
that, all securities were to be freed. He told this Court that, had the
amount of US$ 5.7 been found to be insufficient by the 1st Defendant
Bank, the latter was at liberty to raise an alarm because Exh.P-3 was
written only three days after the discussions evinced by Exh.P-12.
When shown Exh.P-4, Pw-2 admitted that, paragraph 2
thereof does speak of the use of the US$ 5.7million to clear US$ 5.5
million in respect of “Kobil Congo DRC loan” as well as overdue
amount of arrears. When shown Exh.P-13, Pw-2 stated that, as per
that document, the total Term Loan I and II is seen to be US$
7,363,00. He stated that, by the time, the Congo loan was US$
4,737,000. However, Pw-2 stated, that, Exh.P-13 does not show the
loan reference number but talks of the entire loan which he insisted
was taken over by Camel Oil (T) Ltd, having bought the Plaintiff’s
assets. He stated that, the Plaintiff did not receive anything from
Camel Oil (T) Ltd as the arrangement was that, Camel Oil (T) Ltd
would arrange and pay the Bank.
When Pw-2 was shown Exh.P-16, he admitted to have
prepared it. He admitted as well that, there was a conversion of an
Overdraft Facility to a Term Loan Facility and, that, the US$ 500,000
had been settled through the loan liquidation account. He relied on
Exh.P-15 and Exh.P-14 (the Quadripartite Agreement). He emphasized
that, the Plaintiff had no access to the loan liquidation A/c in which
Oryx deposited monies to liquidate the Plaintiff’s loan and the US$
500,000 loan was therefore discharged.

Page 27 of 110
 When shown Exh.P-17, Pw-2 told the Court that, by the 29th
day of March 2018, the loan repayment of the Plaintiff was USD$
38,684.04.
During his re-examination, Pw-2 stated that, the US$ 5.7
million were paid by Camel Oil (T) Ltd having obtained that amount
from the 1st Defendant as a credit facility(loan) meant to fund the
purchase of the Plaintiff’s assets. When he was shown Exh.P-4, he
admitted that, this was addressed to Delina General Enterprises who
is a guarantor of the Plaintiff. He told this Court further, that, in the
whole transaction, the Plaintiff never received any communication
from the 1st Defendant Board of directors.
When further shown Exh.P-14, he told this Court that, the
total amount which Oryx was to pay was TZS 1.06 billion and
Delina’s role was to continue to provide transport services to Oryx
and ensure that, all payments made by Oryx are routed to the
liquidation account. He emphasized once more that, Exh.P-17 (the
liquidation account) was opened by the 1st Defendant who had
100% mandate and sole access to it.
When asked by the Court what would have been the case if
the 1st Defendant’s Board was to refuse the US$ 5.7 million as a final
payment, Pw-2 responded that, the transaction between Camel Oil
(T) Ltd and the Plaintiff to take over the Plaintiff’s assets would not
have proceeded. He told this Court that, Exh.P-3 was never
responded to by the 1st Defendant’s Board but the transaction to
take-over the Plaintiff’s assets went ahead.
Besides, he stated that, the 1st Defendant did go ahead as well
and negotiated with Camel Oil (T) Ltd so as to facilitate the latter’s
Page 28 of 110
desire to acquire the Plaintiff’s assets. He stated that, the Plaintiff
was, therefore, made to believe that, the 1st Defendant had agreed
to the proposed US$ 5.7 million which the Plaintiff had
communicated to her given that all other processes proceeded with
the full cooperation of the 1st Defendant.
The 3rd witness for the Plaintiff was Mr. Hassan Juma who
testified as Pw-3. He told this Court that, he has worked with Camel
Oil (T) Ltd, as a legal advisor for the company for a period of 9 years
now. He told this Court that, the Plaintiff did copy a letter dated
21st September 2017 (Exh.P-3) to Camel Oil (T) Ltd, regarding loan
take over at the 1st Defendant. He told this Court that, the import of
the said letter was that, a loan amounting to US$ 5.7 million was to
be taken-over by Camel Oil (T) Ltd and, thereafter, the Plaintiff was
going to be freed from her indebtedness and her collaterals held by
the 1st Defendant were to be discharged.
Pw-3 testified that, he was aware that, on 14th June 2018,
Camel Oil (T) Ltd entered into a Facility Agreement with the
Defendants for an amount of US$ 5.7million and, that, the said
amount was utilized to facilitate the taking-over of the Plaintiff’s
credit facilities at the Defendants. He tendered in Court the facility
agreement between Camel Oil (T) Ltd and the Defendants and this
was received as Exh.P.19. During cross-examination, Pw-3 told this
Court, when he was shown Exh.P-3, that, indeed, he received a copy
of Exh.P-3 and, that, it was/is about the taking-over of the loan
which the Plaintiff had with the 1st Defendant.
He told the Court that, Exh.P-19 was a facility agreed upon
between Camel Oil (T) Ltd and the 1st Defendant for the purpose of
Page 29 of 110
taking-over the facilities of the Plaintiff which were with the 1 st
Defendant. He said that, the loan facility amounted to US$ 5.7
million and so were the assets as well. He also testified that; he was
unaware if Camel Oil (T) Ltd took-over the full liability of the
Plaintiff’s loans at the 1st Defendants but what he was aware of was
that, the assets were for US$ 5.7 million as per clause 3 of Exh.P-19.
Since Pw-3 was not re-examined, the Plaintiff’s case came to
a closure, paving the way for the defense case to open.
6. The Defense Case
When the Defense case opened, the Defendants called one
witness only. The witness was Ms. Suzan Mayalla, the 1st
Defendant’s Corporate Relationship Manager, who testified as Dw-
1. Her witness statement was received in Court as her testimony in
chief. Therein, Dw-1 testified that, she was fully aware of the
original suit at hand and the counterclaim raised by the Defendants
herein.
However, she corrected the specific claims raised in the
counterclaim by telling this Court that, the correct figures claimed
in the counter-claim are -US$ 1,636,430.01 for Term Loan I plus an
amount of arrears, interests and penalties equal to US$
1,637,170.30, thus, making a total of US$ 3,273,600.31 as of 7 th
February 2022. She also told the Court that, the correct figures for
Term Loan II are TZS 860,426.021.86 (as principal sum) plus TZS
839,311,887.54 which constitutes arrears, penalty interest and all
makes a total of TZS 1,699,737,909.40 as of 6 th May 2019.
Dw-1 told this Court that, the 1st Defendant advanced credit
facilities to the Plaintiff dated 20 th May 2015 and, of interest, the
Page 30 of 110
facility advanced were in the tune of US$ 7,000,000.00 repayable
with 8%. She told this Court that, the amounts were used by the
Plaintiff to acquire shares of KenolKobil. She also told this Court
further that, the amount was to be disbursed in two tranches of
US$4,500,000.00 (for acquisition of KenolKobil (Congo) and US$
2,500,000.00 for acquisition of KenolKobil (T) Ltd. She testified that,
the sums in question were credited into the Plaintiff’s Account
No.3301048781.
Dw-1 told this Court further that, later, there was an
amendment on 4th August 2016 where the restructured credit facility
was executed offering the Plaintiff: (1) Term Loan -1 in the amount
of US$ 4,000,0000; (2) Term Loan II -in the amount of US$
2,500,000.00; (3) Overdraft Facility of US$ 600,000.00 and (4) Short
Term Loan (LC-cum PIF/Bank Guarantee totaling US$
2,400,000.00. She relied on Exh.P-1 as well as Addenda 1, 2 and 3
to the Facility Agreement dated 4 th August 2016 which were
collectively tendered in Court as Exh.D-1.
Dw-1 told this Court that, the repayment period for Term
Loans I & II was extended to 18th October 2021 and the repayment
of principal was waived for 6 and 3 months respectively for which
interest was to be paid during the moratorium period. She testified,
as per Exh.D-1, that, it was agreed, that, the securities previously
held shall continue to secure the loaned facilities. She told the Court
that, the loans were not serviced (repaid).
On that regard, Dw-1 referred this Court to the loan statement
AA16279W1ZSH – 1200437632 (for the Plaintiff) stating that, the
sums of US$ 4.5million were booked unto the Plaintiff’s account
Page 31 of 110
on 05th October 2016. She stated that, since the Defendants engage
in a banking business, interests and penalties constitute their profits,
that is money belonging to them. Dw-1 referred as well to another
Loan A./c of AA 16279HNWVQ - 1200438159 (for the Plaintiff)
for Term Loan II for the sum of US$ 2,500,000.00. She told this
Court that, this was also booked unto the Plaintiff’s account on 05 th
October 2016, and these two loan accounts represented the facility
agreement- Exh.D-1.
Dw-1 told this Court as well that, due to the single borrower’s
limit (SBL) regulations, both Term I and II Loan facilities were
booked by KCB-(K) and the transaction was a loan syndication where
KCB-(T) acted as security agent and Facility Agent and all
transactions were done at KCB-(T). She also referred to Loan
Statement A/C AA 1736S6HDV- 3390229663; Corporate Current
Statement A/c No.3301648781; Loan A/c statement – AA-
1808576ZQT- No.3390274081 and two affidavits and, all the
documents were tendered and collectively admitted as Exh.D-2.
Dw-1 told this Court that, under the moratorium, the Plaintiff
was exempted from repaying the principal sum for 6 months but
was given a repayment schedule for the interest accruing. She
tendered the repayment schedule which had already been admitted
as Exh.P-11. Dw-1 testified that, the statements of Loan A/c (AA-
16279W1ZSH and AA-16279HNWVQ) (admitted as part of
Exh.D-2) contained a phrase: “make due activity”, which refers to
unpaid dues and the phrase: “repayment of dues”, which means
payments made. She stated that, it is only the interest for 05 th
October 2016 amounting to US$ 37,684.38 which got cleared when
Page 32 of 110
that fell due, but denied that the interest for December 2016 to April
2017. She told this Court, therefore, that, the Plaintiff had defaulted
in paying interests for five (5) months.
She also told this Court, referring to Exh.D-2 (Loan Acc.
AA16279W1ZSH dated 25/2/2022) and AA-16279W1ZSH -dated
20/10/2020) that, later on 11th May 2017, the Plaintiff paid US$
18,128.18 and US$ 3,137.16. According to Dw-1, one of the Loan
Account (the one dated 25/02/22) was more detailed and, that, the
payment of the principal sums began on 05 th April 2017. She stated,
however, that, during the entire period no payments were made. It
was Dw-1’s further testimony that, since the Plaintiff was already in
default, she applied, in respect of Term Loan I, for the following:
 a moratorium of 6moths on repayment of
principal and,
 a recapitalization of arrears of principal,
interest and penalties due on that date.
She stated that, all such requests were accepted by the Defendants.
Referring to Exh.D-1 (the addendum dated 29th June 2017) Dw-1
told this Court that, although it is dated 29th June 2017, the actual
capitalization was done on the 19th September 2017, at a time when
principal, interest and penalty had accrued to US$ 811,328.38 as
per Exh.D-2 (loan Acc. AA16279W1ZSH dated 25/2/2022) unlike the
US$ 683,314.87 appearing on Exh.D-1 (the addendum dated 29th
June 2017). She stated that, it is the former amount which was
capitalized and it increased the exposure of the Plaintiff to US$
4,889,358.25 as principal loan liability.

Page 33 of 110
 Dw-1 stated, as well, that, the sums of US$ 811,328.38
capitalized was not exhausted after repayment of arrears of
principal, interest and penalty interest due, given that, the monthly
instalment payable was reduced on account of extension of the loan
tenor for a further 5 years as per Exh.D-1 (the addendum dated 29th
June 2017). She testified that, the Plaintiff did also ask for
recapitalization of Term Loan II’s outstanding principal, interest and
penalties, as per Exh.D-2 (loan statement AA-16279HNWVQ dated
25/2/2022) and her request was accepted and a sum of US$
536,154.47 was capitalized and the booking was made on 19 th
September 2017.
She stated, however, that, the amount capitalized was not
exhausted as well because the amount of monthly instalment
payable was reduced on account of extension of the loan tenor for a
further 5 years as per Exh.D-1 (the addendum dated 29th June 2017).
Dw-1 told this Court as well that, during the period of
December 2017 the single borrower limit of KCB-(T) increased,
and, therefore, KCB-(K) relocated the Plaintiff’s debt liability in the
sum of US$ 2,566,00.00 to KCB-(T) and only US$ 2,323,358.25
remained as outstanding in KCB-(K) as at 29th December 2017 as
per Exh.D-2 (loan statement AA-16279HNWVQ dated 25/2/2022).
She told this Court that, a corresponding loan account was
also opened by KCB-(T) with disbursed loan in the extent of US$
2,566,000.00 which was relocated as per Exh.D-2 (loan statement
AA-17363S6HDV (3390229663) dated 04/09/2019). Dw-1 testified
further that, as per as per Exh.D-2 (customer Account statement for
A/c No.3301048781 dated 24/2/2021), the plaintiff’s account was
Page 34 of 110
credited with US$ 5,700,000.00 deposited by Camel Oil (T) Ltd and
was used to liquidate Loan A/c No. AA-17363S6HDV (3390229663)
dated 04/09/2019).
She told this Court that, the amount was also used to liquidate
loan facility -Term Loan II substantially because, as per Exh.D-2
(loan statement AA-16279HNWVQ (3390229663) dated 25/02/2022)-
outstanding liability in the account stood at US$ 225,643.25 as at
25th February 2022: 13:58:50 hrs. She also told this Court that, the
debt balance in Term Loan -I (Exh.D-1) remained, after relocation,
not properly serviced and continued to accrue interest and penalty
interests which stood at US$ 1,637,170.30 on 25/2/2022. She said
that, the correct outstanding and due as of 7 th February 2022 was
US$ 3,273,600.31.
Dw-1 told this Court further that, sometimes on 4 th August
2016, the Plaintiff applied for conversion of Overdraft facility of US$
600,000.00 to Term Loan repayable in 36 months and the booking
is reflected in Exh.D-2 (loan statement AA-1808576ZQT (3390274081)
dated 04/09/2019). She stated that, the items dated 22 nd June 2018
of US$ 571,723.30 plus US$ 3,552.23 made a total of US$
575,276.03 debited in the Plaintiff’s Current Account, (Exh.D-2 –
Statement of Account for A/c No.3301048781 date 24/02/2021).
She testified, therefore, that, as of 25th February 2022, the Term-
Loan-I remained with an outstanding balance of USD
1,637,170.30 which forms the claim under the Counterclaim. She
stated that, the addendum dated 2 nd March 2018 (part of Exh.D-1)
was an agreement to partially realign US$ 150,000.00 from L/C
Limit of US$ 900,000.00 to Delina.
Page 35 of 110
 It was a further testimony of Dw-1 that, on 31st August 2018,
the Plaintiff had applied for conversion of Bank Guarantee of US$
500,000.00 into a Term Loan to be repaid in 2 years. She tendered in
Court the application letter dated 31/8/2018, a board resolution,
the Facility Agreement dated 06 th September,2018, Plaintiff’s Loan
Statement A/c No. AA-18254W1GF2- (A/c 3390356835) and all
these were collectively admitted as Exh.D-3. She also told this Court
that, the conversion was preceded by the signing of the Quadripartite
Agreement (Exh.P-14).
She testified that, under the above arrangements, the sum of
TZS 1,056,252,441/- (equivalent of the US$ 500,000 at the time)
was booked as Term Loan (with 17% interest, tenor: 2yrs); that, the
Plaintiff agreed to be indebted to the 1 st Defendant to a tune of US$
151,519.89 (in respect of Term-Loan -I) and US$ 2,378,508.11 (in
respect of Term Loan-II), Plaintiff’s directors (Davis Mosha and
Nancy – as guarantors); existing securities pledged to secure the
loan facilities to continue as securities for the Term Loan ( part of
Exh.D-3) arising from the conversion and a Loan A/c- AA-
18254W1GF2- (A/c 3390356835) (part of Exh.D-3).
Dw-1 told this Court that, the account was unsatisfactorily
serviced and, as of 9th April 2022 the debt due was TZS
1,699,737,909.40, a debt claimed under the counterclaim. She
denounced the alleged claims of predatory lending practices by
stating that all loan agreements were freely signed by the parties;
and the Plaintiff never disputed her indebtedness or existence of the
outstanding loan facilities.

Page 36 of 110
 Dw-1 told this Court further that, the alleged takeover of the
loan by Camel Oil (T) Ltd, was a misconception because: the sums
credited in the Plaintiff’s A/c were US$ 5.7 million, while the debt
liabilities acknowledged by the Plaintiff were in a tune of US$
2,626,000 (for Term Loan -I); US$ 4,737,000 (for Term Loan II) and
O/D of US$ 600,000. For that reason, she told the Court that, the
US$ 5.7 million from Camel Oil (T) Ltd.’s transaction was far below
to be able to liquidated the existing debt of US$ 7,963,000.00 which
she said was admitted in Exh.D-1 (dated 20th March,2018).
Dw-1 testified further that; it was the Plaintiff who applied for
the conversion of the guarantee of US$ 500,000 into a term loan,
and, hence, she knows well about her indebtedness and gave no
proof of repayment. She stated that, Exh.D-3 (the Facility letter
dated 06th September 2018), was signed way after Camel Oil(T) Ltd
paid the US$ 5.7 million and, that, there in, at Clause 2.2.2 the
Plaintiff acknowledges to be indebted.
Dw-1 told this Court that, she totally disputed the contents,
validity and authenticity of Exh.P-4, a letter dated 31st October,
2018. She told this Court that, on the 6th day of September 2018,
only two months before Exh.P-4 was issued, the Plaintiff had
acknowledged to be indebted to the extent of US$ 151,591.59 (in
respect of the Term Loan -II); (for US$ 2.5million) US$
2,378,508.11 (in respect of Term Loan- I); (for US$ 4.5 million)
and Bank guarantee of US$ 1.0million.
She also told this Court that, according to her knowledge,
those loaned amounts were not repaid as at 31 st October 2018. She
told this Court further that, on 3rd September 2019, she wrote a letter
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(Exh.P-7) which responded to a letter by the Plaintiff dated 22 nd
August 2019 regarding the loan status and how the Camel Oil’s
monies amounting to US$ 5.7 million, got utilized. As for her, Exh.P-
7 makes Exh.P-4 obsolete.
As regards the claims that the 2nd Defendant is trading
illegally, Dw-1 testified that, as a fact, under the banking
laws/circulars/regulations, residents are allowed to access credit
accommodation from non-resident institutions as was the case in
this present transaction and so, it was legal for the Plaintiff to access
credit accommodation from KCB-Kenya (the 2nd Defendant) and,
that, such a transaction must be carried through a resident bank, in
this respect, KCB-(T), was acting as facility/security agent for KCB-
(K).
Dw-1 told this Court that, loan syndication is a well-known
practice in our jurisdiction especially when the single borrowers
limit (SBL) is reached. She testified that, in the instant case, the
Plaintiff had requested for a loan over and above the SBL limit of
the KCB-(T) (the 1st Defendant) in which case the KCB-T
syndicated with KCB-K a foreign member of the same group of
companies. She stated that, the terms agreed in the loan facility
agreement do not change in case the money is booked either by a
local or a non-resident bank.
According to Dw-1, loan registration is in no way a ground
for nullification/or declaring a loan facility to be a nullity. She also
told this Court that, the 2nd,3rd, and 4th Defendants in the
counterclaim are equally indebted jointly and severally as they

Page 38 of 110
secured and guaranteed the loans as per the securities which she
tendered and were admitted collectively as Exh.D-4.
During her cross-examination, Dw-1 told this Court that, she
appears as a witness for all Defendants. She admitted to be an
employee of the 1st Defendant as a relations manager. She stated
that, the 1st, 2nd and 3rd prayers in the counterclaim are erroneous
and the figures there in should not be counted but the rest of the
prayers are correct. She stated that, from Term Loan I, the
counterclaim prayers are for US$ 225,642.25 but in her correction
in the witness statement, the Term Loan -I should be US$
1,636,430.01. She stated, therefore, that, what is in the witness
statement is the correct position.
She told the Court that, in the Counterclaim the Plaintiffs
forgot to include interests and penalties and, so, she opted to state it
in her witness statement. She told this Court that, such forgetfulness
was a human error as there was a principal amount, interest and
penalties to be paid. She admitted that the Plaintiff had made a
mistake in her pleadings but wanted to be believed and the records
be rectified by way of her witness statement.
Dw-1 told this Court as well that, she was unaware as to when
the repayment of loans was to end had there been no takeover.
However, when shown Exh.D-1 she told the Court that, the tenor
was up to 2026 for Term Loan I and II and, that, by 2018, the
remaining period was about 7-8 years before the loans ended, if
there would not have been their being taken-over by Camel Oil (T)
Ltd. She told the Court that, up to the date of such takeover, the

Page 39 of 110
Plaintiff had about US$ 8.17 million (plus) or so, as outstanding
loan balance and a bank guarantee limit of US$ 1.5 million.
As for Term Loan -II, up to year 2026 she told this Court that,
the Plaintiff was to repay US$ 8.17 million (plus) had there been no
taking over, given that, the principal amount alone, was US$
7,834,134.99 and there were also interests and penalties.
When further cross-examined, Dw-1 admitted that, there
were meetings which took place when the loan taking over took
place and that, there were minutes taken to that effect. When shown
Exh.P-12, Dw-1 stated that, the Plaintiff was to transfer assets upon
fulfillment of conditions and that, what is stated in Exh.P-12 is the
Plaintiff’s position and the 1st Defendant did take note of that
position. Dw-1 admitted that, Exh.P-3 was, indeed, sent to the Bank
stating that, the monies from Camel Oil (T) Ltd would clear the
facility amount of US$ 5.7 million.
She admitted as well that, the last paragraph to Exh.P-3, does
indicate that, with that agreement the Plaintiff’s Account was to be
freed and, after the 1st Defendant had finished the loan transfer
process to Camel Oil (T) Ltd’s A/c, the Plaintiff was to withdrew her
collateral securities sitting in the custody of the 1 st Defendant. She
admitted as well, that, that understanding was the Plaintiff’s
position and, that, the Plaintiff did refer to a meeting of 18 th
December 2017.
Dw-1 told this Court, however, that, as far as she is
concerned, there was no response on the part of the 1 st Defendant
to the Exh.P-3. She admitted that, the 1st Defendant did take steps
but did not respond to the Plaintiff’s letter (Exh.P-3). She further
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admitted that, the process to sell the assets to Camel Oil (T) Ltd
proceeded and approvals were obtained and the amount remained
the same, i.e., US$ 5.7 million, which amount is also as per Exh.P-
3. Likewise, it was her testimony that, the Defendants did approve
the taking over of the loans by Camel Oil (T) Ltd after the payment
of the said US$ 5.7 million. She stated that, the amount was
deposited in the Plaintiff’s account but she maintained that it only
cleared part of the loan.
When shown item 3 of Exh.P-19, Dw-1 admitted that, it
reads: “Term Loan for taking over term loan facility and buying assets of
Kilimanjaro Oil (T) Ltd.” She admitted that, Exh.P-19 does not say
the Term Loan Facility was partially taken-over. When shown a
letter dated 31st October 2018 (part of Exh.P-4), she declined to be
recognizing it though she admitted that, it had a signature that
resembles her signature.
When shown another letter dated 18 th March 2019 (part of
Exh.P-4 as well), Dw-1 admitted that, the 1st Defendant’s Board
approved the release of the title deeds of the Plaintiff subject to
cancellation of Bank guarantees. She stated, however, that, the title
deeds were returned because of the Plaintiff’s request and her debt
had been reduced significantly. She, nevertheless, admitted that, the
letter does not say of partial release of the title deeds or, that, the
debts were uncleared, but it does refer to the “requested titles”.
When shown Exh.P-7, Dw-1 told the Court that, she was
aware of it. She also stated that, the Plaintiff had a loan for Kobil
(T), Kobil Congo and an OD (overdraft) facility. She stated that, when
the sum of US$ 5.7 million was received, part of that amount was
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booked in KCB-(T) Ltd and some in KCB-(K) Ltd because of the
syndication. She also stated that, when the monies arrived, the same
cleared the outstanding OD and the portion of the loan booked in
the KCB-(T) Ltd and partly in KCB-(K) Ltd.
Dw-1 stated further that, the monies cleared all arrears and
accrued interest which all together gave a total of US$ 5,699,852.26
and the balance left was US$ 147.74. She told this Court that, on
the overall, the interest paid was US$ 70,925.67 and the principal
and overdraft balance was US$ 5,628,926.59. She also told this
Court that, she was unaware as to how much amount of money was
saved by that lumpsum payment which would have been paid with
interest, come the year 2026.
When shown Exh.D-3, Dw-1 told this Court that, she had a
mandate to sign it within 30 days as the 1st Defendant’s relations
manager. She stated that, the client is required to sign the facility
Letter and there must be either a response in favor of signing or not
to sign the facility letter. She stated as well that, the Bank had to
hear from the client and, if no signing within 30 days, the facility
was to expire. She admitted that, Exh.D-3 is undated as regards
when the Plaintiff signed it. She further admitted that, it was unclear
if the Plaintiff signed it within the 30 days or not and, that the two
bank guarantees were cancelled and one was converted into a Term
Loan. She stated, however, that, not all collaterals were released as
there were still outstanding loans but could not state the amount.
When shown Exh.D-1 and Exh.D-2, Dw-1 stated that, the 1st
Defendant does not keep 2 banking systems. When shown part of
Exh.D-2 which reads: ‘D6/D11 transaction dated 29th December 2017”,
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Dw-1 responded that, the two speak of the loan A/c
No.1200437632 and, that, Exh.D-2 is a loan statement. She stated
that, there is a transaction dated 20/6/2019 and that, the 1 st
Statement reads US$ 2,060,286.05 and the 2nd reads US$
2,261,167.41.
She admitted that, the two statements are of the same facility
Account and had a difference of US$ 200 plus. She, however, told
the Court that, the banking system is one only that there are two
versions of the same account statement: a simplified version (which is
shared with the client) and another detailed version (for the bank’s
internal purposes). According to Dw-1, if need be, the detailed version
could as well be shared with the client but that, the simplified version
has penalties and interest shown therein. She admitted that, the
transaction dated 30/5/2018 in the simplified version reads- US$
2,280,610 and the detailed one reads US$ 2,238,120 and, that,
between the two, there is a difference of USD 42,000.00.
She as well admitted that, the 1st Defendant’s bank system
could print out same statement in two different versions with
different figures. She stated further that, there is a single borrowers
limit in borrowing and that, the 1 st Defendant could not issue the
whole amount itself but had to syndicate it to the 2 nd Defendant.
When asked about the booking of the US$ 7,000,000, Dw-1
responded that, the amount was booked in KCB (K) Ltd because of
the single borrower’s limit.
Dw-1 admitted as well that, the Plaintiff has never re-paid the
loan to the 2nd Defendant and, that, when there is syndication, the
local bank becomes an agent for security and facility and
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repayments will also be through the local bank which was to later
allow the monies to clear the debt (loan) in KCB-(K) Ltd. She told
this Court that, KCB (K) disbursed the monies to KCB (T) Ltd and
the same were disbursed to the Plaintiff through KCB (T) Ltd.
However, she gave no evidence to show that KCB-(K) disbursed
monies to KCB-(T) Ltd.
Dw-1 denied that the ‘PUMA Guarantee’ was paid off through
the Exh.P-14 but that, it was the ‘Oryx Guarantee’ that was, and, that,
it was paid off through Delina General Enterprises Ltd as per the
liquidation Account. She admitted that, it was only the 1 st Defendant
who had sole access to the liquidation account but told this Court
that, the same account had other different payments being made
therein, so the total was possibly above US$ 500,000.
She admitted as well, that, as per Exh.P-4, Oryx was to pay
through that account and the intention was that, once monies are
paid into that account by Oryx, the amount will be use to liquidate
the Plaintiff’s loan amount of TZS 1.06 billion. She told the Court
that, though she had not gone through the liquidation Account the
amount paid were well above US$ 500,000. She further admitted
that, the TZS 800 million claimed by the 1st Defendant is part of the
Oryx guarantee converted into term loan. She admitted that, as per
the demand notices, the total claims are TZS 1.3 billion and US$
2.4 million.
When shown Exh.P-17, Dw-1 admitted that, the movement
of funds was clear in the statement and the monies in for the months
of March to July 2018 was US$ 654,541 and that, the transaction
done before the signing of Exh.P-14 (before August 30th 2018) has a
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value of US$ 40,000 and that there is transaction dated 07 th
February 2019, whose net effect is zero. She, nevertheless, admitted
that, the amount remains well above the US$ 500,000 and is the
Oryx guarantee converted into a Term Loan and, that, it is the same
that KCB (T) Ltd (the 1st Defendant claims) as TZS 800million).
When cross-examined further regarding whether the 2nd
Defendant is licensed to do business of banking in Tanzania, Dw-1
stated that, she is not and, that, she was unaware if the loans
advanced to the Plaintiff by the 2 nd Defendant were registered in
Tanzania with the BOT.
During her re-examination, Dw-1 told this Court that, the
Plaintiff had a debt of about US$ 8.1 million (plus) before 30 th May
2018 as principal, interest and arrears. She confirmed that, Camel Oil
(T) Ltd did take-over a total of US$ 5.7 million of the Plaintiff’s debt.
When asked about the meeting between the Bank and the Plaintiff
and the alleged offer of US$ 5.7 million, Dw-1 responded that, the
Bank (1st Defendant) took note of the Plaintiff’s position, but that
was subject to appraisal of waiver by the Board- both the group
Board and the local Board of Directors.
She also told the Court that, the securities released were
subject to cancellation of bank guarantee issued by PUMA Energy
and Dalbet Petroleum. She stated that Exh.D-1 is valid even if there is
no date when the client signed it as there is no limitation. Dw-1 re-
confirmed that Camel Oil (T) Ltd took over the debit worth US$ 5.7
million and that, by then, the liability was US$ 8.1 million. She
stated as well, that, the liquidation account was not solely there for
Oryx’s transactions only, though all Oryx transactions were routed
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through it for control purposes. She said, however, that, some
payments went to Oryx and to Delina, but those for servicing the loan
are reflected in the liquidation account and the loan statement as well.
She insisted that, the monies paid did not repay the whole amount
of the converted loan and the balance of TZS 800million which is
being counterclaimed is correct.
As regards loan syndication, she told this Court that, the one
who comes in to syndicate the loan must have a local bank who acts
as facility agent and security agent and, the facilities would be
secured by the securities issued by the client. She told this Court as
well that, there was no need of a business license since the
syndicating bank relies on the local bank in the case where the
syndicating bank is a foreigner.
As regards Exh.D-2 she told this Court that, the difference
between the simplified version of the statement and the detailed one
is that, one has narrations about the “make due activities” appearing
in the detailed one, which means “instalment due for payments”. She
stated that, when the instalment is due, it reduces the balance but at
the end, the “make due activities” shows a summary of the principal
overdue and that is up to February 2022, the summary being US$
624,737.4. As regard the simplified version, it was Dw-1’s response
that, it does not show the “make due activities” but the actual
payments only.
When asked by the Court, Dw-1 told this Court that, the
client was not made aware of the syndication process as it is the
bank that is to satisfy its client as to the amount applied for. She
stated that, the disclosures will only be made in the facility letter but
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the securities of the syndicating bank will be the securities offered
by the client. She re-confirmed that, the whole loan amount of US$
7,000,000.00 came from the 2 nd Defendant (the KCB-(K) Ltd. She
stated that, since Delina Enterprise had as well been offered loan by
KCB-(T) Ltd, the group exposure had exceeded the limits and, so,
the single borrower limit. As regards the US$ 5.7 million paid, Dw-
1 stated that, after the 1st Defendant received the US$ 5.7 million,
there was no waiver which was considered and Exh.P-6 gave a
position after the Bank had received the US$ 5.7million. So far, that
was the case for the Defendants/Plaintiffs in counterclaim.
At the end of cross-examination and re-examination of Dw-
1, the case for the Defence side was brought to an end and the
parties prayed to be allowed to file written submissions. Their prayer
was granted and they duly filed their submissions. In the course of
addressing the issues agreed upon by the parties herein and recorded
by this Court, I will also take those final submissions into account.
7. The Standard of Proof
Before I embark on the detailed consideration of the issues
agreed upon and recorded by this Court, let me state, as a matter of
legal principle that, the duty of proving any alleged fact lays upon
the person who alleges. In short, such a principle is commonly
stated in the form of: “he who alleges must prove”.
Sections 110 and 111 of the Evidence Act, Cap.6 R.E 2020
and a host of cases both reported and unreported, one of them being
the unreported case of Anthony M. Massanga vs. Penina (Mama
Mgesi) and Another, Civil Appeal No.118 of 2014, attest to that
principle. It is as well, trite law that, in civil cases, the Plaintiff’s
Page 47 of 110
burden of proving his case is discharged on the balance of
probability.
8. Submissions and Deliberation on the Issues
In this case, seven (7) issues were agreed upon and recorded
by the Court, the first one being:
Whether the Defendants are in breach of banker’s
duties to the customer by mismanaging the
Plaintiff’s bank account.

In this instant suit at hand, the Plaintiff is alleging that the 1 st

and 2nd Defendants are in breach of their banker’s duty to their
customer, the Plaintiff herein, arising from their mismanagement
of the Plaintiff’s loan accounts. As regards the alleged breach, the
Plaintiff questions the propriety of the 1st Defendant’s act of
maintaining two bank-accounting systems running concurrently in
such a manner that, when the Plaintiff’s bank statement is to be
printed out at the same time, each bank system would give a
different statement indicating a different outstanding loan amount.
In his submissions, Mr. Mwalongo contended that, that fact
constituted evidence of mismanagement of the customer’s account.
He submitted that, the mismanagement manifests itself in the form
of issuance of misleading loan statements and having two systems
each capable of issuing different loan statements at the same time
for the same customer’s account. In an effort to prove that fact,
Mr. Mwalongo relied on Exh.D-2 which, indeed, indicates that,
there are two statements for Account No. AA16279W1ZSH
(1200437632) all for the Plaintiff, dated 30th May 2018, and one
showing a balance of US$ 2,238,120.00 while the other shows a
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balance of US$ 2,280,610.24. In both of these two, there is a
difference of US$ 42,490.24.
Further still, Mr. Mwalongo submitted, and indeed so, that,
there are, as part of the same Exh.D-2, two bank statements for
Account No. AA16279W1ZSH (1200437632), dated 20th June
2019, all for the same Plaintiff and showing different balances: i.e.,
US$ 2,060,286.05 and USD 200,881.36. He contended that; Dw-
1 was unable to account for the reasons of maintaining two bank
statements on the same account giving different figures.
He submitted that, having two banking systems out of which
each could print a different statement and, noting that, the two
systems were used to print bank statements of the Plaintiff’s loan
account, was a manifest breach of banker’s duty to the customer
who is the Plaintiff and, that, having two account statements with
different figures would mean one or all are incorrect, he so
contended.
As regards the alleged mismanagement on the part of the 2 nd
Defendant, Mr. Mwalongo did as well submit that, this is
manifested by the incidences of booking of the loan amounts in the
1st Defendant and the 2nd Defendant as per the wishes of the
Defendants. He submitted that, as per the testimony of Pw-1, the
1st Defendant mismanaged the Plaintiff’s account by conducting
bookings and unilaterally reallocating bookings of the loan facility
of the Plaintiff in the 1st and the 2nd Defendant. He has relied, for
purposes of proof, on Clause 4.2 of Exh.P-1 (the banking facility
dated 20th May 2015) and Clause 4.2 of the banking facility dated
04th August 2016).
Page 49 of 110
 Both clauses have a similar reading which is to the effect that:
“The facilities shall be booked by the Lenders as
agreed. However, as and when the single borrowers
limit of the facility agent is enhanced, the Lenders
may book all or part of the facility with the agent.”

According to Mr. Mwalongo’ submission, this clause is so worded

in order to accomplish the purpose of circumventing the
regulations of the Bank of Tanzania and the Defendants have been
mismanaging the facilities of the Plaintiff by having the liberty to
book them anyhow and in circumvention of the regulations of the
Bank of Tanzania.
He drew the attention of this Court to paragraph 30.0 of the
testimony in chief of Dw-1 where she confirms, indeed, that it was
the 1st Defendant who had all the mandate to decide how the loan
amount should be booked in the 1 st and 2nd Defendant, and, that,
Dw-1 did testify how the 1st Defendant relocated bookings to the
2nd Defendant and back to itself in order to avoid contravening the
Single Borrower’s Limit (SBL), while the bookings had no relevance
with who has given the funds.
Mr. Mwalongo contended, therefore, that, the act of booking
loan amounts in different institution without knowledge of the
borrower was a clear manifestation of mismanagement of the
customer’s loan account, and that, the Defendants have so
admitted it. In support of his position and urging this Court to
respond to the first issue positively, Mr. Mwalongo has relied on
the case of Symbion Power (T) Ltd vs. CRDB Bank PLC
(unreported); the case of Dukhiya vs. Standard Bank of South

Page 50 of 110
Africa Limited (1959) EA 958; and the case of Delina General
Enterprises Limited vs. KCB Bank (T) Ltd and KCB Bank (K)
Ltd, Commercial Case No.16 of 2022 (unreported).
He also relied on section 48 of the Banking and Financial
Institutions Act, Cap.342 R.E 2019; Regulation 3 of the Bank of
Tanzania (Financial Consumer Protection) Regulations, GN.
No.884 of 2019.
In their closing submissions, although the Defendants
responded to the first issue cumulatively with issue No.4, 5, and 6,
their submission touching on the first issue can only be deduced in
relation to what they stated regarding the documents constituting
Exh.D-2 and Exh.P-1 and the testimony of Dw-1 regarding those
exhibits.
In the first place, the learned counsel for the Defendants
submitted that, it is an undisputed fact that, the Plaintiff and the
Defendants executed Exh.P-1 (the facility letter dated 20th May
2015 and its addendum and the facility letter dated 04th August
2016), together with Exh.D-1 (the 1st, 2nd and 3rd addenda to the
facility dated 04th August 2016).
Concerning the alleged fact that the 1st Defendant maintained
a bank system which could print two different account statements
of the same customer simultaneously, Mr. Msuya, the learned
counsel for the Defendants, did not deny that such a fact was proved
by Exh.D-2 and the admissions made by Dw-1. He submitted,
however, that, Dw-1 did explain the function and purposes of the
two systems of maintaining different loan account by the 1 st
Defendant and referred to paragraphs 23 and 27 of Dw-1’s
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testimony in chief, which refers to A/c No. AA16279W1ZSH for
US$ 4.5million and A/c No. AA16279HWVQ for US$ 2.5 million.
Mr. Msuya submitted that, according to Dw-1, one statement
is of a detailed account with words “make due activity” as referring
to unpaid dues, while the other is a simplified version (with words
“repayment of due principal) and which was given to the customer,
(the Plaintiff). However, the Defendants’ counsel said nothing in
their submissions, concerning Pw-1’s averments that the
Defendants have been purposely mismanaging the Plaintiff’s loan
account, have been unfair and perpetrating predatory lending
practices, have been deceptive/or fraudulent, always failed to act in
a transparent manner, and, that, they booked the Plaintiff’s loans at
their own liberty as the 1st Defendant booked them with the 2nd
Defendant in whom the Plaintiff has no access.
Generally, those allegations constituted what the Plaintiff
contends to be amounting to a breach of duty on the part of the
Defendants and, hence, the framing of the 1st issue. That being said,
and looking at the submissions made by the counsels for the parties,
the testimonies made and evidences tendered, can it be said that, the
first issue has been proved by the Plaintiff?
Ordinarily, the relationship between a banker and its
customers (i.e., account holders/borrowers) is anchored on a
variety of sources. Such sources include the laws governing the
industry, the common law principles/ equity, the terms of the
contract between the banker and its customer/borrower and, the
overall banking practices.

Page 52 of 110
 For instance, in the case of Exim Bank (T) Ltd vs. Dascar
Ltd and Another [2017] TLS LR.120, the Court of Appeal of
Tanzania stated that, a loan facility agreement entered into between
a banker and its borrower does create a contractual relationship
whose terms are binging on the parties. However, where that
relationship includes the maintenance of a customer’s accounts, be
it a loan or current account, such relationship does ordinarily
involve, as it was stated in the persuasive case of Karak Brother
Company Ltd vs. Burden [1972] 1 All ER 1210:
“the normal obligation of using reasonable skill and
care; and, that duty on the part of the bank of using
reasonable skill and care, is a duty owed to the other
party to the contract, the customer…”
In my view, reasonable care and skill means that, a banker is
expected conduct herself within the standards of knowledge,
expertise, and ethics that are commonly maintained by those of her
like nature in the banking industry. However, when it comes into
matters of issuance of credit facilities to borrowers, the standard will
as well include a duty to give or disclose adequate information to its
borrowers (as consumers of financial services), either prior to the
borrowing or at times upon requests.
The above stated duty, in my view, is an integral part of the
more general obligations to discharge a banker’s duties according to
the contract, the general principles and the accepted legal practices
applicable to the industry. Section 48 (1) of the Banking and
Financial Institutions Act, Cap.342, R.E 2019 is very instructive on
this. It provides, and I quote, that:

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 “Every bank or financial institution shall observe,
… the practices and usages customary among
bankers….”
As it may be noted from the testimony of Pw-1, which has
been confirmed by Dw-1 as a proven fact, the 1st Defendant
maintained a banking system from which once commanded, could
simultaneously print out loan statements in two different versions
with different figures. Although Dw-1 did strive to explain what that
system and the two versions meant, and, that, a simplified version of
the loan statement is the one shared with the client while the detailed
version is retained for the bank’s internal audit purposes, in my
considered opinion, the explanations rendered by Dw-1 were not
exhaustive and remained wanting. I will explain why I stand for
such a conclusion or finding.
First, as this Court stated in the case of Delina Enterprise
(supra):
“in banking business when an issue is on
management of the accounts … the [banker], who is
the custodian of bank statements has burden to prove
that it was not mismanaged … by production of the
disputed bank statement and explain to the
satisfaction of the court that indeed [there was] no
mismanagement. For clarity, … it is the bank that
has control of all entries and prints out to be availed
to the client…”
In this instant suit before me, Dw-1 did not labour much in
explaining why the alleged mismanagement should be ignored. In
her testimony in chief, she did admit that, the transaction dated
30/5/2018 in the simplified version of the same loan statement reads-
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US$ 2,280,610.00 while the detailed version reads US$ 2,238,120.00,
the two versions having a difference of US$ 42,000.00. The only
thing she stated was that, one account contained interest and
penalties.
But who was to first know about all such information in
detail? Is it not the client who is paying or servicing the account? In
my view, and as I shall explain further below, those marked
differences and existence of the two systems of issuance of account
statement to customers needed to be well explained to the borrower
well in advance and should not have been taken lightly.
Second, although Dw-1 did tell this Court that, the so-called
“detailed version” of the same loan statement could as well be shared
with the client if need be, neither did she tell this Court as to whether
the detailed version was ever shared with the customer (the Plaintiff)
with clear clarifications whenever the Plaintiff applied for a
statement regarding the status of her loan account nor did she state
as to whether the Plaintiff was ever made aware from the very
beginning when the credit facility was being created, that, the
banker maintains a bank system where the Plaintiff as a borrower/
consumer of the banker’s financial services, was entitled to both the
“detailed” and the “simplified” version of the loan statements
whenever requested, leave aside the fact that the banker was
maintaining such a system.
In my view, had that been done, the borrower would have
been removed from the misinformation syndrome she suffered
whenever, on any day, she receives a detailed statement on one hand

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stating “X” amount status and a simplified version stating a “Y”
amount status, on the other hand.
Third, taking into account the above first and the second
reasoning, the conclusion will be that, the lack of such disclosure of
information and/or the failure on the part of the 1st Defendant to
avail to the Plaintiff such a “detailed statement” whenever she asked
for her loan statement was, not only a breach of the general duty to
act with skill and diligence, but also, a breach of a legal duty
imposed by the statute, in this regard, Regulations 22(6) and 28
(1)(a) the Bank of Tanzania (Financial Consumer Protection) Regulations,
2019, GN. No.884 of 2019.
The two provisions of GN. No.884 of 2019 provide that:
“22 (6) A financial service provider shall, before a
consumer signs up for any financial product or service,
provide clear information on the features of the
financial products and services.
28.-(1) Every financial service provider shall provide a
consumer with:
(a) a periodic written statement of every account the
provider operates for the consumer, free of charge.”
In my humble view, looking at the above disclosed scenario
regarding how things played out in respect of the management of
the Plaintiff’s loan account, the practical problem or danger which
might have arisen from such a practice of having in place a system
of the kind as maintained by the 1 st Defendant, and which is
unknown to the customers/borrower (the Plaintiff) is, however,
that, where, for instance, the customer/borrower, requests for a
loan statement today and is “accidentally” availed with the so-
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called “detailed version” and, next time when the customer/borrower
does the same and is availed with the so-called “simplified version”
showing an altogether different and conflicting story, that would
surely bring her to a belief of falsity of information from the part of
her banker, a fact abhorred by regulation 3 of the Bank of Tanzania
(Financial Consumer Protection) Regulations, GN. No.884 of 2019.
To my mind, therefore, and taking into account other facts as
disclosed by Pw-1, where there is lack of full disclosure of
information to the borrower regarding the maintenance of the two
systems regarding the loan account, any ‘accidental discovery’ of
the system would indeed be absurd and able to create a confusing
situation unless the customer was well in advance made aware by
her banker.
In Dukhiya’s case (supra), the defunct Court of Appeal of
Eastern Africa did state, that, “not to misinform a [customer] of the true
state of his account” is indeed part of duty of care imposed upon a
banker towards the customer. This means that, a banker has a duty
to disclose information or provide correct information to her client.
In the case of Delina General Enterprises Limited (supra)
this Court (Magoiga, J.) observed, and I quote, that:
“The way the plaintiff's loans were handled by the
defendants leave a lot to be desired. It is very
unfortunate for a bank under the regulation of Bank of
Tanzania to have two systems on details of the bank
statement of a customer but which systems when
printed out expose two different figures in bank
statements with two different figures and a bank officer

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 cannot explain the difference between the print out of
such systems.”
In essence, I do share those views of His Lordship Magoiga,
J., which I find to be applicable even in this present suit. As I stated
herein, above, without proper disclosures on the part of the 1st
Defendant to borrowers who, like the Plaintiff, are consumers of her
financial credit services, the act of issuance of two conflicting statements
of the same loan account to the borrower would constitute a misleading
and/or an abusive debt recovery practice because, the respective
borrower or client will not be certain as to how much of the debt she
or he has repaid and what is the actual balance.
Put it differently, the status of her or his debt would be
misrepresented if there are two conflicting statements which he is
unaware or uninformed about as the situation seems to be at hand.
The banker’s duty regarding full information disclosure, therefore,
must include a transparent revelation of the agreed charges to be
levied, interest, penalties in case of default and any other relevant
information worth disclosing to a borrower for her/him to make
informed decisions.
In line with the above consideration, it is clear to me, that, in
this jurisdiction of ours, Regulation 11(1)(b) of GN. No.884 of 2019,
does prohibit lenders from using false, deceptive, or misleading debt
recovery practices. Misleading or abusive debt recovery practices,
such as misrepresentation of facts about the debt does, therefore,
amount to a prohibited practice under the above noted regulation
and, in the light of the facts and the evidence as disclosed in this

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present suit, the 1st Defendant cannot escape from shouldering the
allegations levelled against her by the Plaintiff.
The complaint regarding breach of duty on the part of the
Defendants which the Plaintiff has linked with the mismanagement
of her loan accounts is, as well, made in relation to the manner in
which the 1st Defendant booked the credit facilities. According to
Pw-1’s testimony, the Defendants used to book the loan at their own
wish and without the Plaintiff’s knowledge. The Plaintiff has
complained that, the Defendants had based their actions on Clauses
4.2 of the two facilities tendered in Court as Exh.P-1 and which, as
per the Plaintiff’s submissions, were crafted in such a manner that
they will make it easy to circumvent the BOT regulations.
Certainly, Dw-1 did admit and testified how the 1st Defendant
relocated the loan booking to the 2nd Defendant and back to itself in
order to avoid contravening the SBL while the bookings had no
relevance with who has given the funds. In particular, it was Dw-1
testimony during cross-examination that, the 1st Defendant could
not issue the whole amount advanced to the Plaintiff by herself but
had to syndicate it to the 2 nd Defendant and, that, the amount of
US$ 7,000,000 was booked in KCB (K) Ltd because of the single
borrower’s limit.
In essence, however, what the Plaintiff seems to complain
about as constituting a mismanagement of her loan account, is not
the issue of syndication. It is on record that, during cross-
examination, Pw-1 admitted to have no issue with the loan
syndication since, if there be any, that was between the two
Defendants since the Plaintiff did not borrow from KCB-Kenya but
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from KCB-Tanzania. But Pw-1 did state that, the arrangements by
the two banks were unknown to the Plaintiff and, that, the credit
facilities which the Plaintiff had borrowed, were booked in different
institutions without her knowledge, thus, her cry of
mismanagement. Dw-1 could not explain why should that be the
case since the issue of syndication had nothing to do with the loan
disbursements. In fact, no cogent reasoning was given by Dw-1 in
that regard.
In my view, I also find it a pertinent question to ask, i.e.,
whether the Clauses 4.2 of the two facilities constituting Exh.P-1
were such that they tend to circumvent the law. I do understand that
Clauses 4.2 of the said two facilities are part of the contractual terms
agreed upon by the parties. I am also aware, as per the decision of
the Court of Appeal in the case of Exim Bank (T) vs. Dascar Ltd
and Another (supra), which has been relied upon by the learned
counsel for the Defendants, that, a loan facility constitutes a
contract whose terms are binding. However, in law, it is as well trite
that, terms of a contract must not contravene any known law,
otherwise it will be unenforceable to the extent of its infringement
or contravention.
In her testimony in chief, Dw-1 admitted that, the bookings
of the facilities were done partly in the 1st Defendant and partly in
the 2nd Defendant owing to the single borrower’s limit. But, as I said,
the single borrower’s limit is not an issue here but what is
complained about is the booking of the facilities. From that context,
since the issue seems to be of that nature and the Plaintiff was not
made aware that the booking was to be made elsewhere due to the
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changes arising from the single borrower’s limit requirements, that
will also be failure to communicate on part of the 1st Defendant,
which will bring us to the earlier discussion regarding information
disclosure.
Since I have canvassed that aspect of non-disclosure of
information exhaustively earlier herein above, I need not echo it
again. It only suffices to state, therefore, that, from the totality of
what Pw-1 testified and what Exh.D-2 evinced, coupled with there
being lack of information or misinformation, a conclusion that there
was a breach of duty on the part of the Defendants cannot be
avoided. It follows, therefore, that, the 1st issue is responded to in
the affirmative and, indeed, the Defendants did mismanage the loan
accounts of the Plaintiff.
The second and third issues recorded by this Court were as
follows:
2nd-Issue: Whether the 2nd Defendant
is legally licensed to carry out business
in Tanzania.
3rd-Issue: Whether the credit facilities
executed between the Plaintiff and the
2nd Defendant are valid, lawful and
enforceable in Tanzania
In his submissions, Mr. Mwalongo has addressed the second
issue together with the third issue, while, for his part, Mr. Msuya
addressed them separately. As for me, I will adopt Mr. Mwalongo’s
approach and address them in tandem.
In his submissions, Mr. Mwalongo submitted that, Exh.P-1
(the two facilities dated 20th May 2015 and 04th August 2018 and
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their addenda) were executed in Tanzania and, as such, the
applicable law to them is the Tanzanian law. He argued that, the 2nd
Defendant being made a party to Exh.P-1 it means that she is doing
business in Tanzania. He contended further that, Dw-1 did admit
that, the 2nd Defendant is neither registered in Tanzania nor does
she hold a Tax Identification Number (TIN) or business license.
Mr. Mwalongo has placed reliance on the section 3(1) of the
Business Licensing Act, Cap.208 R.E 2002 and the cases of Japhary
Gasto Gwikoze and Wamuhila Future Group, Civil Appeal
No.22 of 2019 as well as Grofin Africa Fund Limited vs. H.
Furniture and Electronics Ltd & 3Others, Commercial Case
No.81 of 2017 where the Courts, upon establishing that the lender
was illegally conducting the business of lending, declared the
agreement unenforceable. He urged this Court to make a similar
finding in respect of the 2nd Defendant and declare Exh.P-1 as being
unenforceable.
For his part, Mr. Msuya was of the view that, Mr.
Mwalongo’s submissions have no merits. To him, the issue is
whether foreign banks are barred from lending monies to Tanzanian
residents without first acquiring a business license and, secondly,
whether failure to register a foreign loan renders a lending
agreement illegal and, hence, unenforceable. Mr. Msuya’s response
has generally been on the negative, arguing that, there is no
provision in the Foreign Exchange Act, Cap.271 R.E 2002 which bars
foreign banks from lending monies to Tanzanian residents.
Mr. Msuya contended that, this Act is meant to make
provisions for the more efficient administration and management of
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dealings and other acts relating to foreign currency. He pointed out
section 7 of the Act, which gives powers to the Governor of the BOT
to make regulations, rules, orders or issue directives relating to
foreign exchange transactions as well as the Foreign Exchange
Regulations, GN.No.629 of 1998. He submitted that, under
Reg.3(3)(b) and (4) of GN.No.629 of 1998, foreign lending is readily
permitted. The said provisions of that regulation read as follows:
Reg.3(3)(b) “Subject to such directions as may be issued
by the Bank, any person who is a resident of
Tanzania may, for purposes other than general
travel…
(a) N/A
(b) Import into… Tanzania any amount of
currencies of contiguous countries.
(4) Sub-regulation 3(b) shall apply to residents
of countries contiguous to Tanzania for
purposes of facilitating border trade.”
He contended that, Kenya, where the KCB-Bank (K) Ltd is
resident, is a contiguous state/country and the purpose for which
KCB-K loaned monies to the Plaintiff was to facilitate border trade.
As such, he submitted that, the 2nd Defendant had all legal mandate
to provide credit facilities to the Plaintiff. Mr. Msuya relied as well
on the Foreign Exchange Regulations, GN.No.294 of 2022, Gazetted on
13th May 2022 Regulation, in particular 25 (1)-(12) which deals with
external borrowing. This regulation repealed and replaced the 1998
Regulations (G.N.No.629 of 1998).
Mr. Msuya submitted that, the Reg. 25 allows a resident to
access a credit accommodation from a non-resident, provided the

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transaction is carried put through a bank or financial institution; the
foreign credit facility is registered and assigned a Debt Registration
Number (DRN) if its tenure exceed 365 days and failure to register
will be punishable by imposition of a fine by the BOT. He contended
that, KCB-K loaned the Plaintiff the amounts through KCB-T as
now required under Regulation 25 (1) and that, the law as it stood
then and now, is that, such lending does not require a business
license, TIN, and or registration via BRELA. He contended that,
the issue of registration was not substantiated and, therefore, it has
no merits.
It is worth noting, indeed, that, in her testimony, Dw-1
denied the claims that the 2nd Defendant is trading illegally. She
testified that, under the banking laws/circulars/regulations,
residents are allowed to access credit accommodation from non-
resident institutions and, hence, it was legal for the Plaintiff to
access credit accommodation from KCB-Kenya (the 2nd
Defendant). Further that, the transaction was carried through a
resident bank, in this respect the KCB-(T), acting as facility/security
agent for KCB-(K).
Likewise, Dw-1 told this Court that, the Plaintiff’s loan was
syndicated with KCB-(K), a foreign member of the same group of
companies, because the Plaintiff had requested for a loan over and
above the SBL limit of the KCB-(T) (the 1st Defendant) in which
case the KCB-(T) syndicated it but, that, the terms agreed in the loan
facility agreement did not change. She also denied the Plaintiff’s
assertion that, the loan registration was a ground for nullification/or
declaring a loan facility a nullity.
Page 64 of 110
 In my view, the question which needs to be dealt with is
whether the 2nd Defendant was illegally doing business of banking.
In the first place, I am in an agreement with Mr. Msuya that, there
is no need for the 2nd Defendant to seek TIN for her to lend monies
to a resident here in Tanzania. However, that does not mean that,
there are no compliance procedures which needs to be adhered to
as I shall further discuss here in. However, let me start with the issue
of syndication since this was relied on by Dw-1 in denying the fact
that the 2nd Respondent was not carrying out her dealings illegally,
but through the 1st Defendant.
Earlier, I did note that, Pw-1 stated that the Plaintiff was not
much concerned with whether the loan was syndicated or not
because she never borrowed from KCB (K). However, since Dw-1
stated in her testimony that, the loans (Exh.P-1) were syndicated
loans, one has to investigate the veracity of such a fact.
On my part, therefore, the questions that follow from that
stated fact by Dw-1 would be: were the loans really syndicated? What is
loan syndication? Loan syndication is a practice that forms part of a
wider concept of co-financing. It allows financial lending
institutions to, among other things, efficiently allocate risk, manage
borrower relationships and ensure their ongoing compliance with
capital adequacy standards. According to the Encyclopedia of
Banking, Vol.2 (2001) Butterworths, at page 1357, it is stated that,
syndication:
“is generally initiated by the grant of a mandate by the
borrower to a managing or arranging bank or group of
banks setting out the financial terms of the proposed

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 loan and authorizing the managing bank(s) to arrange
syndication. This mandate is (or should be) expressed
as a non-legally binding commitment which is subject
to contract: it operates as a commercial understanding
between the parties until the formal loan
documentation is entered into. On normal principles
of contract law, there is a presumption that
commercial arrangements are intended to be legally
binding and hence, if the mandate were not expressed
to be subject to contract, the managers would be
committed to its terms if sufficiently precise.”
In essence, where borrowing requirements of businesses are
surpassed beyond the funding and credit risk capacity of single
lenders, syndication has been a common best practice relied upon
by lenders. Loan syndication, therefore, is a well-known and
accepted practice all over the world and plays a significant role in
providing assistance to lending entities that are statutorily regulated,
like the 1st Defendant, from being overly exposed beyond their
statutory limit.
However, while syndication is a common practice, it is clear,
as observed from the above literature (i.e., The Encyclopedia of
Banking, (supra)), that, the process is ignited when there is an
express mandate and authorization from the borrower to the
arranging bank for such a process to be carried out. Generally,
participants in the syndication process are called upon to perform
their own due diligence exercises, including independent credit risk
analysis and review of syndicate terms prior to committing to the
syndication. The terms are ordinarily hinged on the mandate.

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 In his article titled: “Arranger Fees in Syndicated Loans-A Duty
to Account to Participant Banks” (2004) 24 (1)(3) Penn State
International Law Review, pp. 59-113 at p.63, Skene, G.R, has
posited that, as a matter of common practice in loan syndication,
the borrower’s mandate is given once the bank (arranger) and the
borrower have tentatively agreed on the terms of the loan in a ‘term
sheet’ prior to the syndication. Once such an agreement is reached
regarding the key terms, the borrower appoints the bank as
“arranger” under which the bank is given mandate to arrange the
loan facility on behalf of the borrower.
The mandate, which is also referred to as “mandate letter”, is
usually an express mandate and not implied, and will, thus, set out
the terms of engagement between the arranging bank and the
borrower, under which the former agrees to arrange financing for
the borrower. See, for instance, the case of Barclays Bank Plc vs.
Svizera Holdings BV & Anor [2014] EWHC 1020 (Comm) (08
April 2014), (especially at para 15 regarding how a mandate letter
would be).
In this instant suit, I have not been able to find evidence that
such a mandate and authorization was ever provided for or given
by the Plaintiff to the 1st Defendant (the arranger). On the contrary,
as I pointed out earlier, what I find out is a lament by Pw-1 that, the
loan was booked in KCB Bank (Kenya) Ltd without the Plaintiff’s
knowledge while the borrowing was from KCB-Bank (Tanzania)
Ltd. As it may be noted from his testimony while under cross-
examination, Pw-1 has all along maintained that, the Plaintiff did
not borrow from KCB-Kenya but from KCB-Tanzania.
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 I do take note, indeed, that, during his cross-examination Pw-
1 admitted that, Exh.P-1 does show that the loan was from KCB-
Kenya and that, the KCB-Tanzania was designated as the security
agent with a duty to perfect the loan documents. But the documents,
such as Exh.P-1, do come much later after an authorization to
syndicate the borrowing has been obtained since, that comes at the
preliminaries.
As I stated herein earlier, when Pw-1 was asked about the
issue of loan syndication, his responses were that, there is no
problem with that. However, Pw-1 maintained, as a legitimate
concern, that, procedures ought to have been followed, including
there being an agreement with the Plaintiff (the mandate) that, she
was borrowing from KCB-Kenya, and not Tanzania. He told this
Court that, the Plaintiff was not made aware of the syndication
process and, that, the Plaintiff only came to know of it in December
2017 upon discussion with the bank (1st Defendant).
In my view, what might be gathered from the testimony of
Pw-1, and pursuant to my reading of what I have quoted from the
Encyclopedia of Banking (supra) and the article by Skene, G.R
(supra) concerning the process of loan syndication and the extent of
involvement of the borrower in it, is that, the mandate and
authorization which the 1st Defendant (the arranging bank/ security
agent) ought to have obtained from the Plaintiff to be able to
proceed with the whole process of loan syndication, was not sought
from the Plaintiff, was not given by her, and, by and large, the
Plaintiff was not, in the very first place, not made aware of the
syndication issue.
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 To me, that is a gross mistake on the part of the arranger (the
1st Defendant) because, firstly, it tells one that, either the Plaintiff
was dragged into that arrangement which she was completely
unaware of and/or, secondly, makes one’s eyebrows raised higher
regarding whether at all there was syndication as argued by the
Defendants. Thirdly, it raises doubts as to whether the parties were
operating at arm’s length since, it is important that lending
institutions grant credit to borrowers on an arm’s-length basis.
My take, therefore, would be that, even if the mandate could
be non-binding, in the absence of proof of such an express mandate
to syndicate the loan, the conclusion will be that, there was no
syndication of the said loans no matter how Dw-1 might have
forcefully wanted me to believe that there was. My conclusion is
supported by the fact that, the documents themselves (Exh.P-1) do
not show anywhere that there was syndication.
The effects of lack of such evidential material (i.e., the
‘mandate’ from the Plaintiff) to prove that the loans were syndicated
loans, were made evident in the case of Delina Enterprises Ltd
(supra), a case which had somewhat similar issues with the present
suit at hand and which involved the same Defendants as herein.
In that case, this, Court, while looking at the wording of the
exhibits P-l (i) to viii) (facility agreements), made a finding that,
nowhere the same introduced KCB-K as a “syndicated lender”.
Instead, it was found that, the loan documents (Exh.P-1 (i) and (ii))
just indicated the 2nd Defendant in that case as merely a “lender”.
With such a finding, the Court concluded that, KCB-K’s act of
lending to the Plaintiff did amount to conducting business in
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Tanzania without license. That being said, should this Court follow
the same path?
As I have labored to demonstrate here above, the 2 nd
Defendant’s credit facility advanced to the Plaintiff were not
advanced to her as a result of any act of loan syndication since the
process of syndicating the loan was not evinced to this Court to
prove that it ever took place. No any scintilla of evidence was ever
marshalled to that effect starting with the mandate from the Plaintiff
herself. As such, the 2nd Defendant’s transactions with the Plaintiff
did not amount to a syndicated loan transactions as Dw-1 had
attempted to make this Court believe but was rather a direct lending
by a non-resident lender to a Tanzanian resident. With that in mind,
the question that follows will then be: was the 2nd Defendant’s conduct
or lending illegal?
The answer to the above question will depend on whether the
existing compliance requirements put in place by the laws and
regulations governing the industry were strictly adhere to or not. As
a matter of public monetary policy set out by the Bank of Tanzania
in relation to dealings in foreign currencies/transactions, there are
compliance issues which must be adhered to when a non-resident
lends monies to a resident in Tanzania.
Before I look at them, let me state, and indeed, be in
agreement with Mr. Msuya, that, it is not a legal requirement that a
foreign bank lending monies to a resident in Tanzania will have to
obtain a TIN, as well as a business license or register her business in
Tanzania for it to be able to offer such credit facilities to a
Tanzanian borrower. As correctly stated by Mr. Msuya, and as per
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the testimony of Dw-1, any resident of the country can borrow from
a foreign entity. At least, one should start from that premise.
However, as I stated earlier hereabove, there are compliance
issues put in place by the regulatory organs, the BOT being one of
them, which need to be adhered to as a matter of public policy and
legal requirements. In his submission, Mr. Mwalongo referred this
Court to the requirements set out under section 3 (1) of Foreign
Exchange Circular No.6000/DEM/EX>REG/58 of 24th day of
September 1998.
He submitted that, loan advanced to the Plaintiff by the 2 nd
Defendant was a foreign loan and ought to have been registered as
per the requirements of that Circular. He submitted, as well, that, the
Circular provides that, approved loans should not include a
condition precedent which requires opening of foreign currency
account with banks not registered in Tanzania. Mr. Mwalongo
submitted further that, there has to be SWIFT messages with local
bank to evince the flow of funds to Tanzania prior to debt servicing.
He contended, therefore, that, there was a state of non-compliance
with all that on the part of the 2 nd Defendant.
A further submission of Mr. Mwalongo on the issue of non-
compliance with the law was premised on section 113 (3)(a) of the
Land Act, Cap.113 R.E 2019 in relation to the securities which
supported the lending. He argued, that, the power to create a
mortgage is exercisable subject to certain prohibitions or limitations
set out by the law. He submitted that, for the 2 nd Defendant to stand
as secured creditor, secured by way of a mortgage, there should
either be full compliance with the foreign lending requirements or
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that the 2nd Defendant seek registration and comply with the laws
since, being a foreigner, all mortgages to secure the facilities
advanced by her needed consent of the Commissioner for Lands as
it was held in the case of State Oil Tanzania Ltd vs. Equity Bank
(Tanzania) Ltd and Equity Bank (Kenya) Ltd, Commercial Case
No.105 of 2020 (unreported).
As I stated earlier, Mr. Msuya relied on GN.No.629 of 1998
and GN.No.294 of 2022 and urged this Court to throw away the
submissions by Mr. Mwalongo as being without merits. In my view,
however, the public monetary policies which the BOT puts in place,
as well as its various regulations and the laws enacted by the
Parliament, are not instruments to be taken lightly by any of the
regulated players in the financial market.
I hold it to be so because, all such instruments serve a purpose.
With that in mind, I do not think that this Court can lightly put aside
Mr. Mwalongo’s submission, as Mr. Msuya seems to be urging me
to do. On the contrary, I am satisfied that, Mr. Mwalongo’s
submissions do invite some considerations because, compliance
with laws and policies are matters that require utmost obedience in
any market place for its orderly and prudent operationalization,
failure of which invite chaos.
To start with, therefore, I have asked myself what in law
should be the value of the BOT’s Foreign Exchange Circular
No.6000/DEM/EX>REG/58 of 24th day of September 1998?
In my considered view, this Circular is not just an ordinary
circular with no force of law. I hold it to be so, because, it was made

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under a provision of the law. In particular, section 7 of the Foreign
Exchange Act, provides that:
Section 7(1) (b) Subject to section 6, the Governor
may, make regulations, rules, orders, or directions, as
the case maybe, relating to:
(a)N/A
(b) any foreign exchange transactions other than
transactions referred to in paragraph (a).
In the case of Maswi Drilling Co. Ltd vs. Sengerema
District Council, Commercial Case No.03 of 2019 (unreported),
this Court stated inter alia, that, where a circular supplements and
does run contrary to a cited statutory provision of the law or whittle
down its effect, that Circular or policy guideline bears relevance to
the parties and must be followed.
For clarity purposes, this Court stated as follows, citing the
Indian case of State Of Madhya Pradesh & Anr vs. G.S. Dall and Flour
Mills, [1991] AIR 772:
“It is indeed a well settled legal position, that, a
government policy directive, guideline, circular or
executive instruction, (whatever name it may be
given), can only supplement a statute or cover areas
to which the statute does not extend, but cannot run
contrary to statutory provisions or whittle down their
effect.”
Under the BOT- Foreign Exchange Circular, 1998 there is
indeed a requirement that, where tenure of a credit facility advanced
to resident or company exceeds 365 days, it must be registered with
the BOT and a Debt Record Number (DRN) for disbursement and
debt servicing will be assigned. When that is sought, there has to be
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accompanied with the request, evidence of a copy of executed
agreement, disbursement and debt servicing schedules all of which
must be submitted to the BOT by the approving bank with 14 days.
In this instant case, however, no evidence was put forward to
evince that, the loan, which, as I stated hereabove, was not even a
syndicated loan as Dw-1 wanted this Court to believe, was
registered with the BOT as a foreign loan before it could be serviced.
In the case of Delina General Enterprises Ltd vs. KCB-Bank (T)
Ltd and KCB Bank (K) Ltd (supra), this Court, (Magoiga, J), was
of the view that, although it was not necessary for the 2nd Defendant
to hold a TIN and business licence in order to provide credit
facilities to borrowers in Tanzania, for it to do so, however, she had
to comply with the requirements of section 3(1) of the Foreign
Exchange Circular No.600/DEM/EXREG/58 of 24th September, 1998
and there be evidence of disbursement of funds to Tanzania as per
the BOT directives.
As I stated herein, the BOT Circular on point, commands a
forceful legal compliance owing to the fact that, it was made on the
basis of a provision that empowers the BOT Governor to make such
directives/Circulars and Regulations which enables the Bank to
discharge its functions. A non-compliance with the law, as indicated
hereinabove, coupled with yet another non-compliance aspect as I
shall shortly indicate, taints the transaction rendering it to be
invalid, illegal and, hence, unenforceable, since, as once held by the
Supreme Court of Uganda, in the case of Active Automobile
Spares Ltd vs. Crane Bank Ltd and Rajesh Pakesh SCCA

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21/2001, “it is trite law that courts will not condone or enforce an
illegality."
It is trite, as well, that, a Court, properly constituted should
not be moved to act in a manner that would contravene the law. On
the contrary, Courts act in a way that promotes compliance with the
law. In this instant suit, it has also been submitted that, the 2nd
Defendant was in breach of section 113 (3)(a) of the Land Act.
Under that provision, the law requires that, powers to create
mortgage be exercised subject to conditions and or limitations put in place
by the law. The relevance of that provision comes when it is read
with section 120A(1) and (3) of the Land Act,Cap.113 R.E 2019
which provides that:
“120A.-(1) Subject to the provisions of this Act, a
person may mortgage any land for the purpose of
obtaining money from the local or foreign bank, or
local or foreign financial institution for developing his
land or for any other investment.
(3) A Mortgagor shall within six months submit to
the Commissioner information as to the manner in
which the money obtained from the mortgage is
invested to develop the mortgaged land.”
In his submission, Mr. Mwalongo relied on the case of State
Oil Tanzania Ltd vs. Equity Bank Tanzania Ltd and Another,
(supra) and argued that, the 2nd Defendant being a foreigner, all
mortgages to secure facilities needed the consent of the
Commissioner for Lands. In that particular case, this Court stated
that, any perfection of mortgage which bypasses mandatory
requirements of the law, will have no effect, meaning that, the

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collaterals involved will be discharged. Specifically, this Court
stated as follows:
“As to the mortgagors, now is mandatory requirement
of the law that, a mortgagor shall within six months
submit to the Commissioner of Lands information as
to the manner in which the money obtained from the
mortgage is invested to develop the mortgaged land or
investments for that matter. This is as per section 120
A (3) of the Land Act. So, since perfection did not
follow the mandatory laid down procedures it would
have no effect and the only order was to discharge
them.”
In the upshot of the above discussion, I am made to agree with
Mr. Mwalongo’s submissions that, the 2nd and the 3rd issue will have
to be responded to in the negative but, I wish to add that, the
negative response must be understood from the context of what I
have discussed herein above.
With the above noted conclusion, let me now move on to the
fourth and fifth issues which I will as well consider in tandem. The
respective issues were:
4th Issue: Whether the Plaintiff has paid her loan
liabilities with the Defendants in a full and is no longer
indebted to the Defendants and the Defendants are
bound to discharge securities pledged.
5th Issue: Whether the Plaintiff’s loan liabilities with
the Defendants were fully taken over by Camel Oil (T)
Limited and discharged the Plaintiff from loan
liabilities with the Defendants.

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 The two issues above talk of two separate but related facts.
One is about the Plaintiff’s payment in full of the loan liabilities and
the other talks of the takeover in full of those loans by Camel Oil (T)
Ltd. These two issues are interdependent. As rightly submitted by
Mr. Mwalongo the two issues focus on whether the Plaintiff has any
outstanding loan liabilities with Defendants herein and, hence,
justifying the counterclaims by the “Plaintiffs in the counterclaim” or
otherwise denying such counterclaims. He has maintained as his
argument, that; the lender and borrower relationship which existed
between the Defendants and the Plaintiff came to an end with the
takeover in full of the Plaintiff’s loan by Camel Oil (T) Ltd.
Mr. Mwalongo submitted that, as per Dw-1’s testimony, by
June 2018, when the loan takeover by Camel Oil (T) Ltd took place,
the taken-over loan had 7 to 8 years ahead which counted to the
year 2026 and, that, the total loan which was to be paid up to the
year 2026 standing at US$ 8.1 million as per the testimony of Dw-
1.
He submitted further that, the facility at issue, as per
paragraphs 6.0 and 7.0 of Dw-1’s testimony in chief, was the US$
7,000,000.00 and was used to acquire Kenolkobil shares. He
surmised that, the said term loan particularized by Dw-1 as being
the one at issue in this suit, was fully taken over by Camel Oil (T)
Limited and was, thus, fully cleared.
To substantiate his conclusions, Mr. Mwalongo relied on the
Exh.P-12, Exh.P-3, Exh.P-19, Exh.P-4, Exh.P-5, Exh.P-7, as well as
the testimony of Dw-1 and sections 7, 8 and 9 of the Law of
Contract Act, Cap.345 R.E 2019, the cases of Louis Dreyfuls
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Commodities (T) Ltd vs. Roko Investment (T) Ltd, Civil Appeal
No.4 of 2013 (unreported), and Hillas vs. Arcon Limited (1913) 40
LI L Rep.3017.
Mr. Msuya who appeared for the Defendants, addressed the
4th and 5th issue together with the 1st and 6th issues. I will, however,
single out matters that pertain to the immediate relevant issues
under consideration since I have already dealt with the 1st issue. The
sixth issue will be dealt with separately as well. In short, the
position of the Defendants’ counsel is that, the Plaintiff has not
repaid the loans in full and, that, the takeover by Camel Oil (T) Ltd
did not discharge the loans advanced in full.
The learned counsel for the Defendants placed reliance of
Exh.P-1, Exh.D-1, Exh.D-2, Exh.P-11, Exh.P-3; Exh.P-4, Exh.P-12,
Exh.P-19, Exh.P-6, Exh.P-7; Exh.P-16 and Exh.P-17, Exh.P-14,
Exh.D-3 and the cases of Simon Kichele Chacha vs. Aveline M.
Kilawe, Civil Appeal No.160 of 2018; Harold Sekete Levera and
Another, vs. African Banking Corporation Tanzania Ltd (Bank
ABC) and Another, Civil Appeal No.46 of 2022, Umico Limited
vs. Salu Ltd, Civil Appeal No.91 of 2015; Paulina Samson
Ndawavya vs. Theresia Thomas Madaha, Civil Appeal No.45 of
2017.
It is worth noting that, in her testimony in chief, Dw-1 made
it clear, that, the controversy in this present suit, is based on
Plaintiff’s borrowing of, among others, of US$ 7,000,000 used for
the acquisition of Kenokobil DRC Congo and Kobil Tanzania Ltd. That
paragraph 6.0 of Dw-1’s testimony states categorically as follows:

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 “of relevance in the present suit is a Term Loan
Facility of USD 7,000,000.00 repayable with interest
of 8% p.a.”
The purpose of that loan was also captured in paragraph 7.0
of Dw-1’ testimony in chief where she states that:
“the purpose for disbursement of USD 7,000,000.00
was to enable Kill Oil to acquire KenoKobil shares and
was to be disbursed in two tranches of USD
4,500,000.00 for acquisition of KenoKobil DRC
(Phase I) and USD 2,500,000.00 for acquisition of
KenoKobil Tanzania Ltd (Phase II).”
Moving from that understanding, the Plaintiff has submitted
that, the said loan amount was cleared through a loan takeover
exercise, meaning that, the Plaintiff was freed from the yoke of
repayment following that takeover. The Defendants are in complete
and strict denial of that fact and, Dw-1 told this Court that, the
takeover did not clear all the outstanding dues. The immediate
question that follows, therefore, is whether the takeover cleared the
US$ 7,000,000 credit facility advanced to the Plaintiff for the
purposes disclosed hereabove.
According the testimonies of Pw-1 and Dw-1 it is common
ground that, a takeover of the loans from the Plaintiff by Camel Oil
(T) Ltd did, indeed, take place. According to Pw-1, the takeover
commenced with arrangements entered into between the Plaintiff
and Camel Oil (T) Ltd where the Plaintiff was to dispose-off its
properties to Camel Oil (T) Ltd and, in turn, Camel Oil (T) Ltd was to
take over its debt which arose from the credit facilities advanced to
her by the Defendants.

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 According to Pw-1 and, as per Exh.P-3, it is clear that the 1st
Defendant was aware of that fact. Exh.P-3, which is dated 21st
December 2017, reads in part as follows:

“RE: TAKING OVER THE LOAN OF

KILIMANJARO OIL TO CAMEL OIL
ACCOUNT AMOUNTING TO USD 5,700,000
(USD FIVE MILLION SEVEN HUNDRED
THOUSAND ONLY)

The Heading above refers,

Refer to the meeting held at your office on 18th

December 2017 at the KCB head office concerning the
loan of Kilimanjaro Oil Company Limited. As both
parties agreed, the Kilimanjaro Oil Loan amounting
to USD 5,700,000 (Five Million Seven Hundred
Thousand) will now be taken over by Camel Oil (T)
Ltd. See the contract attached. With this agreement
our account should be free and after you finish the
process of transfer (sic) the loan to Camel Oil account,
we will withdraw our collateral security sitting in your
custodian.
Davis Mosha.”
In his submissions, Mr. Mwalongo was of the view that,
Exh.P-3 constituted an offer which the 1st Defendant had an option
to either expressly or by conduct accept or reject or counter. One
immediate question which flows from above submissions by Mr.
Mwalongo, however, is whether such submissions are meritable.
Put differently, was Exh.P-3 an offer as contended? To respond to
that question, I find it appropriate to start from the premise of what

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constitutes an offer in law. According to O’Sullivan and Hilliard,
The Law of Contract, 7th Edn., Oxford 2016, p.16, the term offer is
defined as:
“an indication of one party’s willingness to enter into
a contract with the party to whom it is addressed, as
soon as the latter accepts its terms. It has two key
features. First, it indicates that the Offeror intends to
be legally bound providing that the party to whom the
statement is addressed takes certain steps. Second, it
contains not only a promise to do something, but also
lays down what, the Offeree must do in return.”
Essentially, establishing whether an offer to enter into a legal
relationship upon agreeable terms did exist between parties is a
matter of evidence, be it direct or circumstantial in nature. When
such determination involves a correspondence, as in the context of
this suit, one has to examine its wordings (i.e., the wordings of Exh.P-
3) objectively in order to see from it, as it was once stated by Lord
Diplock in Gibson vs. Manchester City Council, [1979] 1All ER
972, whether, “on their true construction, there is to be found in them a
contractual offer.”
As it may be observed from the contents of Exh.P.3, there are
at least four things which one can point out in it: first, there had
been a meeting dated 18th December 2017 to which Exh.P.3 makes
reference and which was held at the 1st Defendant’s Head Office
concerning the Plaintiff’s loans, second, that, there was an
‘agreement’ that Camel Oil (T) Ltd would take over the Plaintiff’s loans
for US$ 5,700,000 (Five Million Seven Hundred Thousand), third,
that, with that “agreement” the Plaintiff’s loan account was to be
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free and, fourth, once the takeover process was over, the Plaintiff
was to withdraw her collateral security from the 1 st Defendant’s
custody.
In my considered view, as it might be noted from the
paragraphs constituting Exh.P-3 (or as from first to the fourth points
set out herein above), it is clear that, when one takes them “in
context”, they constitute proposed terms which, if agreed, they
would constitute ‘a binding contract’. The last paragraph of Exh.P-
3 is even more relevant in setting-forth a proposal that the agreed
take-over amounts between the Plaintiff and Camel Oil (T) Ltd of
US$ 5,700,000.00 would, once the processes on the part of the 1 st
Defendant to transfer the loan to Camel Oil (T) Ltd are completed,
free the Plaintiff’s loan account and allow for the withdrawal of the
collateral securities.
For the sake of clarity, I will reprint the wording of the last
paragraph which reads:
“With this agreement our account should be free and
after you finish the process of transfer (sic) the loan
to Camel Oil account, we will withdraw our
collateral security sitting in your custodian.”
(Emphasis added).
Looking at those words quoted hereabove, and taking into
account that Dw-1 told this Court that the Term Loan which is the
subject of this suit was for purposes of acquisition of KenolKobil
assets in Congo and in Tanzania, amounting to US$ 7,000,000.00,
I cannot hesitate to hold that, what the Plaintiff brought to the
attention of the 1st Defendant was certainly an “offer” to settle the

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loan by way of its takeover by Camel Oil (T) Ltd. The offer was for a
settlement consideration of US$ 5,700,000.00 if accepted and, that,
once paid, that was meant to bring to an end the liability which the
Plaintiff had towards the 1st Defendant arising from the existing loan
and that would also pave the way for the discharge of the collateral
securities held by the 1st Defendant.
As I read the above wording of Exh.P-3, I am reminded of
what Cheshire, Fifoot & Furmston posited in their treatise on Law
of Contract, 13th Edn., (1996), at pg. 37, regarding how businessmen
would couch their communications. The learned authors warned,
that:
“It would be ludicrous to suppose that businessmen
couch their communications in the form of a catechism
or reduce their negotiations to such a species of
interrogatory as was formulated in the Roman
stipulatio. The rules judges have elaborated from the
premise of offer and acceptance are neither the rigid
deductions of logic nor the inspiration of natural
justice. They are… to be applied in so far as they serve
the ultimate object of establishing the phenomena of
agreement, and their application may be observed
under two heads: (a) the fact of acceptance, and (b) the
communication of acceptance.”
As this Court has been satisfied that Exh.P.3 constituted an
offer on the part of the Plaintiff which was communicated to the 1 st
Defendant, the next step is to find out whether such was accepted
and how its acceptance was communicated to the Plaintiff.
Ordinarily, it is trite law that, an acceptance by a party of an offer
made to him or her by the other may be deduced from the words,
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documents exchanged as between the two or even from their
conduct. See, for instance, the Court of Appeal decision in the case
of Zanzibar Telecom Ltd vs. Petrofuel Tanzania Ltd, Civil Appeal
No.69 of 2014 (Unreported).
Likewise, see the case of Louis Dreyfuls Commodities
(supra) where the Court of Appeal of Tanzania was of the view that,
instances do exist where acceptance may be inferred from the
conduct of the offeree. See also the case of IBM Tanzania Limited
vs. Sunheralex Consulting Co. Limited, Commercial Case No.9
of 2020, DSM Registry, (Unreported), and RTS Flexible Systems
Ltd vs. Molkerei Alois Müller GmbH & Co KG (2010) UKSC 14,
1 WLR 753).
In his submissions, Mr. Mwalongo has relied on section 7, 8
and 9 of the Law of Contract Act, Cap.345 R.E 2019. According to
section 7 of the Act, it is stated that:
‘7. In order to convert a proposal into a promise, the
acceptance must- (a) be absolute and unqualified; (b)
be expressed in some usual and reasonable manner,
unless the proposal prescribes the manner in which it
is to be accepted; and if the proposal prescribes a
manner in which it is to be accepted, and the
acceptance is not made in such manner, the proposer
may, within a reasonable time after the acceptance is
communicated to him, insist that his proposal shall
be accepted in the prescribed manner, and not
otherwise, but if he fails to do so he accepts the
acceptance.’
Under section 8 of the Act, the law provides that:

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 “Performance of the conditions of a proposal, or the
acceptance of any consideration for a reciprocal
promise which may be offered with a proposal, is an
acceptance of the proposal.”
As I stated herein earlier, acceptance of an offer may be by
conduct. Section 9 of the Act provides that:
“In so far as the proposal or acceptance of any promise
is made in words, the promise is said to be express;
and in so far as such proposal or acceptance is made
otherwise than in words, the promise is said to be
implied.”
To find out whether the offer expressed in Exh.P-3 was
accepted by the 1st Defendant or not, it is pertinent to approach that
question from its rightful contextual settings. According to Exh.P-
12, on the 18th December 2017, an inter-party meeting took place at
the 1st Defendant’s head office- involving the following parties: (i)
the Plaintiff’s Officers (Pw-1 and Pw-2), and (ii) three (3) of the 1st
Defendant’s Officers. The main agenda was a discussion regarding the
Plaintiff’s loan performance and, a possible takeover of the said loan
amount.
According to Exh.P-12, it was the 1st Defendant who
introduced the Plaintiff to two respective companies, namely:
Mount Meru Oil and Camel Oil (T) Ltd, for a possible takeover of the
Plaintiff’s assets which he had acquired in Congo and Tanzania
through the loans earlier advanced to her by the Defendants. The
last paragraph of the Exh.P12’s first page reads as follows:
“The chairman of Kili Oil thanked the KCB Team
for the opportunity presented and indicated, Kili’s

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 willingness and intention of going through with the
deal subject to agreement with the customer but he
had stressed how tough it has also been for him to let
go all the assets he had not earned anything from, just
to clear with the bank while the original intention
was to conduct business and produce enough revenue
to cover the bank and actually getting profits…”

Besides, as per the Exh.P-12, the meeting mutually discussed

and agreed as follows:
1. That, the Plaintiff agreed to the takeover of the loan
facility by the Customer and Kili to transfer its assets to
the Customer if the following conditions are met:
a. That, an agreement is reached between the
Customer and Kili Oil and subsequently the
bank will allow the facilities to be taken over by
the Customer.
b. That, all proceeds are used as a full and final
settlement of all its encumbrances at the Bank.
2. That, the Bank position on the same was as
noted below:
a. That, the bank via the Director of corporate
banking noted that it will proceed with issuance
of facilities or any other arrangement with the
Customer as per their agreement between the two
considering that all conditions are met.
b. That, the bank noted as well, Kili’s deliberation
that the proceeds are final and full settlement of
its obligations at the bank and it will further be
discussed internally and a position will be drawn
afterwards.

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 As it may be noted, while Exh.P12 was dated 18th December
2017, Exh.P-3 came to the attention of the 1st Defendant three days
later, as a follow-up to the 18th December 2017 meeting. Although
in Exh.P-12 there was no mentioning of the exact amount which
would be the proceeds of the takeover of the Plaintiff’s assets and
liabilities (the loans), it is with no doubt, as Exh.P-12 indicates, that,
from the start, the Plaintiff’s position regarding the possibilities of
takeover of her loans if such was to happen, should constitute a “full
and final settlement of all her liabilities to the Defendants.” Essentially,
Exh.P-12 does indicate that, the 1st Defendant’s representative
noted, as well, that, the 1st Defendant was to proceed with the
arrangement to issue a credit facility to the Customer (i.e., Camel Oil
(T) Ltd,) as per the arrangements between the two, “considering that
all conditions are met”.
Besides, the 1st Defendant’s representative who signed Exh.P-
12, did take note of the Plaintiff’s understanding that, the takeover
of her loans, if such was to happen, was to constitute a “full and
final settlement of all her liabilities to the Defendants.” That, the 1st
Defendant’s Director of Corporate Banking, promised to have that
concern internally discussed by the 1st Defendant and thereafter give
the Plaintiff a position, is also an evident fact.
Exh. P-3, therefore, came in to consolidate and put forth a
firm proposal (offer) disclosing an amount of proceeds of the
takeover agreed as between Camel Oil (T) Ltd and the Plaintiff, which
offer, the 1st Defendant was to accept or reject since, as per Exh.P-
12, a legitimate expectation for an answer had already been raised
on the part of the Plaintiff by the 1 st Defendant, following the promise
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made by the 1st Defendant’s Director of Corporate Banking to
communicate a response.
Unfortunately, in the present suit, and as Dw-1 testified, the
1st Defendant never respondent to Exh.P-3 which had consolidated
the matters deliberated under Exh.P-12. This means that, Exh.P-3
did not receive any express qualification from the Defendants and,
so, it went through unqualified. I find it to be so because, aside from
the scenario played out as shown hereabove, the Defendants did
proceed to perfect the takeover processes by issuing a loan equal to
the amount stated in Exh.P-3 (i.e., US$ 5,700,000.00) to the
Customer (Camel Oil (T) Ltd) who took over the assets and liabilities
of the Plaintiff. This is evinced by the facility signed between the 1 st
and 2nd Defendants and Camel Oil (T) Ltd which was admitted as
Exh.P-19. Clauses 2 and 3 of Exh.P-19 reads:
2.The Facility
Subject to the terms of this Agreement, the Facilities
advanced to the Borrower are cited hereunder: Term
Loan (New) – US$ 5,700,000.00
3.Purpose:
The Facilities are hereby granted for the following
purposes:
3.1: Term Loan (New)-for taking-over Term Loan
Facility and buying assets of Kilimanjaro Oil Tanzania
Limited. (Emphasis added).
Certainly, and, as correctly submitted by Mr. Mwalongo,
nowhere was it stated in Exh.P-19 that the Plaintiff’ loans were
taken-over “partially”. It is on record, as per the testimony of Dw-1
that, on 22nd June 2018 the Plaintiff’s current account was credited

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with US$ 5,700,000.00 which deposit came from Camel Oil (T) Ltd.
This amount was exactly the same as the one proposed in Exh.P-3.
In my humble view, if one takes into account the fact that the
Defendants did not provide an express position as earlier promised
in respect of the Plaintiff’s position which was clearly made known
in Exh.P12, and, given that the Defendants did not as well respond
to Exh.P3 but went ahead to act in the manner expressed under
Exh.P-12 and Exh.P-19, it will be clear, as a broad day light, that,
the conduct of the Defendants constituted acceptance of the
Plaintiff’s offer expressed in Exh.P-3 and, the takeover of the loans
settled the Plaintiff’s liabilities as a full and final settlement thereof.
There are, however, other conducts by the Defendants which
lend further support to the averments that the Defendants were
acting in-line with the Plaintiff’s offer and understanding under
Exh.P-3. In Exh.P-4, a letter by the 1st Defendant, a confirmation
was made to Delina General Enterprises Ltd, a guarantor of the
Plaintiff and a 4th Defendant in the counterclaim, that, the Congo
loan was taken over by Camel Oil (T) Ltd in a tune of US$ 5.7 million.
This confirmation of the amount of US$ 5.7 million was indeed a
conduct to take note of as it is in line with what Exh.P-3 had
expressly stated.
I am also in agreement with the Plaintiff’s counsel’s
submission that, the conduct of the 1st Defendant, as expressed in
her letter dated 18th March 2019 (part of Exh.P.-4), in which the 1st
Defendant, in her capacity as the security/facility agent of the 2 nd
Defendant, informs the Plaintiff about the 1st Defendant’ Board of
Director’s approval of release of titles subject to cancellation of the
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existing bank guarantees (in respect of Puma Energy and Dalbit
Petroleum). The said letter, (Exh.P-4) was sent after the taking over
of the Plaintiff’ assets had been completed, which was a stage in line
with the release of collateral securities as earlier intimated in Exh.P-
3. That conduct does also count or confirms the Defendants’
acceptance of what the Plaintiff had proposed under Exh.P-3
regarding the release of securities post the taking over transaction.
On a further notch, are the letters dated 12 th March 2019 and
20th March 2019, which form part of Exh.P-4. In these letters there
was, first, a surrender by the Plaintiff of Bank Guarantee
No.MD1519600022 for US$ 800,000.00 and, second, a submission
of Bank Guarantee No. MD1818301337 for Dalbit Petroleum(T) Ltd
for cancellation, these being part of the conditions expressed in the
1st Defendant’s letter dated 18th March 2019 for the release of titles.
These incidents were followed by a release of titles evinced by
Exh.P-5. In my view, all such conduct by the Defendants, support a
view that, the Plaintiff’s offer expressed in Exh.P-3 was fully
accepted by the Defendants and, the Plaintiff’s debts were fully
discharged by the takeover transaction.
It is indeed notable that, in her testimony Dw-1 relied on
Exh.P-7, a letter dated 3rd September 2019 to support a view that,
the takeover transaction only partially cleared the Plaintiff’s loan.
However, as I stated earlier herein, nowhere was it stated in Exh.P-
19 that the taking over was partial. In fact, when this Court asked
Pw-2 what if the 1st Defendant’s Board had refused the US$ 5.7
million as a final payment, his response was that, the transaction

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between Camel Oil (T) Ltd and the Plaintiff to take over the Plaintiff’s
assets would not have proceeded.
This response by Pw-2 means to me that, the subsequent
conduct of the Defendants lent assurance on the part of the Plaintiff
to proceed with her deal with Camel Oil (T) Ltd, knowing that, it will
set her loan accounts free as per Exh.P-3 stated. This Court did as
well ask Dw-1 why the Defendants did not respond to Exh.P-3 to
inform the Plaintiff that the takeover amount will only be used to
“partially settle the debts” and will not be a “final and full payment”.
Dw-1 did not offer any response.
From the totality of the above considerations, therefore, this
Court is of a firm view that, the 4th and the 5th issues are responded
to positively. These issues sought responses regrading: (i) whether
the Plaintiff discharged her loan liabilities with the Defendants in a
full and is no longer indebted to the Defendants and, the Defendants
are bound to discharge securities pledged, and, (ii) whether the
Plaintiff’s loan liabilities with the Defendants were fully taken over
by Camel Oil (T) Limited and discharged the Plaintiff from loan
liabilities with the Defendants. The positive response to the two
issues means, therefore, that, following the taking-over of the
Plaintiff’s loans by Camel Oil (T) Ltd, the Plaintiff settled her loan
liabilities with the Defendants in full and, in so doing, is not
indebted to the Defendants and the Defendants are bound or
obligated to discharge the securities pledged failure of which
amounts to a breach.
The next issue is issue No.6 which is about:

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 Whether the Defendants (in the counterclaim) are
liable to the Plaintiffs in the Counterclaim.
Whereas the Plaintiffs in the counterclaim contend that the
Defendants in the counterclaim are indebted to them, the
Defendants in the counterclaim have denied such indebtedness.
Where then does the pendulum of truth lies? Before I delve into the
nitty-gritty of this issue number six, it is worth noting, as a matter of
general principle, that, parties are bound by their pleadings. See the
case of James Funkwe Gwagilo vs. Attorney General [2004] TLR
161.
In this present suit, the learned counsel for the Defendants
admitted to be very much aware of that principle. However, he has
contended that, that principle is of general application, and, that, if
certain matters were left on record and it appears from the conduct
of the suit that such were matters left to the Court for it to decide,
then, the Court is bound to make a decision on the same.
Certainly, I am not opposed to that. It is trite that, where
parties have not framed issues on matters which they ought to have
framed one but leave such to be dealt with by the Court, the Court
will have to address such matters on its own and make a decision.
See the case of Odd Jobs vs. Mubia [1970] EA 476 cited by the
Court of Appeal in Agro Industries Ltd vs. The Attorney General
[1994] T.L.R43.
In this present suit, Dw-1 has attempted to amend the claims
raised and the relief sought by the Plaintiffs in the counterclaim,
through her witness statement. Her attempt to do so is anchored on
the ground that, the figures indicated in those pleadings filed by the

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Plaintiffs in Counterclaim were erroneous, the error being attributed
to human nature. In short, Dw-1 told this Court that, the error was
that, penalties and interests claimed were not included therein the
pleadings and the reliefs sought in the Counterclaim.
She insisted, when asked regarding whether she was trying to
amend the pleadings, that, what she introduced in her witness
statement is what should be taken as a new position. In his
submission, Mr. Msuya, who appeared for the Plaintiffs in the
Counterclaim (Defendants herein) supported Dw-1’s approach and
attempt. He submitted that, the Defendants in the counterclaim
have not been prejudiced and, that, taking into account section 3 A
(1) and (2) of the Civil Procedure Code, Cap.33 R.E 2019, it is clear
that the principle of overriding objective will cure any anomaly as it
discourages technicalities and calls for expeditious and affordable
resolution of disputes.
Consequently, he urged this Court to accept the “amendments”
brought about into the pleadings by way of a witness statement. On
the contrary to what Mr. Msuya had submitted, it was Mr.
Mwalongo’s submission, that, any amendment of pleadings is an
issue guided by the law, and, in the event a party pleading for such
amendments is allowed, then, the other party should also be availed
with an ample opportunity to respond. He relied on what Order VI
Rule 7 of the Civil Procedure Code, Cap.33 R.E 2019 provides.
He contended, as a matter of fact, that, there has never been
an application by the Plaintiffs in the Counterclaim seeking to
amend the counterclaim and, that, what has been done is an attempt
to amend the counterclaim by way of a witness statement, an act
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which he considers to be invalid. He submitted that, the Plaintiffs in
the Counterclaim are not certain regarding what they claim from
the Defendants in the counterclaim and, that is the reason why the
Plaintiffs in the Counterclaim are uncertain as to whether or not
there was a loan takeover.
He contended and urged this Court to find, therefore, that, the
pleadings filed by the Plaintiffs in the counterclaim have never been
amended and, this Court cannot be in a better position to adjudicate
on the reliefs sought in the counterclaim since the Plaintiffs in the
counterclaim have stated (through Dw-1) while under oath, that,
the reliefs sought are incorrect and wrong claims.
In my understanding, the principle that parties are to be
bound by their pleadings is one of general application and remains
a settled one. However, much as it is of general application, it does
not mean that it should not be strictly followed. It must always be
followed. I hold it to be so, because, first, as rightly stated by Mr.
Mwalongo, amendments are guided by law, in particular Order VI
Rule7 of the CPC. This rule allows a party to make an application
to the Court and, indeed, if granted, the other party will have to be
afforded an opportunity lest he be prejudiced. Second, much as
amendment can be sought at any stage, the timing must also be
reasonable and there should be sufficient cause why any belated
amendments should be allowed.
In this instant suit, although the Defendants (Plaintiffs in the
counterclaim) had ample time to make application to the Court
either under Rule 24 (1) of the High Court (Commercial Division)
Procedure Rules (as amended) or under Order VI Rule 17 of the
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CPC to correct the pleadings, that avenue was never unutilized.
Instead, the Defendants’ witness (Dw-1) purports to amend the
pleadings through her witness statement.
Primarily, each litigant ought to have reasonably known,
from the very beginning, what his/her case is all about and, where
a need arises to amend the pleadings, he or she ought to strictly
follow the laid down procedures. It is on record, as it might be
noted, that, the Defendants pleadings herein were amended twice
and, their last ‘amended joint statement of defense’, which came up with
a counterclaim, was filed in this Court on the 27th day of June 2022.
There have been no explanations regarding why the Defendants did
not utilize that opportunity to amend their pleadings properly if at
all what Dw-1 tried to introduce in her witness statement was
indeed the correct version of the story.
But what may be even grossly erroneous and unprocedural is
that, the Defendants herein wants to amend their pleadings through
a witness statement. I do not think, by any standard, that is a proper
procedure. Even if the overriding objective principle (Oxygen
Principle) was to be relied upon as Mr. Msuya would want this Court
to do, it cannot be relied upon to condone such an irregular
approach to amendment of pleadings. Simply stated, one cannot be
allowed to amend his/her pleadings through a witness statement
and, witness statements cannot replace the appropriate pleadings.
In view of the above observations, since no amendment was
sought by the Defendants and given by this Court, Dw-1’s assertions
that the reliefs in the counterclaim are erroneous or wrong claims,
puts this Court, as rightly stated by Mr. Mwalongo, between a rock
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and a hard place when it comes to the adjudication of the reliefs
sought in the counterclaim. My take, however, is that, the
amendments are unacceptable and the pleadings cannot be
amended through a witness’s statement. But having so stated, what
really is the nature of the counterclaim?
To respond to that question, let me start by looking at the
reliefs sought by the Plaintiffs in the counterclaim. Such reliefs
sought do constitute the claims against the Defendants in the
counterclaim. The reliefs are seven in number. I will look at each of
them and their validity in light of the available oral and
documentary evidence. The first one is:
For payment of a total sums of TZS 839,311,887.54,
herein described as Term Loan III as from May 2021
until the date of full payment. The said loan was
advanced by the 1st Plaintiff to the 1st Defendants and
duly secured by the 2nd, 3rd and 4th Defendants;
According to the testimonies of Pw-I, Pw-2, Dw-1 and partly
according to Exh.D-3, the Term Loan III was a result of conversion
of an overdraft facility of US$ 500,000 to a Term Loan, (equivalent
of TZS 1.06 billion). While Pw-1 admitted during his cross-
examination about such conversion, in his testimony in chief, he
told this Court that, the Term Loan III was serviced and cleared
through an arrangement evinced by Exh.P.14 (the Quadripartite
Agreement dated 30th August 2018).
In Court, there was also tendered Exh.P-15 which
communicated to the Defendants in the Counterclaim a liquidation
account to be used under the Quadripartite Arrangement to liquidate

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the loan amount. There was also a computation summary (Exh.P-
16) showing the total amount deposited in the respective account,
as per the above computation summary (Exh.P-16) to be US$
552,320.99. Exh.P-16 was never controverted by the Plaintiffs in the
counterclaim. Pw-2 told this Court that, it was only the 1st
Defendant who had access to the said account whose statement of
account was also tendered as Exh.P-17.
In his submission, however, Mr. Msuya, who appeared for
the Plaintiffs in the counterclaim, urged this Court to find that, the
testimony of Pw-2 on that particular matter, was either a lie or
founded on misconceived facts. His take was, firstly, that, Pw-2 was
discredited by Exh.P-17 (the liquidation account) because, the first
entry indicates a balance brought forward, meaning that, the
statement was a continuous banking statement.
Second, he argued that, the second entry in Exh.P-14 shows a
sum of US$ 40,000.00 and is dated 29 th March 2018 which is long
before Exh.P-14 was inked. While that is indeed correct, still, one
has to note that, as per Exh.P-16 (the summary of transactions) such
are also reflected in Exh.P-17, and that, Exh.P-16 does not start with
the US$ 40,000.00 but starts on 12 th September 2018 way as after
the Exh.P-14 was inked. I do take note that, Mr. Msuya did not refer
to Exh.P-16 in his analysis of Exh.P-17. He has submitted, however,
that, the sum of US$ 38,684.04 shown in Exh.P.17 was used to
liquidate loan account of US$ 600,000.00 which was an overdraft
extended via the loan facility dated 04 th August 2016 and amended
by the 3rd addendum on 20th March 2018 (all part of Exh.P.1). He

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said that, it cannot be said the sum was used to liquidate the
TZS.1,056,252,441/= advanced via Exh.D-3.
I do take note as well that, during cross-examination, Pw-2
was shown Exh.P-17 and did admit that, by 29th March 2018, the
loan repayment of the Plaintiff was USD$ 38,684.04. Besides, I note
as well that, there were other transactions routed in the liquidation
account as stated by Dw-1. However, that fact notwithstanding, does
not tilt Pw-2’s testimony because, as I said earlier, Pw-2’s evidence
regarding the repayments done through the liquidation account is
premised on Exh.P-16. This exhibit summarizes the key repayments
as extracted from Exh.P-17.
As I look at the testimony of Pw-2 and Exh.P-14, Exh.P.15
(instructions regarding the use of the liquidation account), as well as
Exh.P-16 and Exh.P-17, I find, therefore, that, indeed payments
made after 30th August 2018 into the “liquidation account” were
routed to clear the debt arising from the converted Overdraft facility
to what has been termed as Term Loan III. Exh.P.16, thus, has
remained intact showing how much was paid.
In law, a counterclaim is a different suit altogether and has to
be proved to the standards required by the law. Further, if there are
specific claims in it, the principle is that, claims of specific nature or
attracting special damages, need to be strictly pleaded and proved.
The cases of Tanzania Saruji Corporation vs. African Marble Co.
Ltd [2004] TLR 155, National Bank of Commerce Holding
Corporation vs. Hamson Erasto Mrecha [2002] TLR 71 and
Zuberi Augustino Mugabe vs. Anicet Mugabe [1992] T.L.R. 137

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and that of Xiubao Cai and Maxinsure (T) Ltd vs. Mohamed Said
Kiaratu, Civil Appeal No.87 of 2020, attest to that principle.
As regards this first claim under the counterclaim, I am in full
agreement with the counsel for the Defendants in the counterclaim,
that, the whole amount constituting Term Loan III was cleared in
line with what was agreed under Exh.P-14. Nowhere has it been
shown with proof, that, Exh.P-14 was ever breached by the
Defendants in the counterclaim. As I earlier stated herein above, the
law under section 110 (1) of the Evidence Act, Cap.6 R.E 2019
requires that, whoever desires any Court to give judgement as to any
right or liability dependent on the existence of facts must prove that
those facts exist. The burden of proving such facts rests upon the
person who so alleged those facts.
In this counterclaim the burden rests on the Plaintiffs in the
counterclaim. However, as I said, they have not been able to
discharge their burden of proving the claims which constitute the
first relief under the counterclaim.
In particular, therefore, the Plaintiffs in the counterclaim have
not been able to prove that, the Term Loan III, was not cleared. On
the contrary, the Defendants in the counterclaim have clearly
proved, through the testimony of Pw-2, and through Exh.P14,
Exh.P15, Exh.P-17 and Exh.P-16, how the Defendants in the
Counterclaim cleared Term Loan -III. Since the first relief sought has
not been sufficiently proved, then such a claim should fail.
The second and the third reliefs sought under the
counterclaim are in respect of:

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 For payment of a total sums of US$ 225,642.25 herein
described as Term Loan I as of 25th February 2022 until
the date of full payment. The said loan was advanced by
the 2nd Plaintiff to the 1st Defendant and duly secured by
the 2nd, 3rd, and 4th Defendants; and,

For payment of a total sum of US$ 1,637,170.30 herein

described as Term Loan II from 25th February 2022 until
date of full payment. The said loan was advanced by the
2nd Plaintiff to the 1st Defendant and duly secured by
the 2nd, 3rd and 4th Defendants.

In paragraph 37 of the witness statement of Dw-1, Dw-1

relied on Exh.D-3 (the Facility letter dated 06th September 2018) to
establish and support the 2nd relief sought in the counterclaim.
Under this paragraph, Dw-1 testified that, Exh.D-3 was dated on
06th of September 2018 long after Camel Oil (T) Ltd paid US$
5.7million on 22nd June 2018 and, that, under clause 2.2.2, the
Plaintiff acknowledged to be indebted in the extent of US$
151,591.89 in respect of Term Loan-I and US$ 2,378,508.11 in
respect of Term Loan II and bank guarantee of US$ 1,000,000.
According to Dw-1; it would be incomprehensible that the Plaintiff
did all these in ignorance that it has paid her debt liabilities in full.
To further cement on that testimony, in his closing
submissions, Mr. Msuya argued that, the Plaintiff has not disputed
existence of Exh.D-3 and, thus, the same should be found to be legal
and binding. He relied on the decision of Simon Kichele (supra) on
sanctity of contract as well as the case of Harold Sekiete Levera
(supra) stating that Exh.D-3 should speak itself. He discounted
Exh.P-4 as a mere letter which was disputed by Dw-1 and, insisted,
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that, at the time of executing Exh.D-3 the Plaintiff acknowledged to
have existing loan liabilities and was aware that the takeover of the
outstanding loans by Camel Oil (T) Ltd was partial.
For his part, Mr. Mwalongo submitted, firstly, that, Exh.D-3
was the attempt by the Plaintiffs in the counterclaim to cure and
reopen an already done deal. He submitted that, clause 2 is titled:
“Availability and options available within the Facility.” He submitted
that, the obligation of the borrower at Clause 2.1.1 was to be created
by compliance to Clause 7 and Annexure I and II before
commencement date and Clause 1.4 defined the commitment
expiry date to mean 30days from the date of the letter which is 6 th
September 2018.
He submitted that, Clause 7 requires the Defendant to receive
documents under Annexure I and II before commitment date for the
obligation to be created. The requirements under that Annexure 1
include:

(i) Board Resolution authorizing borrowing. But he

submitted that, this was never done.
(ii) Facility letter and acceptance form signed by the
borrower. On this Mr. Mwalongo submitted that
there is a form of acceptance which is undated and
so, not sure whether it was executed prior or after
the expiry date.
(iii)Current annual returns filed from Registrar of
Companies. On this he submitted that, it was
never done, hence, the requirement was not
performed.

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 (iv) Board Resolution from Delina General Enterprises
confirming issuance of securities. He submitted
that, this was never done, hence, the requirement
was not performed.
(v) All documents listed under paragraph 11 of the
Facility. The documents included a submission of
land rent and property tax receipts, for year
2018/2019; insurance policy cover for mortgaged
properties, guarantee cancellation to be confirmed
before disbursement.
Second, Mr. Mwalongo submitted that, the conditions set out
in Clauses 1.4, 2.1.1, 7 and 11 and Annexure 1 and II were not met
and, he concluded that, the Facility letter dated 06 th September 2018
never took effect. He also submitted that, under Clause 2, Clause
2.1.2, the bank had to place at the disposal of the borrower the
facility or part of it before commitment expiry date defined under
Clause 1.4. He contended that; in this case the Defendants
(Plaintiffs in the counterclaim) could not have taken any further step
because the borrower had not created obligations as detailed earlier
hereabove.
Third, it was his submission that, the sole purpose of facility
under Clause 3 was “to facilitate full payment of outstanding invoice to
Oryx Energy as per agreements signed between the parties including the
bank”. Mr. Mwalongo submitted that, this purpose was already
addressed and cleared in full through Exh.P-14 and performed
through Exh.P-16. His fourth ground of contention was that, there is
no any transaction that is traceable as having been performed under
Exh.D-3 (the facility letter). From the totality of that account, he

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contended that, the Plaintiffs in the counterclaim cannot succeed as
they are uncertain regarding what exactly their true claims are.
In the first place, it is the Plaintiffs in the counterclaim who
are duty bound to establish their case with sufficient and convincing
evidence. In this case the Term Loans- I and II constitute the amounts
which were borrowed for the purposes of acquiring assets of
KenolKobil (Congo and Tanzania). This Court, through the analysis
of the available evidence did establish, when addressing the 4th and
the 5th issues, that, the takeover of those loans by Camel Oil (T) Ltd
was not partial since, nowhere was it so stated.
Instead, and as I stated earlier herein, under Exh.P-3 and
Exh.P-12 the Plaintiff made it plain that, the loan takeover by Camel
Oil (T) Ltd would constitute a full and final settlement of the
Plaintiff’s liability and set her loan account free. In no way again
could the same loans appear as existing loans under Exh.D-3. To
me, it even raises questions regarding the whole set up and creation
of this facility if one considers the totality of what I stated in respect
of the main suit and this counterclaim.
I hold it to be so because, in his testimony, Pw-1 did testify
that, the Defendants have also been purposely mismanaging the
Plaintiff’s loan accounts, been unfair, engage in predatory lending,
deceptive or fraudulent practices, and, have not acted in a
transparent manner in the way they were booking the loans,
including booking them in the 2nd Defendant in whom the Plaintiff
had no access. In her testimony, Dw-1 denounced the alleged claims
of predatory lending practices by stating that all loan agreements

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were freely signed by the parties. However, she did admit that the
loans were booked at will by the Defendants.
Generally, predatory loans are regarded as “bad” loans for the
borrower, and this results from a myriad of reasons, including,
deception in loan creation, the existence of onerous terms causing
“disproportionate net harm” to the borrower, unfair practices once
the lending relationship is established, or a combination of all these.
As I stated earlier herein above, this Court has established
that, the Term loans I and II were fully discharged with the loan
takeover by Camel Oil (T) Ltd. But even without basing my
conclusion on that aspect, I am fully convinced and inclined to
agree with the submissions by the learned counsel for the
Defendants in the counterclaim, that, Exh.D-3 is nothing but an
attempt to cure and open that which was already a closed deal. The
reasons which the learned counsel unearthed in regard to that
submission, as earlier summarized herein above, are sound and
acceptable in my view.
For instance, Exh.D-3 is said to be for purposes of facilitating
full payment of outstanding invoice to Oryx as per the agreement
signed between the parties including the bank. However, Exh.P-14
and Exh.P-16 as earlier shown to the satisfaction of this Court,
proved that, the Term Loan III was as well cleared. Since the relief
sought in the counterclaim are in the nature of specific claims/
damages, such must be strictly proved.
In the case of Professional Paint Center Ltd vs. Azania
Bank Ltd, Commercial Case No.53 of 2021 (unreported), this Court
made it clear that, the wording “strictly proven” means that, the
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Plaintiff bears a stricter burden of proof to discharge if his claim is
to sail through. Unfortunately, even if Dw-1 maintained that the
loaned amounts, as of 31st October 2018, were yet to be fully repaid,
the Plaintiffs in the counterclaim have not been able to strictly prove
their case to the requisite standards to warrant the grant of the reliefs
sought.
In view of that, even the rest of reliefs sought, including the
Defendants demands for payment interest of 17% p.a, for TZS
account and 9.725% for US$ account from the date hereof (i.e., 27 th
June 2022) until the date of full payment, as well as the claim for
interests at Court’s rate of 7%, from the date of pronouncement of
judgment and decree until date of full settlement, and the claim for
costs and any other reliefs the Court may deem just and fit to grant,
cannot be granted.
With that in mind, the last issue is the kind of reliefs which
the parties are entitled to. In the English case of Miller vs. Minister
of Pensions [1947] All E.R. 372; 373, 374, Lord Denning J (as he
then was) held a view, regarding the discharge of the requisite
burden of proof by a party who is supposed to do so, that:
"If the evidence is such that the tribunal can say: We
think it more probable than not, the burden is
discharged, but if the probabilities are equal, it is not."
In this present suit, and starting with the counterclaim raised
by the Plaintiffs to the counterclaim (who are the 1st and 2nd
Defendants in the main suit), it is my settled views, owing to what
I stated in the course of my analysis of the sixth issue herein above,
the Plaintiffs in the counterclaim have not been able to demonstrate

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with clear and sufficient evidence that, the Term Loan III (as per
Exh.D-3 dated 6th of September 2018) was effective, so as to warrant
the granting of their counter claims.
Moreover, the Plaintiffs in the counterclaim have not been
able to convincingly demonstrate why there should be “existing
loans” (as shown in Exh.D-3), despite there being a “full and final”
takeover of the Plaintiff’s loans by Camel Oil (T) Ltd, the Term Loan
1 and II (as demonstrated in Exh.P-12, Exh.P-3, Exh.P-4, Exh.P-5,
Exh.P-16, Exh.P-17 and Exh.P-19). As discussed herein, nowhere
was it demonstrably shown with evidence that, the taking-over of
the loans by Camel Oil (T) Ltd was partial in nature.
Besides, although the purpose of the Exh.D-3 (the facility
dated 6th of September 2018) was to facilitate full payment of
outstanding invoices to Oryx Energy, as per the Agreement signed
between the parties and the bank ( i.e., Exh.P-14), the Plaintiffs in
the counterclaim have as well failed to explain, in the light of Exh.P-
16 and Exh.P-17, what was left unsettled given what Exh.P-16 and
Exh.P-17 revealed in light of what was agreed under Exh.P-14
(which required the bank loans to be settled through deposit of
monies by Oryx into the liquidation account which was solely
maintained by the 1st Plaintiff in the counterclaim (Exh.P-17)).
Essentially, a party who proves her case to the requisite
standards is entitled to reliefs. However, taking into account what I
have earlier discussed at length herein and, in light of the
submissions by the learned counsel for the Defendants in the
counterclaim, which submissions, as I stated earlier, I am in
agreement with, it is my conclusion and findings that, it cannot be
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said, by all standards, that the Plaintiffs in the counterclaim have
been able to discharge their burden of proving the counterclaims to
the requisite standards. On that account, I am convinced, and with
no flicker of doubt, that, the counter claims must fail and must be
subjected to a dismissal order with costs. That being said, I hereby
dismiss the counterclaim with costs.
As regards the main suit, it is my findings that, the Plaintiff
has been able to discharge his burden of proving his case to the
requisite standards by showing inter alia that, her accounts were
mismanaged by the Defendants in a manner that constitutes a
breach of duty. It has also been established that, the loans advanced
to the Plaintiff by the 2nd Defendant, were so advanced in breach of
the existing legal compliance requirements under the banking
laws/regulations.
Moreover, the Plaintiff in the main case has ably
demonstrated that, the credit facilities advanced to her by the
Defendants in the main claim were fully and finally taken over by
Camel Oil (T) Ltd and, that, the converted overdraft to term loan
(worth TZS 1.06 billion) was settled though the Quadripartite
Arrangement, as evinced by Exh.P-14, Exh.P-16 and Exh.P-17. As
such, there can be no further liability pending and the Plaintiff’s loan
accounts having been freed, a fact which paved way for the
discharge of the collateral securities and the same ought to have
been forthwith discharged. With all such findings which are well
covered under the 1st, 2nd, 3rd, 4th, 5th 6th and the 7th issues, this Court
grants Judgement and Decree in favour of the Plaintiff in the main
suit and the Plaintiff is thus entitled to the reliefs sought.
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 Generally, reliefs may be of declaratory, specific or general
nature. In this case the Plaintiff has sought for declaratory and
general damages. General damages are assessed by the Court and
need not be proved once pleaded. Essentially, the position of the
law is that, general damages may be awarded for inconvenience
caused by the Defendant.
In the circumstance of this case, and, taking into account the
evidence and testimony of Pw-1 and Pw-2, I find that, the Plaintiff
is entitled to general damages given the inconveniences and/or
distressing moments she has endured owing to the mismanagement
of her loan accounts, as well as the unjustified demand notices and
withholding of part of his collateral securities.
In view of all that, this Court, therefore, proceeds to make the
following orders, that:
(i) This Court has found, and, so, it
declares that, the 1st Defendant in
the main suit is in breach of the
credit facilities and her banker’s
duties towards the Plaintiff in the
main suit;
(ii) this Court has established and,
consequently does hereby declare,
that, the Plaintiff in the main suit
has fully paid all her loan facilities
advanced to her by the Defendants
in the main suit and, that, the
Plaintiff in the main suit does not
have any liability towards any of the
Defendants;

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(iii) this Court Orders the Defendants to
discharge all mortgages,
debentures, corporate guarantee,
personal guarantee and all other
securities issued by the Plaintiff or
the Guarantors of the Plaintiffs to
secure the Facilities granted by the
Defendants.
(iv) That, this Court has found and does
hereby declare that, the transactions
by the 2nd Defendant with the
Plaintiff which were non-compliant
with the rules/regulations and
circulars governing the banking
business in Tanzania are unlawful
and contrary to the rules and
regulations governing the banking
business in Tanzania;
(v) That, this Court does hereby find
and declare that, the demand
notices issued by the Defendants
are unwarranted and of no legal
effects.
(vi) This Court declares that the 1st and
2nd Defendants in the main suit are
not entitled to TZS
1,307,902,894.82 and US$
3,471,034.02 respectively, claimed
in the 14 days’ demand notice of 6th
December 2021.

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 (vii) That, the Plaintiff is entitled to
general damages to a tune of US$
300,000/.
(viii) That, the 1st and 2nd Defendants are
liable to pay the Plaintiff all costs
incurred in this suit.

It is so ordered.
DATED AT DAR-ES-SALAAM ON THIS 18th DAY OF
APRIL 2023

...................................
DEO JOHN NANGELA
JUDGE
RIGHT OF APPEAL EXPLAINED

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