IN THE HIGH COURT OF TANZANIA

(DAR ES SALAAM DSTRICT REGISTRY)

AT PAR ES SALAAM

MISCELLENIOUS CIVIL APPLICATION No. 6 OF 2018

(Arising from Civil Case No. 256 of 2017 and Misc. Civil Application No. 4 of 2018)
IN THE MATTER OF ARBITRATION
AND
IN THE MATTER OF ARBITRATION ACT CAP. 5 RE 2002

TANZANIA BREWERIES LIMITED.............................1st PETITIONER

REGISTERED TRUSTEES OF THE TBL Ltd. EMPLOYEES SHARE
OWNERSHIP TRUST.................................................. 2nd PETITIONER

Versus
OSCAR SHELUKINDO.................................................1st RESPONDENT
EMMANUEL FESTO MAC KAN DO............................... 2nd RESPONDENT
FABIAN EPHRAIM MWAKATUMA.............................. 3rd RESPONDENT
EDITH PHILLIP MUSHI............................................. 4th RESPONDENT
EMMA ORIYO............................................................. 5th RESPONDENT
DANIEL SONGELAEL.................................................. 6th RESPONDENT
EDSON MUGANYIZI BALONGO................................. 7th RESPONDENT
ALEX JOHN MTUI....................................................... 8th RESPONDENT
KIDIKA MOSES NYOMBO.......................................... 9th RESPONDENT
MUSTAPHA ABDALLAH............................................ 10th RESPONDENT
MOHAMED LEMU........ ........................................... 12th RESPONDENT
MAC EMMANUEL KOKA.......................... ............... 13th RESPONDENT
 RULING
5th July - 19th December 2019

J. A. DE-MELLO, J;

This Ruling is in respect of Petitioner prayers for Stay of proceedings in

substantive suit in Civil Case No. 256 of 2017 and Misc. Civil

Application No. 4 of 2018 between the Parties herein. However and,

considering a series of adjournments as a result of the confusion as to

what exactly the Court ought to address, submissions by Counsels of the

precise position, it was then unanimously agreed that, the objections

earlier on raised had been abandoned by Hon. Mruke J, since... Written

submissions by Counsel are on record and, which this Court shall endeavor

to derive findings as to whether or not the Application has basis or else. It

is even evident that the 6th to 12th Respondents had vide Misc.

Application No. 4 of 2018 joined as parties by order of this Court on the

1st of June 2018. In that same Application the 1st to 5th Respondent

claimed in paragraph 8 of the Plaint to be participants and beneficiaries

of the Trust Scheme by virtue of the Trust Deed annexed therein.

Other than Reliefs sought by the Respondents in that main suit, injunctive

reliefs pending hearing have been sought as well. The Petitioner herein

finds this improper considering an existence of Arbitration Clause in the

Trust Deed in which Parties in the event ofVcJispute, stay proceedings as

arbitration takes its course. The case of East African Breweries Ltd. vs.

GMM Company Ltd [2002] TLR 12, Tanzania Motors Services Ltd &

PSRC vs. Mehar Singh t/a Thaker Singh CAT Civil Appeal No. 115

of 2005 approving the case of Heymans vs. Darwin Ltd (1942) AC

356, Royal Exchange Assurance vs. Bent worth Finance (Nigeria)

Ltd (1976) 11 S.C, all in effort to assure the Court of the existence of

Arbitration avenue on which the section 21:1 of the Trust Deed

provides. Further that, and, as evidenced from the Respondents, then the

Plaintiffs in both Civil case No. 256 of 2017 and Misc. Civil

Application No.4 clearly depicted from paragraph 8 of their Plaint, as well

as paragraphs 6,7 and 8 of the Affidavit sworn by Oscar Shelukindo

confirming to be participants and beneficiaries of the Trust Scheme

that, the 2nd Petitioner had established. Both the Company and, Trustees

are similarly covered in that, same arrangement. However, it is Counsel's

observation that, the raising of fraud by the 6th to 12th Respondent is

unfounded and an afterthought, not raised in the suit. In absence of

Written Statement of Defence on the part of the Petitioners and,

supported by the case of Bavaria N.V vs. Jovet Tanzania Ltd. Misc

Commercial Cause No. 183 of 2018 expounding on what 'taking a step

in proceedings means, all in view of showffrg^jnwillingness to go along with

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the suit instead of Arbitration, the reason this Petition is lodged. It is

Counsel further submissions that, the Petitioner is ready and willing to

subject itself to Arbitration under Act 15 as read in paragraph 7 of the

Petition. The other suits by the Respondents and absence of response

from the Petitioners, this Petition provides the right avenue for sourcing

order of the Court staying the same pending arbitration. It is their sincere

plea therefore that, based on the above, no reasons whatsoever will this

Court consider no to grant the prayer, an arbitration to commence to the

choice of parties in consensus.

Strongly opposing the Petition, the 1st to 5th Respondents and in care of

their Counsel shares the principles governing the Petition of this nature as

enumerated in the case of PTA Bank & Another vs. Musoma Dairy Ltd

& Others Commercial Case No. 83 of 2003, Bavaria NV vs. Jovet

Tanzania Ltd. Misc. Commetcial Case No. 183 of 2018. Neither of

them to include 'existence of submissions', dispute at stake covered

by reference to arbitration, both parties covered by reference to

arbitration, lack of sufficient reasons to refuse Stay, no further

steps taken after appearance and before filing statement of

defence and Petitioner willingness to arbitrate. The Arbitration

Clause in place, it is observed limited in\SCQfce as to interpretation of the

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Trust Deed and, Rules but, not of the nature within the claim by the

Plaintiff's/Respondents herein. Case of Social Action Trust Fund vs.

New Northern Creameries, Commercial Case No. 74 of 2002 was

referred in this position. None of the issues that, the 1st to 5th

Respondent have claimed can legally be determined by the Arbitrator,

other than this Court alone, which vested under section 26 of the

Trustees Incorporation for that. Section 9 of Cap. 33 of our law

empowers this Court to hear and, determine such s u it ,unless barred by

law, he suggests. On whether the Respondent is covered by reference to

arbitration, Counsel submits that the 1st to 5th are not privy and, hence

not party to arbitration. With regard to sufficient reasons for refusal of

Stay, Counsel reiterates failure on the part of the Petitioners considering

the only ground advanced that the 1st to 5th Respondents are claiming for

proceeds under the 2nd Petitioner's Scheme. To consider the

Respondent as participants and, beneficiaries of the Trust Scheme, is even

misconceived and, contrary to the fact under paragraphs 15 & 16. The

claims by the Respondents is strictly for mis-management of the Trust,

Breach of Trust and Confidence, deliction of powers and, abandonment of

the statutory duties and obligations vested on the Petitioners. It is even

not true that, the Petitioners neve(v took necessary steps to the
 proceedings, considering order for Maintanance of Status Qou in

application for injunction in Misc. Application No. 4 of 2018. The case

of Nam Enterprises Ltd. vs. Kariakoo Market Corp. Commercial

case No. 80 of 2011 for waiver of arbitral conditions following

involvement in litigation, has been cited. On willingness to arbitrate,

Counsel draws the Court to several correspondences which the Petitioners

never heed. Whether or not the Respondents are beneficiaries, it is one

thingn while acceding to is another and, in the vacuum, they are not bound

by the arbitration agreement. Finally, the Court was reminded to be

jealousy of its jurisdiction by avoiding being swayed by assumptions and

predictions. The 6th to 12th Respondent largely shared what their

counterparts submitted but, registered categorically and loudly so their

position of not being ready to be subjected to arbitration, more so when

there is no Notice of Dispute issued by the Petitioners while all along and,

through correspondences, the Petitioners have been reluctant for

Arbitration. Similarly but onn a different but higher note, the Respondents

alleges herein that the Petitioners have "fraudulently misappropriated"

the Trust Properties but even secretly, dissolved the Trust . With such

serious allegations then no arbitration can be entertained other than this

forum at the High Court. Halsbury LawsNjf England 3rd Edition was
referred in expounding this stance. It is with these allegations that, I found

myself constrained and refrain to address, it being criminal in nature and

hence proceed with whether or not arbitration is the forum or else.

Looking at the Trust Deed annexture A of the Petition, it is without

hesitation that, the Petitioner is a Settlor while the four () others are

Trustees holding shares on behalf of the employees. The aim was that of

providing financial facility to enable employees acquire shares of

the Company, while offering incentive for their continued growth. Of

interest and, which parties have attempted to discuss, is section 21 of

same on DISPUTE SETTLEMENT whose section 21.1 reads and, for the

sake of my simple but focused, arrival reads;

21.1 If at any time the dispute occurs between parties between

the Company, the trustees or particiapants concerning

interpretation of this Deed and the Rules, the parties shall make

every effort to resolve the dispute through negotiations. If the

parties fail to arrive at a solution by way of negotiations, the

dispute shall be referred to arbitration by a single arbitrator who

shall be appointed jointly by parties in dispute. The arbitration

proceedings will be governed by theJVrbitration Ordinance Cap.

15.
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 Much as the allegations by the Respondents ranges from various angles,

ending disagreeing with the Petitioners for prayers to Arbitrate, their

participation and beneficiaries subjects them to this clause and from

which their grievances shall be determined as to whether or not from

interpretation of this Deed and Rules, the dispute of such nature can be

resolved or not. Schedule to the Deed defines who a member is;, to include

Participant shares in the Company. Item 9 of the same exhibits rights of

employees, while item deals with Dismissal of participants who ceases to

be employees. It is and rightly so that the Petitioners had opted not to file

the Written Statement of Defence which match with the key words in

section 6 of the Arbitration Ordinance Cap. 6,before filing a Written

Statement of Defence or Taking any Other Step in the proceedings.

The case cited that of East African Breweries Ltd. (supra) rightly

fortifies the Petitioners argument. This part of the section is crucial as it

allows the Defendant like the Petitioner herein, at any time after

appearance and before filing a WSD or taking any other step in the

proceedings apply as he has done, to stay proceedings as prayed. As

already stated, the Parties under the Trust Deed had submitted

themselves to arbitration in the event of any misunderstandings and

disputes. I am, nevertheless of a considered .vtew that a departure from

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that Trust should have been followed by a vigorous response from the

Defendant, the Petitioner by filing/applying for a stay at an appropriate

time. I will but not dare to depart from the Court of Appeal decision in the

case of Construction Engineering & Builders Ltd vs. Sugar

Development Corporation [1983] TLR stating that;

"Where it is clear that the Parties to a contract have agreed to

submit at their disputes or differences arising under the contract

to an Arbitrator, the dispute must go to an arbitrator unless there

is good reason to justify the Court to override the agreement of

parties...".

It is glaring andm vividly clear that, both parties can not avoid this forum

failure to which next level will take its toll, more so with adherence to

relevant provisions of the law as such as one requiring to apply for Stay of

Action or proceedings as it is the case here, soon after entering

appearance and before filing of WSD or taking any other steps in the

proceedings. Rule 18 of the 2nd Schedule of Cap. 33 provides;

"Where any part to an agreement to refer to arbitration, institutes

any suit against any other party to an agreement...in respect of

any matter...any party to such suit m ay^ t the earkies possible

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opportunity apply to the Court to Stay the Suit...the Court may

order staying the suit" What that earliest possible means, is the period

between entering appearance and before written statement of defence has

been filed. The Petitioner and, I observe, has taken the appropriate

steps for Stay of Action.

From the foregoing, the Petition has merit is allowed and, granted

It is so ordered.

JUDGE
19/12/2019

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