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Prosecution of MPs

I have seen many Members of Parliament being prosecuted in Courts of law. Is that legal? Do they now have immunity like in other countries? It is tantamount to prosecuting a judge is it not? TY, Dar

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Husband breach of contract

My husband promised that when I get married, and as part of my condition to get married to him, he would deposit TZS 50M every year in my personal account. I agreed to get married to him based on such a promise. For the last 15 years he complied but the last 2 years he claims that he does not have the money. I have asked him to borrow to pay as this is why I got married to him. He has refused and I want to divorce him, and put up a claim against him. Do I have a strong case against my husband? IT, Dar

It seems like you have another agreement on top of the normal marriage contract with your husband. We have not seen this agreement and hence this answer may not necessarily be conclusive. To begin with, a marriage is based on love and affection between the parties.

Yours seems to be driven by cash. A fundamental element seems to be missing in your relationship which is a shame. This is the first time we are seeing such a marriage based on such a condition. If you are successful in suing your husband, which we doubt you will succeed on, then it will set a bad precedent not only in Tanzania but world over.

Our cursory opinion, based on the few facts above, is that your agreement to be paid TZS 50M might be held to be illegal and if he counterclaims on you, you might be forced to return the money you got over the last 15 years.

We also believe that this is also not a ground for divorce. We strongly recommend you meet a marriage counsellor who might be able to provide more solid help then us lawyers.

Misleading company name

There is a company whose name suggests it is a hospital when infact it is merely a pharmacy.Once in there, the pharmacist gives you oral medication without a prescription. Infact everyone inside calls the pharmacist doctor. Is there a way someone can force this company to change its name so as not to mislead the public? UU, Morogoro

Section 33 of the Companies Act states that (I) If in the Minister’s opinion the name by which a company is registered gives so misleading an indication of the nature of its activities as to be likely to cause harm to the public, he may direct it to change its name.

(2) The direction must, if not duly made the subject of an application to the court under subsection (3), be complied with within a period of 6 weeks from the date of the direction or such longer period as the Registrar may think fit to allow. You can write to the Minister who can force the name change, although the company may challenge this in Court.

Imprisonment of company

I have read various laws of Tanzania and am thoroughly confused when the law mentions that the body corporate ie the company is guilty it shall be sentenced to imprisonment or fined or both. Now how can a company be sent to prison? Do you arrest the poor managers, directors or shareholders? Is that not unfair for sins of a company? GO, Moshi

It is true that you cannot sentence a corporate body as it is not a human being. However some of the laws actually provide that the directors or the managers will be sentenced to jail. In that case it is the directors and managers who are responsible for the acts of the company. However where the law does not specifically state so, you are right that one cannot imprison the company. To salvage such a situation, the Interpretation of Laws Act provides a fine mechanism in lieu of imprisonment and states in section 71 that (1) Every enactment relating to an offence punishable on conviction or on summary conviction shall be taken to refer to bodies corporate as well as to individuals.

(2) Where under a written law, a forfeiture or penalty is payable to a party aggrieved, it shall be payable to a body corporate in every case where that body is the party aggrieved.

(3) Except where otherwise expressly provided, where the penalty prescribed in a written law in respect of an offence does not consist of or include a fine, the court before which the offence is tried may, in the case of a body corporate, impose a fine– (a) where a term of imprisonment not exceeding six months is prescribed, a fine of two million shillings; (b) where a term of imprisonment exceeding six months but not exceeding one year is prescribed, a fine of three million shillings; (c) where a term of imprisonment exceeding one year but not exceeding two years is prescribed, a fine of five million shillings; (d) where a term of imprisonment exceeding three years is prescribed, a fine of ten million shillings. You can see that instead of the corporate being imprisoned it is fined.

Exclusivity of the national oil company

I am intending to invest in the oil and gas sector in Tanzania.Am I free to sell the gas I extract to anyone in Tanzania that I wish at whatever price I want? RE, Dar

Unfortunately if you are a new player, after discovery, you will likely come under the ambit of the Petroleum Act 2015 which has introduced, unlike its predecessor law the Petroleum (Exploratoion and Production) Act 1980, the concept of an aggregator who has the exclusive right to purchase, collect and sell natural gas from producers save for LNG for export purposes. The aggregator thus has the exclusive right to purchase gas from you and then to sell it in the local market. This is a big problem for many private players since the aggregator needs to have the financial muscle to pay for this gas and at the same time should be able to pay a reasonable price that must be negotiated. Hence if you are unable to negotiate the price, you might never be able to sell.

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I have started flying kites very high along coco beach. The police have started harrasing me that I cannot do so. We have had arguments with them and they have failed to shown me what provision of the law disallows me to fly kites. This is my country and I dont see why I should be disallowed to enjoy my airspace. Am I doing the right thing? What about drones for video shooting? YU, Dar

Flying kites at heights over 200 feet is illegal under our laws. The Civil Aviaton (Operation of Aircraft) Regulations states in Regulation 17 that (1) A person shall not, within the United Republic of Tanzania (a) fly a captive balloon or kite at a height of more than 200 feet above the ground level or within 200 feet of any vessel, vehicle or structure; (b) fly a captive balloon within an aerodrome traffic zone; (c) fly a balloon exceeding 6 feet in any linear dimension at any stage of its flight, including any basket or other equipment attached to the balloon, in controlled airspace; (d) fly a kite within an aerodrome traffic zone; (e) moor an airship; or (f) fly a free balloon at night, without the permission in writing of the Authority, and in accordance with any conditions subject to which the permission may be granted. (2) A captive balloon when in flight shall not be left unattended unless it is fitted with a device which ensures automatic deflation if it breaks.

(3) An unmanned free balloon shall be operated in such a manner as to minimise hazards to persons, property or other aircraft. Therefore flying a kite at heights over 200 feet is illegal and you may be charged for doing so as you are endangering the safe navigation of aircraft.As for drones for video shooting, it is very likely that along the same spirit drones are also disallowed be it for video shooting or otherwise. We recommend you contact the Tanzania Civil Aviation Authority for more information.

Bajaj breakdown, refund of fare

I paid a Bajaj driver to take me to Ubungo bus stand. Nearly half way through, the Bajaj broke down and I had to use another Bajaj to ferry me. The first Bajaj driver refused to refund atleast 50% of my fare.Are there any rules I can refer to that can show me my rights in such a scenario? FF, Dar

Fortunately under SUMATRA, there are specific regulations called the Transport Licensing (Motorcycles and Tricycles) Regulations 2010 which has a clear provision that states if such a journey as yours is terminated because of a breakdown, then the passenger is entitled to refund of the remaining part of the journey. Hence you were entitled to atleast 50% of the fare you had paid. If you wish to pursue this, you can report this to SUMATRA for action.

Commercial Court judgment not delivered

I went to the Commercial Court and we completed hearing and final submissions six months ago but the judgment has not been issued till date.I am disappointed. The Court has not lived upto to my expectations. What do I do? GO, Dar

Generally the Commercial Court is a fast track Court. Commercial Court Rule 67 states that (1) The Court shall, at the conclusion of hearing deliver judgment within a period of sixty days in case of a judgment or thirty days in case of ruling. (2) Where a Judge fails to comply with the provisions of sub rule (1), he shall state in the Court record the reason for such failure.

(3) Every judgment shall embody at the end a summary of the reliefs granted by the Court. You will note that judgment must be delivered within 60 days. We recommend you go see the judge in charge or registrar at the Commercial Court who can address this issue. Rights on my farm I own a very large farm which has its own roads inside. Do I need to wear a seatbelt on my farm roads? Can I make my own rules for my roads? I want to get the feel of being home- can I drive on the right hand of the road. Are the police allowed into my private property?

Are there any offences in the traffic laws that provide strictly for imprisonment? TY, Morogoro You must be reminded that you own a farm not a country and hence bound by the laws of Tanzania. The Road Traffic Act and the various traffic regulations dictate that one must wear a seatbelt at all times when driving on a road.

Road is defined as any road, highway, way, street, bridge, culvert, wharf, car park, footpath or bridle path on which vehicles are capable of travelling and to which the public has access whether or not such access is restricted and whether subject to any condition, but does not include any road within the curtilage of a dwelling house. Bearing the above in mind, although you own the farm, you are still bound by the Road Traffic Act and cannot have your own rules or drive on the right hand side of the farm roads. Furthermore the police are allowed in any property, be it a farm or otherwise.

To answer your last question, section 40 of the Road Traffic Act is one of the sections that only provides, as a punishment, only a custodial sentence of a minimum of 3 years (without an option of a fine). It states that (1) Any person who causes bodily injury to, or the death of, any person by the driving of a motor vehicle or trailer recklessly or at a speed or in a manner which having regard to all the circumstances of the case, is dangerous to the public or to any other person shall be guilty of an offence.

(2) Any person who, while under the influence of drink or drugs to such an extent as to be incapable of having proper control of the vehicle, is in charge of a motor vehicle or trailer and by an act or omission in relation thereto causes bodily injury to, or the death of, any person shall be guilty of an offence.

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Mistress wants my money

I had a long affair with a lady with whom I broke up recently. In return for her not telling anyone about our affair including my wife, we entered through our lawyers into a settlement agreement that I pay her Tsh 2.2M every month in addition to paying her medical insurance premium. In consideration the lady was to keep her mouth shut and stay in a different city. I have been paying her these amounts for the past 4 years and am now in deep financial crisis. She says that I have breached the agreement by not paying her and intends to sue me. How do I handle this? Have I not being overpaying her? UI, Dar

Our answer will address the issue of enforceability of the agreement you entered into not the fact that it is likely, when you get sued if you do, that your wife will find out which was the precise reason you entered into the agreement. It seems you entered into the agreement after being blackmailed and were under duress when you signed. It doesn’t matter if both your lawyers were involved. Also immaterial is the fact that you have been paying her for the past few years.

Our opinion is that the agreement is illegal in that it is against public policy and was entered into under duress after being blackmailed. The chances of the lady winning the case against you, assuming you have disclosed all material facts to us, are very low.

If you are sued, we recommend that you also file a counter claim against the lady to pay you the sums you have paid her over the last few years. So that you are not in a compromising position, you might want to consider informing your wife about this.

That is for you to decide and you should perhaps consider meeting a marriage counselor prior to disclosing this to your wife. The issue of adequacy of value does not come in as we believe your agreement was illegal from the outset. However Court’s will generally not go into the adequacy of a consideration.

Shareholders rich, company poor

There is a very large and successful company in Tanzania that has opened so called subsidiaries for each of its businesses. I supply goods to one of these subsidiaries which is always having difficulties paying. My question is twofold: how can the subsidiary be unable to pay the debt when its shareholders are very strong companies owned by very strong people. Secondly, can I directly claim my amount from the shareholders? TY, Dar

Your first question on why the subsidiary is unable to pay its debt is a question we cannot answer. It is more of an accounting issue that you should ask an accounting firm, Your second question is very interesting and we answer it below.

The shareholders of a company are distinct from the company itself meaning that the company has a distinct legal identity from the shareholders. The shareholders own the shares of the company not the assets- the assets are owned by the company. The shareholders are also generally not liable for the debt of the company as it is the company that has borrowed not the shareholders in their individual names. If you have ever borrowed, you will realize that the banks make the shareholders sign a personal guarantee, which is meant to make the shareholder liable for the debt of the company as they are normally not automatically liable.

In order for you to reach out to the shareholders and make the shareholders liable, you need to pierce the veil of incorporation. In order for one to be successful in piercing the corporate veil, one must show the following two prongs: that there is such unity of ownership and interest in the firm that the separate personalities of the corporation and shareholder no longer exist; and that the Court’s refusal to allow piercing would promote an injustice or sanction a fraud.

The application of the above test has proven to be anything but simple, and there are some important caveats and inconsistencies that are worth pointing out. There is no list of necessary and sufficient conditions to tie down this doctrine to determine what goes into the determination of the two prongs.

Some Courts have at times only used one of the two prongs. Factors taken into consideration to pierce the veil of incorporation include commingling of funds and other assets of the two entities (ie shareholder and company), the holding out by one entity that it is liable for the debts of the other, maintaining identical equitable ownership in the two entities, use of the same offices and employees, use of one as a mere shell or conduit for the affairs of the other, inadequate capitalization, disregard of corporate formalities, lack of segregation of corporate records, treatment by an individual of the assets of the corporation as his own and identical or significantly overlapping directors and officers. As to the second prong, the key appears to be proof of some form of bad faith motivation underlying the actions of the company.

A number of cases have offered the following clarifications as to what counts and doesn’t count as bad faith: a simple difficulty in enforcing a judgment or collecting a debt does not satisfy this prong, nor does the fact that the shareholder provide funds to a subsidiary for the purpose of assisting the latter in meeting its financial obligations, so long as it is not for the purpose of perpetrating a fraud.

Inequitable results are more likely to be found in situations where the corporate form is used to avoid the effect of a statute or regulation. By the same token, Courts are perceived to be more receptive in those contract cases where the alleged wrong involves some sort of fraud. Hence for you to be able to pierce the veil of incorporation and hold the shareholders liable for the debt of the company, you must satisfy some of the above. As stated before, piercing the veil and holding the shareholder liable for the debt of the company is not the easiest thing to do- your attorney can guide you further.

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