Court rules in favour of NICOL

AMERICAN Businesswoman Kathleen Armstrong has lost a court battle involving payments of over 600m/- against the National Investment Company Limited (NICOL) for termination of her employment services as Chief Executive Officer.

This followed a decision given by the Commission for Mediation and Arbitration (CMA) to set aside the Deed of Settlement and Mediator’s Certificate of Settlement for 261,383.66 US dollars signed in her favour after granting an application lodged by NICOL.

“In the circumstances, I hereby grant this application. The Deed of Settlement and Mediator’s Certificate of Settlement dated June 24, 2011 is hereby set aside. It is ordered,” Arbitrator Rehema William declared in her decision dated March 2, 2023 delivered at the CMA in Dar es Salaam.

She agreed with the submissions advanced by Advocate Benjamin Mwakagamba of BM Attorneys, for NICOL, the applicant that the said Deed of Settlement granted in favour of Kathleen Armstrong, the respondent, who was NICOL Chief Executive Officer, was obtained fraudulently.

“The applicant has shown in his affidavit and the supporting submissions that indeed there were some aspects of illegality which were involved in procuring the said settlement agreement,” the Arbitrator pointed out in her ruling.

She mentioned some of the illegalities as the deed having discrepancies in the registration number of the labour dispute and it was witnessed by a person who purportedly acted as an advocate of the applicant while at the material time there was no any approval of authority from the Board.

The Arbitrator named other illegalities as that at the time the deed was signed, the respondent’s tenure of office had already expired, the sum of 130,000 US dollars claimed were ambiguous, the deed lacked better particulars and the date of execution had differed from the date the deed was recorded.

“In my view, the illegality stated and elaborated by the applicant’s counsel fall squarely within the meaning of Rule 30 (1) of the Labour Institutions (Mediation and Arbitration) Rules and the guidance provided by High Court in Air Tanzania Co. Ltd v/s Capt. Msami Mmari and another,” she said.

During hearing of the application, the respondent could not show up. The hearing session was ordered to proceed exparte (in absence of the other party) in terms of Rule 28 (1)(b) of the Rules after proof that the respondent, who is in the United State, was served to appear through his address indicated in CMA.

It was submitted by the counsel for the applicant that on March 16, 2011, the Capital Markets and Securities Authority (CMSA), NICOL’s regulator, investigated the applicant’s company and suspended the respondent and the Board Chairman, Mr Felix Mosha for matters related to performance failure.

Subsequently, it was submitted, the entire Board and the respondent were removed from their positions following the shareholders’ meeting held on December 14, 2012. After the removal from their positions, an Interim Manager was appointed to manage the affairs of the applicant’s company.

The CMA was told further that during the pendency of the CMSA, the respondent negotiated a settlement with the applicant and filed a signed Deed of Settlement before the CMA, committing the NICOL to pay her the said 261,383.66 US dollars.

It was also submitted that the purported agreement was lodged in the High Court for execution, but before the deed was executed it was challenged by the Attorney General and the CMSA to the effect that the same was fraudulently obtained.