COURT of Appeal yesterday ordered Zanzibar Telecom Limited (Zantel) to pay 133m/- to Petrofuel Tanzania as an outstanding amount for supplying diesel to various sites of the telecom in the country.
This followed the decision of the Court of Appeal to dismiss the appeal under which Zantel, the appellant company, had lodged to challenge the judgment of the High Court’s Commercial Division, which had ruled in favour of Petrofuel Tanzania Limited, the respondent.
Justices Batuel Mmilla, Shaban Lila and Ferdinand W ambali ruled that “the trial judge was justified to find that the respondent’s evidence proved that an amount of 133,306,579/= remained outstanding from several other invoices dated between March 26, 2008, 2009 and 2010.”
During hearing of appeal, the appellant had resisted to the payments, faulting the trial judge’s finding, as she had paid for all the fuel which was supplied to them which was limited to the period of six months as stipulated in the Letter of Intent and no evidence proved the respondent’s outstanding claims.
The justices said, “We are satisfied that since the appellant’s servants continued to receive the supplies after six months and considering conduct of parties, it is baseless to complain that the judge improperly granted the reliefs in respect of undertakings made beyond the agreed period of supply of goods.”
In their judgment delivered recently, however, the justices turned down the cross-appeal presented by the respondent to oppose the refusal by the trial judge to award them 433,844,159/- interests allegedly accrued as a result of unsettled outstanding payments.
“W e have scrutinized the Letter of Intent with a view of satisfying ourselves on whether or not the aspect of interest was contemplated therein.
W e are satisfied that the said document did not envisage the aspect of interest, but it considered the issue of penalty,” they said.
The justices also noted that interest was also not pleaded in the plaint of the suit nor was it proved.
They emphasized as a matter of substantive law, therefore, that the court could not grant interest in a case where such interest was not pleaded and proved.
Facts show that Zanzibar Telecom Limited and Petrofuel Tanzania Limited were local limited liability companies registered and carrying on business in Tanzania.
The business acquaintances between the two companies was sparked by an expression of intent contained in a document titled “Letter of Intent.”
Through that letter, the appellant signified to buy from the respond diesel at the price which was indicated in the tabulation which was provided in a clause of the letter.
It was an express term of the agreement that payment for each consignment was to be made within two weeks of receipt of invoice. It was further that the respondent was to forward the invoices twice a month.
The appellant instructed the respondent to continue with the execution of the said work in accordance with the contract documents. The appellant added that in the meantime she was finalizing the contract and would notify the respondent when ready for signature.
On the basis of that stipulation, the respondent made various supplies to the appellant’s designated locations in the country.
They include Dar es Salaam, Coast Region, Mtwara, Lindi, Morogoro, Dodoma, Singida, Tabora, Kigoma, Shinyanga, Mwanza, Kagera, Mara, Manyara, Arusha, Kilimanjaro, Tanga, Iringa, Ruvuma, Mbeya and Rukwa. The respondent raised invoices correspondent to the supplies and the appellant accepted them.
However, the appellant made party payments but several other invoices dates between March 26, 2008, 2009 and 2010 amounting to 133,306,579/- remained outstanding.
Though not covered in the Letter of Intent, the plaint quipped that any delay in payment of the invoices attracted interest at three percent. Refusal to pay for the outstanding amount led the respondent to institute the case in the High Court, whose decision was appealed against by both the appellant, for awarding the respondent the outstanding amount; and the respondent, for refusing to give them the claimed interests.