THE High Court’s Commercial Division has dismissed the commercial dispute by Aggreko Energy Rentals Tanzania Limited for payments of over 266m/- by five defendants, including Zania African Resources Limited, following a dispute relating to agreement on renting generators.
Judge Leila Mgonya ruled in favour of the defendants, including employees of the company, Anorld Lange, Charlotte Claesson, Karl Magnusson, William Kazi and Adrian Taylor after holding that Aggreko Company inconsolably failed to establish existence of a valid agreement.
“In order for contract to be legally binding, the object of a contract must be lawful. A contract rendered illegal by common law or by statute confers no right capable of being enforced, nor does it obligate the other party to perform his part of the bargain,” she ruled.
During the testimony of the sole plaintiff witness, it was stated that, apart from the claims to the company of which have proved failure, the said employees were claimed to be part of the claim as they were active members in advising the company in preparation of the contract between the parties.
“On this point, I tend to differ with this logic legally as the (employees) under the said explanation, were privy to the alleged contract. Generally speaking and in general term, “PRIVITY” means the relationship that exists between people as a result of their participation in some transaction or event,” she said.
According to her, the basic Rule and to be specific, the Common Law Doctrine of Privity of Contract states that no one can sue or be sued on a contract to which he is not a party, it can neither confer rights nor impose liabilities on others not privy thereto.
The judge pointed out that the doctrine further cements that, no one may be entitled to or bound by the terms of contract to which he is not an original party.
From such observation, she said, it was her firm view too that Aggreko Energy Rentals Tanzania Limited, the plaintiff do not have any cause of action against the employees, hence wrongly sued.
Judge Mgonya said also that it was unfortunate during the trial the Plaintiff did not adduce the facts established on evidence that he entered into a valid Contract with the defendant company as alleged.
“It follows therefore that, since the Plaintiff has miserably failed to prove his case, he deserves nothing out of the reliefs prayed in his plaint. Consequently, I proceed to dismiss the instant suit in its entirety for want of merits,” the judge declared.
The plaintiff has pushed for declaratory order that Anorld Lange, Charlotte Claesson, Karl Magnusson, William Kazi and Adrian Taylor were employed by the defendant company as a sham to defraud the plaintiff.
He sought for an order against the defendant for immediate payment of 51,141,37 US dollars being outstanding sum of goods supplied and an order for compound interest on the sum at the commercial rate of 12 per cent per annum from date of filing the case up to the date of judgment.
The plaintiff also requested for payments of general damages to be assessed by the court to the tune of 50,000 US dollars and punitive damages to the tune of 20,000 US dollars for refusal and purposeful breach of the agreement.
During the hearing, the plaintiff’s sole witness, Mr. Max Schiff, the Country Director, whose duties in brief are sales, operations and finances for Aggreko Tanzania Limited, had testified to know the defendants as clients of his company.
He testified that the defendant company was the client of Aggreko, while the rest of the defendants are the shareholders of the company, Zania Africa Resources Limited.
He further said that, the Plaintiff entered into Rental Agreement for the Generator, whereby William Kazi signed the contract to that effect where payments were to be made monthly.
Mr. Schiff further averred that, after the plaintiff had entered into the agreement, the business was conducted well where they had received payment for approximately 12 months as per agreement between the parties.
However, later the defendant company stopped to pay but still they were enjoying and using the generators, one 125 KVA diesel generator and two 200 KVA generators, without paying the rent as agreed in the agreement between the parties despite of several reminders.
The witness averred that, despite of the invoices being raised automatically by the system and the same to be forwarded to the client who is supposed to respond by paying the same within 30 days, yet the defendant company did not comply with the terms of their contract.