Barclays Bank dealt huge blow as court turns down appeal

THE Court of Appeal has rejected the appeal lodged by Barclays Bank Tanzania Limited to challenge the dismissal of its commercial case for repayment of over 10bn/- loan facility by the Tanzania Pharmaceutical Industries Limited and three individuals.

The individuals, who had also guaranteed the company in order to obtain the loan in question from the bank, include former Chama Cha Mapinduzi (CCM) Chairman, Dar es Salaam Region, Mr Ramadhani Madabida, Ms Zarina Madabida and businessman Salum Shamte.

Justices Sauda Mjasiri, Richard Mziray and Gerald Ndika, ruled against the bank, the appellant, after granting one ground of objection presented by the company and its guarantors, who were respondents in the matter, over incompetence of the appeal.

In the ground of objection, the respondents had stated that the appeal was incompetent for contravening Rule 96 (1) (d), (h) and (k) of the Tanzania Court of Appeal Rules, as its record did not include some essential copies of proceedings.

The justices noted omission of a copy of the proceedings of the High Court in respect of the application for leave to appeal to the Court of Appeal and a copy of the drawn order dated June 2, 2014 sought to be appealed against.

During hearing of the appeal, the bank had denied to have failed to include in the proceedings the decision sought to be challenged. In their ruling, however, the justices noted that the document attached was not a drawn order but a copy of a purported decree of the High Court dated June 2, 2014.

They agreed with the counsel for the respondents that the High Court dismissal of the suit by its ruling of June 2, 2014 for want of prosecution did not amount to or result into a decree, but an order.

“For in terms of section 3 of the Civil Procedure Code Act, a decree is the formal expression of an adjudication that conclusively determines the rights and obligations of the parties but it does not include an order of dismissal of the suit for default,” they said.

The justices said, what the appellant included in the record of appeal labelled as decree was a wrong document and by doing so, the appellant wrongly excluded from the record of appeal a copy of the order of the High Court extracted from the ruling rendered on June 2, 2014. “That sorry state of affairs amounts to a clear violation of Rule 96 (1) (h) of the Rules and we so hold.

As we have held that the record of appeal by which this appeal was instituted is defective on account of its incompleteness in violation of the rules, we find that the appeal is incompetent,” the justices declared.

In the commercial suit, the appellant had stated that the company, as principal borrower, failed to repay its debts under the facilities by their due dates or at all.

As of November 8, 2012, outstanding amounts due and owing by the company stood at US dollars 4,551,492.86 for the term loan. The outstanding letter of credit was US dollars 74,294.86 and unauthorized overdraft of 10,501,993/-.

The document further indicates that interest accrued up to November 8, 2012 was US dollars 307,825.49 and the outstanding default interest US dollars 45,631.254.

On diverse dates between 2002 and 2008, the bank allegedly availed credit facilities to the company for different amounts in the form of overdrafts, performance bonds, letters of credit, bank guarantees and indemnities and term loans. Subsequently, the plaint of the suit states, in the years 2009, 2010 and 2011, the facilities were varied on, or amended as agreed between the parties.

The bank alleges that Tanzania Pharmaceutical Industries Limited was liable for payment of the amount as principal borrower while other three defendants are jointly and severely answerable to Barclays bank with the company pursuant to their obligations under their respective personal guarantees. In their written statements of defence, the respondents denied the claims.

As it turned out, the suit did not go through trial as the High Court dismissed the case with costs on June 2, 2014 on the ground that the appellant failed to prosecute its case when it came up for hearing on May 14, 2014.

The court held the view that the appellant’s failure to comply with Rules 48 and 49 of the High Court (Commercial Division) Procedure Rules, 2012 to file witness statements as evidence in chief in support of its claims within seven days of completion of mediation amounted to want of prosecution.