Africa-Press – Tanzania. THE Court of Appeal has dismissed the appeal by two Italian companies, SCOVA Engineering and IRTEC SpA, for payments of 1,278,148.60 UK pounds (about 4.1bn/-) in an agreement involving supply of irrigation machines with accessories to Mtibwa Sugar Estates Limited.
Justices Rehema Mkuye, Gerald Ndika and Jacobs Mwambegele ruled in favour of Mtibwa Sugar and three other respondents after holding that the appeal lacked merits. Other respondents are Kagera Sugar Limited, Super Star Forwarders Company Limited and General Motors Investment Limited.
“The upshot of the matter is that the appeal is without merit as we uphold the High Court’s refusal to assume jurisdiction over the matter. Accordingly, the appeal stands dismissed,” the justices ruled.
They referred to Clause 1.9.2 of the Agreement under which the appellants and other three respondents chose in clear, explicit and specific terms that the Court of Rome, in exclusion of other courts, would be their forum for litigating any dispute between them in connection with the said agreement.
“That agreement bound the parties and it was not open for the appellants to resort to the High Court, Commercial Division. To that extent, the High Court was right to refuse to take cognizance of the suit and rightly bound the parties to their bargain,” the justices said.
Nonetheless, it was their view that the High Court’s ruling is riddled with an oversight in that it incorrectly held that the said court’s jurisdiction was ousted by Clause 1.9.2 and, as a result, it had no jurisdiction to try the matter.
The justices pointed out that an exclusive jurisdiction clause only allows parties to choose a forum out of two or more competent courts to try disputes between them and does not, so to speak, oust the jurisdiction of the other competent courts not chosen as the forum.
There was another ground of appeal, in which the appellants faulted the High Court for dismissing the entire suit as against the respondents while the choice of law and forum clause did not bind Mtibwa Sugar.
On that point, the justices faulted the High Court decision, ruling that the trial judge should have stayed trying the suit pending the institution and determination of the claim in the Court of Rome.
“On that basis, we vacate the dismissal order and substitute for it an order staying the suit in the High Court, Commercial Division. We must hasten to say that this variation is obviously inconsequential to the outcome of the appeal,” they said and proceeded to dismiss the appeal.
The appellants instituted their joint suit in the High Court, Commercial Division, claiming that sometime in mid-2011, they entered into an agreement with Mtibwa Sugar for the supply of irrigation machines with accessories.
It was further averred that the appellants also entered into two Guarantee and Indemnity Agreements dated June 10, 2011 with other three respondents under which they undertook to pay any amount due under the supply agreement between the two Italian companies and Mtibwa Sugar.
