According to a judgment delivered on August 18, 2025, in Ecobank Tanzania Limited v East African Fossils Company Limited and three others, Judge Mwajuma Kadilu ruled that the defendants were jointly and severally liable for outstanding credit facilities, default interest, penalties and charges totalling Sh14.03 billion
Dar es Salaam. The High Court’s Commercial Division has ordered East African Fossils Company Limited and its guarantors to pay Ecobank Tanzania Limited more than Sh14 billion in a protracted loan dispute.
According to a judgment delivered on August 18, 2025, in Ecobank Tanzania Limited v East African Fossils Company Limited and three others, Judge Mwajuma Kadilu ruled that the defendants were jointly and severally liable for outstanding credit facilities, default interest, penalties and charges totalling Sh14.03 billion.
“The defendants herein are jointly and severally ordered to pay the plaintiff Sh14.038 billion, being the amount due and owing from credit facilities issued to the first defendant,” Judge Kadilu stated in his 27-page judgment.
The dispute arose from four credit facilities granted between 2014 and 2016, which were secured through mortgages over several properties, vehicles, cotton ginning machines and a ship named MV Saint Mathew.
The loans were further guaranteed by Mathayo Sons Enterprises Limited and two individual guarantors, Vedastus Mathayo Manyinyi and Stephen Marwa Mathayo.
Ecobank claimed the defendants defaulted on repayments, prompting the bank to sell off some secured assets, including farms, petrol stations, trailers and trucks.
However, the proceeds—about Sh1.3 billion—were insufficient to clear the debt.
The defendants did not deny receiving the facilities but argued that their petroleum business in the Democratic Republic of Congo (DRC) was disrupted by civil wars, which frustrated performance.
They also alleged that Ecobank mismanaged their accounts and benefited from a risk-sharing arrangement with Ecobank Paris.
Judge Kadilu rejected these arguments, holding that the doctrine of frustration did not apply because civil unrest in the DRC was foreseeable.
“It cannot be said that the possibility of civil wars erupting in the DRC was not foreseeable by the parties when contracting in 2014.
What transpired in this case was hardship to perform the contractual terms rather than impossibility,” she observed. On the alleged fraudulent transactions, the court said the complaints should have first been addressed through the Bank of Tanzania’s Financial Consumer Protection Regulations before coming to court.
“Skipping these steps renders the suit incompetent before the High Court,” Judge Kadilu ruled, striking out Fossils’ counterclaim.
The court further dismissed claims that the facilities were guaranteed by Ecobank DRC or placed under a loan risk-sharing arrangement with Ecobank Paris, noting that no binding agreements had been produced as evidence.
Citing the Court of Appeal’s stance in Private Agricultural Sector Support Trust v Kilimanjaro Cooperative Bank Ltd (2022), Judge Kadilu stressed that borrowers must honour their commitments.
“If you borrow money, you must ultimately pay it back, in most cases with interest. There is no shortcut,” she said. The court also reduced the contractual default interest from 19 percent to 10 percent per annum, running from the filing of the suit to the judgment date, and further awarded post-judgment interest at two percent per annum until full settlement.
Ecobank was also awarded costs of the suit. However, the court declined to immediately order attachment and sale of additional assets, saying such measures should be pursued at the execution stage.
The case was heard together with another suit filed by East African Fossils against Ecobank, which was dismissed for being filed in the wrong forum.
The judgment underscores the enforceability of loan contracts and the obligations of guarantors in Tanzania’s commercial lending sector.
