Tanzania Portland Cement wins Sh1.3bn verdict in breach of contract case

Dar es Salaam. Tanzania Portland Cement has secured Sh1.3 billion verdict against the leading bag manufacturer Techpark Tanzania Limited in a breach of contract case for supply of empty bags.

The decision was delivered recently by the commercial division of the High Court after nearly one year of trial before Judge Stephen Magoiga.

“I am satisfied that the plaintiff has been able to prove Sh1, 069,729,000 being an amount for bags not supplied and Sh236, 585,621 being a refund for detective bags supplied,” said the judge.

Techpark is one of the largest manufacturers of bags for various uses. The cement manufacturer brought a suit against Techpark allegedly for under supply of bags and for supply of defective bags.

Tanzania Portland Cement entered with Techpark on January 1, 2017 into a purchasing agreement for supply of 14.4 million empty bags at Sh370 each. Description of the bags and other terms were detailed in the contract.

It was agreed, among other things, that the quantities of bags to be supplied and delivered on monthly basis will depend on the plaintiff’s demand and upon payment in advance the price of the bags to be supplied on particular month.

Records show between January 24, 2018 and December 2, 2018 the cement firm requested for supply of 14.4 million bags and effected advance payment of Sh5.1 billion but Techpark was only able to supply bags worth Sh4 million out of agreed bags, leaving unsupplied bags worth Sh1.069 billion.

It was further alleged that in the course of performing the supply, the defendant supplied defective bags worth Sh236.5 million contrary to agreed quality which were returned to the defendant but to date the defendant neither reimbursed the amount nor resupplied the bags, despite several reminders.

No Techpark defence

The case against Techpark was heard and determined without their defence in court. They failed to show up in court to defend themselves even after being notified of the case.

When the suit was called on for orders on December 2, 2022, Techpark had yet to file defence or applied for more time to do so.

On that day, Mr Rwekama Rwekiza, a lawyer who represented the cement company, asked to be allowed to proceed with the suit in absence of the respondent.

Rule 22 (1) of the High Court (Commercial Division) Procedure Rules, 2012 allows the court to enter judgment in favour of the plaintiff if the party required to file defence fails to do so within specified period.

The judge granted to prayer and ordered the cement company to prove her case by filling in Form number 1 accompanied by affidavit in proof of the claim as provided for under rule 22 (1), paving the way for judgment in favour of the plaintiff.

The cement company had sought a declaration that Techpark was in breach of the terms and condition of the contract of supply of bags and for the payment of Sh1 billion and Sh236.5 million for bags Techpark failed to supply and value of defective bags respectively.

“I have carefully gone through affidavit and the exhibits annexed in proof of the claim, I am satisfied that the plaintiff has discharged his legal burden required in civil cases,” said the judge.

At this stage, the cement firm was only to prove to the court that it had notified the respondent about the case, it has made application for default judgment in form number 1 and that the application in Form No 1 has been accompanied by an affidavit in proof of the claim.

“In the instant suit, there is no dispute that the plaintiff was served in accordance with the law. However, despite such proof of service, no written statement of defence has been so far failed or any application for extension of time to file one.

However, the judge ordered that the verdict should not be executed unless the cement firm has publicized the decree two daily newspapers and a period of 21 days from the date of expire of the said ted days has elapsed.