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Objection in Mechmar-IPTL case dismissed
2005-05-22 08:27:01
By Sunday Observer Correspondent
The Court of Appeal of Tanzania has unanimously dismissed with costs the preliminary objection raised by Mechmar Corporation (Malaysia) Berhad on 8th March 2005 against an application by VIP Engineering & Marketing Ltd for revision of the IPTL winding up proceedings.
The application was filed at the High of Tanzania since 25th February 2002.
The ruling was delivered last week by Nsekela, J.A. on behalf of the other Justices of the Court namely, Mroso, J.A. and Kaji, J.A.
The ruling means that the Court of Appeal has allowed VIP to show the irregularities at the High Court of Tanzania in the pending IPTL winding up proceedings.
However, the hearing of the application for revision could not proceed on 29th April 2005 because Mechmar Corporation of Malaysia took a preliminary objection on the grounds that pursuant to the Written Law (Misc. Amendments) Act No. 25 of 2002, the application for revision was expressly and specifically prohibited.
Also Mechmar alleged that the application was an abuse of the process of the Court intended to derail and delay the High Court proceedings.
Apparently both VIP and Mechmar agree that the High Court proceedings should not be delayed any further. However, they differ on the correct method of their advancement.
VIP insist that the due process that is required by law in first determining the applications that were filed in Court first should be maintained, especially after waiting for almost three years, while Mechmar now insists that execution of the orders of the London Court for International Arbitration (LCIA) dated August 2003 directing VIP to discontinue the winding up proceedings should be heard and determined concurrently with VIP’s applications for the winding up of IPTL some of which date as far back as February 2002.
Mechmar’s Notice of preliminary objection dated 8th March 2005 prompted a response by VIP on 22nd March 2005, in which VIP contended that Mechmar’s preliminary objection was incompetent and misconceived based on twelve grounds.
VIP had given six grounds of revision .One of them is that VIP was seeking guidance on whether it was proper for the High Court to continue with the change of assignment of the proceedings from Oriyo, J. to Ihema, J. notwithstanding the resultant confusion and misunderstanding by Ihema, J. of the import of Oriyo, J.’s order for staying the application for consolidation and that for the appointment of the Official Receiver of Independent Power Tanzania Ltd (IPTL) pending determination by this Court of Civil Appeal No. 54 of 2002, against Judge Chipeta’s interim order of paying the IPTL’s Capacity Revenue into Court.
During hearing of Mechmar’s preliminary objection, Mr. Cuthbert Tenga, advocate for VIP Engineering and Marketing Ltd complained that the proceedings in the High Court were fraught with irregularities rendering them difficult to follow and consequently urged the Court to accept that remedial measures by way of revision were imperative without waiting for a final decision at the end of the trial of the suit.
The Court of Appeal agreed with Mr. Tenga that in a proper case, where irregularities are present in the High Court proceedings, Act No. 25 of 2002 cannot prevent the Court of Appeal from intervening to prevent the proceedings from being conducted in a haphazard manner in the lower Courts.
It pointed out that changing the assignment of judges without giving reasons especially when the individual calendar system requires that once a case is assigned to an individual judge or magistrate it shall continue before that particular judge or magistrate and that such a system was meant not only to facilitate case management by trial judges or magistrate but also to promote accountability on their part.
This was therefore accepted as one valid ground for revision as held in Civil Revision No. 1 of 1999 between (1) Fahari Bottlers Ltd. (2) Southern Highlands Bottlers Ltd versus The Registrar of Companies (3) The National Bank of Commerce (1997) Ltd (unreported).
The Court of Appeal observed that there was a serious general complaint by VIP that so far the proceedings in the High Court were in a state of confusion and being conducted in a haphazard manner.
Apparently the parties did not know what Court order to follow.
Consequently, the Court of Appeal decided that hearing of the substantive application for revision should be heard at a date to be fixed by the Registrar, meaning that VIP will now get the opportunity to detail its complaints against the irregularities it is alleging at the High Court on which it wishes to seek for directions and guidance from the court of Appeal.
Some of the VIP’s grounds of revision include that since there was an order of the Court made by Judge Oriyo and which was known to the present Judge, Hon. Ihema, to the effect that the proceedings in Civil Cause No. 254 of 2003 were stayed pending the return of Misc.
Civil Cause file No. 49 of 2002 to the High Court from the Court of Appeal and as the present judge claims that he was not aware that Misc.
Civil Cause file No. 49 of 2002 had already been returned from the Court of Appeal, the present judge has no jurisdiction to proceed with hearing of the matters in Miscellaneous Civil Case No. 254 of 2003.
VIP also says that the ensuing confusion arising out of the change of assignment of the proceedings to different judges is also clearly manifested in the dropping of two necessary parties by Judge Ihema—IPTL and the Administrator General——who had earlier appeared before Judge Oriyo as evidenced by the Court record but who were not summoned by Judge Ihema.
So, VIP seeks to know if it was proper for Judge Ihema to proceed without first determining the Application for consolidation of all the pending applications.
And whether in the light of Mechmar’s Counter Affidavit that IPTL’s application for stay of proceedings made on 1st March 2002, was also still pending, Judge Ihema, could proceed to determine the application in the absence of the Applicant who had not been summoned as a necessary party in the proceedings before Judge Ihema who has to date not withdrawn the application for stay of proceedings filed at the High Court on 1st March 2002.
VIP is also seeking guidance on whether the High Court should be allowed to continue abdicating performance of its duty by failing to appoint the Official Receiver of IPTL to protect the interests of VIP which under the Companies Ordinance Cap 212, the High Court was required to do, since 25th February 2002, when the Petition for the winding up of IPTL was presented at the High Court.
The applicant (VIP) also wants to know whether the statutory right of VIP granted by the Companies Ordinance Cap 212, to petition the High Court for the Winding Up of IPTL can be fettered by any pre-incorporation contract and whether any foreign tribunal like the London Court of International Arbitration (LCIA) can order the High Court of Tanzania to discontinue proceedings commenced under the Companies Ordinance Cap 212.
In the alternative, VIP seeks guidance of the court on whether the LCIA has jurisdiction to prevent VIP from seeking a winding up relief from the High Court of Tanzania when the LCIA has no jurisdiction to grant such winding up relief to VIP even where such a relief is merited.
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