Automated Summary
Key Facts
The plaintiff (Attorney General) and defendant (Solohaga Company Limited) entered into a 2014 agreement for financing road construction in Msata/Masuguru village, Bagamoyo. The plaintiff advanced TZS 344,068,580.85, to be repaid within one month post-project completion. After the defendant defaulted, a 2017 Deed of Settlement was signed requiring repayment of TZS 500,000,000 in 11 installments with 15% interest on defaults. The defendant paid TZS 254,800,000, leaving an unpaid balance of TZS 245,200,000 plus interest. The court found no dispute on these facts, confirming the defendant's breach of both the original agreement and the Deed of Settlement.
Transaction Type
Loan agreement for road project financing in Bagamoyo, Tanzania
Issues
- To what reliefs the parties are entitled following the court's determination of the disputed issues
- Whether the defendant company breached the facility agreement and tripartite agreement between UTT-Projects and Infrastructure Development PLC (UTT-PID) and SOLOHAGA Company Limited dated 26th March 2014
- Whether the defendant company is indebted to the plaintiff to the tune of Tshs 369,148,919.10
- Whether the defendant company breached the terms and conditions of the deed of settlement between UTT-Projects and Infrastructure Development PLC (UTT-PID) and SOLOHAGA Company Limited dated 25th July 2017
Holdings
- The court found that the defendant breached the facility agreement dated 26th March 2014 and the tripartite agreement by failing to repay the loan as agreed.
- The court determined that the defendant is indebted to the plaintiff for Tshs. 369,148,919.10, comprising the unpaid principal and accrued interest.
- The plaintiff was granted reliefs including payment of the outstanding amount, general damages of Tshs 5,000,000, interest at 7% annually, and costs of the suit.
- The defendant also breached the terms and conditions of the Deed of Settlement dated 25th July 2017, which outlined a repayment plan for the outstanding debt.
Remedies
- Payment of general damages to the tune of Tshs.5,000,000/=
- Payment of TZS 369,148,919.10 to the plaintiff being amount due and remain unpaid, hence, constituting a breach of contract
- Interest of the claimed amount (TZS 369,148,919.10) from the date of judgement (2021-12-15) till payment at the court's rate of 7% per annum
- The plaintiff will have costs of this suit
Contract Value
344068580.85
Monetary Damages
5000000.00
Legal Principles
The court applied the principle of Pacta Sunt Servanda (parties must honor their contractual obligations) and relied on Order I rule 9 of the Civil Procedure Code to address non-joinder of parties, affirming the enforceability of the Deed of Settlement.
Precedent Name
- Simon Kichele Chacha Avelina M. Kilawe
- HARI RAM Vs. CENTRAL GOVERNMENT
Key Disputed Contract Clauses
- The Deed of Settlement dated 25th July 2017 stipulated a 15% interest rate on outstanding balances for defaulted instalments, later adjusted to 7% by the court.
- Clause 7.1 of the 2014 loan agreement between UTT-PID and SOLOHAGA, mandating repayment of the principal sum and interest within one month after completion of the road opening project.
Cited Statute
- Civil Procedure Code
- Law of Contract Act
Judge Name
S. M. Magoiga
Passage Text
- The court confirmed the defendant's debt of Tshs. 369,148,919.10, stating: 'the remaining Tshs. 245,200,000 plus interest to the tune of 213,217,500 minus TZS 89,268,580.89 the outstanding debt is now at Tshs. 369,148,919.10.'
- The court ruled on the Deed of Settlement breach, stating: 'defendant breached terms and conditions of the Deed of Settlement... by free consent signed Deed of Agreement. It is settled law that parties are bound by the agreement they freely entered into.'
- The final orders included: 'Payment of Tshs.369,148,919.10... interest of the claimed amount... at 7% per annum; and the plaintiff will have costs of this suit.'
Damages / Relief Type
- Compensatory Damages of TZS 369,148,919.10 for the unpaid principal and accrued interest.
- General Damages of TZS 5,000,000.
- Interest at 7% per annum from the date of judgment (2021-12-15) until full payment.
- Plaintiff awarded costs of the suit.