Urafiki General Store of Zanzibar Vs Attorney General of Zanzibar & Another (Urafiki General Store Vs Attorney General of Zanzibar & Another, Civil Application No.114 of 2024) [2025] TZZNZHC 74 (2 May 2025)

Key Facts

Issues

• The court considered whether the Applicant, Urafiki General Store of Zanzibar, was required to submit a board resolution to file the application under section 150 of the Companies Act. The court found that since the entity's name does not include 'Limited,' it is not legally recognized as a company but rather a business name, meaning the board resolution requirement does not apply.
• The court examined whether the Applicant properly named the Director of Zanzibar Anti-Corruption and Economic Crime Authority (ZAECA) as a party to the case, when section 4(2)(a) of the Zanzibar Anti-Corruption and Economic Crimes Act requires suing the corporate body in its own name. The court determined that while the objection had merit, it was not fatal and granted leave to amend pleadings to substitute ZAECA as the proper party.

Holdings

Remedies

• The applicant is granted leave to cure the defects identified within seven (7) days from the date of this ruling
• The court granted the applicant leave to amend the pleadings to substitute ZAECA as a party in place of the Director of Zanzibar Anti-Corruption and Economic Crime Authority, as the proper party to be sued is the corporate body itself rather than its Director
• The court made no order as to costs in this matter

Legal Principles

• The court addressed preliminary objections to an application for interim injunction seeking release of a suspended bank account. The court found merit in objections regarding proper party but allowed amendment rather than dismissal, and overruled the board resolution objection as inapplicable to business names.
• The court applied the principle that legal requirements under the Companies Act are binding only on entities legally recognized as companies (names ending with 'Limited'). Business names like 'Urafiki General Store of Zanzibar' are not subject to the same statutory requirements such as board resolutions for instituting legal proceedings. The court also applied the principle that corporate bodies must sue or be sued in their proper corporate name, not in the name of their directors.

Precedent Name

• Faster (Its) Company Limited Vs LT Solution (smcprivates) Company Limited
• Ursino Palms 3 Estate Limited Vs Kyela Valley Foods Limited
• Managing Director of Jack Enterprises Limited Vs. Managing Director of Mwananchi Engineering & Contracting Co. Ltd.
• Attorney General of Zanzibar & The Grand Mufti of Zanzibar Vs. Muhammad Nassor Abdalla Bachu
• Mukisa Biscuit Manufacturing Co. Ltd Vs. West End Distributors Ltd

Cited Statute

• Zanzibar Anti-Corruption and Economic Crimes Act No. 5 of 2023
• Zanzibar Anti-Corruption and Economic Crime Act No. 5 of 2023
• Companies Act No. 15 of 2013
• Companies Act No. 15 of 2023
• Article 56 of the Constitution of Zanzibar, 1984
• Order 1 Rule 10(2) of the Civil Procedure Decree, Cap. 8

Judge Name

Passage Text

• In the upshot, the preliminary objections raised by the Respondents are hereby overruled. Consequently, the applicant is granted leave to cure the defects identified above within seven (7) days from the date of this ruling. Given the circumstances, I make no order as to costs. It is so ordered. DATED at ZANZIBAR this 2nd day of Mei, 2025.
• That being the position of company law in Zanzibar, numerous decisions of this Court have supported that proposition. See the case Faster (Its) Company Limited Vs LT Solution (smcprivates) Company Limited (Civil Case 33 of 2021) 2022 TZZNZHC 43 (6 December 2022), Zanzibarlii, Zanzibar Maritime Mechantile Intl Co. Ltd Vs Zabwas Company Limited T/A Pilipili House, Commercial Case No. 04 of 2022 and Dream Sand (Pty) Limited v Manager Azan Bin Breik Company (Pty) Ltd and Another (Civil Application 86 of 2022) 2022 TZZNZHC 88 (5 December 2022) Zanzibarlii. Just to mention the few. More so, the requirement for a company to have a board resolution before the institution of the suit has been imported by the Court of Appeal of Tanzania in Ursino Palms 3 Estate Limited Vs Kyela Valley Foods Limited and another, Civil Application No. 28 of 2014 (Unreported) from the Ugandan case of Bugerere Coffee Growers Limited Vs Sebaduka and Another (1970) EA 147, where the Court had this to say: "When the companies authorize the commencement of legal proceeding a resolution or resolutions have to be passed either by a company or a board of director's meeting and recorded in the minutes..." Therefore, guided by the above authorities, I agree with the learned Senior State Attorney for the Respondents that a board resolution is a condition precedent for a company before instituting legal proceedings in court. However, in the present case, this proposition is not applicable because Urafiki General Store of Zanzibar, the Applicant herein, is not, on the face of its name, legally recognized as a company. I shall explain. All registered companies in Zanzibar are governed by the Companies Act No. 15 of 2013. Section 3(3) of the Act states that a company may be either a company limited by shares, a company limited by guarantee, or an unlimited company. Moreover, Section 4(1) of the same Act provides a mandatory requirement for the inclusion of the word "Limited" in a company's name. The provision reads: The memorandum of every company shall be printed in the English or Kiswahili language and shall state: (a) the name of the company, with "limited" as the last word of the name in the case of a company limited by shares or by guarantee; (b) N/L. From the provision cited above, it is a mandatory requirement of the law that the official name of a company must end with the word "Limited." In the present case, the Applicant's name is Urafiki General Store of Zanzibar, which does not include the word "Limited" at the end. Therefore, in the eyes of the law, it cannot be recognized as a company but may instead be regarded as a business name. In that regard, it is the settled view of this Court that the legal requirements provided under the Companies Act are not binding on business names, and therefore, the issue of a board resolution does not arise in this context. In the premises, the second point of objection is hereby overruled.
• 4-(1) There is established an Authority to be known as the Zanzibar Anti-corruption and Economic crimes Authority and its acronym shall be "ZAECA". (2) The Authority shall be a body corporate with perpetual succession, a common seal and by its corporate name, be capable of: (a) suing and being sued; It is clear from the above cited provision that ZAECA is a corporate body capable of suing and being sued in its corporate name. This provision clearly indicates that it is improper to sue the Director in their personal or official capacity where the authority itself is vested with corporate legal personality. In Managing Director of Jack Enterprises Ltd Vs. Managing Director of Mwananchi Engineering & Contracting Co. Ltd, (Supra), cited by the learned counsel for Respondents, this Court emphasized that a legal entity must sue or be sued in its proper legal name. In the present matter, the Applicant sue the Director of ZAECA as a party to the case instead of ZAECA itself. I am of the view that the Applicant erred in suing the Director of the Authority contrary to the requirement of the law as shown above. However, this Court is also guided by Order I Rule 10(2) of the Civil Procedure Decree, Cap. 8, which allows for the amendment of pleadings to substitute or add a proper party. This was echoed in Attorney General of Zanzibar & The Grand Mufti of Zanzibar Vs. Muhammad Nassor Abdalla Bachu, Misc Civil Application No. 22 of 2024, cited by the learned counsel for Applicant where the Court allowed amendment rather than striking out the entire suit. Therefore, this Court finds merit in the first objection but does not consider it fatal. In my view, the appropriate remedy is to grant the Applicant leave to amend the pleadings and substitute ZAECA as a party in place of the Director.