First North Corporation Ltd vs Quintex International (Civil Case No. 211 of 2023) [2024] TZHC 1941 (10 May 2024)

In Civil Case No. 211 of 2024, the High Court of Tanzania (Dar es Salaam) ruled on a jurisdictional dispute between First North Corporation Ltd (plaintiff) and Quintex International (defendant). The defendant argued the contract governed by European Union Law (clause 9(c)) barred the Tanzanian court's jurisdiction, while the plaintiff claimed the objection was improperly raised and the agreement did not explicitly oust the court. The judge sustained the preliminary objection, striking out the suit as the parties' choice of EU law did not contravene public policy or Tanzanian law.

Sale and Purchase Agreement

The court addressed whether the High Court of Tanzania could be barred from jurisdiction by a contract clause designating EU law to govern disputes. The defendant argued the contract's choice of EU law (via Clause 9(c)) ousted the court's jurisdiction under the Civil Procedure Code (CPC), while the plaintiff claimed the issue was improperly raised and that parties cannot oust jurisdiction by agreement. The court upheld the defendant's preliminary objection, finding the contract's choice of EU law valid and not contrary to public policy, thereby striking out the suit for lack of jurisdiction.

The court sustained the preliminary objection, finding that the jurisdiction of the Tanzanian court was ousted by the parties' agreement to be governed by EU law. The suit was struck out with costs as the parties freely chose EU law for dispute resolution, and the court determined this choice was not contrary to public policy or in contravention of the Law of Contract Act.

The court sustained the preliminary objection, striking out the suit and ordering costs to be paid by the plaintiff. The right to appeal to the Court of Appeal was also explained.

The court applied the principle of Pacta Sunt Servanda (agreements must be kept) to respect the parties' contractual choice of European Union law governing disputes. It held that parties can freely agree on governing law and forum unless such agreement contravenes public policy or statutory provisions. The ruling emphasized that while jurisdiction cannot be ousted by private agreement, the parties' explicit choice of EU law in their contract did not violate Tanzanian public policy or statutory requirements, leading to the conclusion that the Tanzanian court lacked jurisdiction.

Clause 9(c) of the Sale and Purchase Agreement explicitly states that the contract shall be governed by and construed in accordance with the laws of the European Union (EU), including all matters of construction, validity, performance, and enforcement. This clause formed the core of the jurisdictional dispute between the parties.

S. M. Magoiga