Tanzania Daily News (Dar es Salaam)

Tanzania: Firm Drags Stanbic to Appeal Court Over Botched Payment

A LOCAL firm, Jaruma General Supplies Limited, has appealed to the Court of Appeal opposing the dismissal of its case for payment of over 300m/-, by Stanbic Bank Tanzania Limited, on a transaction involving supplying of Bavaria drinks.

The company is asking judges of the court to quash and set aside the decision given on March 24, 2010, by High Court Judge Robert Makaramba, and enter a judgment and decree in its favour as requested in the plaint lodged before the Court's Commercial Division.

In the plaint of the commercial case, the company sought for, among others, payment of 250,320,000/- it had credited by way of a cheque. But, it alleged that the cheque was negligently and unlawfully debited by the Bank. The firm had also requested to be paid 45m/-monthly, effective March 2008 for loss of earnings and general damages to be assessed by the court.

Jaruma General Supplies Limited, as a customer with Stanbic Bank Tanzania Limited, had sued the latter for breach of contract, violation of law and negligence. The appellant had claimed that on February 27, 2008, he deposited the cheque in question, property of NBC Limited, Mlimani City Branch, for collection from the drawer (J.O. Investment Company) account.

Records show that the cheque was drawn on J.O. Company for credit to the account of the appellant as payment for Bavaria drinks. The J.O. Company purchased the drinks from the appellant. It was agreed that the appellant would not release the drinks until the cheque is cleared.

As things turned out, two days later on February 29, 2008, the said cheque was dishonoured by the Bank for reason that effects were not cleared. On March 5, 2008, the appellant re-deposited the cheque, which again was returned unpaid five days later by the Bank.

Jaruma General Supplies Limited, thereafter, decided to take the matter to court. But in its defence, Stanbic Bank alleged that having being deposited at the Bank on February 27, 2008, the cheque was returned unpaid two days later for reason that drawer's confirmation was required.

According to the Bank's defence, the second re-deposition transaction of the cheque was not successful because it had been stopped by drawer. The Bank claimed that it was informed by its branch Manager that the application for banker's cheque was rejected as effects had not been cleared.

Having gone through the evidence produced during the trial, the High Court Judge dismissed the suit, prompting the company to cross over to the Appellate Court for further determination and advanced several grounds to support its appeal.

In the memorandum of appeal, the company states, among others, that the trial judge erred in not finding that the Bank was negligent or acted not in good faith when its branch manager advised the company that its account had been credited with the cheque, whilst had in effect not been cleared.

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