6 January 2014

Tanzania: Court Throws Out Puma Application

THE High Court's Commercial Division has dismissed with costs an application lodged by Puma Energy Tanzania Limited, seeking payments of over 2.4bn/- as security and attachment of assets owned by three other persons, who deal with oil business in the country.

Judge Robert Makaramba ruled in favour of the oil dealers, Parsley Limited, Richard Gwau and Richol Limited, who were respondents in the matter, after being satisfied by submissions presented on their behalf by prominent advocate, Mr Jerome Msemwa.

In the application, Puma Energy Company, under legal services of senior advocate Corman Ngalo, requested the court to retrain the respondents from dissipating, disposing of or releasing their assets, in particular, bank accounts and Plot Number 2159 Block E at Kunduchi area in Dar es Salaam.

The applicant company also applied for attachment of respondents' assets and that they should be directed to disclose any other assets to be attached before judgment.

Furthermore, the applicant had applied for orders requiring the respondents to deposit in court a security of 2,448,110,160/87.

In his counter arguments, Mr Msemwa had, however, notified the court that regarding the property in question sought to be protected by the injunction, it has been attached and was liable for sale in execution of decree issued by the High Court in another case.

Mr Msemwa said: "It will not serve the ends of justice where this court, having been made aware of the existence of an order of the High Court with respect of the dispute, to proceed and grant an interim order affecting the same property the subject of attachment order."

Regarding the bank accounts, the judge further agreed with the advocate that Puma Company totally failed to comply with the law by failing to mention the respondents' bank accounts and other assets.

He also observed that the applicant failed to meet conditions for attachment of the assets. According to the judge, the applicant has not been able to show that the respondents were about to dispose of the whole or any part of their property or to remove the whole or part of it from the local limits of the jurisdiction of the court.

On the question of depositing security, the judge said, "the applicant counsel has failed (... ) to satisfy this court that the respondents are about to leave the country. The fear in the applicant's mind cannot constitute a basis for this court to grant the relief sought."

It is claimed that according to a supply agreement dated July 24, 2013, Puma Energy supplied to and Parsley Limited took delivery of fuel and lubricants on different dates in July and August last year, for which the latter was to pay for all the supplies made within 30 days of the invoice date.

Puma Energy alleged that Parsley Limited procured two bank guarantees made in its favour by Diamond Trust Bank Tanzania Limited to secure its payment from Parsley Limited invoices in case of failure or default.

The first guarantee involved 850m/- while the second had 1.65bn/-. The applicant company further claimed that on divert dates supplied fuel and lubricants to Parsley Limited worth 2,448,110,160/87. Such respondent made two payments of 200m/-on July 24, 2013 and other 100m/- paid by Richol Limited on August 2, 2013 on behalf of Parsley Limited.

Other payments of 200m/-was credited towards the Parsley Limited's account. Puma claims that in spite of non-payment of most of its invoices, it continued to make further supplied to Parsley Limited. Puma made further follow ups on the remaining payments but without success, prompting the court action.


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