Court orders Eden Tanzania to pay TBL Sh607 million

By The Citizen Reporter

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Dar es Salaam. Wooden pallets supplier---Eden Tanzania Limited---has been ordered to pay Tanzania Breweries Limited (TBL) Sh606.7 million for breach of

contract and undersupply of pallets.

The commercial division of the High Court sided with the beer maker that the Eden has failed to supply Sh306.7 million worth of pallets.

The court has also agreed with TBL that the firm has to refund Sh300 million which it had mistakenly received from TBL. The beer firm filed a suit against Eden in December 2020 in which it sought a declaration that the firm was in breach of agreement for supply of pallets. It had also sought an order compelling it to pay Sh300 million as specific damages for the advance payment that was made mistakenly.

The beer maker wanted Eden to pay Sh306.6 million as outstanding balance of advance payment for the unsupplied new wooden pallets.

Counter claim

Upon being summoned to appear in court to enter defence, Eden disputed the claims and instead accused the beer maker of breach of the supply agreement by unilaterally cancelling orders without prior notice.

Simultaneously, the company raised a counter claim against TBL praying for payment of Sh125 million, payment for breach of contract and loss of business caused by the alleged breach by TBL.

According to court documents, TBL and Eden entered into a wooden pallets supply contract on August 31, 2016.

Further facts had it that on March 29, 2016 TBL issued a purchase order for supply of 5,000 pallets worth Sh477.9 million followed by another order on August 31, 2016 for supply of 2,000 pallets at Sh191.1 million..

The two enjoyed a good business relationship and again on December 23, TBL issued another purchase order for the supply of 10,000 pallets at Sh937.6.

TBL claimed that Eden was only able to supply only 4800 new wooden pallets out of 5,000 ordered worth Sh436.1. As to the order of 2,000 pallets, Eden was able to supply only 900 pallets despite being fully paid for the work.

TBL also claimed that on December 6, 2016 it mistakenly upon defendant raised invoices credit his account with Sh300 million which was credited by defendant’s account maintained and operated by Standard Charted Bank.

As the dispute started to unfold, on October 14, 2018 Eden wrote to TBL in which it agreed, among other things, to pay Sh563 million with a condition that the outstanding balance of undelivered wooden pallets would be converted to purchase order in the following year.

“The defendant (Eden) did not supply the wooden pallets nor repaid for unsupplied as agreed,” TBL according to TBL.

Several efforts were made by TBL to recover the money but all arrangements for the defendant to fulfil its obligation proved futile.

Eden, on the other side, insisted that it was not responsible for the business fallout. It claimed that in course of the business the terms of the agreement were frustrated by the government order of September 26, 2016 when it banned harvesting of certain species of tree including those that were being used for making wooden pallets.

It was further alleged in court that around October, 2017, TBL unilaterally cancelled the orders without prior notice nor any justification and subsequently went on to float a new tender, and allocated them with only 1,000 pallets contrary to their contract.

TBL was represented by Mr Issa Mrindoko and Mr Augustine Rutakolezibwa while Eden was enjoying the legal service of Mr Mwita Waissaka.

The court framed three issues for determination; whether Sh300 million was mistakenly credited to Eden’s account, whether Eden fully discharged its obligations in the supply of wooden pallets ordered by TBL and the reliefs parties are entitled to.

Delivering his judgment recently, Judge Stephen Magoiga said TBL has produced enough evidence to prove that it had mistakenly credited Eden’s account with Sh300 million.

“Careful perusal of Credit Cheque Requisition and Swift Transfer indicates that the plaintiff (TBL) credited Sh300 to defendant (Eden) account which is not disputed in the account of the defendant on 06.12.2016,” said Judge Magoiga.

The judge rejected the argument by an advocate who represented Eden that the documents availed by TBL were photocopies, saying they complied with the law of tendering secondary evidence as provided for under sections 67 and 68 of the Tanzania Evidence Act and section 18 of the Electronic Transaction Act, 2015.

“In this case the plaintiff complied with the law and the said secondary documents were properly admitted and this court will act on them.

“I hereby find and hold that the plaintiff mistakenly credited the defendant’s account of Sh300 million as such the plaintiff has satisfied this court on the balance of probability that actually the defendant as inspired by cases cited by Mrindoko is obliged to refund the money had and received by mistake,” said the judge.

The court has also dismissed a counterclaim of Sh125 million raised by Eden, saying the firm breached the contract for failure to discharge its obligation.

“I am certain that the plaintiff has managed to prove as advanced payment of Sh306.7 million and Sh300 million as money paid under mistake of fact,” said the judge.