Description
Breach of contract – bank guarantee – governing law for agreements executed in Tanzania – punitive interest.
- Violation of a contractual obligation by failing to perform one’s own promise is what constitutes a breach of contract.
- Bank guarantee for performance of a contract to supply petroleum – guarantee invoked contrary to agreed conditions.
- Jurisdiction – guarantee instrument confers exclusive jurisdiction as to its construction andinterpretation to English courts – whether Tanzanian court has jurisdiction to entertain a suit involving that guarantee – Tanzanian court has jurisdiction since the suit is not solely based on the guarantee but rather on a new agreement. Additionally, the guarantee document was tendered not as the basic foundation of the plaintiff’s case but as evidence in support of the plaintiff’s claims. Secondly, the new agreement was signed in Dar es Salaam within the United Republic of Tanzania.
- Afri Scan Group (Tanzania) Limited Vs Pacific International (Tanzania) Limited Civil Case No 14 of 2001; Friendship Container Manufacturers Limited Vs Mitchell Cotts K Ltd [2001]2 EA P 338; and Jamila Sawaya Vs Royal Marine Shipping of Dubai and others Commercial Case No 30 of 2006 distinguished.
- It is unconstitutional for parties to enter into anagreement which is executed within the United Republic of Tanzania to transact partly or wholly within the United Republic but which contain a clause which excludes the jurisdiction of the courts of the land over the matter.
- An award of punitive interest at the rate of 36% per annum from the date of filing the suit to the date of Judgment.
