Local communication firm saves 20,000/-, loses 20bn/-

FAILURE to pay 20,000/- exhibit fee has cost Betam Communications Tanzania Limited 20bn/- in law suit against two Chinese companies in the national ICT project.

Judge Zainabu Mruke, who was hearing the suit before the High Court in Dar es Salaam, ruled in favour of China International Telecommunication Construction Corporation (CITCC) and CITCC Tanzania Limited, holding that there was no agency agreement between the parties in the project execution.

In the suit, Betam demanded about 20bn/- for allegedly breach of agreement in the National Information Communication Technology (ICT) Broadband Infrastructure Backbone Networks project, famously referred to as ‘Mkongo wa Taifa’ and tendered 11 documentary exhibits to prove the claims.

The plaintiff claimed 6,2255,000 US dollars (over 12bn/-) as agency commission, 10 per cent compound interest per annum to the date of the suit, which is 2,216,926.97 US dollars for the delayed period, 10 per cent interests on general and special damages, among other claims.

But, in her verdict, the trial judge, after perusing the court records, revealed that court fee was not paid before tendering some exhibits, citing the letter from the Ministry of Infrastructure Development and the Commission Agency Agreement for the project.

She said according to Court Fees Rule, 2015, before tendering an exhibit in the High Court, 20,000/- must be paid for each exhibit. Justice Mruke argued that the requirement had been skipped, ruling that the tendered exhibits could therefore not be considered.

“Having satisfied that there is neither proof of commission agency agreement for project in Tanzania nor proof of deed of assignment between Betam Communication Limited and Betam Communications Tanzania Limited, the suit is dismissed with costs for want of merits,” she ruled.

It was alleged that through an agreement, “Commission Agency for Project in Tanzania,” signed between Betam Communications Limited and CITCC on April 14, 2006, the Chinese firm appointed Betam its agent for the fibre optic cable network projects in the country at a commission fee of 3.75 per cent of the contract price.

The plaintiff claimed that it was an express term of the agreement for CITCC to pay appropriate negotiated compensation to Betam as per agreement.

On April 24, 2007, CITCC signed the 170 million US dollars (about 221bn/-) contract of National ICT Broadband Infrastructure Backbone Networks in Tanzania with the government of Tanzania through the Ministry of Infrastructure Development.

The court heard that the contract was to be executed between February 1, 2009 and July 31, 2010. Subsequently, CITCC incorporated CITCC Tanzania Limited as the subsidiary company on May 18, 2012, registering it with the Contractors Registration Board as the project executor.

According to the plaint of the suit, it was all material time an implied term of the Commission Agency for the project that the CITCC would do everything to perform the contract and never do anything to avoid paying the agreed commission.

Alternatively, the plaintiff was entitled to re-claim commission from CITCC Tanzania Limited in quantum meruit being reasonable remuneration for international commission agents in the construction industry as per mercantile practice.

According to the plaint of the suit, it was the obligation of the CITCC to give due account of the contracts entered into and pay Betam its agreed commission in two installments.

Subject to giving due account, based on the estimated value of the first phase of the project of 170 million dollars, CITCC owes the plaintiff assignee the principal sum of 6,375,000 US dollars, being 3.75 per cent of the contract amount which was financed by the Exim Bank of China loan.

The plaintiff claimed in the suit to have acknowledging receipt of offer of 150,000 US dollars only from CITCC, leaving the sum of 6,225,000 US dollars due and owing from the two Chinese companies.

During the defence hearing, Mr Li Jung, the Manager of International Affairs with the two Chinese firms, testified to the contrary that the plaintiff was entitled to nothing. The manager denied knowledge of the plaintiff with whom his companies had never transacted.