Court summons three Dar es Salaam firm’s directors over 400m/- bond

Written by DAILY NEWS Reporter.

THE High Court's Commercial Division has summoned three directors of a company dealing with agricultural inputs to appear and show cause why they should not be arrested and imprisoned for failure to pay 400m/- bond to Niko Insurance (T) Limited.

According to the court summonses, the directors of Tanzania Bags Corporation (TBC) 1998 Limited, Isaack Mwamanga, Abel Ntamkenga and Bartholomew Kijazi, are required to appear in their personal capacity before the presiding Judge Robert Makaramba on April 3, this year.

The decision to summon the directors (judgment debtors) was part of execution of a decree issued on August 30, last year. The decree required the judgment debtors and the TBC 1998 Limited to pay NIKO the said 400m/- plus some interests, being warehousing bond.

There was, thereafter, an attempt by the judgment debtors to stay the execution of the decree, but such challenge was rejected by the court. It is alleged that the cause of action against the judgment debtors emanated out of the warehouse bond issued to TBC 1998 Limited in favour of Commissioner for Customs and Excise on February 2, 2009, renewable on yearly basis.

As a conditional precedent for issuance of the said bond, NIKO demanded and was granted a counter guarantee from Mr Mwamanga, Mr Ntamkenga and Mr Kijazi, securing the insurance firm's position should there be a default.

"The terms of the said counter guarantee is to the effect should Niko Insurance (T) Limited (plaintiff) be obliged to pay under the said bond the guarantors of or the said counter guarantee shall be responsible to indemnify the plaintiff against any loss and other costs," part of the plaint of the suit states.

It was alleged that between May 14 and 18, last year, NIKO received two demand letters from the Commissioner of Customs and Excise, requiring the plaintiff company to pay the said 400m/- as a result of the default of the said warehousing bond on part of TBC 1998 Limited.

Reacting to the demand letters and subsequent by a deed of settlement, NIKO arranged to pay the Commissioner for Customs and Excise to the fulfillment of the terms of the bond. Despite the repeated demands by the plaintiff company to refund the same, the judgment debtors remained defiant.

Source: Daily News (27/03/2013): http://dailynews.co.tz/index.php/local-news/15888-court-summons-three-dar-firm-s-directors-over-400m-bond