Tanzania: High court dismisses with cost 92bn/- decree application by FBME Bank

FBME Bank was asking the court to call, revise and set aside the ruling and orders of September 7, 2016, issued in execution of the judgment and decree of July 25, 2015 by Judge Aloysius Mujulizi.

Tanzania: High court dismisses with cost 92bn/- decree application by FBME Bank

FBME Bank was asking the court to call, revise and set aside the ruling and orders of September 7, 2016, issued in execution of the judgment and decree of July 25, 2015 by Judge Aloysius Mujulizi.

05 June 2017 Monday 10:27
Tanzania: High court dismisses with cost 92bn/- decree application by FBME Bank

THE High Court in Dar es Salaam, Tanzania has dismissed with costs an application by FBME Bank Limited to challenge execution of a decree for payment of over 92bn/- to Coast Textiles Limited.

Judge Wilfred Ndyansobera issued the verdict last week when the bank, through its advocate, Ms Angelister Naashon attempted to withdraw the application. Justice Ndyansobera said the bank could not withdraw the application because the company, through its counsel, Mr Joseph Rutabingwa, had lodged two grounds of objection to oppose the hearing of the matter.

In its objections, the company stated that the court has not been properly moved and that the application relating to the execution ought to have been brought under section 38 of the Civil Procedure Code and not under section 95, which merely saves the inherent power of the court.

The advocate further stated that in as far as FBME Bank Limited was seeking the court to exercise revisional powers, such powers could not be invoked under section 95. In his brief ruling, the judge said under the circumstances, the bank could not withdraw an application, which does exist in law, striking out the application with costs.

FBME Bank was asking the court to call, revise and set aside the ruling and orders of September 7, 2016, issued in execution of the judgment and decree of July 25, 2015 by Judge Aloysius Mujulizi.

There is similar application by the Bank of Tanzania (BoT) pending before the same judge who has indicated to give the ruling on the matter on June 9.

In the execution proceedings, Deputy Registrar Projest Kahyoza ordered BoT Governor Professor Benno Ndulu and Statutory Manager with FBME Bank to show cause how the decree should be satisfied or else will be imprisoned.

The decree execution originates from a civil case that was decided against FBME Bank after selling landed property, including Coast Textiles Limited owned plant, which was later transferred to Five Star Investment Limited over an overdraft related dispute.

Records show that BoT, which was not part to the original proceedings, is linked to the matter after taking over FBME Bank management to protect Tanzanian customers, after the bank was implicated in money laundering.

The court, on December 31, 2015, issued a garnishee order, directing BoT Governor to attach accounts belonging to FBME Bank in execution of the decree by High Court Justice Mujulizi for payment of 92,265,023,140/- , which include principal sum and interests.

Following the garnishee order, BoT filed an application requesting the court to investigate into the legal ownership and, or fund status in the two bank accounts and eventually lift and set aside the order.

Reasons advanced were that the central bank was currently managing FBME Bank, therefore having interest on its affairs, thus no attachment could be made in respect of those accounts, which are legally known as Statutory Minimum Reserve Account and no any third party could claim interests therein.

The court was told that the accounts are opened for specific purpose and could not be attached until when the banking operation of the financial institution ceases.

In its ruling, the court agreed to lift the issued garnishee order, but that could not exonerate the BoT to satisfy the decree.

It noted that FBME Bank was operating smoothly its business in Tanzania though they were under the management of BoT and was getting profit out of the daily transaction.

As a result, the court ordered BoT Governor and FBME Bank Statutory Manager to personally appear before the court to explain how they will pay the decree holder, Coast Textiles Limited.

Dailynews

Updated: 05.06.2017 10:30
Keywords:
FBME Bank
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