Legal dispute on fertiliser supply takes new twist

TANZANIA: THE legal dispute concerning the supply of fertiliser has taken a new shape after NMB Bank transferred to Yara Tanzania Limited the liability that will result from the judgment in the suit filed by Rubuye Agro-business Company Limited, demanding over 10bn/- compensation.

Rubuye Agro-business Company and its Managing Director, Leonard Rubuye, the plaintiffs, who engage in procurement, distribution and trading of agricultural inputs such as fertiliser, seeds, pesticides, herbicides and farm implements, have sued the NMB Bank for breach of contract.

The plaintiffs allege in the suit filed before the High Court’s District Registry at Dar es Salaam that between 2013 and 2015 they made several orders to be supplied with fertiliser by Yara Tanzania Limited, an international fertiliser manufacturer.

They subsequently requested the NMB Bank to make various payments to Yara Company amounting to 600m/-, a sum of which was deducted from the plaintiffs’ bank accounts.

Furthermore, between August and September 2013, Rubuye Agro-business Company presented agricultural vouchers with 325,430,000/- to NMB Bank with instructions to redeem them and pay the proceeds to Yara Tanzania Limited.

The plaintiffs alleged that on several occasions thereafter, the NMB Bank confirmed that it had complied with their instructions concerning the agricultural subsidy vouchers.

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However, in 2015, a dispute arose between Yara Company and the plaintiffs after denying receiving any payments from the Bank or redeeming agricultural subsidy vouchers.

As a result, the plaintiffs claim the bank to have breached the contract by failing to comply with their instructions to pay Yara Tanzania Limited the said amount and redeem agricultural subsidy vouchers.

In the suit, therefore, the plaintiffs are pushing for refund of the amount deducted from their bank accounts and be paid specific and general damages of over 10.26bn/- as well as punitive damages as may be assessed by the court following such alleged breach.

In the written statement of defence, the NMB Bank generally disputed the plaintiffs’claims, stating that it has not in any way breached a contract with them.

The bank stated further that they complied with the plaintiffs’ instructions and paid Yara Tanzania and timely redeemed agricultural subsidy vouchers as requested.

Following such position, the Bank filed a third-party notice, stating that being a banker of the plaintiffs, upon receipt of their instructions regarding the transactions in question, transferred or credited the instructed sum to Yara Tanzania Limited.

“By virtual of the alleged facts by the plaintiffs in the suit that you denied having received the funds that were transferred into your account, it follows therefore that (if we are) found liable (we) will be entitled to claim remedy or indemnification from you,” the NMB Bank stated.

The bank stated further that if Yara Tanzania Limited wished to dispute the plaintiffs’ claims should file a statement defence, failure of which, they will be deemed to have admitted the Bank’s claims and be bound by the judgment given after determination of the suit.

Yara Tanzania Limited has already filed the defence and raised points of objection, seeking the dismissal of the suit on the ground that the court has no jurisdiction to determine the matter and that the suit is time-barred as claims emanate from transactions made between 2013 and 2015.

Judge Hussein Salum Mtembwa, who is hearing the matter, has directed the parties to argue the points of objection by way of written submissions and he will deliver the ruling on July 9, 2024.

In the suit, the plaintiffs also claim that the Bank breached the contractual relationship between a banker and its customer by failing to comply with their instructions to pay Yara Tanzania Limited the sum in the TISS Fund Transfer Requests.

They further accuse the Bank of misrepresenting to them that it had complied with the instructions to pay Yara Tanzania Limited as contained in the TISS Fund Transfer Requests while it had not.

The plaintiffs also claim that the Bank breached the contractual relationship between a banker and its customer by deducting the sums contained in the TISS Fund Transfer Requests from their bank accounts and not paying Yara Tanzania Limited.