Q&A – 16 June 2014

PSA tax term not respected

Our company has a Production Sharing Agreement (“PSA”) with the government where a tax that was stabilized got changed by the government. This is a clear breach of the terms of the PSA. In what Court can we sue TRA for not respecting the PSA?
OW, Dar

The PSA is entered into between the Ministry of Energy and Minerals, Tanzania Petroleum Development Corporation (“TPDC”) and the exploration company. TRA is not a signatory to the PSA and cannot be sued in the instance.

It is likely that your PSA has an arbitration clause which you can invoke and claim compensation from the Government for the damages and/or additional expense you incurred due to the change of tax. If your PSA does not have an arbitration clause, you can proceed sue the Government at the High Court. However before you sue the government, under the Government Proceedings Act you must provide a 90 days notice prior to suing. This 90 days notice however doesn’t apply in case there is an arbitration clause.

Furthermore, the PSA tax clause does not mean that a tax law cannot be changed. However at the same time the government has to respect the agreements it enters into and your option of arbitration and/or local Court intervention remains. The government is also signatory to various international arbitration agreements and based on the facts provided to us, we believe you have a good chance of success.

Advertising for stolen car

My car was stolen and I wish to advertise for citizens to come forward with information and that I shall give them a reward if I recover the car. Is this allowed under Tanzanian laws?
PG, Dar

There is no law that disallows you from advertising this. However be careful of the wording of the advert since section 113 of our Penal Code states that any person who- (1) publicly offers a reward for the return of any property which has been stolen or lost, and in the offer makes use of any words purporting that no questions will be asked, or that the person producing such property will not be seized “or molested; or (2) publicly offers to return to any person who may have bought or advanced money by way of loan upon any stolen or lost property the money so paid or advanced, or any other sum of money or reward for the return of such property; or (3) prints or publishes any such offer, is guilty of a misdemeanour. Corporate bodies imprisonment I have been reading various laws of Tanzania and have noted that the corporate bodies can be imprisoned.

I am unsure how a company can go to jail. Does it mean that the directors and/or management will be sentenced to jail? That makes it scary to do business in Tanzania.EM, Mwanza It is true that various of our laws refer to imprisonment of corporate bodies. In some of the laws, the imprisonment is specific and mentions the directors or manager, whilst in others there is no such reference. In laws where there is no such specific reference, the Interpretation of laws act provides for the sentence by way of fines and states in section 71 that every enactment relating to an offence punishable on conviction or on summary conviction shall be taken to refer to bodies corporate as well as to individuals. (2) Where under a written law, a forfeiture or penalty is payable to a party aggrieved, it shall be payable to a body corporate in every case where that body is the party aggrieved. (3) Except where otherwise expressly provided, where the penalty prescribed
in a written law in respect of an offence does not consist of or include a fine, the court before which the offence is tried may, in the case of a body corporate, impose a fine- (a) where a term of imprisonment not exceeding six months is prescribed, a fine of two million shillings; (b) where a term of imprisonment exceeding six months but not exceeding one year is prescribed, a fine of three million shillings; (c) where a term of imprisonment exceeding one year but not exceeding two years is prescribed, a fine of five million shillings; (d) where a term of imprisonment exceeding three years is prescribed, a fine of ten million shillings.

Delay in probate, now out of time

It took me just over two years to get a probate issued in my name after the death of my brother. I then applied to sue a certain party over a land matter and the lawyers on the defendant’s side claim that more than 12 years have lapsed since the dispute arose and hence under the statute of limitation I am time barred. What can I do?
HP, Mtwara

It is true that under the law of limitations act, one is supposed to sue within 12 years of the cause of action in a land matter.

However this act also excludes the time that it took you to obtain the probate. Section 35 states that for the purposes of the provisions of this Act relating to suits for the recovery of land, an administrator of the estate of a deceased person shall be taken to claim as if there had been no interval of time between the death of the deceased person and the grant of the letters of administration or, as the case may be, of the probate. Hence we believe you are not time barred.

We recommend your lawyer relook at the facts and guide you.