Q&A – 22 September 2014

Commissioner directs claim to be paid

Can the Commissioner of Insurance force an insurance company to pay a claim even though it is not payable. What options does an insurance company have against any such decision? Can the Commissioner overrule the decision of the CEO or the board?
NF, Dar

The Commissioner of Insurance has a role to oversee the insurance sector in the country, amongst other functions as provided for under the Insurance Act no 10 of 2009. He is neither the manager of an insurance company nor a director and cannot overrule any decisions pertaining to a non payability of a claim by the insurance company, its CEO or the board.
This is the first time we are hearing such complaints against the Commissioner but if you are being forced to pay, you can appeal such decision to the Insurance Tribunal under section 126(4) which states that “a person aggrieved by the decision of the Commissioner under this Act may, within one month from the date on which the decision is communicated to him in writing, appeal by a petition in writing to the Tribunal which may, uphold, reverse, revoke or vary that decision. This must be done within 2 months of presentation of the petition.”

If you are further aggrieved with the decision of the Tribunal on a point of law, you may appeal to the High Court within 1 month of such decision being communicated to you.

If what you are saying is true, which we find quite surprising, we believe you have a good chance of succeeding. Please note that the decision of the Commissioner that you intend to appeal must be a decision in writing. It is unlikely you can go to the Tribunal based on any telephonic pressure that may have been exerted on you by the Commissioner.

Bid seal in tender opened prematurely

Our company applied for a large tender for road construction. When the bids were opened we found that our tender seal had been tampered with and envelope open. Is this not a serious issue?
IT, Dar

If the tender seal was opened, the tender may be cancelled. However this will depend on the circumstances and the evidence that can be led.

Assuming you are correct, the person who opened the seal is guilty of an offence as provided under section 104 of the Public Procurement Act 2011 which states that a person who opens any sealed tender, including such tenders as may be submitted through electronic system and any document required to be sealed, or divulge their contents prior to the appointed time for the public opening of the tender documents commits an offence and on conviction shall be liable to a fine of not less than ten million shillings or to imprisonment for a term of not less than seven years or to both, and in addition to the penalty imposed in this section, the Court shall order that the amount of loss incurred by the complainant be compensated, failure of which, the Court shall issue an order of confiscation of personal property of the person convicted in order to recover the loss.

Will stolen by wife

Is it possible for a wife to steal from a husband? My brother passed away and I am sure he left a Will with his wife, who has disappeared with it and is not seen.
FD, Dar

Section 264 of the Penal Code states that for the avoidance of doubt, it is hereby declared that a husband may be guilty of stealing from his wife or a wife from her husband. The Penal Code further states that if the thing stolen is a testamentary instrument, whether the testator is living or dead, the offender is liable to imprisonment for ten years. Hence the disappearance of the wife can be reported to the police, and if she has stolen the Will, she can be arrested and prosecuted.

Tax Board as mediator

I am fighting a case against TRA at the Tax Revenue Appeals Board (“Board”). In the last date that we appeared before the Board, one of our key witnesses, who is a former employee of TRA, refused to come for testimony. Whilst adjourning the matter, the Board was of the opinion that the taxpayer sits with TRA to try resolve its differences. Is that a normal process?
JE, Mwanza

Under section 17, the Tax Revenue Appeals Act provides that the Board has powers to mediate. Mediation is a powerful tool in dispute resolution and is widely used. Section 17 states (1) The Board and the Tribunal shall respectively have the power- (a) to take evidence on oath; (b) to resolve any complaint or appeal by mediation, conciliation or arbitration; (c) to issue warrants of arrest for failure to comply with summons; (d) to order payment of costs in relation to any matter referred to the Board or the Tribunal; (e) to dismiss any matter before it; (f) to adjourn the hearing of any proceedings before it. (2) Notwithstanding subsection (1), the Board or the Tribunal shall have the power to summon and hear any witness and receive evidence in the manner and to the same extent as if it were a court exercising civil jurisdiction in a civil case and the provisions of the Civil Procedure Code, relating to summoning of witnesses, the taking of testimony on oath, and noncompliance with a witness summons shall apply in relation to an appeal before the Board but the Tribunal may not admit any fresh evidence save in the circumstance in which the High Court may admit fresh evidence on a first appeal in a civil case.

You can also make an application to the Board to summon the witness to appear and if he fails to do so, he can be arrested and brought before the Board.