Al Hatimy Enterprises Limited and Another versus The Registrar of Companies; Misc Commercial Case No 207 of 2015; High Court of Tanzania (Commercial Division) at Dar es Salaam (Unreported).
- Company Law
- Amalgamation – Petition to amalgamate two companies filed before consulting creditors- whether proper.
- Amalgamation – Proposal to amalgamate companies -what is the duty of the court?
Held:-
(i) According to Section 229 of the Companies Act No. 12 of 2002, an arrangement including amalgamation has to be proposed to the company’s creditors first, before it is referred to the court for sanction.
(ii) The duty of the Court in considering proposed amalgamation or scheme is to assess whether or not the proposed amalgamation or scheme has substantially complied with provisions of section 229 of the Companies Act. The court has to be satisfied if the proposed arrangement is being proposed in good faith, and it is at least fair and reasonable to the extent that, an intelligent and honest man, who is a member of that class, and acting alone, in respect of his interest as such member might approve of it (Cited Indian Building Contractors v. R.B. Purohit ( 1965) 1 E.A. 342)
(iii) Before a petition is filed in court for amalgamation of companies, the same should be proposed to the creditors of the companies involved or at least prior notice should be given to creditors.