Yara Tanzania Limited versus Ada Africans Procurements Limited and Another; Commercial Case No 88 of 2015: High Court of Tanzania (Commercial Division) at Dar es Salaam (Unreported).
- Civil procedure
- Commercial Court Procedure Rules – default judgment – under what circumstances it can be granted?
- Default judgment – default judgment under the Commercial Court Rules to be published.
- Default judgment – default judgment under the Commercial Court Procedure Rules- whether the court has a duty to scrutinize the plaint before granting default judgment.
- Company Law
- Corporate veil – prayer for lifting of corporate veil in a plaint – the same must be pleaded
Held:-
(i) Under the Commercial Court Procedure Rules, when the Defendant is served through publication or otherwise and fails to file defence, the Plaintiff may file an application for a default judgment in terms of Rule 22(1) of the High Court (Commercial Division) Procedure Rules, 2012.
(ii) Conditions for the grant of default judgment are proof of service to the defendants by the plaintiff and failure to file defence by the defendants.
(iii) Prudence has it that a default judgment must be issued without prejudice to the duty of the court to scrutinize the pleadings as well as the documents attached in ascertaining the veracity of the prayers before granting the same.
(iv) For the prayer to lift the corporate veil of a company to be granted, the plaint should disclose either that the Company is no longer a going concern or that it is unable to discharge its debts by reason of lack of funds or property.
(v) A decree of the default judgment issued under the Commercial Court produce Rules cannot be executed unless the decree holder publishes in newspapers within a period of ten days from the date of the default judgment in terms of Rule 22(2)(a) and (b) of the Rules.