{The Court of Appeal has ordered a businessman, Benedict Mkasa, who trades as Bema Enterprises, to pay over 122m/- to Univeler Tanzania Limited, following a dispute involving variation of commission after supply of goods.}
Justices Nathalia Kimaro, Katherine Oriyo and Ibrahim Juma ruled in favour of the company after allowing its appeal it had lodged to challenge the judgment given by then Judge of the High Court’s Commercial Division, Frederick Werema, on January 30, 2009.
“We hereby order the respondent (Bema Enterprises) to comply with the terms of the product distribution agreement and pay the appellant (Univeler Tanzania Limited) the sum of 122,316,459/- being the amount due as on January 31, 2007,” they ruled.
The justices noted after evaluation of evidence of the agreement between the parties, the counsel for the appellant, Bathwel Peter, was entitled to complain about the way the trial judge placed reliance on the consultant’s report to upgrade the commission from the aggregates of 5.5 per cent to 7.5 per cent. “We think, any variation of the commission must be mutually agreed.
It was, therefore, a misapprehension of evidence for the trial judge to conclude that the consultant report was sufficiently independent to objectively guide the variation of the commission,” they said.
Strictly speaking, the justices noted, under the law once parties have freely agreed on their contractual clauses, it would not be open for the courts to change those clauses which parties have agreed between themselves.
“It was up to the parties concerned to renegotiate and to freely rectify clauses which parties find to be onerous. It is not the role of the courts to re-draft clauses in agreements but to enforce those clauses where parties are in dispute,” they said.
The dispute surrounding the parties could be traced back to a distribution agreement by which the appellant appointed the respondent as its key distributor. The respondent has as a result agreed to distribute goods produced by the Unilever Tanzania to several retail shops, wholesale shops and supermarkets in designated zones in Dar es Salaam and Bagamoyo. Once the goods reached the designated outlets, it was the appellant who recommended the sale prices at those outlets.
In his role as the key distributor, the respondent was required to keep all the customers fully stocked with goods at all times. To ensure that the respondent received regular supplies of goods for the purposes of distribution, the appellant operated a system described as generator system which required the respondent to record input of its sales on a weekly basis.
Once the respondent records the input in the generator system, the appellant would immediately forward new supplies to the respondent to replenish the sold out goods. As consideration, the respondent was entitled to a commission of 5.5 per cent of the value of the products.
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