The plaintiff, a Turkish insurance company, claimed USD 49,641.60 from the first defendant, the Tanzania Ports Authority, and the second defendant, Auerbach Schifffahrt GmbH & Co KG, as reimbursement for compensation that the plaintiff had paid to Yapi Merkezi Insaat ve Sanayi Anonim Sirket (the insured) for damage to the insured's cargo caused by the first and second defendants' negligence. The plaintiff alleged that the insured cargo was damaged during discharge at Dar es Salaam Port due to mishandling by the defendants' agents.

The first defendant and the third defendant, the Attorney-General of Tanzania, filed preliminary objections arguing that the proceedings violated cl 4 of the relevant bill of lading, which required all disputes 'arising out of or in connection with the Bill of Lading' to be resolved exclusively in the German courts under German law. The second defendant argued that the plaintiff's cause of action was anchored on the bill of lading in respect of which the statutory time limit was one year from the date of discharge of the goods under the Carriage of Goods by Sea Act 1927, Cap 164 of the Laws of Tanzania [which gives domestic effect to the Hague Rules in that country].

Held: The second defendant's preliminary objection regarding the time bar is dismissed. The first and third defendants' preliminary objections regarding the parties' choice of a foreign forum are upheld. Proceedings are stayed in favour of the German courts.

The second defendant raised a preliminary objection on the assumption that the present suit was founded on the bill of lading as a contract regulated by the Carriage of Goods by Sea Act, which requires claims to be filed in Court within one year. The plaintiff, however, was adamant that its cause of action was based on the tort of negligence and not contract because the plaintiff was not privy to the contract in the form of the bill of lading. In short, it is disputed whether this suit is premised on breach of contract or negligence. It cannot form a basis for preliminary objection as it needs evidence to prove it one way or the other. Preliminary objections must be raised on undisputed facts on the assumption that what is pleaded by the other side is true. The plaintiff has pleaded that its claim is based on the tort of negligence. If that were to be accepted as the truth, would the second defendant still be justified to insist, by way of preliminary objection, that the suit is time-barred? The Court's answer would be in the negative. Where evidence is needed, the issue cannot be disposed of as a preliminary objection even if it touches on matters of time limitation, cause of action, jurisdiction, or an obligation to refer the dispute to arbitration. It is not the name tag given to the objection that matters; rather it is the nature of the objection raised. Once an issue needs evidence to be resolved, it fails the test of being a pure point of law. Therefore, as the preliminary objection on time limitation raised by the second defendant in this matter does not qualify as a pure point of law, it is dismissed.

Next, the first and third defendants' preliminary objections regarding forum choice and applicable law must be considered. The parties to the bill of lading agreed on the jurisdiction of the courts and application of the laws of the principal place of business of the carrier. There is no dispute that the carrier's principal place of business is Germany. The plaintiff has argued, however, that the provisions of the bill of lading do not apply to it because its claim is not based on the bill of lading to which the plaintiff is a stranger, but rather on the tort of negligence. This is incorrect. The plaintiff has been clear and emphatic that its suit is founded on the doctrine of subrogation whereby the plaintiff as insurer stepped into the shoes of the insured after having paid the insured. Under the doctrine of subrogation, the plaintiff can only enforce those rights which the insured could have enforced against the first and second defendants. The insured could have sued for breach of contract or negligence. The plaintiff has opted to sue for negligence. The claim for negligence relates to, and is connected with, the relationship and the transaction which the insured had with the first and second defendants under the bill of lading.

The drafting of cl 4 of the bill of lading is broad enough to cover disputes arising out of the bill of lading directly as well as indirectly in connection with the bill of lading. The negligence claim now preferred by the plaintiff was also envisaged and captured by the broad terms of cl 4 by the use of the words 'in connection with the Bill of Lading'.

Now that the plaintiff has instituted a suit in violation of the agreement on choice of forum and law, what should happen? This Court is required to stay the proceedings and refer the parties to their chosen forum. This position can be seen in the decision of the Court of Appeal of Tanzania in Sunshine Furniture v Maersk (China) Shipping Co Ltd, Civil Appeal No 98 of 2016, where the Court of Appeal held that

the court in which the suit is instituted has the discretion to stay the suit once it learns of existence of an agreement between the parties to sue in a particular forum, whether foreign or not. For, it neither can dismiss the suit because it has not heard and determined it on the merits nor can it strike it out because, except for the choice of a different forum, it is otherwise competent to try the matter. The High Court in the instant matter, we think, should have stayed trying the suit pending the institution and determination of the claim in the court of Rome. On that basis we vacate the dismissal order and substitute for it an order staying the suit in the High Court, Commercial Division.

A similar position was taken by the Court of Appeal in Scova Engineering SpA v Mtibwa Sugar Estates Ltd. Therefore, as it is settled that there is an agreement whose terms were expressed in writing in the bill of lading, by virtue of which the parties chose the courts of Germany as their preferable forum for settlement of disputes emanating from their agreement, the role of this Court is to uphold that agreement by keeping parties to their bargain. That, however, does not mean that this Court lacks jurisdiction, or that the parties by their agreement have ousted the jurisdiction of this Court. It only means that, whereas this Court, as well as the foreign court chosen by the parties, has jurisdiction over the dispute on different grounds, the parties' chosen forum should be given prominence under the doctrine of party autonomy. The preliminary objection on forum choice is therefore upheld.