Warehouse operator ordered to pay cashew buyer Sh921 million

Wednesday December 01 2021
Cashew pic
By Bernard James

Dar es Salaam. The High Court in Mtwara has ordered a warehouse operator to pay cashewnut buyer--- Export Trading Company Limited Sh 921 million for failing to deliver 414,529 kilograms of the commodity.

The amount includes payment of Sh70 million and 200 million for loss of business and general damages respectively.

Export Trading Company Limited brought a suit against Tandahimba Newala Cooperative Union (Tanecu) Limited and a warehouse operator, Dar es Salaam Ndogo Auction Mart Limited for delivering Grade II cashewnut instead of Grade I it paid for.

“As amply demonstrated, the plaintiff bought the cashewnut and paid for it but there was misdelivery. There is no dispute that the plaintiff never collected a total of 414, 527 kilograms of cashewnut worth Sh651, 052,527.

“The pleading and the evidence points a finger to the second defendant (Dar es Salaam Ndogo Auction Mart Limited) as the party responsible for midelivery and therefore responsible for the loss incurred by the plaintiff on the transaction,” said Judge Wilfred Ndyansobera in his recent decision.

The business relationship that would culminated into a court dispute has its roots during the 2014/2015 cashewnut season when Export Trading bought cashewnut from Tanecu and kept them in various warehouse operators including the one operated by Dar es Salaam Ndogo Auction Mart Limited.

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It was alleged at the hearing of the case that after paying for the commodity and having been issued with Warehouse receipts and release warrants from NMB Bank PLC and CRDB Bank PLC, export trading went to collect to collect the cashewnut from the warehouse operated by Dar es Salaam Ndogo Auction Mart.

It was the contention of the plaintiff that in the course of collecting the commodity they discovered that the cahsenuts she was collecting was not grade one she had paid for but grade two.

The company claimed it informed Dar es Salaam Ndogo which issued unused release warrants and warehouse receipts of 414,529 kilograms worth Sh551 milion. The remaining receipts worth 87,347 kilograms which were already used, according to the plaintiff, were not returned to the plaintiff.

The company claimed it communicated with Tanecu who was the vendor of the cashewnuts on the difference of the cargo it paid for and the one the they were being given by the warehouse operator.

Recommendation of a team that was formed by the Tanzania Warehouse Licencing Board confirmed that the second respondent was responsible for the loss.

Tanecu general manager, Mohamed Mwinguku had told the court at the hearing of the case his company was not responsible with the loss they were mere depositors and not a custodian of the commodity, thus it could not be held responsible for the loss of cashewnuts deposited in the second defendant’s warehouse. Another defence witness, a senior agriculture officer working with the Cashewnut Board of Tanzania had told the court that official records of 2014/2015 season do not show any complaint on the quality of cashew nuts by the plaintiff and that there was not record on any commission being formed.

Judge Ndyonsobera said the cashew buyer has produced ample evidence there was misdelivery on the part of the second defendant of 414,529 kilograms of cashwenuts worth Sh651 million.

“With respect, I am in no doubt that the plaintiff has proved on the balance of preponderance of probability that the plaintiff is entitled to the claims,” said the judge.