Shose Sinare gets reprieve in Sh69 billion lawsuit against Stanbic Bank

Dar es Salaam. Ex-Stanbic Bank executive Shose Sinare has new hopes that a suit in which she is claiming a $30 million (Sh69 billion) compensation from the lender allegedly for ruining her banking carrier could be heard and determined on merit.

This is so after the Court of Appeal reinstated the case two years after it was struck out by the High Court and directed determination of issues which the apex court said were not decided according to law.

The suit that has its roots in a Sh12 billion bribery scandal that would later send Ms Sinare to four years behind bars before she and co-accused were set free last year.

The former Miss Tanzania filed a suit against Stanbic Bank and ICBS Standard Bank PLC in 2016 after accusing them of passing false information to UK’s Serious Fraud Office (SFO) that landed her in trouble and ruined her career in banking.

Ms Sinare worked with Stanbic Tanzania Limited as head of Corporate and Investment Banking before she resigned in June 2013 after being implicated in the Sh12 billion bribery scandal.

She is now suing Stanbic and ICBC (formerly Standard Bank PLC) over claims it presented false information to the UK’s Serious Fraud Office (SFO) accusing its Tanzanian executive of failing to stop bribery.

This is after $6 million was paid to Enterprise Growth Market Advisors Limited (EGMA) as an agent for Stanbic Tanzania to win $600 million (Sh1.3 trillion) government loan deal on behalf of the bank’s UK-based unit, Standard Bank.

Standard Bank noted that the involvement of EGMA in the procurement of the financing was improper and surrendered and reported her to SFO in London for prosecution before English courts.

Standard Bank admitted to failing to prevent Shose Sinare and Bashir Awale from committing bribery in circumstances in which they intended to obtain or retain the $600 million deal.

Following the self-reporting to SFO by Standard Bank PLC, Sinare felt deeply offended and filed a $30 million lawsuit against Stanbic Bank Tanzania Limited and Standard Bank PLC for ruining her career in banking.

She also sought a declaration that the information passed on to the SFO by Standard Ban was full of misrepresentation.

Banks denies claims

The two banks consistently denied the claims. Before Sinare’s case went into full hearing, Stanbic Bank raised a preliminary objection, arguing that the High Court at Dar es Salaam District Registry did not have jurisdiction to resolve a labour matter.

ICBC raised four legal challenges to the suit, arguing that it cannot be sued or prosecuted based on statements made during or in the course of judicial proceedings, or in the course of preparations or evidence for such proceedings.

After hearing the legal challenges, Judge Ilvin Mugeta sided with the respondents that ICBC was legally bound to report the suspicious transaction and that the bank enjoyed absolute immunity in the UK.

The court also exonerated Stanbic from the liability, saying the bank had done nothing to enable Sinare to bring a case against it.

Sinare lodges appeal

The former Miss Tanzania was dissatisfied with the decision and lodged a six-ground appeal last year.

Judges of the Court of Appeal, however, decided to entertain only two grounds of appeal (second and third grounds) when the case was called for hearing on August 24, 2021.

Through her lawyer, Mr Saharan Sinare, the former Miss Tanzania argued that the trial judge grossly misdirected himself in holding that Standard Bank enjoyed absolute immunity in the UK.

She also contended that the judge was wrong in holding that Standard Bank did nothing that entitled her to sue the bank.

Stanbic was represented by Mr Juvenalis Ngowi while Standard Bank enjoyed the service of Deusdedith Mayomba Duncan and Edward Nelson Mwakingwe.

At the hearing of the appeal, Mr Sinare challenged the trial judge for imposing his own views that Standard Bank was a witness before the SFO.

He submitted that absolute immunity applied to judges, advocates and extended to investigators and prosecutors

“Since there was not prosecution, there was no possibility that the second respondent became a witness,” argued the lawyer.

In reply, Mr Ngowi insisted that Standard Bank was witness in the proceedings that gave rise to the Deferred Prosecution Agreement (DPA).

He prayed that the suit be dismissed or the matter be remitted to the High Court for determination of preliminary objections that were not determined.

For ICBC, Mr Duncan was of the view that there were two proceedings, in the SFO and in the Crown Court at Southwark and his client was reporting person like an informer under the Whistle Bolowers and Witness Protection Act of 2015 or The Prevention and Combating of Corruption Act.

He submitted that there was no self-reporting document, except the DPA which the court perused in deciding the preliminary objection.

He urged the apex court to uphold the High Court’s decision and dismiss the appeal or else the record be remitted to the High Court for determination of the issues that remained outstanding.

Mr Duncan submitted that the issue whether the point of immunity was pure point of law could not be entertained because it was not raised in the High Court.

But Mr Sinare insisted there were no proceedings at SFO and in the Crown Court at Southwark, where parties just presented the DPA.

Court’s decision

In deciding the matter the judge said that an allegation that the second respondent was a witness in English court or not, was not an issue of law. “The issue of whether the second respondent was a witness and therefore immune to persecution under English law was prematurely determined as a preliminary objection because it needed proof and investigation by the High Court,” said the judges.

The third and last ground of appeal was to the effect that the High Court made a decision on the preliminary objection that was not raised at all.

It was Mr Sinare’s submission that the issue whether the appellant had a cause of action was, first, not a preliminary objection.

Secondly, he contended that the issue was not raised anywhere by the first respondent as she never questioned why she was sued in the notice of preliminary objection.

He added that the first respondent complained only of the court’s jurisdiction.

Mr Ngowi was of the view that the court had jurisdiction and it was justified to go through the pleadings.

Judges Gerald Ndika, Zephrine Galeba and Abraham Mwampashi rejected the holding of High Court that the appellant had no sufficient facts to justify suing Stanbic Bank only because it was sued as a necessary party.

“With respect to the High Court, that reasoning was incorrect, in our view. It was wrong because, first, the High Court did not decide the point of law that was raised by the first respondent, the point whether the court had jurisdiction or not, instead suo motu (on its own motion), raised another mater of whether the appellant had a cause of action against the first respondent or not and resolved it by reading the pleadings.

The judges said the point of whether the appellant had or had no cause of action against Stanbic bank was not argued by either of the parties to the suit. That, they said, denied parties the right of a fair hearing on that point.

The judges went on to set aside the ruling of the High Court and remitted the record of the case to the High Court for determination of that case according to law.