Tanzanian Investment Centre fails to uphold law
By Linda Levy U.K. Freelance Journalist
In August 2010 the head of the Tanzanian Investment Centre Emmanuel Ole Naiko met with the British High Commissioner to Tanzania to discuss the now infamous Silverdale Farm Case.
In 2004 Benjamin Mengi sold the lease to Silverdale and Mbono Farms to British investors Stewart Middleton and Sarah Hermitage. The Right of Occupancy to the farms is held by the Kyeri, Shari and Uswa Mamba co-operative societies who gave their written permission for the sale (which under the terms of the lease agreement was not required) and accepted rent from the investors after the sale had taken place. Benjamin Mengi issued a receipt for the monies paid to him which was witnessed by Moshi advocate Peter Jonathan and the then manager of Stanbic Bank Moshi.
One year after the assignment Mengi demanded the lease back stating he had not been paid in full. When the investors refused, Mengi stated he would drive them out of Tanzania by any means; “cut to pieces in a coffin, if necessary”. A four-year campaign of violence and harassment was then unleashed against them facilitated by the police and judiciary and involving a plethora of State institutions. This included:-
- The refusal of the authorities to register the lease or recognise the Deed of Assignment;
- The destruction of commercial contracts;
- Violence to, and the imprisonment of, key operational staff; and
- The constant arrest, and ultimate imprisonment, of Mr. Middleton and his staff on trumped-up charges.
Mengi told the investors he would open case after case against them in the courts to destroy them financially and damage their reputation. One such case was an application to the District Housing and Lands Tribunal to declare the sale of the lease null and void and evict the investors from the farms. In 2006 The Moshi High Court (lands Division: Hon. Kileo) dismissed this application on appeal. Mengi made a further application to the High Court to remove the investors from the farms which has not yet been heard.
In the meantime, Mengi has unilaterally declared the sale of the lease to the investors null and void, a position now being supported by the Government of Tanzania.
In 2010 Moshi advocate Apollo Maruma representing the Co-operative Societies made an application to the Moshi High Court to foreclose on the lease agreement between themselves and Benjamin Mengi (which no longer exists) ignoring the fact that the lease had been sold to the investors and there is a caveat of non-dealing on the lease. The Tanzanian judiciary is upholding this clearly corrupt position and a bizarre situation now exists. The Moshi courts are entertaining an application from Mengi in one court where he admits the sale of the lease to the investors and is asking the court to set the sale aside and the same court, is hearing applications from the Co-operative Societies in respect of their former relationship of contractual Privity with Mengi, a situation which is clearly indefensible.
At the meeting with British High Commissioner Diana Corner to discuss the issue, Ole Naiko sets forth yet another bizarre legal doctrine. He states, that the Silverdale Farm case could only be resolved if Mengi’s claim against the investors was taken out of court. If this was done he states the investors could refer the issue to the Investors Complaints Bureau. Ole Naiko again is failing to respect the laws of Tanzania in respect of the sale of the lease.
The British investors were registered with the Tanzanian Investment Centre but were not issued with a Certificate of Incentive due to the fact Mr. Ole Naiko states; the lease to the farms was not registered.
When Mengi sold the lease to the investors their advocate Peter Jonathan told them he had checked at the Land registry and Mengi’s lease from the Kyeri, Shari and Uswa Mamba Co-operative Societies was properly registered. He lied, it was not. The investors had an absolute right to rely on information provided by a properly admitted advocate in Tanzania
However, whether or not the lease was registered did not affect the validity of the tenure. A lease agreement is simply a mutual agreement between parties. Registration is a measure that facilitates ‘dealings’ with land being a mirror of its ownership since registration. Want of registration of the lease, simply reduces the status of the holding from Legal to Equitable, a perfectly acceptable holding capable of registration under Tanzanian law. The downside is, it is a less secure tenure and banks tend not to loan on Equitable estates. Lack of registration therefore frustrates investment, progress and sustainable development. In countries that respect the rule of law, an Equitable estate in land is a safe estate.
Indeed it was incumbent upon the Tanzanian government to register the lease and incumbent upon the Tanzanian Investment Centre to assist with that registration. Both administrations have failed to comply with their legal obligations. Mr. Ole Naiko is either not aware of the laws of Tanzania or, is deliberately obfuscating the facts of the Silverdale Farm case. There can be no other explanation as his statements do not accord with the laws of Tanzania.
Dr Juma Ngasongwa, former Minister of Investment, Empowerment and Planning wrote to the former Minister of Lands Magafuli asking him to impress upon the Commissioner of Lands the need to proceed with registration of the lease. A copy of this letter was sent to the then Prime Minister Edward Lowassa. Ngasongwa stated “it was clear that the lease should be registered-even the papers Mengi had given him-despite Mengi’s attempts to be clever, showed no reason why the lease should not be registered.” Former Minister of Justice Dr Mary Nagu ironically, now Minister of Investment stated she wished the Silverdale Farm case to be resolved “in a manner that protected the Mengi name” as opposed to seemingly, in accordance with the rule of Tanzanian law.
The Tanzanian government and corrupt parties involved in this case can go around and around in circles in their attempts to obfuscate the facts of this case but, it will always come back to the same legal position.Until such time as a Tanzanian court declares the sale of the lease to the farms from Mengi to the investors as unlawful, it is incumbent upon the Tanzanian government and particularly the Tanzanian Investment Centre to uphold the laws of Tanzania in respect of the sale of the lease.
The fact that they have not is an indictment on Tanzanian’s investment policy and undermines the trust of the investment community in Tanzania as a defender of legal rights and a safe place in which to invest.
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