GBL & ASSOCIATES LTD v DIRECTOR OF WILDLIFE MINISTRY OF LANDS, NATURAL RESOURCES AND TOURISM AND TWO OTHERS 1989 TLR 195 (HC)

GBL & ASSOCIATES LTD v DIRECTOR OF WILDLIFE MINISTRY OF LANDS, NATURAL RESOURCES AND TOURISM AND TWO OTHERS 1989 TLR 195 (HC)

Court High Court of Tanzania- Dar Es Salaam

Judge Rubama J

16 October, 1989 E

Flynote

Contract - Government tender - Whether an invitation to treat or an offer.

Contract - Government tender - Whether central tender board obliged to accept

highest bid. F

Contract - Tenderer's bid made within period stipulated by tenderee - When legally

binding contract arises. G

Contract - Government tender - Period within which to bid and pay purchase price

stipulated in tender - Tenderer bids within stipulated period - Tenderee accepts bid

subject to confirmation sale price - Tenderee confirms award of tender but shortens

original period within which sale price payable - Whether open to tenderee to modify

period of payment of H sale price.

Contract - Government tender - Tender submitted within stipulated period -

Tenderee accepts bid and confirms award of tender but shortens period within which

sale price payable - Tenderer objects - Tenderee cancels award of tender - Whether

open to I tenderee to cancel award after acceptance.

1989 TLR p196

Civil Practice and Procedure - Right of hearing - Parties to suit aware of hearing date

- A Defendants absent at hearing without assigning any reason - Suit set down for ex

parte proof - Defendants enter appearance on day set down for ex parte - Whether

defendants have a right of hearing. B

-Headnote

On behalf of the government of the United Republic of Tanzania the Secretary of the

Central Tender Board by advertisement in the Daily News paper of 9/2/88, invited

tenders for sale of elephant ivory of approximately 13 tons. The tenderers were C

requested to quote prices per kilogram in US$ or any convertible foreign currency,

the quotations to be firm and valid for acceptance for at least 60 days from closing

date of the tender. Further, successful tenderers were required to make full payment

and to collect the ivory within 30 days from the date of the award.

The plaintiff company, an agent of M/S TAT Hing Ivory Wares Factory, Hong Kong,

D offered to buy the whole lot of ivory at US$ 80 per kilogram or at US$ l0% above

highest bidder's offer

should its offer be beaten. On 13/5/88 the Director of Wildlife, Ministry of Lands,

Natural Resources and Tourism accepted the plaintiff company's offer to buy the

ivory at E 10% above the highest bid which was US$ 140 - that is to say, at US$ 154

per kilogram subject to the plaintiff company confirmation within seven days of

receipt of the letter of acceptance of the sale and at the price per kilogram. On the

same day, i.e. 13/5/88 the plaintiff company communicated its confirmation to the

Director of Wildlife. F On 19/5/88 the Director of Wildlife wrote to the plaintiff

company's principal in Hong Kong stating that the plaintiff company were the

winners of the government tender for the sale of nearly 16.5 tons of mixed ivory. The

letter of the Director of Wildlife which was copied to the plaintiff company was silent

as to the time for payment of the sale G price. On 28/5/88 the Acting Director of

Wildlife wrote to the plaintiff company confirming that the tender had been awarded

to it and requiring the plaintiff company to pay the sale price within the period of one

week from the date of the letter. The H plaintiff company objected, maintaining that

the tender regulations under which they had been operating had provided for a thirty

day, and not seven day, period of payment of the sale price. On 22/6/88 the Director

of Wildlife cancelled the award of the tender to the plaintiff company. In a suit by the

plaintiff company heard ex parte on 15/9/89, for a I declaration that the cancellation

of the tender was null and void:

1989 TLR p197

RUBAMA J

Held: (i) The advertisement by the Secretary of the Central Tender Board calling for

the A purchase of elephant ivory was not an offer but an invitation to treat. Each of

the tenderers offered to buy at his quoted price and it was upon the government of

the United Republic of Tanzania to accept an offer or reject it; B

(ii) in the letter of the Director of Wildlife of 13/5/88 seeking confirmation on

acceptability of the purchase price of US$ 154 per kilogram, the plaintiff company

was being asked if it still stood by its tender to pay 10% above the highest bidder's

offer. In this respect, the Central Tender Board was not obliged to accept the highest

bid or any of the tenders for that matter. The highest bid need not necessarily be the

best. The C Central Tender Board after opening tenders moves to evaluate them and

it is the highest evaluated tender, which need not be the highest bid, that is accepted;

(iii) on the evidence, the tender by the plaintiff was the highest evaluated

tender and that it was the offer that the government had accepted. By the Director

Wildlife's D letter dated 19/5/88 to the plaintiffs principal in Hong Kong, the

Director of Wildlife had created a legally binding contract between the government

of the United Republic of Tanzania and the plaintiff's principal; E

(iv) the tender had been awarded to the plaintiff on the basis of the tender

conditions stipulated in the advertisement that appeared in the Daily News of 9/2/88.

These conditions required payment of the sale price within 30 days and not 7 days as

demanded by the Director of Wildlife. It was not open to the Director of Wildlife to

modify and shorten the said period of 30 days subsequent to him declaring the

plaintiff F the winner of the tender. As there was a binding contract between the

plaintiff and defender.

(v) the unilateral cancellation of the award of the tender to the plaintiff by the

Director of Wildlife vide his letter of 22/6/88 was illegal and in breach of a contract

which already existed. G

(vi) Obiter: The counsel for the defendants who appeared on 15/9/89 did not

have a right of audience as the case was coming up for ex parte hearing.

Case Information

Judgment for plaintiff. H

Lamwai, for the plaintiff

Ihema, for the defendant.

[zJDz]Judgment

Rubama, J.: By Tender No. 116 of 1987 for the sale of Elephant Ivory appearing in I

the Daily News dated 9th February,

1989 TLR p198

RUBAMA J

1988, the Secretary of the Central Tender Board on behalf of the government of the

A United Republic of Tanzania invited tenders from potential authorised buyers for

the purchase of "Elephant Ivory of approximately 13 Tons".

The tenderers were told that the Ivory for sale was available for inspection in the

Ivory B Room, Dar es Salaam. Details on whom to contact to gain access to the Ivory

Room and the allowed time were provided. The tenderers were also "requested to

quote prices per kilogram in US$ or any convertible foreign currency". The quotations

had to be firm C and valid for acceptance by the government for at least 60 days

from closing date of the tender, i.e. 11 March, 1988, at 0900 am. Further, the

successful tenderer was going to be required to make full payment and collect the

Ivory within 30 days from the date of award of the tender. Failure to accomplish this

was going to have the effect of nullifying the award.

GBL & Associates Ltd on behalf of a Principal, M/S Tat Hing Ivory Wares Factory D

submitted its tender on 10th March, 1988, a day or so before the closing date for the

tender. Their tender was couched in the following terms:

We offer to buy the whole lot of Ivory at US$ 80 (eighty) per kilogram. E

PRINCIPAL CONDITION

Should our tender above become low, then we offer 10% above highest

bidders' offer. F

On 13th May, 1988 the Director of Wildlife, Ministry of Lands Natural Resources and

Tourism wrote to GBL & Associates Ltd referring to a conversation he (the Director of

G Wildlife) had had that morning with Mr. Lugendo of the GBL & Associates Ltd he

stated:

As pointed out to you, we are prepared to award your company the tender for

the sale of nearly H 16.5 tons of ivory at a price of US$ 154/kg of mixed or ungraded

ivory. This price is arrived at as follows:

i. The highest bid in the tender advertised on 19th and 11th March, 1988

was for US$ I 140 (US$ one hundred and forty).

1989 TLR p199

RUBAMA J

ii. In your quotation for the same tender, you offered US$ 80 or 10% over

and above the A highest bidder.

iii. Since your quotation for US$ 80 was far too low, we opted for your

second quotation (i.e. 10% above the highest bid, i.e. US$ 140. And 10% of US$ 140 =

154). B

The purpose of this letter is to seek your official confirmation that if you are

finally awarded the tender for the sale of nearly 16.5 tons of ivory you will be able to

pay US$ 154 per kilo of mixed ivory. We need your confirmation within seven days

upon receipt of this letter. C

GBL & Associates Ltd, wrote to the Director of Wildlife on the same day, i.e. 13th

May, 1988, confirming that if finally awarded the tender for the sale of nearly 16.5

tons of ivory, they would pay US$ 154 per kilo of mixed ivory. No doubt following

receipt of D the confirmation of sale price per kg. from GBL & Associates Ltd., on

19th May, 1988 the Director of Wildlife directly communicated with the plaintiff's

Principal in Hong Kong copying the letter to the plaintiff. The Director of Wildlife

stated: E

This is to confirm that Messrs GBL Associates Ltd. of P.O. Box 3154, Dar es

Salaam, Tanzania, are the winners of the recent Government tender for the sale of

nearly 16.5 tons of mixed ivory. F

We also confirm that the ivory will be accompanied by relevant CITES

documents which will only be released after the ivory has been paid for in full.

No mention of within what time that payment for the ivory had to be effected. The

G Acting Director of Wildlife did, however, address the Managing Director of GBL &

Associates Ltd. on the time within which payment for ivory had to be made. In his

letter dated 28th May, 1988, he stated: H

I have the pleasure to inform you that you have been awarded the said tender

under the following conditions:

(a) That you will pay US$ 154.- per kg without subjecting the lot to any

grading. I

(b) That you are ready to effect the total payment of the

1989 TLR p200

RUBAMA J

16.538 tons of elephant tusks at once, into our Bank Account within a

period of one A week from the date of this letter.

The condition on payment schedule was objected to by Mr. Lugendo on the very day,

B i.e. 28th May, 1988. He maintained that the Tender regulation under which they

had been operating had provided that payment for the purchased ivory had to be

effected within 30 and not 7 days. He called upon the Ag. Director of Wildlife to

honour his own tender regulations. On the same day, Mr. Lugendo also

communicated by phone with C the boss of the Acting Director of Wildlife, i.e. the

Principal Secretary, Ministry of Lands, Natural Resources & Tourism. He confirmed

this conversation in a letter addressed to the Principal Secretary. He stated:

Please refer to our telephone conversation of this morning with our Mr.

Lugendo and we wish D to know your account number and where in Europe or

anywhere and name of your Bankers so that our Principal in Paris and Hong Kong

can send the money in respect of the purchase of the ivory which you have advised us

we have won on behalf of our Principals. Without this E information, we cannot

arrange for payment.

On 14th June, 1988, Mr. Lugendo in two letters addressed to the Director of Wildlife

one of which was copied to the Principal Secretary of the Ministry of Lands, Natural

F Resources and Tourism presses for the same information he had sought from the

Principal Secretary on 28th May, 1988, i.e. where his Principal was to effect payment

for the 16.538 tons of elephant tusks. The response to these letters was a letter dated

22nd June, 1988, addressed to Mr. Lugendo from the Director of Wildlife cancelling

the G award of the tender number 116 for the purchase of 16.538 tons of elephant

tusks. The second paragraph of that letter reads:

I wish to inform you that a decision has been taken by the Government to

cancel the award of H the tender number 116 to your firm for the purchase of

16.538 tons of elephant tusks. Our letter No. GWC.5/73/315 dated 28th May, 1988,

addressed to you in which you were awarded the tender is, therefore, withdrawn. I

1989 TLR p201

RUBAMA J

Following this communication GBL & Associates Ltd filed a suit against the

defendants A seeking the following orders.

(i) A Declaration that the government Tender award for 16.538 tons of

ivory, the subject matter of this suit, is still valid and that the cancellation of the same

by the 1st and 2nd defendant is null and void. B

(ii) An order that the 1st and 2nd defendants issue to the Plaintiff and/or

its Principal, M/S Tat High Ivory Wares Factory Cites certificates and all necessary

permits to enable the plaintiff and/or its principal to export the ivory from Tanzania.

C

(iii) Costs of this suit.

(iv) Any other relief which the court will deem fit to grant.

I wish to first state that this suit was properly filed in that consent of the Attorney

General D was duly obtained for purpose of suing the government. The 1st and 2nd

defendants have been included herein since they were the officers that had been

involved in this case.

Following completion of the pleadings, this case was fixed for hearing on 20th July,

1989 E before my brother judge (Kyando, J.). All the parties were aware of this

hearing date. However, the defendants without assigning any reason absented

themselves. The learned counsel for the plaintiff prayed for permission to prove his

case ex parte by affidavit. This prayer was granted. An Affidavit was duly filed on

11th August, 1989 as ordered F by the Court (Kyando, J). The case eventually came

for hearing on 15th September, 1989 when learned counsel for the plaintiff, Dr.

Lamwai, prayed for judgment. Mr. Ihema, learned counsel for the Defendants, also

appeared on this day. He did not on the G day have a right of audience as the case

was coming up for an ex parte hearing.

In the affidavit sworn by the Managing Director of GBL & Associates Ltd. in

compliance with this Court's order of 20th July, 1989 (Kyando, J.), the deponent

submits that once the tender was made on the basis of the conditions stipulated in the

H advertisement that had appeared on the Daily News on 9th February, 1988,

namely, the period within which to pay to be 30 days, it was not open to the 1st

defendant to modify and shorten the said period, especially subsequent to the 1st

defendant declaring the plaintiff the winner on the 19th of May, 1988, and the 1st

defendant's letter dated 28th I May, 1988 did not have any effect on the original

terms of payment

1989 TLR p202

RUBAMA J

as stipulated in the original agreement. Further noting that on the 22nd day of June,

A 1988, the 1st defendant, vide his letter of even date, unilaterally cancelled the

award of the tender, the deponent submits that this unilateral action by the 1st

defendant was illegal and in breach of a contract which already existed.

Let us revisit the advertisement by the Secretary of the Central Tender Board calling

for B tenders from authorised buyers of Elephant Ivory. The tenderers were

"requested to quote prices per kilogram in US$ or any convertible foreign currency"

and further informed that: C

(a) Quotations be firm and valid for acceptance by the government for at

least 60 days from closing date of the tender, i.e. 11th March, 1988, at 9.00 a.a. and

that

(b) The successful tenderer would be required to make full payment and

collect the Ivory D within 30 days from the date of award of the tender. Failure to

comply with this requirement was going to nullify the award.

Were the Tender Regulations operative in respect of Tender No. 116 for the purchase

E of 16.538 tons of Elephant Tusks those detailed by the Secretary to the Central

Tender Board's advertisement appearing in the Daily News of 9th February, 1988?

This court accepts the plaintiff's submission that the tender had stipulated in the

advertisement that had appeared on the Daily News on 9th February, 1988. F

The plaintiff on behalf of M/S TAT Hing Ivory Wared Factory of the United Kingdom

had quoted the price of the highest bidder plus 10% thereof as its tender price. This

quotation was in a convertible currency, i.e. American Dollars. From the exchange of

letters between the Director of Wildlife and the Managing director of GBL &

Associates G Ltd (both dated 13/5/88) fully reproduced above, it is clear that the

quotation by GBL & Associates Ltd had remained firm and valid for the acceptance of

the United Republic of Tanzania for more than 60 days from the closing date of the

tender, i.e. 11/3/1988 at H 9.00 am. The 1st defendant, vide his letter dated 19th

May, 1988 addressed to the plaintiff accepted the plaintiff offer and required the

payment of US$ 154.00 per kilogram.

What then was the legal status of the advertisement by the Secretary of the Central

Tender Board that had appeared on the Daily News on 9th February, 1988, calling for

I the purchase of "Elephant Ivory of approximately 13 tons"? Was it an "invitation

1989 TLR p203

RUBAMA J

to Treat" or an "Offer"? Was the Central Tender Board obliged to accept the highest

A bid? The call for tenders by the Secretary of the Central Tender Board on behalf of

the Government of the United Republic of Tanzania was an "Invitation to Treat".

These tenderers' bids were the "offers". Each of the tenderer offered to buy at his

quoted price and it was upon the Government of the United Republic of Tanzania to

accept an offer B or reject. The substance of the Director of Wildlife's letter dated

13th May, 1988 to GBL & Associates Ltd., seeking confirmation from GBL &

Associates Ltd. on acceptability of the purchase price of US$ 154 per kilogram of ivory

testifies to this very fact. In this letter, GBL & Associated Ltd were being asked if they

still stood by their C tender to pay "10% above the highest bidder's offer." In this

respect, the Central Tender Board was not obliged to accept the highest bid or any of

the tenders for that matter. The highest bid need not necessarily be the best to accept.

The Central Tender Board after opening tenders moves to evaluate them and it is the

highest evaluated tender which D need not be the highest bid that is accepted.

Going by the various communications between the Director of Wildlife and the

Managing Director of GBL & Associates Ltd., the Director of Wildlife and the

plaintiff's Principal and also between the Principal E Secretary, Ministry of Lands,

Natural Resources and Tourism and the Managing Director of GBL & Associates Ltd.,

it is clear that the tender by the plaintiff was the highest evaluated tender and that it

was the offer that the government had accepted vide its letter by the Director of

Wildlife dated 19th May, 1988 to the plaintiff's Principal in F Hong Kong which was

copied to the GBL & Associates Ltd. Dar es Salaam. The 1st defendant, ignoring the

legal effect his letter to the plaintiff's Principal has had, again directly wrote to the

plaintiff on 28th May, 1988, stating that the tender for the purchase of Elephant

Tusks had been offered to the plaintiff. By the 1st defendant's letter dated G 19th

May, 1988 to the plaintiff's principal in Hong Kong, the 1st defendant had created a

legally binding contract between the government of the United Republic of Tanzania

and the plaintiff's Principal. This legal status between the two parties was again

affirmed by the 1st defendant's letter dated 28th May, 1988, addressed to the

Managing H Director, GBL & Associates Ltd. In this situation, what is the effect of

the United Republic of Tanzania's action "to cancel the award of the tender No. 116 to

the plaintiff for the purchase of 16.538 tons of Elephant Tusks" communication to the

plaintiff vide the 1st defendant's letter dated 22nd June, 1988? I

As the Tender Regulations operative in respect to Tender No.

1989 TLR p204

RUBAMA J

116 for the purchase of 16.538 tons of Elephant Tusks those detailed by the Secretary

A of the Central Tender Board's advertisement appearing in the Daily News of 9th

February, 1988 a successful tenderer was going to be required to make full payment

and collect the Ivory within 30 days from the date of award of the tender. Failure to

B accomplish this was going to have the effect of nullifying the award. "Within 30

days" here does not apportion the time within which to make payment on award of

the tender and the time within which to collect the elephant tusks. The successful

tenderer could, if he so chose, make payment on the last day allocated, i.e. 30 days

and collect the elephant tusks on the same day. C

It is clear that the 1st defendant had not acted under the above mentioned regulation.

There is no reference to non-payment for the ivory or failure to collect the bought

ivory within 30 days from the date of award of the tender. If the government had

proceeded D under this regulation, the award of the tender would have been

nullified. This is not the case in the instant case. Here we are told "that a decision has

been taken by the government to cancel the award of the tender No. 116 ... for the

purchase of 16.538 tons of elephant tusks". No reason is assigned. The plaintiff was

left to speculate whether E that government reaction was out of the objection raised

by the Managing Director, GBL & Associates Ltd. that the tender regulations under

which they were operating required payment within 30 and not 7 days as demanded

by the Director of Wildlife. For whatever reason the government had thus acted, this

chief accepts the plaintiff's F submission that the tender had been awarded to the

plaintiff on the basis of the tender conditions stipulated in the advertisement that had

appeared on the Daily News on 9th February, 1988, namely, the period within which

to pay to be 30 days. It was not open to the 1st defendant to modify and shorten the

said period of 30 days subsequent to the G 1st defendant declaring the plaintiff the

winner on the 19th day of May, 1988. As noted above, there was a binding contract

between the defendants and the plaintiffs on the 19th of May, 1988 and the 1st

defendant's letter dated 28th May, 1988 could not have any effect on the original

terms of payment as stipulated in the original agreement. H The 1st defendant's

unilateral cancellation of the tender award vide his letter of 22nd June, 1988 to the

plaintiff was illegal and in breach of a contract which already existed. On the

materials before this court, I further find that in consequence of the cancellation

referred above, the plaintiff and its Principal have suffered loss in that they had

already I opened letters of credit in favour of the defendants and that payment had

been

1989 TLR p205

RUBAMA J

duly made and the contract thus firmly concluded. The defendants could not back out

of A it at will.

In view of the above, I enter judgment for the plaintiff with costs as prayed: B

(i) It is hereby declared that the Government Tender award for 16.538

tons of ivory, the subject matter of this suit, is still valid and that the cancellation of

the same by the 1st and 2nd defendants is null and void.

(ii) It is ordered that the 1st and 2nd defendants issue to the plaintiff

and/or its Principal, C M/S TAT Hing Ivory Wares Factory Cites certificates and all

necessary permits to enable the plaintiff and/or its principal to export the ivory from

Tanzania.

(iii) Costs of this suit. D

Lastly, I find it necessary to state the obvious that the law involved in this case is

extremely simple. Appreciating that, I must express utter astonishment on how so

straight forward a matter could be left to get out of hand leading to the necessity of a

government being taken to court. Worse still, the action of the principal actors on

behalf of the E government have been contradictory and unilateral and in complete

disregard to the adverse repercussions in its future dealings in international trade.

Consistency, steadfastness and fairness are some of the many qualities and a

democratically elected F government as the one being sued is must strive to have in

its dealings. A government that chooses when to abide by a freely entered contract

does so at extreme costs to its reputation or standing. This court decries this sorry

development.

G Order accordingly.

1989 TLR p206

A