Tanzania's FBME Bank sued for contempt

Two Dar es Salaam businessmen have lodged an application before the High Court, seeking orders requiring the manager of FBME Bank to show cause why he should not be committed to prison for court contempt.

The Bank is alleged to have disobeyed the order issued by Judge Rose Teemba on May 11, this year, for deposit in court four million US dollars (about 8bn/-) pending determination of a case lodged by the two local businessmen, Islam Abdallah and Quresh Delaware.

Judge Teemba had taken into consideration the concerns on whether the decree that would be given by the court would be enforceable, having FBME Bank placed under Management of the Bank of Tanzania (BoT), for being linked with money laundering and sponsoring terrorism scandal.

Since the Tanzania’s BoT announced to have taken over the management of FBME Bank, no other security has been provided to the litigants in the suit to ensure the decree that would be issued by the court in case of their favour would not be rendered nugatory.

In the application filed under certificate of urgency on Wednesday through legal services of advocate Henry Massaba, the two businessmen further request also officers of the Bank, shareholders, directors, agents, workers and servants of the Bank held contemptuous for such disobedience.

Advocate Masaba has filed an affidavit to support the application in question stating that on the said May 11, this year, Judge Teemba made the order to the effect that the Bank deposit the total sum of four million US dollars as security before judgment for the decree should his clients in their claims.

The said deposit, he stated, was required to be made by the Bank within 14 days from the date of the ruling of the court. On May 26, this year, according to the advocate, he perused the court file and found noting to have been filed incompliance with the court order.

“The (Bank) acts of failure, refusing to abide or otherwise adhere to court orders is sheer contempt of court orders,” reads part of the affidavit.

He stated that such acts and the use of laws of the jungle to suppress the interests of the applicants warrant this court to order the Bank to show cause as to why they should not be committed for contempt.

The advocate stated further that since the bank officials were still refusing to abide by the order, it entails a violation of his client’s rights.

According to him, it is in the interest of justice that the orders for contempt of court against the bank officials be issued in order to punish them.

He stressed that the Bank officials are not above the law and are subjected to the laws of the land like any other reasonable person in the country and it would be in the interest of justice if orders of the court are obeyed.

Therefore, he stated, the bank officials should be punished severely to serve lesson to others. The two businessmen are suing the Bank and two other defendants, FM and F Limited and African Consolidated Mining Corporation (Mining Corporation), as necessary parties in the matter, demanding compensation for loss of business allegedly caused for unlawfully retaining their two titles.

Mid-July last year, the Central Bank of Cyprus (CBC), took control of FBME’s operations in Cyprus, following a report from the US Treasury describing the bank as a “primary money laundering concern”. Irate customers of the Cyprus branch of FBME were quoted as saying that they were being held hostage.

The CBC took further steps of selling the bank, a move that prompted shareholders of the lender in Cyprus turning to international arbitration aimed to halt the action.

Following such movement, the Bank of Tanzania (BoT) also took over the management of the bank’s Tanzania Branch, as of July 24, 2014.

It was argued further that the disposal of assets for FBME Bank would leave the two businessmen with no means to execute the decree should the judgment be in their favour.

Furthermore, any disposal of Bank’s assets would also affect the said two titles owned by the businessmen. Silence by the Central Bank and other circumstances, forced advocate Henry Massaba, to seek the intervention of the court, in particularly Judge Teemba to depart from her order dated February 18, 2014, prohibiting parties to bring new issues in the matter.
Source: Daily News, reported by Faustine Kapama, from Dar es Salaam, Tanzania
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