Oil firms ordered to pay law firm Sh1m

The High Court has ordered two oil companies to pay Nyachoti and Company Advocates Sh1 million as legal fees from a 2015 court case.

Justice Alfred Mabeya entered a judgment in favour of lawyer Philip Nyachoti compelling Metro Petroleum Tanzania Ltd and Premium Petroleum Company Ltd to pay Sh1,056,229 as certificate of tax for instructions given to him to oppose proceedings for adoption of a foreign judgment rendered by the Tanzania High Court.

In his judgment, Mabeya ruled that the law firm should be paid Sh1, 056,229 as per the certificate of taxation.

Justice Mabeya said the application by Nyachoti seeking judgment against Metro Petroleum Tanzania Ltd for Sh 1,056,229.05 as per the certificate of taxation is merited.

“I allow the application and enter judgment for the applicant in terms of the certificate of taxation dated July 2, 2018 together with costs of the application,” said the judge.

Nyachoti had moved to court seeking judgment against Metro Petroleum Tanzania Ltd, which is listed as First Respondent in the suit, and one Bill Kipsang Rotich, Florence Chepkoech and Premium Petroleum Co Ltd listed as Second, Third and Fourth respectively.

The case arose from another case namely Milimani HCC No. 423 of 2015 United Bank of Africa (Tanzania) Limited VS Metro Petroleum Tanzania Ltd and three others.

Mabeya said the court is satisfied that the respondents failed to discharge the burden upon them that the monies had been paid and received by the applicant.

“The view this court takes is that when a person makes a cash payment and fails to demand for a receipt, such payment cannot be accounted to the tax authorities.

The payer in such a case is aiding and abetting an illegality. He is assisting the payee to avoid paying tax for such payment.

This is obviously an illegality and the loss will fall where it lies,” said Justice Mabeya.

Nyachoti had denied the allegation. Justice Mabeya found that there was no explanation given why a cash payment was not receipted.