The Revolutionary Government of Zanzibar leased a parcel of land to the Appellant to build a restaurant. However, the Appellant was later informed that the Government had decided to cancel that lease with the intention to enter into a new lease agreement with the 2nd Respondent. The Appellant instituted a declaratory suit moving the High Court of Zanzibar to declare as valid, its lease agreement with the Government of Zanzibar and to invalidate the lease agreement between the Government of Zanzibar and the 2nd Respondent. In the alternative, the Appellant sought a sum of Tshs. 1,764,000,000/= as compensation for loss of the income which the Appellant had anticipated for the 49 years of lease. The 2nd Respondent filed a notice of preliminary objection contending that the Appellant had not complied with legal requirements to enable it to trade and own land in Zanzibar. The objection also contended that the Government of Zanzibar could not enter into the lease agreement with the Appellant who was described as a non-existent company.
The Judge not only sustained the objection, but went ahead to dismiss the entire suit on the ground that the Appellant company was non-existent under the Companies Decree of Zanzibar and could not have been granted a lease by the Revolutionary Government of Zanzibar. Aggrieved, the Appellant argued that the court erred in dismissing the suit without hearing evidence from both sides, since there were disputed substantive issues of fact. The Respondents however argued that the Applicant’s advocate had verbally conceded in court that the Appellant did not exist in Zanzibar. Hence, they argued, it could not enter into any valid lease agreement with the Government of Zanzibar.