Tanzania LPG dealer loses Sh148m legal fee claim

Justice Roseline Aburili found that the application challenging the magistrate’s decision appeared to be a collateral attempt to escalate compensation far beyond the bounds of proportionality.

In the bill of costs, the companies had sought Sh95.9 million as instruction fees for their advocates but the magistrate, also known as the taxing master, reduced the same to Sh600,000.

“The taxing master in reaching the decision, was well within her mandate and the confines of the law. The interested parties’ claim for Sh95.9 million as instruction fees was not only unsubstantiated but also grossly exaggerated,” said Justice Aburili.

The companies had also asked for Sh31.9 million as “getting up fees” of the advocates but the magistrate awarded them at Sh200,000.

The legal fees involved a case filed in 2020 by Proto Energy against the Energy and Petroleum Regulatory Authority (Epra) over the issuance of licences to Lake Oil and Lake Gas for the storage, filing and wholesale of liquefied petroleum gas cylinders.

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It had claimed that it extended credit facilities by transferring its cylinder deposit to Lake Gas Limited to the tune of Sh87 million in August 2019. Further, pursuant to the LPG Cylinder Pool Agreement it also incurred storage expenses in storing cylinders of Lake Gas Ltd of Sh2.7 billion.

It wanted Epra stopped from licensing Lake Oil and Lake Gas until the debt of the LPG pool was settled.

However, the case did not go to full trial as it was dismissed in June 2021 following a finding that Epra had not decided to licence the two companies.

While asking to be awarded legal fees of Sh148.7 million, the two companies' complaint was that the instruction fees awarded by the magistrate was low and failed to reflect the complexity, novelty and urgency of the judicial review proceedings.

But Justice Aburili said the companies failed to point out the errors committed by the magistrate or how she had misdirected herself in the ruling.

“I note that Lake Gas Limited and Lake Oil Limited have not pointed out to this court any identifiable misdirection in law or in principle by the taxing master. Nor have they demonstrated that the award is so inordinately low as to constitute a miscarriage of justice,” said the judge.

She added that since the original case never reached the substantive stage for a full hearing, no evidence was presented indicating that there was extensive preparation or trial readiness.

Proto Energy’s Head of Legal Wambui Maina had opposed the review of the magistrate’s ruling. She contended that the claim for Sh148.7 million was grossly exaggerated, unjustifiable, and not commensurate with the nature or volume of work demonstrated.

Ms Wambui said the bill of costs appeared designed to unjustly inflate compensation, containing figures unsupported by court filing receipts or relevant disbursements.

She stated that the magistrate properly considered all relevant factors under the Advocates (Remuneration) Order such as the nature, complexity, pleadings, volume of work, and remedies sought, and awarded a fair amount of Sh968,282.

In the contested ruling, the magistrate had observed that the case was filed in the year 2020 and concluded in the year 2021 and as such, the same was therefore concluded in approximately one year.

Since the application was filed at the Judicial Review division of the High Court, Justice Aburili said the dispute of legal fees failed to identify how the claimed amount correlates with any known or measurable valuation of the subject matter in judicial review litigation.

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