Civil Reference No. 7 of 2004
Quality Meats and Beverage Supplies Ltd (QMB), a business dealing in various products including importation of liquor into Zanzibar, had its 2022 liquor importation licence renewal rejected by the Zanzibar Liquor Licensing Board on the ground that the newly enacted Liquor Act No. 9 of 2020 (LCA) restricted the number of liquor importers to three persons. Before its previous licence expired, QMB had already ordered merchandise to avoid delays and inconvenience to customers; upon arrival at Zanzibar Sea Port this merchandise (containers) was detained and later advertised for auction by the Tanzania Revenue Authority (TRA) under its customs powers. Aggrieved, QMB petitioned the High Court for Zanzibar, seeking declarations that section 33(1)(a)-(d), (2) and (3) of the LCA (limiting liquor import permits to three Zanzibari nationals meeting certain criteria) was unconstitutional and inconsistent with section 43(1) of the Fair Competition and Fair Consumer Protection Act No. 5 of 2018 (FCFCPA), or alternatively that injured parties be granted relief pending legislative amendment. The Attorney General and TRA opposed the petition, initially raising preliminary objections (later partly abandoned) including lack of cause of action against TRA and that the petition was 'barren of fruits'.
1. Whether the petition disclosed a cause of action against the second respondent (TRA) and whether it was otherwise incompetent. 2. Whether section 33(1)(a)-(d), (2) and (3) of the Liquor Act No. 9 of 2020 contravenes the Constitution of Zanzibar, 1984 (as amended), particularly provisions on equality/non-discrimination (s.12), right to life (s.13), right to work (ss.21(3) and 22(1)), and the economic objective against concentration of wealth (s.10(d)/(e)). 3. Whether section 33 of the LCA violates section 43(1) of the Fair Competition and Fair Consumer Protection Act No. 5 of 2018, and which statute should prevail in case of conflict. 4. What remedies were available if the impugned provisions were found unconstitutional or unlawful.
Petitioner (through Mr. Mwarab): Argued that constitutional petitions are not governed by Civil Procedure Decree rules on cause of action, but that in any event a cause of action existed against TRA because it had acted to auction QMB's containers under the impugned regime. On the merits, argued that section 33 of the LCA discriminates against non-Zanzibaris in violation of section 12 of the Constitution, promotes favouritism contrary to section 10(e), and unjustifiably restricts the right to work and equal opportunity under sections 21(3) and 22(1) by limiting liquor importers to three persons without lawful, proportionate justification, relying on the three-part limitation test from Ndyanabo, Kukutia Ole Pumbun, Daudi Pete and Charles Onyango Obbo. Further argued that section 33 conflicts with section 43(1) of the FCFCPA, which prohibits anti-competitive practices, and that under section 70(1)(a) FCFCPA the fair competition provisions must prevail over any inconsistent legislation such as the LCA. Sought a declaration of unconstitutionality/nullity and consequential relief for injured parties. Respondents (State Attorneys Ms. Khatau for AG and Ms. Hassan for TRA): Raised preliminary objections that the petition disclosed no cause of action against TRA and was 'barren of fruits' (the latter unargued). On the merits, argued the LCA enjoyed a presumption of constitutionality, that limiting importers to three was a legitimate, reasonable and proportionate measure under section 24 of the Constitution to control excessive liquor importation and protect public order, and that the right to work was not absolute. They contended the petitioner had not pleaded the section 12 discrimination claim and that adequate appeal/judicial review mechanisms existed under the LCA. On the FCFCPA conflict, they argued the LCA was a specific law and FCFCPA a general law, invoking lex specialis derogat legi generali and the principle that a later statute prevails over an earlier inconsistent one, urging that LCA should prevail over FCFCPA.
The Court dismissed both preliminary objections, holding that a cause of action was disclosed against TRA (given its role in attempting to auction the petitioner's containers) and that the 'barren of fruits' objection was unargued and thus without merit. On the substantive issues, the Court held: (1) Section 33(1)(a) of the LCA, by restricting liquor import permits to only three Zanzibari nationals meeting specified criteria, is discriminatory against non-Zanzibaris and violates section 12(1)-(2) of the Constitution (equality before the law), which is an absolute right without claw-back. (2) The provision also violates sections 13, 21(3) and 22(1) of the Constitution by unjustifiably restricting the right to work/freedom of business, since the respondents failed to demonstrate any legitimate, proportionate justification (e.g., evidence of excessive importation exceeding market demand) and the LCA itself imposed no quantity limits on the three permitted importers; thus the restriction failed the limitation test from Kukutia Ole Pumbun and Ndyanabo and was not saved by section 24(1) of the Constitution. (3) Contrary to the respondents' submission, both the LCA and FCFCPA are specific laws in their respective domains, so the lex specialis principle did not favour the LCA; instead, under section 70(1)(a) of the FCFCPA, which mandates that fair competition provisions apply to all sectors and cannot be excluded or modified by other legislation unless expressly done so by a later Act, section 33(1) of the LCA (being anti-competitive by restricting importers) was inconsistent with and subordinate to section 43(1) of the FCFCPA, and also offended the economic objective in section 10(d) of the Constitution against concentration of wealth. Consequently, the Court declared section 33(1)(a) of the LCA unconstitutional and void ab initio, and a nullity for inconsistency with the FCFCPA; declared the refusal of the petitioner's 2022 licence illegal and void; ordered return of sale proceeds/containers to the petitioner (subject to payment of 2022 licence fees); and made no order as to costs.
The judgment is significant as a Zanzibari constitutional law precedent establishing that (i) constitutional petitions, while not strictly governed by Civil Procedure Decree rules, still require disclosure of a cause of action under section 24(2) of the Zanzibar Constitution; (ii) the right to equality (section 12) and the right to work/freedom of business (sections 13, 21(3), 22(1)) under the Zanzibar Constitution are treated as largely non-derogable absolute rights requiring rigorous justification for any legislative limitation, applying the three-part proportionality test (legitimate objective, non-arbitrariness, minimal impairment) drawn from Ndyanabo, Kukutia Ole Pumbun and related authorities; (iii) sector-specific regulatory statutes (like the Liquor Act) cannot override the general application clause of the Fair Competition and Fair Consumer Protection Act (section 70(1)(a)), reinforcing that fair competition principles apply across all sectors unless expressly and validly excluded by later legislation; and (iv) courts will strike down numerical or exclusionary licensing restrictions in trade regulation where the state fails to adduce evidence justifying the restriction as necessary and proportionate to a legitimate public interest. The decision reinforces judicial willingness to invalidate protectionist or anti-competitive licensing schemes that discriminate on nationality grounds and to harmonize sector legislation with overarching constitutional and competition-law principles favouring economic freedom and non-discrimination.
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