This is an appeal against the decision of the High Court upholding an arbitral award handed down by the third respondent on 10 July 2018 in terms of which the appellant's claim was dismissed for want of prosecution and the first respondent's counter claim was granted.BACKGROUND FACTSPrior to January 2006, ...
This is an appeal against the decision of the High Court upholding an arbitral award handed down by the third respondent on 10 July 2018 in terms of which the appellant's claim was dismissed for want of prosecution and the first respondent's counter claim was granted.
BACKGROUND FACTS
Prior to January 2006, the appellant and the first and second respondents owned mines which are in close proximity situate in the Mutoko and Mudzi districts. In January 2006, the parties concluded a shareholder's agreement governing their respective shareholding in a joint venture company called Quarrying Enterprises (Pvt) Ltd (QE). As contribution towards their shareholding to Quarrying Enterprises (Pvt) Ltd (QE) the parties contributed, inter alia, mining claims.
Alleging breach by the first and second respondents of the shareholder's agreement, the appellant approached the arbitral tribunal seeking an order declaring the shareholder's agreement of no force or effect, restitution of its mining claims and movable assets it contributed to the joint venture, eviction of the first and second respondents from the mining claims, and payment of damages in the sum of US$21,693,374.
The first and second respondents resisted the claim and filed a counterclaim wherein they alleged that the appellant was in breach of the shareholders agreement. They sought an award declaring that the appellant was in breach of the shareholders agreement and that the other shareholders were entitled to cancel the agreement and acquire the appellant's shareholding in accordance with the agreement.
In 2015, the parties referred the dispute to arbitration before the third respondent ('arbitrator'). After various interlocutory applications and several postponements requested by the appellant, the arbitrator scheduled the final hearing on 28 May 2018.
At the commencement of the hearing, the appellant's Managing Director, Mr Smit, appeared in person and sought a further postponement. He averred that Mr Samukange, the appellant's counsel of choice, was unavailable to argue the matter as he was involved in elections and was not sure when he would be available. He stated that it was in the interests of justice to have the appellant's legal practitioner of 20 years to represent it in the matter.
The first and second respondents opposed the postponement and argued that the appellant's right to legal representation was not absolute and proceedings could not be forestalled because of the unavailability of a particular legal practitioner.
Counsel for the first and second respondents insisted that the respondents had a right to the prompt resolution of the dispute. He further indicated that the appellant had ample time to enlist the services of another legal practitioner but failed to do so.
In any event, it was submitted, it had been indicated to the appellant at the last postponement of 2 May 2018 that the respondents would make an application for the dismissal of the claim for lack of prosecution. Consequently, the respondents moved for the dismissal of the appellant's claim for want of prosecution.
The arbitrator refused the postponement and proceeded with the matter.
On 10 July 2018, the arbitrator handed down his award dismissing the appellant's claim for want of prosecution in terms of Article 25(d) of the UNCITAL Model Law. as set out in the Arbitration Act [Chapter 7:15] (Model Law).
This was upon a finding that the appellant was 'virtually absent' as Mr Smit, the appellant's representative, was not in a position to prosecute the appellant's case or defend the counterclaim without the assistance of a legal practitioner. The arbitrator held that the appellant's conduct exuded an unwillingness to prosecute its case as it sought to forestall the arbitration from October 2017.
After dismissing the appellant's claim, the arbitrator proceeded to deal with the respondent's counterclaim, and, after analysing the evidence placed before him, he upheld the counterclaim.
In the result, he declared that the appellant was in breach of the shareholder's agreement signed by the parties and that the other parties retained their right to cancel the agreement and to acquire the appellant's shareholding.
Dissatisfied with the award, the appellant approached the court a quo in terms of Article 34(2) of the Model Law, Arbitration Act [Chapter 7:15] to have the arbitral award set aside.
It argued that the arbitrator violated its right to be heard by directing that the hearing proceeds despite the unavailability of the appellant's legal practitioner of choice. Thus, the appellant contended, its constitutional right to legal representation by counsel of choice had been infringed.
It also stated, that, by imposing a date of hearing, the respondents violated its right to a fair, speedy hearing within a reasonable time before an independent judiciary.
It further submitted that the arbitrator's finding that its claim was not prosecuted was contrary to the evidence and amounted to a misrepresentation of facts in order to frustrate the appellant's claim.
In its opposing papers, the first respondent argued that the postponement was rightfully denied as the appellant's selection of a lawyer, who was known to be unavailable, had the effect of delaying, indefinitely, the determination of the parties' rights.
It further contended that the appellant was not left without representation as it could engage counsel who represented it at the initial stages.
The first respondent also indicated that the appellant had ample opportunity to regularise its affairs as it had been granted several adjournments prior to the final hearing but failed to do so.
The first respondent was of the view that the appellant was abusing the arbitration proceedings as evidenced by its numerous unmeritorious applications in the High Court.
Regarding the arbitrator upholding its counterclaim, the first respondent averred that the evidence against the appellants was overwhelming as it established the unrebutted fact that the appellant was in breach of the shareholders' agreement.
In response, the appellant insisted that Mr Samukange was well versed with the facts and issues surrounding the main case and would effect proper representation.
Concerning the counterclaim, the appellant submitted that due to Mr Samukange's absence, Mr Smit was incapable of addressing the technical arguments made by the respondent's counsel. However, it was highlighted that the allegations of breach were refuted by Mr Smit. The appellant also argued that the postponement sought could not be classified as an 'indefinite delay' and that it occasioned no prejudice to the respondents.
The appellant took a further point in its heads of argument, that, the arbitrator adopted a wrong procedure in dismissing its claim for want of prosecution wherein, in terms of Article 25(c) of the Model Law, Arbitration Act [Chapter 7:15] he could make an award on the merits based on the evidence placed before him.
The court a quo dismissed the application.
It held that the arbitrator properly exercised his discretion in refusing a postponement, after considering the applicable principles. The court held that the appellant's right to legal representation was not absolute. It reiterated that the unsuitability of a date for a legal practitioner is not good enough reason to seek a postponement where no reason is advanced as to why other legal practitioners could not be engaged. It reasoned that the refusal of a postponement was justified considering the duration of the matter and the legitimate reasonable needs of the respondents to have the matter resolved expeditiously considering that the arbitrator had allowed another postponement on 2 May 2018 on similar grounds. The court was of the view that the appellant had ample time, between 2 May 2018 and 28 May 2018, to enlist the services of other legal practitioners. It found that the appellant's right to be heard had not been breached because Mr Smit consciously elected not to participate in the proceedings when it was indicated that there would be no postponement.
The court further held that the arbitrator properly invoked Article 25(d) of the UNCITAL Model Law. as set out in the Arbitration Act [Chapter 7:15] (Model Law). It reasoned that Article 25(c) of the Model Law, Arbitration Act [Chapter 7:15] was inapplicable since the appellant was duly represented by Mr Smit who had participated in making an application for postponement although he was 'absent' for other purposes.
Aggrieved by that decision, the appellant noted an appeal to this Court on the following grounds:
“GROUNDS OF APPEAL
1. The learned judge erred in finding that the Appellant's constitutional right to a lawyer of his choice had not been infringed by the arbitral tribunal and erred in finding that Appellants insistence on being represented by a legal practitioner of his choice was unreasonable in the circumstances.
2. The learned judge erred in finding that the Appellant was obliged to retain the services of an alternative counsel in the circumstances.
3. The learned judge misdirected himself in finding that the arbitral tribunal had not breached Appellants rights in terms of section 69(4) of the Constitution in the circumstances.
4. The learned judge erred in finding it was reasonable of the arbitral tribunal to impose a date for the resumption of the hearing on the Appellant when its legal practitioner of choice had previously advised the arbitral tribunal it was not available.
5. The learned judge erred in finding that a postponement of the arbitration was not merited and reasonable in the circumstances.
6. The learned judge erred in concluding that the delay in proceedings was occasioned by Appellants remissness and hence he was not entitled to a postponement in the circumstances.
7. The learned judge misdirected himself in finding that the arbitral tribunal acted properly in proceeding without Appellant's legal practitioner.
8. The learned judge misdirected himself in finding that the arbitral tribunal was correct in proceeding under Article 25(d) of the Arbitration Act instead of Article 25(c) which required the arbitral tribunal to consider the matter on the merits.
9. The learned judge erred in finding that the Appellant was not in default on the day in question and hence that the arbitral tribunal was correct in dismissing Appellants claim for want of prosecution.”
SUBMISSIONS ON APPEAL
Counsel for the appellant argued that the arbitrator's undue refusal of a postponement infringed on the appellant's constitutionally guaranteed right to counsel of choice. He submitted that since a plausible explanation for the unavailability of the appellant's counsel of choice was proffered, the arbitrator's denial of postponement, in the circumstances, was an infraction of effective legal representation.
He also submitted that it was improper for the arbitrator to invoke Article 25(d) of the Model Law, Arbitration Act [Chapter 7:15] as opposed to Article 25(c) in disposing of the appellant's claim.
He argued that such a technical approach to the matter was unwarranted as the appellant's claim and defence to the counterclaim, both of which were before the arbitrator, were not adjudicated on.
He argued that by resorting to Article 25(d) of the Model Law, Arbitration Act [Chapter 7:15], the arbitrator made an order akin to a default judgment in arbitration proceedings yet such an order is the preserve of a proper court of law.
Counsel for the appellant contended, that, where pleadings are closed, Article 25(d) of the Model Law, Arbitration Act [Chapter 7:15] cannot be employed. The arbitrator is obliged to deal with the merits of the matter. Accordingly, he argued that Article 25(d) applies where a defaulting party has not yet filed documents on the merits of the dispute.
Counsel for the appellant submitted that had Mr Smit not attended the hearing, Article 25(c) of the Model Law, Arbitration Act [Chapter 7:15] would have been applicable and the arbitrator would have dealt with the matter on the papers placed before him. To that end, he argued that since Mr Smit was present at the hearing but failed to participate, there was no reason for the arbitrator to be excused from determining the merits of the matter.
Upon being asked by the court if a case had been made for the setting aside of the arbitral award on the grounds that it was contrary to public policy, counsel for the appellant stated that the arbitral award was contrary to the public policy of Zimbabwe in two respects:
(i) Firstly, in that the arbitrator did not afford the appellant attendance of its legal practitioners; and
(ii) Secondly, that the arbitrator failed to determine the appellant's claim or the defence to the respondent's counter-claim.
ISSUES FOR DETERMINATION
Although the appellant has raised several grounds of appeal, its case hinges on a determination of the following issues:
1. Whether or not the court a quo erred in holding that the arbitrator's refusal of the appellant's request for a postponement was justified....,.
1. Whether or not the court a quo erred in holding that the arbitrator's refusal of the appellant's request for a postponement was justified
It is settled law that postponement of a matter is not a right obtainable on demand but is at the court's indulgence: as such, it involves an exercise of discretion which discretion must be exercised judicially. This position was enunciated by this Court in Apex Holdings (Pvt) Ltd v Venetian Blinds Specialists Ltd SC33-15, where it was held that:
“An application for the postponement of a matter which has been set down for hearing is in the nature of an indulgence sought, the grant of which is in the discretion of the judge or court before which it is made. The applicant must therefore show that there is good cause for the postponement or that there is a likelihood of prejudice if the court refuses the indulgence being sought.”
In exercising the discretion to postpone a matter, several factors have to be considered cumulatively.
In Persadh v General Motors SA (Pty) Ltd 2006 (1) SA 455 (SE)…, the court succinctly set out the applicable legal principles when a party applies for a postponement as follows:
“(i) First, as that party seeks an indulgence he or she must show good cause for the interference with his or her opponent's procedural right to proceed and with the general interest of justice in having the matter finalised;
(ii) Secondly, the court is entrusted with a discretion as to whether to grant or refuse the indulgence;
(iii) Thirdly, a court should be slow to refuse a postponement where the reasons for the applicant's inability to proceed has been fully explained, where it is not a delaying tactic, and where justice demands that a party should have further time for presenting his or her case;
(iv) Fourthly, the prejudice that the parties may or may not suffer must be considered; and
(v) Fifthly, the usual rule is that the party who is responsible for the postponement must pay the wasted costs.”…,.
In casu, the court a quo found that the arbitrator was alive to the salient factors surrounding the grant or refusal of a postponement and he applied them judicially.
Having considered that the appellant's conduct sought to frustrate the arbitration proceedings by filing several un-meritorious applications; seeking several postponements; that the appellant failed to indicate when the arbitration would continue if postponed, why the legal practitioner of choice was unavailable, and why other legal practitioners who had handled the matter previously could not act for the appellant, the court a quo held that the appellant's insistence on representation by Mr Samukange in the circumstances was unreasonable. The court found that the appellant had ample time to enlist the services of other legal practitioners.
The court a quo's reasoning cannot be faulted.
It was a proper case to deny a postponement as the reasons for the appellant's inability to proceed had not been fully explained and postponement had been employed as a delaying tactic.
Over and above that, the mere fact that a party's counsel of choice is unavailable is not a good ground upon which to grant a postponement. This position was laid out in D'Anos v Heylon Court (Pty) Ltd 1950 (1) SA 324 C…, where the court held that:
“…, the non-availability of counsel cannot be allowed to thwart the bringing before the court of the matter in issue. In all but the rarest of cases suitable counsel will be available. This is not the convenience of counsel; it is the reasonable convenience of the parties, and by that I mean both parties, and the requirement of getting through the court's work which must be the dominant considerations. The availability of counsel is a subsidiary consideration. A party's predilection for a particular counsel to take his case can, in my view, seldom, if indeed ever, be regarded as a decisive objection to a date of set down which is in all other respects reasonable and acceptable to both parties.”…,.
The parties' interests must be taken into consideration.
In the present case, the arbitrator further considered the respondent's interest in respect of its counterclaim which required speedy determination which could not be delayed further by the appellant who did not wish to prosecute its case.
That finding cannot be impeached.
In any event, it is a salutary principle of law that there should be finality in litigation: see Ndebele v Ncube 1992 (1) ZLR 288 (S)…,.
Therefore, the arbitrator's refusal of postponement was justifiable. The appellant failed to show good cause for the grant of the indulgence it sought. The arbitrator, and the court a quo, cannot be faulted for holding that the appellant had not made a good case for a further postponement of the hearing.
