Final Orders re: Nature, Amendment, Variation, Rescission and the Final and Conclusive Rule iro Quasi Judicial

SC34-22 : NICHOLAS MUKARATI vs PIONEER COACHES (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

This is an appeal against the judgment of the Labour Court (the court a quo) handed down on 21 October 2016 which allowed an appeal by the respondent against an arbitral award issued by an arbitrator on 13 October 2015.

The court a quo set aside the arbitral award and remitted the matter to an arbitrator of the parties choice, or one selected by the Registrar, for a hearing to determine the appropriate penalty to be imposed on the appellant.

FACTUAL BACKGROUND

The case itself has a chequered history, being a labour dispute that has gone backwards and forwards as the parties bickered over either the procedure adopted or the choice of arbiter.

The appellant was employed by the respondent as its Managing Director. He was suspended from employment in April 2010 on allegations of gross incompetence and gross inefficiency under section 4(f) and (h) of the National Employment Code of Conduct, S.I.15 of 2006 (the National Code of Conduct).

Five counts of misconduct were preferred against the appellant:

(i) Firstly, it was alleged that he had submitted a report to the Board of Directors of a net loss of US$56,930 for the year ending on 31 December 2009 when the real net loss, as uncovered by external auditors, was US$657,365.

(ii) Secondly, it was alleged that the appellant failed to fully account for R700,000 which had been transferred from Mavambo Coaches.

(iii) Thirdly, it was alleged that the appellant paid himself a US$2,000 long service award in January 2010 without Management and Board approval.

(iv) Fourthly, he was accused of authorising staff loans amounting to US$23,549 in December 2009 and January 2010, when the company was in financial dire straits.

(v) Fifthly, the appellant was accused of paying management incentives amounting to US$21,800 in December 2009, against a loss which militated against payment of incentives.

An internal disciplinary hearing was conducted which found the appellant guilty and recommended his dismissal from employment.

The appellant challenged the propriety of those proceedings through a review application brought before the court a quo.

That contested review application yielded a consent order granted by the court a quo on 28 October 2010 in the following terms:

“IT IS HEREBY ORDERED THAT:

1. The disciplinary hearing held against the applicant be and is hereby set aside to allow a de novo hearing and the suspension letter dated 13 April 2010 remains in force.

2. The arbitration proceedings before Arbitrator M. Dangwa be and is (sic) hereby withdrawn.

3. A fresh disciplinary hearing shall be held before Mr J. T. Mawire as the hearing officer and the parties shall share the costs of the hearing officer equally.

4. The issue of whether the applicant should be paid between the period of April to October 2010 is reserved for ruling by the court after receiving submissions from the parties legal practitioners before close of business on 29 October 2010.”

I note in passing that J. T. Mawire was appointed as a “hearing officer” by consent of the parties.

The earlier disciplinary proceedings were abandoned in favour of a hearing de novo before a different hearing officer, J. T. Mawire, who was appointed “to hear and determine the matter in terms of the Code.”

Indeed, hearing officer Mawire heard the matter, took evidence from both parties, and received written closing submissions.

In his determination dated 22 February 2012, Mawire found the appellant not guilty of misconduct. He ordered that he be reinstated without loss of salary and benefits from the date of suspension.

The respondent was aggrieved.

Initially, it made frantic efforts to appeal internally against the determination by the hearing officer. Again, the parties bickered for some time on the choice of an Appeals Authority.

Problems started when, at the instance of the appellant as claimant “an independent arbitrator” Munyaradzi Dangarembizi issued an arbitral award on 13 November 2012 to wit:

“AWARD

Wherefore, after carefully analysing the facts and the law, I make the following award -

That the claimant's prayer is upheld and I hereby order that the merits of the matter be conciliated upon by the Labour Officer.”

Following that award, it is common cause that a Labour Officer unsuccessfully held conciliation proceedings as a result of which the matter was referred to compulsory arbitration before an arbitrator.

When the respondent took its grievance to the arbitrator it stated categorically, at paragraph 2.8 of the Claimant's statement of claim and submissions:

“2.8. Hence, the matter in casu is an appeal by the employer, the claimant herein against the determination of Mr Mawire, the Disciplinary Authority dated 22nd February 2012.”

It is also beyond disputation that the arbitrator also dealt with the matter as an appeal.

He said so at paragraph 5 of the arbitral award dated 8 October 2015, to wit:

“Therefore, the instant matter is an appeal by the claimant against the determination of Mr Mawire, the disciplinary authority, dated 22 February 2012.”

The arbitrator upheld the determination of the hearing officer.

He ordered the reinstatement of the appellant to his position with no loss of salary and benefits from the date of dismissal. In the event that reinstatement was no longer possible, the appellant was to be paid damages in lieu of reinstatement.

PROCEEDINGS BEFORE THE COURT A QUO

The respondent was again unhappy with the arbitral award. It lodged an appeal to the court a quo on three grounds:

(i) The first was that the arbitrator grossly erred and misdirected himself on a point of law by failing to make a finding that the employee was grossly incompetent.

(ii) The second was that the arbitrator erred and misdirected himself at law by relying on an affidavit without according the respondent the opportunity to cross examine its deponent and to adduce oral evidence.

(iii) The third ground was that the arbitrator grossly erred and misdirected himself at law by handing down a grossly irrational and unreasonable award.

The court a quo found that the appellant had a responsibility to account to the Board on the operations of the business. He could not simply rely on his subordinates regarding the financial figures of the company as the buck stopped with him because he was the Managing Director.

The court a quo found, that, before presenting the financial figures to the Board, it was incumbent upon the appellant to verify the correctness of the figures. In its view, this was a case of res ipsa loquitar wherein the failure of the appellant to verify the figures was proof of incompetence.

The court a quo further found, that, the arbitrator's finding that the appellant was not responsible for the presentation of the faulty accounts to the Board flew in the face of available evidence. It was a gross misdirection entitling the court to interfere and set aside the award.

It set aside the award and remitted the matter for the assessment of an appropriate penalty.

PROCEEDINGS BEFORE THIS COURT

It became the appellant's turn to be aggrieved.

He appealed to this Court on five (5) grounds of appeal most of which attacked the factual findings of the court a quo instead of the law as required by section 92F(1) of the Labour Act [Chapter 28:01].

In terms of that section, an appeal lies from any decision of the Labour Court to this Court on a question of law only.

As that issue was not canvassed with the parties at the hearing of the appeal, it shall not be used as a basis for resolution of the appeal.

At the commencement of the hearing, counsel for the appellant took a point of law that the entire proceedings before the Labour Officer who conciliated the matter, the arbitrator who heard what was in fact an appeal from a decision of the hearing officer, and the subsequent appeal before the court a quo were a nullity.

Counsel for the appellant entreated this Court to strike off the appeal from the roll and to invoke its power, in terms of section 25 of the Supreme Court Act [Chapter 7:13], to set aside those proceedings.

In advancing that argument, on nullity of the proceedings, counsel for the appellant relied on the authority of two judgments of this Court in Mabeza v Sandvick Mining (2) Construction (Pvt) Ltd & Anor SC91-19 and Living Waters Theological Seminary v Rev Chikwanha SC59-21.

In those cases, this Court pronounced that proceedings referred to the court a quo, having been adjudicated upon by a Labour Officer without authority to do so, were a nullity.

In response, counsel for the respondent took a different view, namely, that, the authorities in question were distinguishable from the present case.

In his view, those authorities applied to situations where an employer would have made a determination in terms of a Code of Conduct thereby ousting the jurisdiction of the Labour Officer.

Counsel for the respondent submitted further, that, in the present case, the employer did not decide the matter at all.

According to counsel, what was placed before the Labour Officer was not an appeal but a referral to the Labour Officer in terms of section 93 of the Labour Act.

He submitted that section 93 of the Labour Act conferred what he called “a special jurisdiction” to the Labour Officer.

Counsel for the respondent submitted, that, the law which was applicable at the time the dispute arose made it legally competent for disputes to be referred to Labour Officers as happened in this case.

I must mention, that, after hearing submissions from counsel on that preliminary point, this Court directed the parties to file written submissions on the point of law.

The appellant was directed to do so by 24 January 2022 while the respondent was directed to file a response by 27 January 2022.

The parties managed to file their submissions timeously which is commendable indeed.

In his written submissions, counsel for the appellant surprisingly moved for an order that the appeal should succeed with costs and that the decision of both the Labour Court and the arbitrator be set aside in terms of section 25 of the Supreme Court Act on the basis that both are a nullity.

No ground of appeal attacked the proceedings a quo on the basis of a nullity.

The appeal cannot succeed on non-existent grounds.

On the other hand, in his written submissions, counsel for the respondent submitted that the appellant did not point to any prejudice suffered as a result of the manner in which the proceedings were conducted.

On the authorities pointing to the lack of jurisdiction by a labour officer to deal with a referral under section 8 of the National Employment Code of Conduct, SI15 of 2006 (National Employment Code), counsel submitted that those cases do not have retrospective effect. They are not applicable to cases that were referred to labour officers prior to their pronouncement.

Counsel also sought to distinguish this case by virtue of the arbitral award issued by Munyaradzi Dangarembizi which referred the dispute to a labour officer.

As shall be demonstrated below, this proposition is faulty.

I also mention, for completeness, that, the court proceeded to hear arguments on the merits. That was done on the understanding, that, in the event that the point of law raised by counsel for the appellant found favour with the court, it would not be necessary for the court to determine the merits.

The point of law relating to the validity of the proceedings is dispositive of the matter if upheld. The court would only relate to the merits if the proceedings were valid.

The position taken in this judgment makes it unnecessary to consider the merits.

The question of when a Labour Officer may exercise jurisdiction over a dispute is one that has been with us for a long time, mainly because of the problematic wording of the relevant provisions of the Labour Act.

In Watyoka v Zupco (Northen Division) SC87-05, the employee was charged with misconduct and dismissed from employment before he referred the matter to a Labour Relations Officer who ordered his reinstatement - a decision later upheld by a senior Labour Relations Officer.

In that case, this Court considered the provisions of section 101(5) and (6) of the then Labour Relations Act [Chapter 28:01] which read:

“(5) Notwithstanding this part, but subject to subsection (6), no labour relations officer or senior labour relations officer shall intervene in any dispute or matter which is or is liable to be the subject of proceedings under a code, nor shall he intervene in any such proceedings.

(6) If a matter is not determined within thirty days of the date of the notification referred to in paragraph (e) of subsection (3) the employee or employer concerned may refer such matter to a labour relations officer, who may then determine or otherwise dispose of the matter in accordance with section ninety-three.”

The court reasoned that three important conditions upon which a matter can be referred to a labour relations officer emanated from that provision. These were:

(i) That, the matter must not be one that is or is liable to be the subject of proceedings under a Code of Conduct;

(ii) The matter has not been determined within thirty days of notification; and

(iii) Where the parties to the dispute request it and agree on the issue in dispute.

It went on to pronounce, at p5 of the judgment:

“Subsection (6) of section 101 provides for a referral of the matter to a labour relations officer if it has not been determined within thirty days. It does not provide for a referral of a matter that has been determined. The referral to a labour relations officer is a relief granted to a party who is concerned about the delay in the determination. It is not a referral intended to challenge a determination that has already been made.”…,.

A more recent case dealing with the same issue is Mabeza v Sandvick Mining (2) Construction (Pvt) Ltd & Anor SC91-19.

Again, in that case, following an internal disciplinary hearing, the employee was dismissed for misconduct. His internal appeal was also dismissed. Thereafter, the matter was referred to a Labour Officer for conciliation, which failed, resulting in the Labour Officer referring the matter to compulsory arbitration.

The arbitrator found in favour of the employee, but, the employer appealed to the Labour Court which found in favour of the employer.

On appeal to this Court, the court considered that the matter had proceeded to compulsory arbitration through reference to the Labour Officer in terms of section 8(6) of the National Employment Code of Conduct, S.I.15 of 2006 (National Code of Conduct). The relevant provisions of that National Code of Conduct read:

“(6) A person or party who is aggrieved by a decision or manner in which an appeal is handled by his or her employer or the Appeals Officer or Appeals Committee, as the case may be, may refer the case to a Labour Officer or an employment Council Agent, as the case may be, within seven working days of receipt of such decision.

(7) The Labour Officer or an Employment Council Agent to whom a case has been so referred shall process the case as provided for under section 93 of the Act.”

GOWORA JA…, took the view that regardless of how the case was disguised, it was in fact an appeal against the dismissal of the appeal by the Appeals Authority.

In considering whether the arbitrator had jurisdiction to act as an appeal tribunal, the learned appeal judge concluded, that, the arbitrator did not have such jurisdiction. She remarked at p12 of the judgment:

“In my view, the principle emerging from all the authorities referred to above can be summarised by the statement to the effect, that, a labour officer does not have any jurisdiction, under section 93, to entertain a matter once a determination on the merits has been made through a disciplinary process under a registered Code of Conduct. It is clear that in this case the labour officer presided over a matter over which he did not have any jurisdiction. As stated in Watyoka's case (supra), once there is a determination on the merits of a dispute, a labour officer has no jurisdiction under section 93 of the Act.

In this context, the implications of what the arbitrator did are obvious.”

Later in that judgment the court stated, at p14:

“I conclude, therefore, that the labour officer did not have jurisdiction to hear a complaint from the appellant of whatever nature and that the referral to compulsory arbitration was unlawful and the proceedings before the arbitrator were, as a result, an irregularity.”

See also Munchville Investments (Pvt) Ltd t/a Bernstein Clothing v Mugavha SC62-19.

The reasoning in Mabeza v Sandvick Mining (2) Construction (Pvt) Ltd & Anor SC91-19 rhymes with that in Sakarombe N.O. & Anor v Montana Carswell Meats (Pvt) Ltd SC44-20 where the court was called upon to consider the ambit of the jurisdiction of a Labour Officer under section 93 of the Labour Act where a matter is referred to him or her in terms of section 8(6) of the National Employment Code of Conduct, SI15 of 2006 (National Code of Conduct).

It concluded, that, under section 93(1) of the Labour Act, a Labour Officer is only mandated to preside over a fresh hearing where a complaint has been lodged. The Labour Officer does not preside over any matter where a determination has been made or one in which completed disciplinary proceedings were conducted at the work place.

In fact, in Living Waters Theological Seminary v Rev Chikwanha SC59-21, the court went further to state that the provisions of section 8(6) of the National Employment Code of Conduct, S.I. 15 of 2006 (National Employment Code) are rendered inoperative by their being ultra vires and inconsistent with the provisions of sections 93 and 101 of the Labour Act [Chapter 28:01].

Whether the proceedings were regular

In this case, internal disciplinary proceedings were conducted before a hearing officer, J. T. Mawire, who rendered a determination. The determination was never set aside on appeal, which the employer had commenced, before another arbitrator erroneously referred the matter to a Labour Officer for conciliation.

To the extent that there was an internal disciplinary process which had yielded a determination, by the authorities I have referred to above, the Labour Officer did not have jurisdiction to conciliate the matter.

The matter had to proceed by way of an appeal, firstly, to an internal appeal authority, and, later, to the Labour Court.

I do not agree with counsel for the respondent that Mawire was clothed with special jurisdiction to determine the matter in any manner outside the provisions of the National Code of Conduct.

The law, as it existed at the time the parties reached a deadlock on the appeals authority to hear the appeal, did not allow for a referral to a Labour Officer in the way arbitrator Dangarembizi sought to do on 13 November 2012.

The recent authorities cited above only underscored a legal truism that has always existed. The issue of their retrospective application does not arise at all.

It follows that the proceedings before the Labour Officer who referred the dispute to arbitration were irregular, the Labour Officer not having had jurisdiction. By the same token, the arbitration yielded by an irregular conciliation, and, indeed, the appeal to the Labour Court that followed, were also irregular.

Nothing lawful could result from an invalidity.

It follows that this appeal could not have been properly before this Court.

DISPOSITION

An invalidity occurred which has come to the attention of this Court. This Court has review power reposed upon it by section 25(1) of the Supreme Court Act. The logical thing to do is to invoke that provision to set aside the invalid proceedings.

Regarding the issue of costs, the jurisprudence which has come out of this Court, on the invalidity of proceedings brought before a Labour Officer, in the way the present matter was done, has been available for quite some time. Counsel in this matter should have known of it. They did not do anything about the fate of this appeal right up to the date of hearing.

Accordingly, the view that I take is that neither of the parties is entitled to costs for that reason.

In the result, it is ordered as follows:

1. The matter is hereby struck off the roll with no order as to costs.

2. In terms of this Court's review powers in section 25(1) of the Supreme Court Act [Chapter 7:13] the proceedings before the Labour Officer, the arbitrator, and the Labour Court are hereby set aside.

SC43-22 : LEGACY HOSPITALITY MANAGEMENT SERVICES LIMITED vs AFRICAN SUN LIMITED and HON. JUSTICE MTSHIYA (RTD) N.O.
Ruled By: MAKONI JA, MATHONSI JA and MWAYERA JA

This is an appeal against the entire judgment of the High Court dismissing an application to set aside an arbitral award in terms of Article 34 of the Arbitration Act [Chapter 7:15] and registering the award instead.FACTUAL BACKGROUNDThe appellant is a non-resident company in the business of hospitality management providing ...

FACTUAL BACKGROUND

The appellant is a non-resident company in the business of hospitality management providing hotel management services. The first respondent is a resident Zimbabwean company that leases hotels and lodges in Zimbabwe and is listed on the Zimbabwe Stock Exchange.

Sometime in 2015, the first respondent decided to outsource the management of some of its premium hotels and selected the appellant to manage its hotels.

On or about 18 September 2015, the parties entered into a management agreement (“the agreement”) to regulate their business relationship in terms of which the appellant was to render management services to the first respondent's hotels. The agreement was amended and re-signed on 10 October 2015.

Thereafter, the agreed services were delivered by the appellant.

Subsequently, about three years later, on or about 13 September 2018, the first respondent purported to terminate the agreement between the parties on the basis that the Reserve Bank of Zimbabwe (RBZ), as the Exchange Control Authority, had refused to accommodate the first respondent's continued position of incurring the obligation to pay fees in foreign currency to the appellant in terms of the agreement.

In addition to the Reserve Bank of Zimbabwe's refusal to countenance the obligation for payment of fees by the first respondent, the first respondent also sought to terminate the agreement on the basis that the appellant had refused to re-negotiate the terms and rates of payment in order to bring the parties agreement in conformity with the Reserve Bank of Zimbabwe's Exchange Control Regulations.

The first respondent indicated that it was unable to pay outside the Reserve Bank of Zimbabwe's directives, as it deemed that this would be illegal.

Further, the first respondent averred that the fact that the Reserve Bank of Zimbabwe refused to countenance the continued accrual of the foreign currency obligation made the fulfilment of its contractual obligation permanently impossible to perform.

The respondent averred that the impossibility to perform was through no fault of either party, but that a supervening impossibility barred the parties from performing the terms of the agreement.

The appellant was not amenable to the termination of the agreement and disputed the lawfulness of the termination by the respondent.

Dissatisfied with the purported termination by the first respondent, a dispute arose and the parties referred the dispute to the second respondent for arbitration.

PROCEEDINGS BEFORE THE ARBITRATOR

In its claim before the second respondent (the arbitrator) the appellant contended, that, the first respondent had unlawfully terminated the agreement as it should have given the appellant notice of the force majeure in terms of clause 25.12.3 of the agreement.

It averred, that, after being given notice of termination, only the appellant was entitled to terminate the agreement and not the first respondent, since it was the one alleging failure to perform due to the Reserve Bank of Zimbabwe directives.

The appellant claimed, before the arbitrator, that the termination was unlawful and invalid.

The appellant further claimed, that, there was no supervening impossibility warranting the purported termination of the agreement.

The appellant, in summary, sought an order in the following terms;

1. The purported termination was invalid and improper and should be set aside for non-compliance with the parties agreement.

2. There was no supervening impossibility, as refusal of authority to pay by the Reserve Bank of Zimbabwe (RBZ) only amounted to delay in payment, which did not excuse non-performance.

The second respondent found in favour of the first respondent.

His finding was based on the fact, that, the lack of approval of the agreement from the Reserve Bank of Zimbabwe (RBZ) signified the existence of force majeure. He stated that it was unlawful for two parties to enter into an agreement without the authority of the RBZ in terms of the Exchange Control Act [Chapter 22:05]. The resultant force majeure was detrimental to both parties, and, as such, the first respondent was equally entitled to withdraw from the agreement by operation of the law.

He issued an award in favour of the first respondent, effectively dismissing the appellant's claim.

PROCEEDINGS IN THE COURT A QUO

The appellant, dissatisfied with the arbitral award, approached the High Court in terms of Article 34(2)(b)(ii) of the Arbitration Act seeking to have it set aside.

The appellant averred, that, the award issued by the second respondent was contrary to public policy.

It was illogical as it was in conflict with substantive Contract Law and it abrogated the tenets of the pacta sunt servanda principle, which recognises the sanctity of contract and provides that once a contract is entered into freely and voluntarily it becomes sacrosanct and the courts should enforce it.

The appellant insisted that the agreement was lawful, and, therefore, the purported termination by the first respondent was invalid.

The first respondent, in turn, opposed the application and also made a counter application for the registration of the award.

The court a quo found that the award was not so illogical as to offend public policy, as the parties had not obtained the authority of the Reserve Bank of Zimbabwe, a pre-requisite in terms of the Exchange Control Act.

The court a quo reasoned, that, the award could not be said to be contrary to public policy as there was indeed a supervening impossibility since the agreement could not be implemented without the exchange control approval.

It then dismissed the application for the setting aside of the award and registered it instead.

Aggrieved by the finding of the court a quo, the appellant lodged the present appeal on five grounds of appeal.

GROUNDS OF APPEAL

1. The court a quo erred in failing to determine, that, the second respondent's arbitral award abrogated the pacta sunt servanda principle. The second respondent's award is inimical to public policy in that it irregularly excuses the first respondent from complying with express provisions of the contract relating to force majeure.

2. The court a quo erred in failing to hold, that, the second respondent's arbitral award went far beyond mere faultiness or incorrectness. The Reserve Bank of Zimbabwe had no ability to cause nor call for cancellation of the contract inter partes. Consequently, the court a quo ought to have found offence in the second respondent concluding that the Reserve Bank's suggestion that parties renegotiate their contract actuated force majeure.

3. The court a quo grossly misdirected itself in failing to find, that, the second respondent's adjudication was palpably anomalous in that it was predicated on non-existent datum such as the finding that the appellant had refused to negotiate with the first respondent. Any decision born of non-existent facts is inimical to logic and thereby impairs the conception of justice.

4. The court a quo also erred in failing to hold, that, the arbitral award offended acceptable moral standards and what fair minded persons would consider just. In conflating the Exchange Control approval of the agreement by the Reserve Bank, and the approval of payment, the court a quo erred in law and rewrote the contract between the parties.

5. The court a quo also ignores, that, in the circumstances, the second respondent's arbitral award is not only anomalous at law but goes on to actuate a sense of shock for a society in the midst of trying to court foreign investment in the ilk of the appellant. The registration of an award that negates what the parties agree in a contract eviscerates current law on exchange control and occasion dis-investment in the country is contrary to public policy and must be set aside.

ISSUES FOR DETERMINATION

Although there are five grounds of appeal, there are only two issues for determination, namely;

1. Whether the court a quo erred in not setting aside the award; and

2. Whether or not the court a quo erred in registering the award.

SUBMISSIONS ON APPEAL

Counsel for the appellant submitted, that, the court a quo erred in registering the arbitral award which was not only illogical but contrary to public policy. He argued that the termination of the agreement by the first respondent was unlawful and invalid. He further asserted, that, even if it was to be assumed that the first respondent was entitled to terminate the agreement, the termination was unlawful for want of giving notice.

He contended, that, in terms of clause 25.12.3 of the agreement, the respondent ought to have first given the appellant notice of the force majeure before terminating.

After such notice, it was the appellant who was entitled to terminate the agreement, and not the first respondent, as it was the one alleging failure to perform due to the Reserve Bank of Zimbabwe's directive.

He further submitted, that, there was no force majeure, contending that the termination was unlawful, and, as such, the arbitral award ought to be vacated.

Per contra, counsel for the first respondent submitted, that, the termination of the agreement was above board and was lawfully done.

He submitted, that, the agreement was registered with the Reserve Bank of Zimbabwe (RBZ) for one year, from 8 January 2016 to 7 January 2017. The yearly contract was not thereafter extended as the RBZ stated that the management fees had to be reviewed before the agreement could be renewed. He contended, that, the fact that the RBZ did not grant the relevant authority amounted to a supervening impossibility which had the effect of terminating the agreement.

It was further submitted, that, the respondent could not incur obligations to make a payment outside Zimbabwe without the Reserve Bank of Zimbabwe's authority in terms of clause 11(1)(b) of the Exchange Control Regulations, and, that without authority from the RBZ, the contract became not only unenforceable, but illegal.

He submitted, that, the respondent conducted itself in accordance with the suspensive condition clause and the force majeure clause.

Counsel argued that the court a quo properly registered the arbitral award which was not contrary to public policy. He urged the court to dismiss the appeal with costs.

THE LAW

Article 34 of the Model Law (Schedule to the Arbitration Act [Chapter 7:15]) prescribes the procedure for setting aside an arbitral award and the substantive grounds upon which it may be set aside by the High Court.

In terms of Article 34(2)(b) of the Model Law:

“An arbitral award may be set aside by the High Court only, if it finds that the subject matter or dispute is not capable of settlement by arbitration under the law of this country or the award is in conflict with public policy of Zimbabwe.”

Article 34(5) of the Model Law goes further to set out what would ordinarily be regarded as being contrary to public policy. It states:

“For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this article, it is declared that an award is in conflict with public policy of Zimbabwe if:

(a) The making of the award was induced or affected by fraud or corruption; or

(b) A breach of the rules of natural justice occurred in connection with the making of the award.”

These provisions were considered in Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S) where the Court set out the approach to be adopted when considering whether an award is contrary to public policy.

GUBBAY CJ, at 465D, made the following remarks:

“In my opinion, the approach to be adopted is to construe the public policy defence, as being applicable to either a foreign or domestic award, restrictively, in order to preserve and recognise the basic objective of finality in all arbitrations, and to hold such defence applicable only if some fundamental principle of the law or morality or justice is violated.”

He further stated, at 466E-H:

“An award will not be contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in fact or law. In such a situation, the court would not be justified in setting the award aside.

Under Article 34 or 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognise and enforce an award by having regard to what it considers should have been the correct decision.

Where, however, the reasoning or conclusion in an award goes beyond mere faultiness or incorrectness and constitutes a palpable inequity that is so far reaching and outrageous in its defiance of logic or accepted moral standards that a sensible and fair-minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award, then, it would be contrary to public policy to uphold it.

The same consequence applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue, and the resultant injustice reaches the point mentioned above.”

Force majeure, which is also known as vis major in contract, means that a superior force has occurred, disabling a party from performing contractual obligations due to a circumstance(s) beyond their control.

A force majeure clause in a contract excuses a party from performing some, or all, of its obligations.

The case of Standard Chartered Bank Zimbabwe Limited v China Shougang International 2013 (2) ZLR 385 (S) is apposite in illustrating what constitutes force majeure.

The Court made reference to the case of Peter Flamman and Company v Kokstad Municipality 1919 AD 427, in which SOLOMON ACJ said;

“Nor is it necessary to consider generally what are the circumstances in which it can be said a contract has become impossible of performance. The authorities are clear, that, if a person is prevented from performing his contract by vis major or casus fortuitus, under which would be included such Act of State as we are concerned with in this appeal, he is discharged from liability.”

See also the case of Firstel Cellular (Pvt) Ltd v Net One Cellular 2015 (1) ZLR 94 (S) in which the Court, when dealing with suspension of contractual obligations on the basis of a vis major or causa fortuitus, held that…,.:

“It is trite that the courts will be astute not to exonerate a party from performing its obligations under a contract that it has voluntarily entered into at arm's length. Thus, the suspension of a contractual obligation by dint of vis major or casus fortuitus can only be allowed in very compelling circumstances.

The courts are enjoined to consider the nature of the contract, the relationship between the parties, the circumstances of the case, and the nature of the alleged impossibility.

See also Watergate (Pvt) Ltd v Commercial Bank of Zimbabwe 2006 (1) ZLR 9 (S) at 14B-F.”…,.

The Latin maxim pacta sunt servanda aptly refers to the sanctity of a contract to the effect, that, a contract freely and voluntarily entered into is sacrosanct and should be given effect by the courts.

In Barkhuizen v Napier 2007 (5) SA 323 (CC) the maxim pacta sunt servanda was succinctly defined as meaning that parties to a contract have freedom to contract and assent to whichever terms they wish to and the court should only intervene and oversee when such contract contravenes another set of legal rights.

In Makani and Ors v Arundel School and Ors CC07-16 the Constitutional Court fluidly, and in clear terms, visited the import of the doctrine of sanctity of contract. It stated the following…,:

“It is trite that a contract concluded in contravention of the written or unwritten law, or one that is contrary to public policy, is susceptible to being struck down and rendered of no force or effect. The doctrine of sanctity of contracts is obviously subject to constitutional limits. As was observed in Bredenkamp and Ors v Standard Bank of South Africa Ltd 2010 (4) SA 468 (SCA) at para 39, every contract or institutional rule must pass Constitutional muster.”

Again, in Barkhuizen v Napier 2007 (5) SA 323 (CC)…, it was emphasised that:

“All law, including common law of contract, is now subject to Constitutional control. The validity of all laws depends on their consistency with provisions of the Constitution and the values that underlie our Constitution. The application of the principle pacta sunt servanda is, therefore, subject to constitutional control.”

APPLICATION OF THE LAW TO THE FACTS

The appellant's main contention is that the arbitral award ought not to have been registered as it was illogical and offends the public policy of Zimbabwe.

To buttress this contention, the appellant relied heavily on the contention that the award goes against the pacta sunt servanda principle which is at the heart of contractual agreements.

In order to determine whether the arbitral award offends public policy, as contended by the appellant and vehemently disputed by the first respondent, due consideration to the agreement entered by the parties ought to be made.

A close look at the contract reveals, that, the parties entered into a management agreement which needed exchange control approval as Legacy Hospitality Management Services Limited is a foreign company. The parties, in due recognition of this legal position, included a suspensive condition in their contract, in clause 5, which provides:

“5.3 This agreement is subject to the following suspensive conditions -

5.31…,.

5.32…,.

5.33 That both parties receive all statutory and regulatory approvals necessary for the legal fulfilment of all requirements attendant to this management agreement.”

The exchange control approval relates to approval to enter into a liability to pay a foreign company which has to be paid in foreign currency.

When the Reserve Bank of Zimbabwe (RBZ) declined to authorize the agreement, in terms of the Exchange Control Regulations, this constituted a supervening impossibility to the performance of the contractual obligations as it would have been unlawful to proceed without the authority of the regulatory Board.

It is apparent from the record that the parties received a year's approval from the Reserve Bank of Zimbabwe. After the lapse of one year, the Reserve Bank of Zimbabwe refused to authorize the agreement and advised the parties to re-negotiate.

The re-negotiation did not work out.

The court a quo's finding was that when the parties entered into the contract, they subjected themselves to fulfilment of statutory and regulatory requirements.

In this case, there was no regulatory authority approval thus termination of the contract was inevitable.

The force majeure affected both parties such that termination, at the instance of either of the parties, without giving notice, was appropriate.

The court a quo, having made a finding that the refusal of the Exchange Control authority to register the agreement fell squarely within a force majeure event, as defined in clause 25.12.1 of the agreement, found no fault in the arbitral award setting aside the contract.

The court a quo's findings in that regard cannot be faulted.

In compliance with guidelines outlined in Article 34(2)(ii) of the Arbitration Act on what constitutes an award that conflicts with public policy, the courts have been scrupulous to interpret that provision narrowly.

In doing so, the courts have been cognisant of the need to protect the principle of sanctity of contract.

The sentiments of MATHONSI J…, in Harare Sports Club v Zimbabwe Cricket HH398-19…, on the need to adopt a narrow interpretation as to what constitutes conflict with public policy, are apposite. He stated:

“…,. After all, it is the parties who voluntarily submit to arbitration as an instrument for speedy and cost-effective means of resolving their disputes. The courts are therefore more inclined to deprecate conduct of a party intent on disrespecting the agreement by undermining the process of arbitration agreed upon by the parties. Fanciful defences against registration of arbitral awards and frivolous applications seeking to set aside an award, by inviting the court to plough through the same dispute which has been resolved by an arbitrator, in the forlorn hope of obtaining a different outcome, will not be entertained.”

See also Zimbabwe Cricket v Harare Sports Club & Anor SC27-22.

It is trite that parties to a contract are bound by the terms of the contract.

If parties contractually agree to arbitration as a means of dispute resolution, then, the court should be loathe to interfere with decisions made by arbitrators.

Intervention is only resorted to if the decision reached is in contravention of the Arbitration Act [Chapter 7:15] and/or is so irregular and illogical to amount to moral turpitude on the part of the arbitrator.

This principle was emphatically enunciated by MALABA DCJ…, in Alliance Insurance v Imperial Plastics (Pvt) Limited & Anor SC30-17 wherein he stated…,.:

“The rationale behind the provision is that voluntary arbitration is a consensual adjudication process which implies that the parties have agreed to accept the award given by the arbitrator, even if it is wrong, as long as the proper procedures are followed. The courts therefore cannot interfere with the arbitral award except on the grounds outlined in Article 34(2). An application brought before the court under this provision is, in essence, a restricted appeal and the applicant should prove the grounds set out in order to succeed in its application.”

The cautionary approach was lucidly enunciated in Peruke Investments (Pvt) Ltd v Willoughby Investments (Pvt) Ltd & Anor 2015 (1) ZLR 491 (S) and also Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S).

See also Clark v African Guarantee and Indemnity Co Ltd 1915 CPD 68…, and Tel Cordia Technologies INC v Telkom SA Ltd 2007 (3) SA 266…, where HARMS JA stated as follows:

“Likewise, it is a fallacy to label a wrong interpretation of a contract, a wrong perception or application of South African law, or an incorrect reliance on inadmissible evidence by the arbitrator as a transgression of limits of his power. The power given to the arbitrator was to interpret the agreement, rightly or wrongly; to determine the applicable law, rightly or wrongly; and to determine what evidence was admissible, rightly or wrongly…,. To illustrate, an arbitrator in a 'normal' local arbitration has to apply South African law, but, if he errs in his understanding or application of the local law, the parties have to live with it.”

From the cases cited above, it appears settled that an arbitral award will not be lightly set aside on the basis that a party considers that the decision of the arbitrator is wrong.

The court will not interfere with an award unless the reasoning of the arbitrator constitutes a palpable inequity so outrageous and far reaching in its defiance of logic or acceptable moral standards as to cause a fair-minded person to regard it as hurting all sense of justice and fairness.

Article 34 of the Model Law is certainly not intended for the court to re-assess a dispute on the basis that the appellant views the arbitrator's decision as wrong.

The court a quo's conclusion, that the arbitrator's finding that the parties subjected themselves to a suspensive condition in conformity with the exchange control regulations, cannot be faulted.

The continuity of the management agreement was centred on Reserve Bank of Zimbabwe approval.

When the Reserve Bank of Zimbabwe (RBZ) declined to authorise the obligation to incur a foreign liability, the contract was rendered illegal and incapable of performance, regard being had to the fact that the appellant is a foreign entity.

This constituted a vis major.

It is apparent that the suspensive condition could not be fulfilled and this rendered continuity of the agreement unlawful and impossible.

The sanctity of contract was not in any manner interfered with by the registration of the award by the court a quo.

The fact that the contract was impossible of performance meant that either of the parties was entitled to terminate it on that basis.

The arbitral award registered by the court a quo did not amount to creation of a new contract for the parties, neither did it interfere with freedom and sanctity of contract. Registration of the award actually gave effect to the contract made and entered into by the parties, contrary to the appellant's contention that termination of the agreement fell foul of the maxim pacta sunt servanda, which recognises the sanctity of contract.

The agreement itself was self-regulating as it contained a suspensive condition. Once the authority to register the agreement was not given and/or renewed, the agreement was brought to its knees.

DISPOSITION

Considering the circumstance of this matter and the nature of the agreement between the parties, the second respondent's finding that there was a supervening impossibility and that termination was inevitable cannot be said to be illogical and outrageous.

The arbitral award was not so iniquitous as to violate principles of justice and fairness. It does not at all conflict with public policy, and, as such, was properly registered.

The management agreement was terminated for impossibility to perform. The judgment of the court a quo cannot be faulted in that regard.

The appeal is without merit and stands to be dismissed.

Regarding the issue of costs, there is no reason why the costs should not follow the result.

In the result, it be and is hereby ordered as follows:

The appeal be and is hereby dismissed with costs.

SC56-22 : CENTRAL AFRICAN BUILDING SOCIETY vs FINORMACG CONSULTANCY (PRIVATE) LIMITED and RETIRED JUSTICE L.G. SMITH
Ruled By: GUVAVA JA, CHATUKUTA JA and MUSAKWA JA

This is an appeal against the whole judgment of the High Court of Zimbabwe handed down on 9 September 2020 in which it ruled that the arbitral award granted against the first respondent be set aside and the matter be referred to a different arbitrator.BACKGROUNDThe appellant and the first respondent ...

BACKGROUND

The appellant and the first respondent entered into a consultancy contract which commenced on 1 January 2013 and was expected to terminate on 31 July 2013.

Although the contract was not signed by the first respondent, the parties were agreed that the contract regulated their relationship.

The purpose of the contract was to transform the appellant from being a building society into a commercial bank.

On 28 February 2013, the Managing Director of the appellant wrote a letter to the first respondent advising that it was not renewing the contract. It thus terminated the contract and tendered to pay the first respondent cash in lieu of notice.

Aggrieved by the contents of the letter, the first respondent referred the matter to arbitration.

ARBITRAL PROCEEDINGS

The first respondent's contention before the second respondent (the arbitrator) was that the appellant had no right, in terms of clause 7.1 of the contract, to unilaterally, and without reason, terminate the contract. It argued, that, the appellant should have given it notice to cure the breach and/or an opportunity to defend itself.

It claimed that the contract should be reinstated failing which it be paid damages in the sum of US$1,744,451=50.

The appellant argued that it exercised its rights to terminate the contract on notice in terms of clause 7.1 of the contract. It argued that termination of the contract, in terms of clause 7.1, did not require the existence of a breach or fault as a pre-condition to invoke the clause. It further argued that it was therefore not obliged to justify or give the first respondent reasons for the termination.

The appellant further argued, that, the first respondent had breached the contract as it had failed to implement the project successfully within the agreed time frame and budget.

It contended, that, in order to mitigate its losses, it engaged another consultant to complete the project. It argued that it suffered contractual damages in the sum of US$1,648,169=91 as a result of the breach and filed a counterclaim for damages in the stated sum.

The appellant conceded, that, a monthly payment of US$23,517 for the month of March 2013 was due to the first respondent in terms of clause 4 of the contract.

The first respondent denied that it had breached any terms of the contract. It argued that the damages claimed by the appellant were wrongly calculated and incompetent.

The arbitrator made a finding, that, the termination of the contract was in compliance with clause 7.1 of the contract which clause permitted termination of the contract without giving reasons for the termination.

The arbitrator dismissed the first respondent's claim that the cancellation of the contract be declared a nullity and that the contract be reinstated.

He also dismissed the first respondent's claim for damages.

The arbitrator awarded the first respondent the sum of US$23,517 being the monthly payment for the month of March 2013 due to the first respondent from the appellant.

The arbitrator further held, that, the appellant had not established its entitlement to the damages in the sum of US1,648,169=91. He therefore dismissed the appellant's counterclaim.

Aggrieved, the first respondent applied to the High Court to have the arbitral award set aside in terms of Article 34(2)(b)(ii) of the Uncitral Model Law, Schedule to the Arbitration Act [Chapter 7:15] (the Model Law).

PROCEEDINGS BEFORE THE COURT A QUO

The first respondent argued that the arbitrator misdirected himself in his interpretation of the contract.

It was argued, that, the arbitral award offends the principles embodied in our public policy as the arbitrator was biased in his decision. It was submitted that the possibility of bias arose from the fact that the arbitrator and Kevin Terry, the Managing Director of the appellant, were known to each other. It was contended that the two engaged in a conversation at the hearing during which the arbitrator expressed more than a casual interest in the life of Kevin Terry. It further contended, that, the two had a prior relationship, and, as a result, the conversation was likely to give rise to a reasonable apprehension of bias on the part of the arbitrator and he ought to have recused himself.

The first respondent further argued that the arbitrator, in an opposing affidavit which he filed in response to the application before the court a quo, used intemperate and unacceptable language towards the first respondent. It was submitted, that, the language used was evidence that the arbitrator was supporting the appellant in proceedings in which he ought to have been neutral.

In response, the appellant submitted that the conversation between Kevin Terry and the arbitrator was done in the presence of all the parties. It was further submitted, that, the conversation did not relate to the subject matter of the arbitral proceedings. It was argued that the conversation was innocuous, and, therefore, there was no basis for the apprehension of bias.

The appellant further argued, that, the allegations relating to the intemperate language in the arbitrator's opposing affidavit were not the basis for the first respondent's apprehension for bias as they were contained in the answering affidavit and not the founding affidavit.

The court a quo was urged to disregard the arbitrator's opposing affidavit.

DETERMINATION OF THE COURT A QUO

The court a quo found, that, the arbitrator's interpretation of the contract, though it was faulty, did not render the award contrary to public policy.

The court a quo held, that, the conversation between the arbitrator and Mr Kelly was innocuous and did not raise a reasonable apprehension of bias. It found that the first respondent did not raise the allegations of bias with the arbitrator during the arbitration process. The allegations were only raised after the decision of the arbitrator. It therefore concluded, that, the first respondent had not established reasonable apprehension of bias in the making of the award.

The court a quo, however, found that the arbitrator's post award averments, in the opposing affidavit, created an impression that he was “pitching camp” with the appellant.

It found that the averments were intemperate, disparaging, and unacceptable in judicial proceedings. The court a quo held, that, disparaging averments taken in conjunction with the conversation between the arbitrator and Mr Terry, and the faulty interpretation of the contract, gave a reasonable apprehension of bias.

Consequently, it ruled that the arbitral award be set aside and the matter be remitted to a different arbitrator.

Aggrieved by the court a quo's decision, the appellant noted the present appeal.

PROCEEDINGS BEFORE THIS COURT

The appellant noted the appeal on the following grounds:

“(1) The court a quo erred and grossly misdirected itself on the facts and evidence in holding that the degree of fault in the arbitrator's reasoning in the award, and his alleged acquaintance with Kelvin Terry, gave rise to a reasonable impression and apprehension of bias on part of the arbitrator, and that, consequently, the award was contrary to the public policy of Zimbabwe.

(2) The court a quo erred and misdirected itself, and, in any event, in considering the factual basis of the alleged bias which allegedly took place three months after the granting of the award and therefore could not invalidate the prior award on the basis of the alleged bias.

(3) The court a quo erred in placing reliance on the opposing papers in finding that there was an impression of bias as opposed to the founding papers upon which the application ought to have succeeded or failed.

(4) The court a quo erred and acted without jurisdiction in referring the dispute between the parties to be determined by a different arbitrator.”

ISSUE FOR DETERMINATION

The grounds of appeal raise two issues for determination:

1. The first three grounds of appeal raise one issue: whether the court a quo misdirected itself in holding that there was a reasonable apprehension of bias warranting the setting aside of the arbitral award.

2. The second issue is raised in the fourth ground of appeal. In that ground, the appellant seeks to challenge the order of the court a quo to remit the dispute between the parties for determination by a different arbitrator on the basis that the High Court is not reposed, by the Arbitration Act, with the power to make an order for remittal.

APPELLANT'S SUBMISSIONS

Counsel for the appellant submitted, that, the judgment of the court a quo was irregular in that it set aside the award on a basis other than the one alleged by the first respondent in its founding affidavit.

He submitted that the first respondent, in the proceedings a quo, alleged, in its founding affidavit, bias of the arbitrator during the arbitral proceedings. He argued that an application stands or falls on its founding affidavit.

He further argued that the court a quo was therefore called to answer whether there was bias on the part of the arbitrator during the making of the award.

He submitted, that, the court a quo correctly concluded that the first respondent did not establish bias and hence the application ought to have failed on that basis.

Counsel for the appellant argued, that, the court a quo however placed a lot of emphasis on the arbitrator's opposing affidavit to the application instead of the first respondent's founding affidavit.

Counsel for the appellant further submitted, that, the court a quo made a finding that both the substance of the award and the manner of the making of the award were not contrary to public policy. Counsel for the appellant argued that the court a quo therefore misdirected itself in relying on the arbitrator's affidavit which was filed three months after the issuance of the award.

He also argued that the court a quo erred in making contradictory findings and thus reviewed itself.

He submitted, that, the court a quo found that the conversation between Kevin Terry and the arbitrator did not constitute a reasonable apprehension of bias. He argued that the court a quo, later in the same judgment, found that the same conversation constituted bias if it is read together with the arbitrator's opposing affidavit.

He submitted that the court a quo misdirected itself by taking into account factors it had rejected earlier in its judgment.

FIRST RESPONDENT'S SUBMISSIONS

Counsel for the first respondent submitted, that, the court a quo could not be faulted for accepting the evidence adduced by the first respondent in support of its claim that the arbitrator was biased.

He argued that the issue of bias was raised in the first respondent's founding affidavit.

He submitted that the adverse averments in the arbitrator's opposing affidavit were alluded to in the answering affidavit to illuminate the allegations of bias in the founding affidavit.

He submitted, that, the court a quo did not misdirect itself in considering the arbitrator's conduct post the award. He submitted that the court a quo did not review itself but considered the arbitrator's pre-award conduct together with the post-award conduct.

APPLICATION OF THE LAW

It is trite that an application stands or falls on its founding affidavit.

The founding affidavit sets out the case that a respondent is called upon to answer.

The principle was aptly set out in Austerlands (Pvt) Ltd v Trade & Investment Bank Limited & Ors SC92-05. CHIDYAUSIKU CJ remarked…, as follows:

“The general rule that has been laid down in this regard is that an application stands or falls on the founding affidavit and the facts alleged in it. This is how it should be, because the founding affidavit informs the respondent of the case against the respondent that the respondent must meet. The founding affidavit sets out the facts which the respondent is called upon to affirm or deny.”

The first respondent alleged, in its founding affidavit in the court a quo, that the conversation between the arbitrator and Mr Terry was the basis for its apprehension of the bias of the arbitrator and the reason why the arbitrator arrived at a wrong decision.

It stated, in paragraph 9.10 of the founding affidavit, that:

“Finally, the inexplicable findings of the Honourable Arbitrator as illustrated above could only be understood in the contest (sic) of some other influence. I am constrained to give that influence as the unusual familiarity between the Honourable Arbitrator and Kelvin Terry the managing director of the 1st respondent.”

The appellant disputed that the conversation was a cause for an apprehension of bias.

The court a quo held that there was no basis for any reasonable person to have an apprehension of bias.

It remarked, at p10, that:

“I agree with the observations made by the respondent in its heads of argument. These are that the discussion forming the basis of the applicant's case was held in the presence of both parties and within hearing distance. There was nothing to hide. A biased arbitrator would have been more circumspect. The discussion centred not on the arbitral proceedings themselves but on Mr. Terry's pending relocation to Kenya on transfer. The timing of his relocation was relevant from a case management point of view in the event that oral evidence was required.”

Further down, at p11, the court stated that:

“I am satisfied that the discussion between him and the arbitrator arose as a result of that communication by the respondent's legal practitioners and that the Arbitrator's sole interest in Mr Terry's imminent departure was legitimate. No reasonable person could perceive bias under these circumstances. Further, no allegation has been made that the prior dealings referred to by the applicant were in any way connected to the matter under arbitration.”…,.

The court a quo agreed with the appellant's submissions, and, in essence, concluded that the first respondent had not established bias.

The court a quo therefore ought to have dismissed the application following its finding.

The court a quo however proceeded to consider the first respondent's contention that the remarks by the arbitrator, in his opposing affidavit, gave credence to the first respondent's assertions of the arbitrator's bias.

It remarked that:

“In my view, the applicant's case hinges on the following factors: the degree of faultiness in the arbitrator's reasoning, the fact that the arbitrator and Kevin Terry are acquaintances, and the fact that in response to the present application, the arbitrator has attacked the applicant's intelligence and its legal practitioners professional standing.

Do these three factors, taken together, give rise, in the mind of a reasonable litigant in the applicant's position, to a reasonable apprehension of bias on the part of the arbitrator?

In my view, that question should be answered in the affirmative.

The arbitrator's post award comments in particular give the impression that he is 'pitching camp with, or rendering assistance to one of the contestants to the dispute before him'.”…,.

The court a quo misdirected itself in three respects when it took into account the arbitrator's averments in the opposing affidavit.

(i) Firstly, the first respondent's allegations of the arbitrator's bias, as contained in the founding affidavit, were based on the conversation between the arbitrator and Mr Terry during the arbitral proceedings.

The arbitrator's averments in the opposing affidavit were not pleaded in the founding affidavit. They found their way into the answering affidavit.

The first respondent therefore raised fresh allegations of bias in the answering affidavit instead of confining itself to its allegations in the founding affidavit.

The first respondent could not make out a case against the appellant on the basis of the answering affidavit.

The court a quo therefore misdirected itself when it made a decision relying on the fresh allegations in the answering affidavit.

The order of the court a quo was therefore not on the basis upon which the application had been brought in the founding affidavit.

(ii) Secondly, the court a quo had earlier on in its judgment concluded that the allegations of bias, based on the conversation between the arbitrator and Mr Terry, were without merit.

It thus misdirected itself when it relied on the same conversation to arrive, in the same judgment, at a contrary conclusion that the arbitrator was biased.

In so doing, it contradicted its earlier findings and essentially reviewed its own earlier determination.

It could only have relied on the averments in the answering affidavit to bolster its findings on the first respondent's case as pleaded in the founding affidavit. It could not use the averments in the answering affidavit to take away findings made on the basis of the founding affidavit.

Regard is given to the fact, that, when the court a quo made its pronouncement on the issues raised in the founding affidavit, the first respondent's answering affidavit and heads of argument addressing the arbitrator's opposing affidavit were both before it.

(iii) Thirdly, the court took into account factors which occurred after the award in order to find bias during proceedings leading to the award.

The arbitrator's opposing affidavit was filed long after the arbitration proceedings had been terminated. It could not therefore be a basis for a finding of bias during the making of the award.

The judgment of the court a quo is irregular on the basis that it set aside the arbitral award on a basis other than that sought by the first respondent.

It is also untenable on the basis that the court a quo relied on an opposing affidavit that had no bearing to the making of the award.

(iv) Lastly, before it contradicted itself, the court a quo had found in favour of the appellant on the two issues that had been placed before it in the founding affidavit.

The resultant order ought to therefore have been the dismissal of the application by the first respondent.

In view of the above findings, it is therefore not necessary to consider the second issue raised in the fourth ground of appeal.

The appeal has merit. The judgment of the court a quo cannot therefore stand. It must be set aside.

COSTS

The appellant prayed, in the notice of appeal, for costs on the legal practitioner and client scale.

It however did not motivate for such costs in its heads of argument or oral submissions.

There is no basis advanced for granting the punitive costs. An order for ordinary costs is therefore appropriate.

Accordingly, it is ordered as follows:

1. The appeal be and is hereby allowed with costs.

2. The judgment of the court a quo be and is hereby set aside and substituted with the following:

“The application be and is hereby dismissed with costs.”

Appealed
SC27-22 : ZIMBABWE CRICKET vs HARARE SPORTS CLUB and ADVOCATE DANIEL TIVADAR (ARBITRATOR)
Ruled By: MALABA CJ, GUVAVA JA and MAVANGIRA JA

This is an appeal against the judgment of the High Court (“the court a quo”) handed down on 5 June 2019 wherein the appellant's application to set aside an arbitral award was dismissed for lack of merit.

After hearing argument from both parties and considering the submissions made, the court dismissed the appeal.

The court indicated that reasons for the decision would follow in due course. These are the reasons.

The background of the dispute is that the first respondent was the registered owner of a sporting complex known as Harare Sports Club, which it leased to the appellant, then known as Zimbabwe Cricket Union, through a Notarial Agreement of Lease (“the lease”) signed on 16 July 1999.

At the time, the Zimbabwe dollar was the official currency in the country.

The rental payable was fixed in that currency at $40,000 per month.

In terms of clause 3(c) of the lease, the rent was to be escalated on an annual basis, at a rate to be agreed between the parties. In terms of clause 20 of the lease, in the event that the parties failed to agree on the rent, the rental was to be determined and set by an independent arbitrator appointed by mutual agreement between the parties.

The decision of the arbitrator was to be final and binding on the parties.

When the multi-currency system was introduced, at the beginning of 2009, the parties failed to agree on the rent chargeable in foreign currency.

The matter was referred to arbitration in terms of clause 3(c) of the lease.

The parties could not agree on the appointment of the arbitrator.

The first respondent made an application to the court a quo seeking an order authorising the Commercial Arbitration Centre to appoint the second respondent as the arbitrator.

The application was made in terms of Article 11(4) of the United Nations Commission on International Trade Law (“the UNCITRAL Model Law”) as set out in the First Schedule to the Arbitration Act [Chapter 7.15] (“the Arbitration Act”).

Article 11(4) of the Model Law recognises the right of the parties to agree on a procedure of appointing an arbitrator but provides, that, should they fail to agree on the procedure to be followed, the arbitrator may be appointed by the High Court upon request of either party.

The appellant opposed the application, arguing that Article 11(4) of the UNCITRAL Model Law empowers the High Court to appoint an arbitrator of its own accord.

The contention was that the High Court had no power to delegate the authority to appoint an arbitrator to another body, such as the Commercial Arbitration Centre.

The appellant also argued, that, the dispute over the appropriate rental for the property was governed by the Commercial Premises (Rent) Regulations, Statutory Instrument No.176 of 1983 (“the Rent Regulations”) and, as such, should be determined by the Commercial Rent Board.

The appellant further argued, that, clause 3(c) of the lease was invalid by virtue of section 29 of the Rent Regulations.

Section 29 of the Rent Regulations provides, that, any agreement by which any party purports to limit his or her or its right to proceed under the Rent Regulations for the determination of a fair rent or the variation thereof is void.

The court a quo was not persuaded by the argument. It was also not persuaded by the argument that it had no authority to delegate the power to appoint an arbitrator to the Commercial Arbitration Centre.

It held, that, the parties were bound by the procedure for the resolution of the dispute arising from the contract they had agreed upon.

The court a quo made the order directing the Commercial Arbitration Centre to appoint the second respondent as the arbitrator in the dispute between the parties.

As a result of the order of the court a quo, the second respondent was appointed the arbitrator in the dispute regarding the rentals.

Having heard the matter, he issued the arbitral award which is the subject of the appeal.

Two applications were made to the court a quo. They were consolidated for purposes of hearing and the determination of the issues raised.

In the first application, the appellant sought the setting aside of the arbitral award in terms of Article 34 of the UNCITRAL Model Law. In the second application the first respondent sought the registration of the award in terms of Article 35 of the UNCITRAL Model Law.

The court a quo was of the view, that, a party to arbitration cannot approach it for review of the arbitral award on the ground that the arbitrator made an incorrect decision. It held that the courts only interfere with an arbitral award where the reasoning or conclusion goes beyond mere faultiness or incorrectness. The courts only interfere with an arbitral award which can be regarded as constituting a palpable inequity, so far-reaching and so outrageous in its defiance of logic or acceptable moral standards as to cause a fair-minded person to regard it as unbearably hurting all sense of justice and fairness.

The court a quo further expressed the view, that, the decision that had been reached by the second respondent was supported by the facts. It held that the second respondent applied his mind to the matter and came to a conclusion which was not contrary to the public policy of Zimbabwe.

The application for setting aside the arbitral award was found to be meritless and dismissed. Consequently, the application for the registration of the arbitral award was granted.

Dissatisfied with the decision of the court a quo, the appellant noted the appeal.

The main argument, on appeal, was that the court a quo misdirected itself in finding that the second respondent's award on the rentals payable was not susceptible to being set aside. It was also argued that the court a quo misdirected itself when it endorsed a formula by the second respondent for rent variation other than the one contemplated by the parties in terms of the lease. The contention was that the second respondent had no authority to determine the issue of rent variation in terms of a formula other than the one contemplated by the parties.

The first respondent argued, that, the decision of the court a quo was un-impeachable because the appellant had not challenged the second respondent's ruling on whether he had jurisdiction to hear the matter. It was also argued that the appellant had failed to meet the required standard for proving that the arbitral award was in conflict with the public policy of Zimbabwe.

The issue for determination was whether the appellant met the requirements of Article 34 of the UNCITRAL Model Law. Article 34 provides as follows:

“Application for setting aside as exclusive recourse against arbitral award

(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this article.

(2) An arbitral award may be set aside by the High Court only if —

(a) The party making the application furnishes proof that —

(i) A party to the arbitration agreement referred to in Article 7 was under some incapacity, or, the said agreement is not valid under the law to which the parties have subjected it, or, failing any indication on that question, under the law of Zimbabwe; or

(ii) The party making the application was not given proper notice of the appointment of an arbitrator of the arbitral proceedings or was otherwise unable to present his case; or

(iii) The award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or

(iv) The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Model Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Model Law; or

(b) The High Court finds, that —

(i) The subject-matter of the dispute is not capable of settlement by arbitration under the law of Zimbabwe; or

(ii) The award is in conflict with the public policy of Zimbabwe.

(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the award, or, if a request had been made under Article 33, from the date on which that request had been disposed of by the arbitral tribunal.

(4) The High Court, when asked to set aside an award, may, where appropriate and so requested by a party, suspend the setting aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal's opinion will eliminate the grounds for setting aside.

(5) For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this Article, it is declared that an award is in conflict with the public policy of Zimbabwe if —

(a) The making of the award was induced or effected by fraud or corruption; or

(b) A breach of the rules of natural justice occurred in connection with the making of the award.”

The court a quo held, that, the arbitral award could not be found to be in conflict with public policy of Zimbabwe because the second respondent did not escalate the rent in terms of the parties agreement.

In ZESA v Maphosa 1999 (2) ZLR 452 (S)..., it was stated that:

“Under Article 34 or 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognise and enforce an award by having regard to what it considers should have been the correct decision. Where, however, the reasoning or conclusion in an award goes beyond mere faultiness or incorrectness and constitutes a palpable inequity that is so far reaching and outrageous in its defiance of logic or accepted moral standards that a sensible and fair minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award, then, it would be contrary to public policy to uphold it.

The same consequence applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue, and the resultant injustice reaches the point mentioned above.”

The position is settled, that, a party to arbitration cannot come to court because the arbitrator was wrong.

The allegation in the court a quo was that the second respondent's decision to enforce a clause in the agreement requiring the parties dispute over the escalation of rent to be submitted to the arbitration procedure was a breach of section 29 of the Rent Regulations.

Section 29 of the Commercial Premises (Rent) Regulations, SI176 of 1983 (the Rent Regulations) provides:

“Any agreement by which any person purports to limit his right to proceed under these Regulations for the determination of a fair rent or the variation of such a determination, or to limit or affect any other rights to which he would be entitled under these Regulations, shall be void.”

The court a quo held, that, the Rent Regulations were not applicable because cricket activities did not relate to commercial enterprises.

The order of the court a quo was not appealed against.

The second respondent was therefore bound to perform his duties. The second respondent had the power to act in the manner he did.

The award by the second respondent could not have been a violation of public interest or policy of Zimbabwe.

Article 16 of the UNCITRAL Model Law allows a party to challenge the jurisdiction of the arbitrator. The arbitrator can make a determination on the challenge.

Article 16 of the Model Law reads as follows:

“Competence of arbitral tribunal to rule on its jurisdiction

(1) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, a second respondent. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.

(3) The arbitral tribunal may rule on a plea referred to in paragraph (2) of this Article either as a preliminary question or in an award on the merits. If the arbitral tribunal rules on such a plea as a preliminary question, any party may request, within thirty days after having received notice of that ruling, the High Court to decide the matter, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.”

The appellant raised the issue of the arbitrator's jurisdiction.

The second respondent gave a ruling on the matter, holding that he had jurisdiction to hear and determine the dispute between the parties.

The appellant did not seek to have the decision reviewed by the High Court.

The exercise of jurisdiction by the second respondent could not, therefore, have been in breach of the public policy of Zimbabwe.

The question whether the second respondent decided the matter of a fair monthly rental when in fact it should have been an escalation of fair rental was the issue agreed upon by the parties.

This was the issue determined by the court a quo.

The lease between the parties was entered into in July 1999 and the rent agreed upon at that time was in Zimbabwe dollars. The lease was in writing, and, any alteration to the rent ought to have been in writing.

In 2009, the Zimbabwe dollar lost its value as legal tender and was substituted by a multi currency regime.

There is no record of a written agreement on the payment of US$170 per month as rent.

There was an arrangement, based on an oral agreement, for the rent to be paid at the rate of US$170 per month, as a temporary measure, pending negotiations on the agreed fair rent.

This arrangement was not consistent with the lease. The first respondent was losing out on value for its property.

The parties subsequently entered into yet another oral agreement, whereby the appellant would pay US$3,000 per month as rent.

The appellant denied the existence of the second oral agreement, despite the evidence placed before the court a quo that it paid the amount pending the ascertainment of a fair rental.

The first respondent argued, that, in terms of clause 3c of the lease, there was nothing to escalate, given that a fair rental could only be escalated if there was a fixed fair rental payable.

Due to the demise of the Zimbabwe dollar, there was no fixed fair rental in place.

He accepted that the issue for determination was: “What was a fair rental payable?”

The court a quo decided, that, the determination by the second respondent could not be said to be in conflict with public policy of Zimbabwe. What was before the second respondent was a question of fact, and he applied his mind to it.

The complaint that the second respondent sided with the first respondent, in admitting expert evidence to determine the fair rental payable, had no legal basis.

The evidence was necessary because the second respondent needed expert evidence to assist him to determine a fair rental. He gave both parties an opportunity to present expert evidence on the matter. He explained to the parties, that, expert evidence would enable him to decide the dispute fairly.

The UNCITRAL Model Law gave the second respondent the discretion to adopt a procedure for the determination of the issues that would produce just and equitable results.

For the above reasons, the Court dismissed the appeal.

View Appeal
HH398-19 : HARARE SPORTS CLUB CASE NO. HC9909/18 and ZIMBABWE CRICKET CASE NO HC10011/18 vs ZIMBABWE CRICKET and HARARE SPORTS CLUB and ARBITRATOR ADVOCATE DANIEL TIVADAR
Ruled By: MATHONSI J

This judgment is a two-in-one.

It disposes of the application in HC9909/18, an application in which Harare Sports Club (the applicant) seeks a registration of an arbitral award issued by an arbitrator and HC10011/18, one in which Zimbabwe Cricket (the respondent) seeks the setting aside of the same arbitral award on the ground that it is contrary to the public policy of Zimbabwe.

Registration of the award is sought by the applicant in terms of Article 35 while the setting aside of the award is sought by the respondent in terms of Article 34 of the Model Law in the Arbitration Act [Chapter 7:15].

The contentious arbitral award was issued in terms of an agreement entered into between the parties on 16 July 1999 supported by an order of this court, per MANGOTA J, handed down on 21 July 2017.

The award itself was delivered on 28 August 2018.

By order of this court, per CHIKOWERO J, granted on 27 March 2019, the two (2) mutually destructive applications were consolidated for set down and determination at the same time.

At the commencement of the hearing, counsel for the parties agreed that upholding one of the applications necessarily brings the other to its knees. In other words, if the court finds that there is no merit in the application to set aside the arbitral award, it should, without further ado, recognize the award and register it for enforcement.

The background is that the applicant is the registered owner of a sporting complex known as Harare Sports Club which it leased to the respondent, then known as Zimbabwe Cricket Union, by Notarial Agreement of Lease signed on 16 July 1999, at a time when the Zimbabwe dollar ruled the roost.

The rental payable was therefore fixed in that currency, at $40,000 per month, and, in terms of clause 3(c) the rent was to be escalated on an annual basis with effect from the agreement's first anniversary at a rate to be agreed between the parties.

In the event of the parties failing to agree, the rent was “to be determined and set by an independent arbitrator appointed by mutual agreement between the parties, whose decision shall be final and binding as between them, based upon any fluctuation in the prime bank rate of interest and the inflation rate prevailing in Zimbabwe at the relevant juncture.”

When the Zimbabwe dollar became moribund, at the beginning of 2009, the parties could not agree on the rent in foreign currency and a dispute arose, which has escalated over the years, resulting in the need to refer the matter to arbitration in terms of clause 3(c) of the agreement.

The parties still could not agree on an arbitrator to resolve the dispute, and, as they bickered endlessly, the applicant brought an application in this court under case no. HC217/17 in which it cited both the respondent and the Commercial Arbitration Centre.

It sought an order authorizing the Commercial Arbitration Centre to appoint an arbitrator to determine the dispute over rent.

The application was made in terms of Article 11(4) of the Model Law which recognizes the right of the parties to agree on a procedure of appointing an arbitrator but provides, that, should they fail to agree, such arbitrator may be appointed by the High Court on request of a party.

The respondent opposed that application arguing, inter alia, that Article 11(4) of the Model Law empowers the High Court itself to appoint an arbitrator and not to delegate the power to appoint to someone else.

The respondent also argued in opposition, that, the dispute over the appropriate rental for the property was governed by the Commercial Rent Regulations and should thus be determined by the Commercial Rent Board.

The respondent further argued, that, clause 3(c) of the parties agreement, which provides for arbitration of a rent dispute, was void by virtue of section 29 of the Commercial Rent Regulations which provides:

“…, any agreement by which any person purports to limit his right to proceed under these Regulations for the determination of a fair rent or the variation of such a determination, or the limit or affect any other rights to which he would be entitled under these Regulations, shall be void.”

The respondent sought to side-foot the imperatives of the agreement it entered into with the applicant and avoid arbitration by hiding behind the Commercial Rent Regulations which would have meant that the dispute would be referred to the Commercial Rent Board.

MANGOTA J, who heard the application, was not persuaded by that argument. Neither was he persuaded by the argument that the High Court could not delegate the power to appoint an arbitrator to the Commercial Arbitration Centre.

In Harare Sports Club v Zimbabwe Cricket & Anor HH471-17 the learned judge upheld the principle of sanctity of contract holding that having crafted for themselves “a clearly defined manner of resolving their disputes” neither of the parties was entitled to renege from the agreement.

On the issue of the power of the court to delegate the authority to appoint an arbitrator, the learned judge ruled that this court has inherent jurisdiction to do so, and, in the exercise of that inherent jurisdiction, he authorized the Commercial Arbitration Centre to do the honours.

It was by virtue of that judgment that Daniel Tivadar was appointed arbitrator, and, having heard the matter, he issued the arbitral award which is the subject of this application.

The case of Harare Sports Club v Zimbabwe Cricket & Anor HH471-17 is significant in two ways:

(i) Firstly, it determined the issue of the arbitrator's jurisdiction to adjudicate over the dispute and clothed him with authority to do so.

(ii) Secondly, it completely resolved the issue of the validity of the arbitration clause, that is, clause 3(c) of the parties agreement, and ruled that it was valid notwithstanding section 29 of the Commercial Rent Regulations.

As shall be seen later, the respondent has not given up on these arguments, which form the main thrust of its challenge to the arbitral award and why it moves that the award be set aside and why it should not are registered for enforcement purposes.

It is significant that the judgment of MANGOTA J in Harare Sports Club v Zimbabwe Cricket & Anor HH471-17 has not been challenged in any way. It has not been appealed and remains extant to this day.

As I have said, the applicant has made an application for the registration of the arbitral award in terms of Article 35 of the Model Law.

The award directs the respondent to pay rent of US$7,500 per month with effect from 28 August 2018 for the Sports Complex; to pay US$88,119=85 together with interest from 6 December 2016; to pay rent of US$3,000 per month from 1 January 2018 to the date of the award; and costs of suit.

In its application for setting aside the award, the respondent states that the arbitral award is against the public policy of Zimbabwe because the arbitrator enforced clause 3(c) of the agreement, which provides for referral of the dispute to arbitration, when that clause is contrary to statute law, namely, section 29 of the Commercial Rent Regulations, which provides that any provision in a lease agreement which limits the rights of the parties in terms of those Regulations shall be void.

Secondly, the arbitrator did not deal with the issue of rent escalation.

As the parties had agreed on an interim rental of US$170 a month, it is that rent which should have been escalated in terms of clause 3(c) of the agreement.

Thirdly, the award unjustly enriches the applicant at the respondent's expense because it came out during the hearing, that, the applicant is renting out a portion of the complex to the Tobacco Industry Cricket Supporters Association for a rental.

Fourthly, the respondent submitted that the arbitrator pitched camp with the applicant because he allowed for expert evidence on what is a fair rent for the complex to be presented which the applicant had not submitted.

I must put the issue of unjust enrichment out of the way straight away.

Counsel for the respondent conceded, that, it is an issue which was not argued before the arbitrator. Counsel for the applicant submitted, that, unjust enrichment is a cause of action which should have been pleaded before the arbitrator. It was not, and, therefore, cannot be relied upon to challenge the award.

I agree.

Raising a defence which was not relied upon before the arbitrator only means that a party is seeking a fresh hearing of the case and not a challenge of the arbitrator's decision - a decision arrived at without consideration of the new defence.

That cannot be allowed. The issue must end there.

Counsel for the applicant took essentially two (2) points in limine, namely;

(i) That, the application for the setting aside of the arbitral award, issued by the arbitrator on 10 April 2018, was filed out of time and should fail for that reason alone.

(ii) Secondly, he submitted that the respondent cannot challenge the arbitrator's ruling on jurisdiction at this stage because the time during which to do so lapsed in terms of Article 16 of the Model Law.

There is merit in both points in limine.

At the commencement of the arbitration process, the respondent objected to the jurisdiction of the arbitrator to arbitrate the dispute. In fact, the lack of jurisdiction was one of seven (7) preliminary objections made on behalf of the respondent at that stage.

In an award dated 10 April 2018, the arbitrator dismissed that preliminary point holding that he had jurisdiction. He proceeded with the arbitration.

An arbitrator is entitled to rule on his or her own jurisdiction in terms of Article 16(1) of the Model Law. That Article further provides in paragraphs (2) and (3):

“(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment, of an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.

(3) The arbitral tribunal may rule on a plea referred to in paragraph (2) of this Article either as a preliminary question or in an award on the merits.

If the arbitral tribunal rules on such a plea as a preliminary question, any party may request, within thirty days after having received notice of that ruling, the High Court to decide the matter, which decision shall be subject to no appeal; while such request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.”

The respondent did not challenge the determination on jurisdiction within the period of 30 days provided for in paragraph (2) of Article 16 of the Model Law. In fact, the respondent only mounted the challenge in the main application filed on 30 October 2018 - almost seven (7) months later.

It could not do that without seeking condonation.

That is not the only reason why the challenge on the arbitrator's jurisdiction cannot succeed.

I have stated, that, in Harare Sports Club v Zimbabwe Cricket & Anor HH471-17 this court determined the issue of the arbitrator's jurisdiction. It also determined the application of section 29 of the Commercial Rent Regulations - both arguments still being pursued by the respondent.

What we have therefore is a case in which the setting aside of an arbitral award is sought on arguments that have already been determined by this court, and the determination has not been challenged, leaving the court's decision extant.

After exchanging pleasantries with counsel for the respondent on the propriety of that approach, he submitted that I am not bound by the judgment of MANGOTA J and that I should overlook it and uphold the respondent's challenge on the arbitrator's jurisdiction.

Asked as to how that could be possible in light of the two of us enjoying the same level of jurisdiction, meaning that I cannot review the decision of another court of the same jurisdiction, counsel for the respondent submitted, that, the prior decision is not binding because it is premised on a wrong conclusion of the law.

Counsel for the respondent obviously misses the point.

The issue is not whether the decision is correct. It is that the arbitrator was appointed in terms of a court order which is still extant. Even if the arbitrator had no jurisdiction, the order of this court clothed him with jurisdiction.

It was incompetent for the respondent to still insist on absence of jurisdiction in the face of a court order it did not challenge.

It was also incompetent for the respondent to still raise the issue of an alleged invalidity of clause 3(c), the arbitration clause, when the court had ruled it valid and the respondent had not appealed the court's judgment.

It was an exercise in futility.

That is what happens when a tenant is imbued with magical qualities beyond the ken of mortals, the power of resisting demand for payment of fair rent insisting on paying only what it wants to pay for a lengthy period of close to ten (10) years.

When the magic is taken away by a court order, it disappears so inexplicably it may be seen as a terminal development.

In fact, the respondent appears to have this unrivalled record of pressing the self-destruct button when it comes to its rent dispute with the applicant.

How can a litigant which has a court order authorising the appointment of an arbitrator to its rent dispute beat the same drum about absence of jurisdiction before that arbitrator, and, again, before the same court which authorized the appointment of the arbitrator?

That is done at the expense of the merits of the matter.

This may well be a case of res judicata, that, the issues of jurisdiction and the validity of clause 3(c) have already been determined by this court and cannot be lawfully revisited again.

The present legal fact is that the order remains valid and binding. Arbitration was conducted in terms of it.

The Supreme Court made the crucial point in Wolfenden v Jackson 1985 (2) ZLR 313 (S)…,:

“The exceptio rei judicatae is based principally upon the public interest that there must be an end to litigation and that the authority vested in judicial decisions be given effect to - even if erroneous: see Le Roux en'n Ander v Le Roux 1967 (1) SA 446 (A) at 461H.

It is a form of estoppel and means that where a final and definitive judgment is delivered by a competent court, the parties to that judgment or their privies (or, in the case of a judgment in rem, any other person) are not permitted to dispute its correctness.”

The law recognises that once a dispute between the same parties has been exhausted by a competent court, it cannot be brought up for adjudication again. There is need for finality.

As stated by MAKARAU JP…, in Chimpondah & Anor v Muvami HH81-07…,:

“To allow litigants to plough over the same ground hoping for a different result will have the effect of introducing uncertainty into court decisions and will bring the administration of justice into disrepute.”

See also Towers v Chitapa 1996 (2) ZLR 261 (H).

The decision to hold the respondent to the terms of the agreement between the parties is grounded in good authority.

Quite often, in their relations, parties agree among themselves, as they conclude agreements, that any dispute arising therefrom be referred to and resolved by arbitration which is an alternative dispute resolution mechanism in terms of which the parties refer their dispute to a third party, the arbitrator, for impartial determination.

Although it does not oust the jurisdiction of the court, it simply compliments the court process; it is an accepted way of dispute resolution and is respected by the courts.

In the words of GOLDSTONE JA in Amalgamated Clothing & Textile Workers Union of South Africa v Veldspun (Pty) Ltd 1994 (1) SA 162 (A)…,.:

“When parties agree to refer a matter to arbitration, unless the submission provides otherwise, they implicitly, if not explicitly (and subject to the limited power of the Supreme Court under section 3(1) of the Arbitration Act), abandon the right to litigate in courts of law and accept that they will be finally bound by the decision of the arbitrator….,.

In my opinion, the courts should, in no way, discourage parties from resorting to arbitration and should deprecate conduct by a party to an arbitration who does not do all in his power to implement the decision of the arbitrator promptly and in good faith.”

See also Brumat Ltd v Multicom Ltd 2000 (1) ZLR 637 (H).

So, the ruling on the jurisdiction of the arbitrator, and, therefore, the validity of clause 3(c) of the parties agreement, should have been approached by the respondent from three (3) fronts - none of which was resorted to:

(i) The respondent could have appealed MANGOTA J's judgment authorizing the appointment of an arbitrator. It was not done.

(ii) When the arbitrator ruled on his own jurisdiction, the respondent had the leeway to challenge that determination in terms of Article 16(2) of the Model Law within thirty (30) days. This was not done.

(iii) Finally, the respondent could have sought that it be set aside in terms of Article 34 of the Model Law within three (3) months. Again, this was not done.

Surely, the respondent cannot be seen to smuggle that issue into the application now.

That then brings me to the last two factors considered by the respondent as indicative of the award being contrary to the public policy of this country, namely:

(i) That, the arbitrator did not escalate the rent in terms of the parties agreement; and

(ii) That, the arbitrator pitched camp with the applicant by allowing more information to be provided which the applicant had not initially provided.

In terms of Article 34(2)(b) of the Model Law, an arbitral award may be set aside by this court only if the court finds that the subject matter of the dispute is not capable of settlement by arbitration under the law of this country or the award is in conflict with the public policy of Zimbabwe.

Article 34(5) of the Model Law goes further to set out what would ordinarily be regarded as being contrary to public policy. It states:

“For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this Article, it is declared that an award is in conflict with the public policy of Zimbabwe if:

(a) The making of the award was induced or effected by fraud or corruption; or

(b) A breach of the rules of natural justice occurred in connection with the making of the award.”

In a line of cases, the courts have been very careful to interpret that provision narrowly, cognisant of the need to protect the principle of sanctity of contract.

After all, it is the parties who voluntarily submit to arbitration as an instrument for the speedy and cost effective means of resolving their dispute. The courts are therefore more inclined to deprecate conduct of a party intent on disrespecting the agreement by undermining the process of arbitration agreed upon by the parties.

Fanciful defences against registration of arbitral awards and frivolous applications seeking to set aside an award, by inviting the court to plough through the same dispute which has been resolved by an arbitrator in the forlorn hope of obtaining a different outcome, will not be entertained.

As eloquently stated in Zesa v Maphosa 1999 (2) ZLR 452 (S)…,:

“Under Articles 34 and 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognize and enforce an award by having regard to what it considers should have been the correct decision.”

See also Delta Operations v Origen Corp (Pvt) Ltd 2007 (2) ZLR 81 (S)…,.; Provincial Superior Jesuit Province of Zimbabwe v Kamoto & Ors 2007 (2) ZLR 8 (3)…,.; Origen Corporation (Pvt) Ltd v Delta Operations (Pvt) Ltd 2005 (2) ZLR 349 (H)…,.; Decimal Investments (Pvt) Ltd v Arundel Village (Pvt) Ltd 2012 (1) ZLR 581 (H).

I agree with counsel for the applicant, that, an arbitrator is entitled to be wrong without attracting the setting aside of the award.

That view was expressed with silky eloquence by GARDINER J in Clark v African Guarantee and Indemnity Co. Ltd 1915 CPD 68…,.:

“The courts will always be most reluctant to interfere with the award of an arbitrator. The parties have chosen to go to arbitration instead of resorting to the courts of the land, they have specially selected the personnel of the tribunal, and they have agreed that the award of the tribunal shall be final and binding.

As Halsbury LC said in Holmes Oil Co. v Pumpherston Oil Co. Court of Sess R 18 at 53:

'One of the advantages that people are supposed to get by reference to arbitration is the finality of the proceedings when the arbitrator has once stated his determination. They sacrifice something for that advantage.

They sacrifice the power to appeal.

If, in their judgment, the particular judge whom they have selected has gone wrong in point of law or in point of fact, they have no longer the same wide power to appeal which an ordinary citizen prosecuting his remedy in the courts of law possesses, but, they sacrifice that advantage in order to obtain a final decision between the parties. It is well-settled law, therefore, that when they have agreed to refer their difficulties to arbitration, as they have here, you cannot set aside the award simply because you think it is wrong.'”

See also Kolber & Anor v Sourcecom Solutions (Pty) Ltd & Ors; Sourcecom Technology Solutions (Pty) Ltd v Kolber & Anor 2001 (2) SA 1097…,.

The views expressed in the foregoing authorities were endorsed by the South African Supreme Court of Appeal in Telcordia Technologies Inc v Telkom SA Ltd 2007 (3) SA 266. HARMS JA stated at 302A:

“An arbitrator 'has the right to be wrong' on the merits of the case, and, it is a perversion of language and logic to label mistakes of this kind as a misconception of the nature of the inquiry; they may be misconceptions about meaning, law, or the admissibility of evidence but that is a far cry from saying that they constitute a misconception of the nature of the inquiry.”

Pursing the same line of reasoning, that, it does not matter that the arbitrator may have misinterpreted the agreement, failed to apply the law correctly, or had regard to inadmissible evidence, the learned Judge of Appeal stated at 302D-E:

“Likewise, it is a fallacy to label a wrong interpretation of a contract, a wrong perception or application of South African law, or an incorrect reliance on inadmissible evidence by the arbitrator as a transgression of the limits of his power. The power given to the arbitrator was to interpret the agreement rightly or wrongly; to determine the applicable law, rightly or wrongly; and to determine what evidence was admissible, rightly or wrongly…,. To illustrate, an arbitrator in a 'normal' local arbitration has to apply South African law, but, if he errs in his understanding or application of local law the parties have to live with it.”

That position is settled; a party to arbitration cannot come to court because the arbitrator was wrong.

The court will only interfere with an award which is not just wrong, but, where the reasoning or conclusion goes beyond mere faultiness or incorrectness but can be regarded as constituting a palpable inequity so far-reaching and so outrageous in its defiance of logic or acceptable moral standards as to cause a fair-minded person to regard it as unbearably hurting all sense of justice and fairness.

In my view, the authorities set a very high threshold for the court to interfere.

It is certainly not enough that a party does not agree with the decision of the arbitrator and would rather have a re-assessment of the dispute.

That is not what Articles 34 and 36 of the Model Law are intended for.

Regarding the issue of escalation of rent provided for in clause 3(e) of the agreement, the respondent's position is that when multi-currencies were introduced, the parties reached an agreement that rent would be US$170 a month. For that reason, it is that figure which should have been escalated in terms of the agreement.

The applicant's case was that the parties failed to agree on a fair rent, and, while the dispute escalated, they agreed on an interim figure of US$170 which was later revised to US$3,000.

The arbitrator found in favour of the applicant, concluding that the only agreed rent which was expressed in writing was one sounding in Zimbabwe dollars which could not be escalated after that currency ceased to exist.

In light, inter alia of clause 25, which required all agreements to be expressed in writing, there was no agreement for payment of any amount in United States dollars.

In my view, the decision reached by the arbitrator was supported by full reasons. He applied his mind and came to a conclusion. I am unable to see anything contrary to the public policy of Zimbabwe.

Surely, public policy cannot be disturbed by a decision adverse to one of the contesting parties.

On the issue of the procedure adopted by the arbitrator in the conduct of arbitration, it should be observed that arbitration proceedings are free from the trappings of formal court formalities and procedures. In fact, their informality is their major strength which continuously attract parties to resort to that alternative dispute resolution mechanism.

The arbitrator invited parties to provide additional information he required to arbitrate.

He openly did so and also gave them an opportunity to make representations in that regard mindful of the rules of natural justice.

This was an arbitration conducted in terms of an agreement containing clause 20(d), to wit:

“The arbitrator shall decide the matter submitted to him according to what he considers just and equitable in the circumstances, and, therefore, the strict rules of law need not be observed or to be taken into account by him in arriving at his decision.”

There can be no doubt that this clause liberated the arbitrator from the shackles of procedure, allowing him to decide the matter in any manner he deemed just and equitable.

I do not regard requesting expert evidence on a fair rent to be an act of descending into the arena of battle as envisaged in the case of Leopard Rock Hotel (Pvt) Ltd v Warrent Construction (Pvt) Ltd 1994 (1) ZLR 255 (S)…, relied upon by counsel for the respondent.

Even a court of law, which is bound by rules of procedure, is entitled to call a witness to clarify grey areas in a case.

There was therefore nothing wrong, at least nothing which would offend public policy, with the arbitrator calling for evidence on the current fair rent.

The application for setting aside the arbitral award is clearly meritless and cannot succeed.

I have said that both parties agreed that a dismissal of the application for setting aside the award necessarily means that the award should be registered by the grant of the application for registration.

I am however disinclined to award punitive costs. The respondent was entitled to test the correctness of the arbitral award.

In the result, it is ordered that;

1. The application for the setting aside of the arbitral awards of Daniel Tivador, dated 10 April 2018 and 28 August 2018, which is case No.10011/18 is hereby dismissed.

2. The application for registration of the arbitral award, which is case No. HC9909/18 is hereby granted.

3. The arbitral award of Daniel Tivador, dated 28 August 2018, is hereby registered as an order of the High Court of Zimbabwe in terms of Article 35(1) of the First Schedule to the Arbitration Act [Chapter 7:15].

4. The respondent shall pay the applicant the sum of US$112,119=85.

5. The respondent shall pay interest on the sum of US$88,119=85 at the rate of 5% per annum reckoned from 6 December 2016 to date of final payment.

6. The respondent shall pay the costs of suit.

Appealed
HHHH262-10 : ZIMBABWE POSTS (PVT) LTD vs COMMUNICATION AND ALLIED SERVICES WORKERS UNION OF ZIMBABWE
Ruled By: MUTEMA J

This application is redolent with irregularities. This, understandably, constrained the respondent to raise a number of points in limine praying for its dismissal.

The irregularities complained of, which were not fully conceded by the applicant, are these:

1. The application does not comply with Rule 227(3) in that when it was filed, it did not contain a draft of the order sought;

2. It offends against Rule 227(2)(d) in that it has more than five (5) pages but does not have an index attached;

3. It is unclear whether the application is being brought in terms of Order 32 (Ordinary Court Application) or in terms of Order 33 (an Application for Review). The applicant has prefaced its founding papers with a document titled 'Court Application' and another titled 'Application for Review' both prepared by the applicant's legal practitioners on 4 May 2010 and filed on 17 May 2010.

3. If it be taken as an application for review, it is fraught with deficiencies in that it fails to comply with Rule 256, Rule 257 and Rule 259 by not citing the arbitrator whose award is sought to be reviewed, by not stating shortly and clearly the grounds upon which the applicant seeks to have the proceedings set aside or corrected, and, by not having been filed within the stipulated eight (8) week period. Further, this Court does not have review jurisdiction in respect of arbitration proceedings.

On the basis of the foregoing alleged irregularities, the respondent moved the court to dismiss the application with costs on a higher scale.

The gravamen of the application is essentially for the setting aside of an arbitral award.

The applicant's legal practitioner, while making half-hearted concessions in respect of the above cited irregularities through skilful manipulation that is not taught in law school but acquired naturally thereafter, endeavoured to persuade the Court to invoke Rule 4C(a) and condone the departure from the provisions of the Rules flouted.

Regarding the non-attachment of the draft order, he insisted that one was attached to the application. He submitted that in any event, when the objection pertaining thereto was raised in the respondent's opposing affidavit, one was attached to the answering affidavit in case the respondent was truthful in objecting.

I am not persuaded that the respondent would have been that naive to raise an objection of this nature merely for the “heck” of it if such documents were attached. If that were the sole flouting of the Rules, the Court would not have any difficulty in invoking Rule 4C(a).

There are numerous others which are more material.

As regards the non-indexing of the application, this was conceded with the qualification that it was subsequently cured by the filing of a consolidated index thereby rendering the initial non-indexing irrelevant.

He asked the Court to invoke Rule 4 and condone the departure from the provisions of the Rules in the interests of justice.

For the same reason given when dealing with the non-filing of the draft order supra, I am not persuaded to condone.

Over and above that, that consolidated index being alluded to was not prepared by the applicant's legal practitioners but by the respondent's legal practitioners, ex mero motu, who are not the dominus litus.

Regarding the issue that the application was made using the wrong form of review instead of in terms of Article 34(2) of the Model Law in terms of the Arbitration Act [Chapter 7:15], the legal practitioner conceded the error and attributed it to a genuine but mistaken belief of law on his part.

This, quite apart from being utterly footling at law, for lawyers are presumed to know the law, the alleged mistake of law is so gross and persistent as to render it not only not genuine but inexcusable.

Here is a terse recital of the legal practitioner's blunders of the law which culminated in the one at hand:

(a) In what is titled 'Application For Review' (p3), it is stated:

“TAKE NOTICE THAT on a date to be set by the Registrar, an application will be made for the review of an arbitrary (sic) award made by the Honourable Mr Mordecai P. Mahlangu on the 23rd of February 2010 but received by the applicant on 3 March 2010…, on the following grounds.”

Six grounds for the review are then enumerated.

The founding affidavit clearly deals with an application for review.

In spite of being alerted to the irregularities alluded to supra by the respondent in the opposing affidavit, including the wrong form of the application, the applicant did not “reck”. It remained obdurate in its answering affidavit that the application for review was the proper one.

In paragraphs 4.1 to 4.3:

“4.1 The long and short of it all is that this is a Court Application for review. This is quite apparent on the papers. The document says it's a Court Application and the other defines it as one for review. No magic is required to discern this much.

4.2 The basis for the application for review could not have been stated in better terms than what it is in the founding affidavit. In summary and in simple terms, the award is being challenged on the grounds that it is contradictory, it is unreasonable, and it offends against public policy.

4.3 Citing the Arbitrator as a party to the proceedings is not a rule cast in concrete. Such non-joinder is not fatal to the proceedings….,.”

In paragraph 5.1 the applicant reiterates that the application was one for review by averring:

“Again, I should emphasis (sic) that there is no magic in how the grounds for review should be stated as long as they are stated with sufficient clarity to enable the Court to appreciate their substance.”…,.

In paragraph 6 of the answering affidavit, the applicant attempts to defend why the review application was filed outside the required eight (8) week period.

It avers that it first filed an application for review in the Labour Court within the eight (8) week period and alleges that a copy of that application is attached marked 'A'.

However, no such copy is attached!

After being awakened to the fact that only the High Court had exclusive jurisdiction to set aside an arbitral award made in terms of the Arbitration Act, by way of application, it then withdrew that application from the Labour Court. It alleges also that a copy of such withdrawal is attached marked 'B'.

Again, no such copy is attached!

In paragraph 7.1 the applicant avers that it believed that “respondent is wrong in its view that the High Court has no review jurisdiction in respect of arbitration proceedings;” and in paragraph 8.2 the applicant alleges that “our Courts have dealt with applications for setting aside such awards as ones for review.”

The foregoing recital displays what I may call an orgy of legal blunders on the part of the applicant's legal practitioner.

At the hearing, while conceding that this application should not have been brought by way of review, counsel for the applicant submitted, that, this Court is perfectly entitled to condone the use of the incorrect form of application seeking to rely on the case of Moyo v Forestry Commission 1996 (1) ZLR 173 (a case not cited in his Heads of Argument).

That case does not support the applicant's cause because it was overturned on appeal in the case of Forestry Commission v Moyo 1997 (1) ZLR 254.

In the earlier case, the point had been made in limine that a wrong procedure had been used and that the decision complained of should have been brought on review instead of an ordinary court application. The court a quo had held that the relief susceptible to review could be granted even though the proceedings had not been brought under the review procedure provided in the Rules. The court had also condoned the delay of over two (2) years, although there had been no application for condonation or explanation for the delay. The reason for so doing was that the decision to dismiss the respondent from employment was null and void because of gross procedural irregularities by the disciplinary enquiry, and so, to dismiss the application would constitute a failure to redress an injustice.

The Supreme Court, in overturning the decision of the court a quo, held inter alia, that, though the rules of court are not an end in themselves, to be slavishly applied for their own sake, they are there to regulate the practice and procedure of the High Court, and, in general, strong grounds would have to be advanced to persuade the court or judge to act outside them.

In casu, have strong grounds been advanced to persuade the court to act outside the Rules?

The answer must be perfectly in the negative. The orgy of legal blunders recited supra speaks for itself and admits of no other answer.

In spite of it having been pointed out that a wrong format has been employed in the launch of this application, the applicant persevered undaunted in its argument in futility that the application was one for review and that 'no magic is required to discern this much' and that the High Court has 'review jurisdiction in respect of arbitration proceedings.'

It was only in the applicant's Heads of Argument that the legal practitioner made an unexplained about turn stating that the application is one in terms of Article 34 of the Model Law, a review sui generis to be understood as one for setting aside in terms of Article 34(2)(b)(ii).

Article 34(2)(b)(ii) of the Model Law provides, that, the High Court can only set aside an arbitral award if it finds that the award is in conflict with the public policy of Zimbabwe.

The mere fact that the arbitral award is alleged to be 'in conflict with the public policy of Zimbabwe' as one of the grounds for review in the application per se does not imbue the review application with the nuance to transform it into an application in terms of Article 34 of the Model Law.

That an application under Article 34 of the Model Law must be made in terms of Order 32 and not Order 33 of the High Court Rules 1971 was put beyond doubt by GWAUNZA JA in Mtetwa and Anor v Mupamhadzi 2007 (1) ZLR 253 (S)…,.

The words of the learned Judge of Appeal, in that case, bear useful repetition for clarity. She said:

“It is contended for the appellants, that, they were perfectly within their rights to file an application for review/setting aside of the decision of the arbitrator in terms of Order 33 Rule 256 of the High Court Rules since there is nothing in that Rule which precluded them from bringing such an application.

This contention, I find, has no validity.

As discussed below, the Model Law, in its Article 34(1), makes it clear that recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) thereof. Specifically, the relevant provision reads as follows:

'ARTICLE 34 Application for setting aside an exclusive recourse against arbitral award

(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paras (2) and (3) of this article.'…,.

The use of the words 'exclusive' and 'only' in my view suggest that there is to be no compromise when it comes to an attempt to have an arbitral award set aside. The application must be made in terms of the provision cited. That provision quite simply and effectively precludes the applicants from filing their application for the setting aside of an arbitral award otherwise than in terms of paras (2) and (3) of Article 34.”

Further, the learned Judge of Appeal also found that the contention that there is nothing in Order 33 Rule 256 of the High Court Rules that prevented them from making the application in question under that Order was misplaced.

Article 34 of the Model, being part and parcel of a statute, the Arbitration Act, should hold dominance over Order 33 of the High Court Rules, which is subsidiary legislation.

In any case, so the learned Judge found, the purported application in question failed to satisfy even the provisions of Order 33.

Rule 256 of Order 33 makes it imperative by the use of the word “shall” for an applicant to “direct” his application to the person whose decision is to be reviewed, as well as to all other parties affected.

In the instant case, the application, as already pointed out above, was one for review of the arbitral award up until the stage of the applicant's Heads of Argument when a u-turn was made in a vain endeavour to clothe it with a semblance of one made in terms of Article 34 of the Model Law.

Indeed, the respondent avers that there is even an application before this court, in Case No.4120/10, seeking condonation for late filing of the review.

I did not hear the applicant to dispute this assertion.

It goes without quarrel that a wrong form for this application was adopted.

Even assuming that the application were permissible in terms of Order 33 of the High Court Rules, it would still fail to scale the insurmountable difficulty besetting it for flagrantly flouting provisions of Order 33.

Rule 256 of Order 33 makes it imperative by the use of the word “shall” for an applicant to “direct” the application to, inter alia, the person whose decision is to be reviewed, viz the arbitrator.

This omission to cite the arbitrator is fatal to a review application.

The applicant in casu did not cite the arbitrator.

In paragraph 4.3 of its answering affidavit, the applicant lamely tried to defend this omission saying “citing the Arbitrator as a party to the proceedings is not a rule cast in concrete. Such non-joinder is not fatal to the proceedings. In any event, the relief sought is against the respondent only.”

This argument does not hold water for it merely amounts to digging in the ashes.

Further, a review application in casu would also have been hamstrung by it being lodged outside the eight (8) week period permitted by the Rules.

It also does not state shortly and clearly the grounds for review.

In the result, on the totality of the numerous fundamental irregularities alluded to supra, I am satisfied that the application was improperly brought and is ill-conceived. I have no option but to dismiss it with no need to delve into the merits, with costs on the scale of legal practitioner and client.

It also behoves me to remark that I hope that Mr Kwaramba will not charge his client any fees regarding this aborted application.

View Appeal
SCSC20-16 : ZIMBABWE POSTS (PRIVATE) LIMITED vs COMMUNICATION AND ALLIED SERVICES UNION
Ruled By: MALABA DCJ, GOWORA JA and HLATSHWAYO JA

As a result of runaway inflation and the sliding value of the local currency, in February 2009 the Government of Zimbabwe adopted the multi-currency regime as a mode of conducting financial transactions.

Salaries that had been pegged on the local currency lost buying power in the hands of the recipients. It became necessary to re-negotiate salaries and benefits across the board with the unions representing the appellant's employees.

In casu, the parties were unable to agree on a minimum wage and allowances. It was resolved to submit the dispute to voluntary arbitration through the Commercial Arbitration Centre.

On 13 January 2010, the Commercial Arbitration Centre in Harare appointed M.P. Mahlangu ('the arbitrator') to arbitrate the dispute between the parties.

After hearing the parties, on 23 February 2010 the arbitrator issued an award in the following terms:

“For the period between 1 May and 31 August 2009, the salary of the lowest earning employee of the respondent company should receive an adjustment of US$25 in respect of each month, and for the period between 1 September and 31 December 2009 a further US$25 adjustment should be effected. The effect of this on the lowest earning employee of the respondent is that, in total, the back-pay payable to him or her will be US$300.

In doing this, I realise that further financial strain will be added to the respondent but believe that this is necessary in fairness to the claimant.”…,.

The appellant was aggrieved by the award, and, on 17 May 2010 it filed a Court Application in the High Court.

Attached to the court application, under separate cover, was what was termed an Application For Review. One of the grounds upon which the review was sought was “that the arbitral award was in conflict with the public policy of Zimbabwe.”…,.

The respondent filed papers in opposition in which it raised a number of preliminary issues on alleged procedural irregularities appearing on the papers.

When the matter was heard, the High Court upheld the objections raised by the respondent, and, on 1 December 2010 the court a quo dismissed the application without determining the merits of the dispute.

This appeal is against the dismissal.

In the court a quo, the respondent relied on the following points in limine:

1. That, the application was fatally defective in that it was not clear whether or not it was a court application or an application for review;

2. That, in the event that it was an application for review, the application did not comply with the provisions of Order 33 of the rules of the High Court and the court should find that it was filed out of time;

3. That, if it was a review the arbitrator ought to have been cited as a party to the proceedings;

4. That, in any event, an arbitral award is not subject to review and the High Court lacks the jurisdiction to review an arbitral award outside the provisions of the Arbitration Act [Chapter 7:15] (the “Act”).

In upholding the preliminary issues, the learned judge in the court a quo said:

“In the instant case, the application, as already pointed out above, was one for review of the arbitral award up until the stage of the applicant's Heads of Argument when a u-turn was made in a vain endeavour to clothe it with a semblance of one made in terms of Article 34 of the Model Law. Indeed, the respondent avers that there is even an application before this Court in Case No. HC4120/10 seeking condonation for the late filing of this review.

I did not hear the applicant to dispute this assertion. It goes without quarrel that a wrong form for this application was adopted.

Even assuming that the application was permissible in terms of Order 33 of the High Court Rules, it would still fail to scale the insurmountable difficulty besetting it for flagrantly flouting provisions of Order 33.

Rule 256 of Order 33 makes it imperative by the use of the word 'shall' for an applicant to 'direct' the application to, inter alia, the person whose decision is to be reviewed, viz, the arbitrator.

The applicant in casu did not cite the arbitrator. This omission is fatal to a review application.

In para 4.3 of its answering affidavit, applicant lamely tried to defend this omission saying 'citing the arbitrator is not a rule cast in concrete. Such non-joinder is not fatal to the proceedings. In any event, the relief sought is against the respondent only.'

Further, an application for review in casu would also have been hamstrung by being lodged outside the 8 week period permitted by the rules.

The application does not comply with the requirements for an application for review in that it does not state, shortly and clearly, the grounds upon which an application for review would be sought in terms of Order 33 of the Rules of the High Court.”

The criticism that the learned judge in the court a quo placed more emphasis on form rather than substance cannot be denied.

It is true that the format adopted in launching the application does indeed cause confusion.

The applicant appears to have merged two applications into one. There is a court application to which is annexed an application for review, thus creating the impression that the applicant to the process is not confident of what form the intended proceedings should take.

Nevertheless, the application for review lists as one of the grounds of the application that the arbitration award was in conflict with the public policy of Zimbabwe.

That is a ground for review which is peculiar to the Arbitration Act, and, in particular, Article 34(2)(b)(ii) of the Model Law incorporated in the Arbitration Act.

To show the confusion under which the appellant's counsel was labouring under; in the answering affidavit, it is averred that the application is one for review in terms of the said Rules.

It was only in the heads of argument that reference was made to the Model Law.

Notwithstanding reliance by the appellant on the Model Law as a basis for the application, the court a quo was persuaded to find, that, what was before it was an ordinary review which had been brought in defiance of the provisions of Order 33 of the rules of the High Court.

Order 33 does not set out the grounds upon which a review may be launched. It merely sets out the form an application should take and sets out time limits for bringing such application.

The grounds upon which a review may be brought are set out in the High Court Act [Chapter 7:06], in particular section 27 thereof which reads in relevant part:

“27 Grounds for Review

(1) Subject to this Act and any other law, the grounds on which any proceedings or decision may be brought on review before the High Court shall be -

(a) Absence of jurisdiction on the part of the court, tribunal, or authority concerned;

(b) Interest in the cause, bias, malice or corruption on the part of the person presiding over the court or tribunal concerned or on the part of the authority concerned, as the case may be;

(c) Gross irregularity in the proceedings or the decision.

(2) Nothing in subsection (1) shall affect any other law relating to the review of proceedings or decisions of inferior courts, tribunals, or authorities.”

An examination of the additional grounds upon which the applicant sought reliance for relief points to those grounds as being an amplification of the first ground rather than grounds of review under Order 33 of the rules of the High Court.

None of those grounds are such as contemplated by the High Court Act as being grounds upon which the court could set aside any decision on the basis of its powers of review.

The conclusion by the court a quo, to the effect that what was before it was an ordinary review was therefore a misdirection.

The issue that begs an answer is: how the court a quo should have dealt with the matter given the apparent confusion that had been created by the appellant in settling its papers.

An application must be disposed of on the basis of the founding affidavit.

The only ground for review referred to in the affidavit is that the award is contrary to the public policy of Zimbabwe.

Granted, there is an averment within the affidavit to the effect that the decision of the arbitrator was irrational, but, the statement is made in the context of justifying the claim that the award was in conflict with the law.

The court a quo overlooked the dicta in ZESA v Maposa 1999 (2) ZLR 452 (S) wherein GUBBAY CJ stated…,.:

“Certainly, for some reason not easy to comprehend, the application purported to be in the nature of a review to the High Court rather than one brought pursuant to Article 34(2)(b)(ii) of the Model Law. Consequently, the ground justifying an order that the award be set aside was specified as 'gross unreasonableness in the decision arrived at.'

However, one of the particulars given of such unreasonableness was that the arbitrator had erred 'in holding that ZESA did not comply with section 13(2) of the code of conduct.'

This was to be read in conjunction with the earlier explanatory statement of the Chief Executive, that, the application in which Maposa sought an order that the looming disciplinary proceedings be held before an independent arbitrator as opposed to the disciplinary committee of the Board, caused such proceedings to be stayed.

When so viewed, it seems to me that the complaint, by implication, sets out the factual basis for the application to set aside the award as a breach of Article 34(2)(b)(ii). This is how the learned judge understood the contention, and, I do not think he was wrong. Accordingly, I am not persuaded that the objection raised is valid.”

In my view, these remarks apply with equal force to the facts of this case.

The facts, as contained in the founding affidavit, cried out for the setting aside of the award on the basis that it was contrary to the public policy of Zimbabwe.

Here, rather than an implication of the relief being sought, there was a statement identifying the basis upon which the award was being challenged. There was no need for further amplification, and, the fact that the applicant thereto described the application as one for a review to the High Court did not change the substance of what it was.

The applicant might have been confused as to the form that it was meant to take, but, the legal principle upon which the award was challenged was clearly stated and identified in the founding papers.

The heads of argument filed in support of the application state clearly and succinctly, that, the challenge to the award was predicated on the ground that recognition of the award would be contrary to the public policy of Zimbabwe.

The essence of the application was not lost upon the learned judge who commented that “…, the gravamen of the application is essentially for the setting aside of an arbitral award.”…,.

It becomes obvious that the learned judge understood the contention of the application and premise upon which it had been brought. It is then difficult to fathom the rationale for refusing to entertain the same on the premise that it was a review to the High Court.

The view I take is that there was no application for review before the court a quo. What was filed was an application to set aside an arbitral award under the Model Law.

It was for these reasons that we allowed the appeal and issued an order in the following terms:

“It is ordered that:

1. The appeal be and is hereby allowed with costs.

2. The judgment of the court a quo be and is hereby set aside.

3. The matter is remitted for a determination on the merits by the same judicial officer.”

HH92-15 : CAPRI (PVT) LTD vs HOWARD MAPONGA
Ruled By: MATHONSI J

The applicant seeks a rescission of a judgment entered against it in default on fools day in 2014 in terms of which this court, per MANGOTA J, registered an arbitral award made by an arbitrator, R Matsikidze on 16 October 2013 in terms of section 98(14) of the Labour Act ...

Prior to the grant of the order for registration, the applicant had been served with the application for registration on 13 March 2014. It was served upon its Human Resources Manager, one Simba Munondo, who says on that very same day he had visited a dentist who authorised that he be given over two weeks sick leave. It was as a result of what he terms his “precarious health condition” that he forgot about the application resulting in the judgment being granted in default.

Simba Munondo says it came as a surprise when the Sheriff came to attach property on 29 May 2014, more than 2 months after the application had been served and forgotten. The applicant's default was not wilful. Given that on 4 December 2013, the applicant had filed an application in the Labour Court for condonation of the late noting of an appeal against the arbitral award, which application is yet to be set down more than a year later, the arbitral award should not have been registered. The applicant has a good defence against the application for registration. For that reason, the order for registration should be rescinded to accord the applicant an opportunity to contest that application.

The reasons given for the applicant's failure to act upon receipt of the application for registration of the arbitral award are tenuous to say the least. How can a whole company which boasts of the employment of a Human Resources Manager, in the form of Simba Munondo, meaning that it has other departments as well, suffer paralysis because its Human Resources Manager has gone to consult a dentist and been given time off? Surely, someone else remained in the company to run its affairs. Simba Munondo must have had subordinates that held the fort when he was away.

In any event, how can a senior person like Simba Munondo fail to delegate responsibility to someone else and be so affected by a dental problem as to be unable to assign someone to deal with the matter?

Clearly, no reasonable explanation has been given for the failure to act timeously.

The application has been made in terms of Rule 63 of the High Court of Zimbabwe Rules, 1971 and the applicant should satisfy the court that there is good and sufficient cause to rescind the judgment granted in default. Good and sufficient cause to rescind has been stated as being;

(i) The reasonableness of the explanation for the default.

(ii) The bona fides of the application to rescind the judgment.

(iii) The bona fides of the defence on the merits of the case which carries prospects of success.

These factors must be considered not only individually but also in conjuction with one another.

Stockhill v Griffiths 1992 (1) ZLR 172 (S)…,.; Roland & Anor v McDonnel 1986 (2) ZLR 216 (S)…,.; Songore v Olivine Industries (Pvt) Ltd 1988 (2) ZLR 210 (S)…,.

Whichever way one considers the factors, the applicant has failed to show good and sufficient cause to rescind. I have already stated that no reasonable explanation has been given for failure to act. In addition, the application itself lacks bona fides and the applicant has not the slightest defence whatsoever to the application for registration of the arbitral award….,.

I have no doubt in my mind that the applicant has been grossly remiss in their handling of this matter as a result of which we now have an arbitral award made in favour of an employee 1 year 3 months ago which has not been honoured and has not been contested either. Meanwhile, the employee remains wallowing in poverty and was definitely justified in approaching this court for the relief of registration. He could not be expected to wait for the old rickety chariot of Capri to trudge along treacherously at its chameleon speed towards delivery of justice.

There is a discernable attempt to deliberately slow down the wheels of justice by an applicant intent on flaunting its financial muscle in the forlon hope of wearing down the employee who appeared before me self-acting and obviously unable to afford legal representation.

Having come to the conclusion that the application lacks merit, it simply cannot succeed…,.

In the result, the application is hereby dismissed with costs.

HH260-14 : UZ – UCSF COLLABORATIVE RESEARCH PROGRAMME vs ISDORE HUSAIWEVHU and WALTER MUTOWO and FUNGAI ZINYAMA and THE SHERIFF FOR ZIMBABWE
Ruled By: MAFUSIRE J

Tied to the issue of res judicata was the respondents' argument that except for applications for the registration of arbitral awards for enforcement purposes, in terms of section 98(14) of the Labour Act, this court lacks jurisdiction in all other employment matters as they are the preserve of the Labour ...

Counsel for the respondents submitted that in terms of Rule 34 of the Labour Court Rules, S.I.59 of 2006, the Labour Court or a President sitting in chambers may, on application, order a stay of execution of a decision, order or determination that has been registered in terms of section 92B(3) of the Labour Act.

Section 92B(3) of the Labour Act entitles a party to whom a decision, order or determination by the Labour Court relates, to register it for enforcement purposes with either the Magistrate's Court or the High Court, depending on the jurisdictional limits. The state of the law on this aspect is obviously unsatisfactory in that, among other things, the Labour Court, whose status the Legislature undoubtedly elevated to that of a court of first instance in practically all labour matters, withheld from it the power to enforce its own judgments. Successful litigants in that court and the other judicial structures created under it have to be shunted from that court to this court or the Magistrates' Court for the purposes of enforcing any orders or decisions made in their favour. Be that as it may, and in spite of the provisions of Rule 34 of the Labour Court Rules, which, incidentally, is confined to decisions of the Labour Court itself as opposed to that of an arbitrator as was the case in the present matter, it is now settled law that the superior courts have the power to regulate their own processes.

Section 98(15) of the Labour Act provides that where an arbitral award has been registered with the Magistrates' Court or this court, it shall have, for enforcement purposes, the effect of a civil judgment of the appropriate court.

This court has an inherent jurisdiction to order a stay of execution of its judgment. There is nothing in the Labour Act or the regulations made under it that has ousted that jurisdiction. The issue was put beyond doubt in the case of Dhlodhlo v Deputy Sheriff, Marondera & Ors 2011 (1) ZLR 416 (H). At pp 422–423 GOWORA J…, had this to say:

“The contention by the applicant is that, as a result of the registration, the Labour Court ceases to have jurisdiction over the judgment and it cannot control, vary, set aside or rescind the judgment. I think this is a correct exposition of the law. The effect of the registration with this court is that only the High Court, barring an appeal to the Supreme Court, can interfere with the judgment or its execution. This is because, the High Court, being a court of superior jurisdiction, has the inherent power to regulate its own proceedings…,.

Clearly, the import of Rule 34(1) is to permit the stay of any judgment registered with a court, possibly with inferior jurisdiction to it. I say 'possibly' because this aspect was not argued before me as that was not the situation confronting the parties. I am therefore not in a position to state with certainty that the rule permits this. It is an issue that would have to be argued before a court can pronounce on it. What I can state is that the rule cannot be read as giving the Labour Court the power to regulate proceedings of the High Court. To the extent that it appears to do so, the rule is, in my view, in conflict with the Act and the limited jurisdiction granted to the court in terms of section 89 thereof.

It is trite that a judicial officer cannot vary or set aside a judgment or order issued by an officer of parallel jurisdiction, except in the case of a rescission of an order granted in default, or in restricted circumstances in accordance with the provisions of Rule 449 of the Rules of this court.

As the applicant rightly argues, if a judge cannot vary or alter aside an order issued by a judge with parallel jurisdiction (see Parker v Parker 1985 (2) ZLR 79 (H)...,.) how can it be possible for a judge from a lower court [to] have the power to stay an order issued by a court of superior jurisdiction?

I cannot conceive of a situation where a court can lawfully interfere with execution or suspension of a court order issued by [a] court of superior jurisdiction to its own.

Execution is a process of the court and every court has the power to control its own process subject to the rules of court. In the High Court that power is inherent. See Strime v Strime 1983 (4) SA 850 (C) and Stumbles & Rowe v Mattinson 1989 (1) ZLR 172 (H).

The courts in this country have all been imbued with the power to regulate their own proceedings and therefore no other court can legally interfere with those proceedings, unless in an appeal or a review of the proceedings of that other, which, in any case, would have to be a court of inferior jurisdiction.

In casu, the Labour Court is not such a court as can review or subject to appeal the proceedings of the High Court and it ought not to have stayed the judgment of this court, as that is not within its jurisdictional power.”

The Supreme Court, in the case of Ritenote Printers (Pvt) Ltd v A Adam & Co Anor 2011 (1) ZLR 521 (S), confirmed…, the doctrine of the inherent jurisdiction enjoyed by the superior courts to regulate their own processes.

Therefore, I dismissed the point in limine.

HH494-13 : PATRICIA MAPINI vs OMNI AFRICA (PVT) LTD
Ruled By: TSANGA J

This is an opposed application for rescission of judgment which has its genesis in the dismissal of the applicant, Patricia Mapini, from employment by the respondent, Omni Africa.

The applicant was engaged as a Sage Pastel Sales Executive by the respondent.

The working relationship soured when the respondent terminated the applicant's contract of employment on the basis of certain allegations it made against her.

Aggrieved by what she considered to be unfair dismissal, the applicant sought resolution of the matter through compulsory arbitration.

She obtained a default judgment for the sum of US$36,064 on 29 June 2012.

The present application, for rescission, has its foundations in this initial default judgment obtained by the applicant.

Since two different sets of default judgements, one at the instance of the present applicant, and the other at the instance of the respondent, inflame this dispute, it is important to capture the details of both.

Furthermore, in resolving disputes, the devil is often in the factual details ultimately examined against whatever the law provides.

The first default judgement, that resulted in the granting of the arbitral award, was spawned by two postponements of the arbitrator's hearing.

Initially set for hearing on 9 February, the matter could not take place as the arbitrator was away on that day. Further postponed to 15 February, it again still failed to take off on that day: this time, the respondent's lawyer, Mr Mazhande, was unable to attend due to the need to attend a funeral. He, however, requested a representative from another law firm to inform the arbitrator. The evidence on file suggests that this was duly done.

The papers filed of record further reveal, that, the arbitrator, after receiving word from the emissary, dutifully postponed the matter to 21 February. This was by written notice to both the applicant and the respondent.

The information in the papers placed before the court, in addition, confirms that the respondent's receptionist signed and received the notification of this new date, on 16 February.

Nonetheless, on the re-appointed day, February 21, the respondent did not show up which resulted in the granting of a default judgement by the arbitrator in favour of the applicant.

This judgement was subsequently finalised on 29 June.

The evidence, placed before the Honourable Court, also shows, that, in carrying out the necessary processes for the finalisation of the award, the respondent was accordingly notified at every stage. The applicant proceeded to register the arbitration award on 6 July 2012. The registration was granted on 4 December 2012.

It is against this order that the High Court issued a writ of execution on 29 January 2013.

This has also spawned yet a pending matter of stay of execution.

Parallel to the above processes, the respondent, who had not been present at the hearing on 21 February, filed an application, on 1 October 2012, in terms of Article 34 of the Arbitration Act [Chapter 7:15] seeking the setting aside of the arbitral award which was granted on 29 June 2012.

The respondent's primary argument was that the award made by the arbitrator, in its absence, violated the dictates of natural justice in that it had not been granted a hearing.

The respondent succeeded in setting aside the arbitral award.

This was not on the basis of consideration of any merits, but, as a result of a default judgement granted in an unopposed matter.

It appears that the applicant did respond to the application on the 18th of October (also confirmed by stamped documents in file HC/11439/12) attaching documents challenging the respondent's averment of lack of notification.

However, she sent her documents to the respondent's previous lawyers, Muchandibaya and Associates.

These lawyers had indeed, at some stage, as evidenced by correspondence, represented the respondent in the matter.

There is some dispute as to when exactly they assumed agency. No record was on file regarding this aspect.

They were, however, no longer acting for the respondent at the time of the application for rescission as the application was issued by Mawere and Sibanda Legal Practitioners.

A default judgment was granted on 21 November 2012.

It is this default judgement that the applicant seeks to rescind.

The applicant states, that, she only got to know of the default judgement on 15 July 2013. This was after she was served with an urgent chamber application for stay of execution. She filed her application for rescission on 23 July 2013.

She avers, in support of her application for rescission, that, she was unaware, at the time, that, the respondent had since changed practitioners.

She also disputes, that, the respondent was not aware of the arbitration award until its registration on the basis, that, the evidence from process shows, that, the respondent was informed at all times and generally chose to ignore correspondence.

The applicant also challenges the setting aside of the arbitral award on the grounds that the High Court lacked the necessary jurisdiction to hear this matter.

She maintains, that, the setting aside of an arbitral award is the exclusive jurisdiction of the Labour Court in terms of the Labour Act [Chapter 28:01].

Reference was made to several judgements which I will canvass more fully later in this judgement in addressing this issue.

The respondent opposes the application for rescission on the basis that none of the acceptable grounds for rescission are met by the applicant.

These include:
(i) A reasonable explanation for the default;
(ii) The bona fides of the application to rescind; and
(iii) The bona fides of the defence to the claim, which must have some prospect of success at the trial.

Cases referred to include Stockhill v Griffiths 1992 (1) ZLR 172 (S); Rolland and Anor v Donell 1986 (2) ZLR 216 (S); Songore v Olivine Industries (Pvt) Ltd 1988 (2) ZLR 201 (S); and Barclays Bank of Zimbabwe v CC International (Pvt) Ltd SC16-86.

Counsel for the respondent also argued, that, the applicant has to bear responsibility for not being vigilant: see Ndebele v Ncube 1992 (1) ZLR 288 (S).

The applicant's reasons for her default HC/11439/12 are credible.

Order 2 Rule 5(2) of the High Court Rules requires a party who has changed legal practitioners to file a Notice of Change with the Registrar and to advise all other parties to the proceedings of the change.

It is unreasonable, and most certainly irregular, to simply expect that the applicant should have picked the change of address from the fact that the application came from Mawere and Sibanda Legal Practitioners.

There is nothing on record that shows that the applicant was advised of the sea of changes in practitioners representing the respondent at various turns - these include the take over from Mr Mazhande who is said to have been unable to attend the hearing on 15 February by Muchandibaya and Associates who subsequently came into the picture sometime thereafter.

Then, there is the notification of the takeover by Mawere and Sibanda from Muchandibaya and Associates, the respondent's current practitioners, that is also not on file.

In the result, the applicant assumed, albeit, erroneously, that, Muchandibaya and Associates were still handling the matter.

Her opposition did not find its way to Mawere and Sibanda and the matter was heard as unopposed.

Once she got knowledge of the judgement, she acted swiftly to seek its rescission.

I find that the default was not wilful and that the applicant is bona fide in her application to rescind.

On the bona fides of the applicant's defence to the claim, and whether it has some prospects of success if the matter is rescinded, again, I find that the weight of the evidence appears to favour her claim.

The basis of the respondent's application against which rescission is sought, was that it had not been accorded a right to be heard.

As I have earlier remarked, this is not supported by the papers placed before the court since the arbitrator put the postponement in writing. The notice was received and signed for at the respondent's offices.

The applicant, in my view, has some prospects of success in challenging the respondent's claim.

I proceeded, in my analysis of this application, on the basis, that, the matter against which rescission is sought was properly brought before the High Court by the respondent.

The applicant, in her heads of argument, also argued, that, the primary matter had been improperly brought before this court.

The crux of her averment is that the proper forum for an application to set aside an arbitration award is the Labour Court.

Indeed, various decisions of this court have canvassed the increased jurisdictional issues as well as the specialist nature and positioning of the Labour Court in labour matters in relation to the High Court. This followed, in particular, amendments to the Labour Act such as No.17 of 2002 and Amendment No.7 of 2005: see Tuso v City of Harare 2004 (1) ZLR 1 (H); Zimtrade v Makaya 2005 (1) ZLR 427; Delta Corporation t/a Delta Beverages v Lovett Mabhumbo HB34-07; Dlodlo v Deputy Sherriff of Marondera & Ors HH76-11; Benson Samudzimu v Dairiboard Holdings HH204-10.

Where specific statutes apportion responsibility and authority for hearing certain matters, it is indeed vital, for the swift administration of justice, that the jurisdiction accorded any specific courts be recognised, respected, and enforced.

Clarity on the part of the legislature, in according such jurisdiction, is equally important as its absence can result in overlapping jurisdiction.

A key issue in this regard is whether the jurisdiction of the High Court, pertaining to setting aside arbitration awards in labour matters, is now indisputably the strict preserve of the Labour Court or whether the High Court maintains its jurisdiction.

This issue arises in light of the wording of the applicable provision that deals with this issue.

The relevant provisions of Article 34 of the Unicitral Model Law, Arbitration Act [Chapter 7:15] upon which the respondent brought the matter to the High Court reads as follows:

“Application for setting aside as exclusive recourse against arbitral award

(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this Article.

(2) An arbitral award may be set aside by the High Court only if…,;

(i)…,.

(ii) The party making the application was not given proper notice of the appointment of the arbitrator or the arbitral proceedings or was otherwise unable to present his case; or

(iii)…,.

…,.

…,.

…,.

(4) For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this article, it is declared, that, an award is in conflict with the public policy of Zimbabwe if –

(a)…,.

(b) A breach of the rules of natural justice occurred in connection with the making of the award.”

Section 5(2) of the Arbitration Act [Chapter 7:15], which addresses the application of the Arbitration Act under other enactments is also vital. It is couched as follows:

(2) Where an enactment provides for the determination of any matter by arbitration, the provisions of that enactment, to the extent that they are inconsistent with this Act, shall prevail.”

The provisions of Article 34 of the Unicitral Model Law, Arbitration Act have found specific commentary in case law.

For instance, CHIWESHE JP, in the case of Benson Samudzimu v Dairiboard Holdings HH204-10 remarked as follows with specific reference to Article 34 and 36 of the Arbitration Act:

“I agree with the applicant, that, the correct interpretation would be, that, with regards the law, the Labour Act takes precedence over the Arbitration Act or any other enactment.

The intention of the legislature was to have all labour matters initiated and resolved to finality in terms of the Labour Act.

Equally, the legislature must have intended that such matters be dealt with by the Labour Court to the exclusion of any other court.

Sections 34 and 36 of the Arbitration Act are not applicable in cases where the award sought to be challenged is a labour dispute. The mechanisms for challenging awards are provided for in the Labour Act and may be accessed through the medium of the Labour Court. No other court has jurisdiction to entertain such matters.”

This approach towards interpreting the enhanced powers of the Labour Court, occasioned by legislative intervention, helps to streamline and direct labour matters towards this court.

However, Article 34 of the Arbitration Act still specifically mentions the High Court in no uncertain terms as the forum for applying for the setting aside of an arbitral award.

The purported ouster of the High Court's jurisdiction, in labour matters, while the provision remains couched as it is, is doubtful.

In my view, there is no inconsistency between the jurisdictional provisions of the Labour Act, on issues relating to arbitration, and the provisions of Article 34 of the Arbitration Act that would justify the invocation of section 5 of the Arbitration Act.

I say this because the issues envisaged in Article 34 of the Arbitration Act, for setting aside an award, are not dealt with elsewhere in the Labour Act.

Indeed, it is for this reason, that, MUNYARADZI GWISAI, a labour scholar, attempts to argue at p234 of his book on Labour Law in Zimbabwe that appeals on questions of law, as stipulated in section 98(10) of the Labour Act, encompass the kind of issues envisaged by Article 34 of the Arbitration Act: see Munyaradzi Gwisai, Labour and Employment Law in Zimbabwe: Relations of Work under Neo Colonial Capitalism (Harare: Zimbabwe Labour Centre and Institute of Commercial Law, UZ 2006).

To quote him:

“Where the making of an award is in violation of grounds specified under Article 34 of the Model Law, discussed above, such violation qualifies the appeal as being on a question of law.”

The essence of his interpretation is that it is to the Labour Court, under appeals on question of law, that any matter relating to the award under Article 34 should be brought.

In my view, such an interpretation, while clearly recognising the specialist role of the Labour Court, is nonetheless a contortionist way of locating jurisdiction within the Labour Court for setting aside arbitral awards.

Given its specific wording, and in the absence of a specific ouster through an amendment clarifying the non-application of Article 34 of the Abitration Act to labour matters, the jurisdiction of the High Court, in such issues, cannot be said to have been ousted.

There is nothing that stops the legislature from effecting the desired clarity in the interests of the smooth administration of justice in labour matters if indeed its intention was, and is, to exclude these from the ambit of the provision of Article 34 of the Arbitration Act in favour of the Labour Court: see De Wet v Deetlefs 1928 AD 286…, where SOLOMON CJ remarked as follows:

“It is well a recognised rule in the interpretation of statutes, that, in order to oust the jurisdiction of a court of law, it must be clear that such was the intention of the legislature.”

Pending such clarity to the application of Article 34 of the Arbitration Act, in labour matters, litigants, such as the respondent, who have sought audience in the High Court to set aside an arbitral award cannot be said to be accidental, unwelcome visitors.

In the result, I therefore make the following order:

1. The judgement of this Honourable Court under case No. HC11439/12 be and is hereby rescinded.

2. There is no order as to costs.

SC30-21 : GRAIN MARKETING BOARD vs ARENEL (PVT) LTD and GORDON GEDDES N.O.
Ruled By: GWAUNZA DCJ, MATHONSI JA and KUDYA AJA

This is an appeal against part of the judgment of the High Court (“the court a quo") which granted an application for the registration of an arbitral award.FACTUAL BACKGROUNDOn 11 November 2016, the appellant and the first respondent entered into an agreement in terms of which they agreed that the ...

This is an appeal against part of the judgment of the High Court (“the court a quo") which granted an application for the registration of an arbitral award.

FACTUAL BACKGROUND

On 11 November 2016, the appellant and the first respondent entered into an agreement in terms of which they agreed that the appellant would sell and supply to the first respondent 6,000 metric tonnes of biscuit making flour. The flour was to be sold at a price of USD$450 per metric tonne. The purchase price was payable within sixty days of the monthly statement for all flour delivered. In the event of a dispute arising between the parties, it was also agreed that such dispute would be resolved through arbitration and that the decision of the arbitrator would be final and binding on both parties.

Pursuant to the agreement, the appellant supplied the first respondent with 1,379 metric tonnes of flour as at 16 April 2019, leaving a balance of 4,620 metric tonnes. Thereafter, the parties signed an addendum to the agreement varying the price of the flour from USD$450 per metric tonne to RTGS1,135 per metric tonne.

Thereafter, the appellant only supplied 267 metric tonnes leaving a balance of 4,353 metric tonnes.

On 13 June 2019, the appellant wrote to the first respondent informing it that it could no longer continue to supply the flour in terms of the agreement due to "force majeure." It was averred, that, the Government of Zimbabwe, being the owner of the flour, had directed that all flour be supplied exclusively to bakers of bread.

Consequently, a dispute arose between the parties, and, in terms of clause 6 of the agreement, it was submitted to arbitration before the second respondent.

The first respondent prayed for an order of specific performance for the supply of the outstanding 4,353 metric tonnes at the agreed purchase price. The appellant persisted with its contention, that, it could not perform its obligation to supply the biscuit flour to the first respondent owing to the aforementioned Government directive which allegedly amounted to "force majeure".

The appellant further averred, that, it was however willing to supply the outstanding flour - but on different terms as regards quantities and pricing.

In its "supplementary statement of defence" the appellant sought to argue the defence of severability, more particularly, that, the purchase price had been eroded by inflation so as to render it unreasonable and unequitable thus the specific clause relating to the purchase price had to be severed from the rest of the contract.

The second respondent granted the first respondent's claim for specific performance.

Following that arbitral award, the appellant filed an application in the court a quo to set aside the arbitral award in terms of Article 34(2)(b)(ii) of the Model Law in the Arbitration Act [Chapter 7:15] (“the Model Law").

Simultaneously, the first respondent filed an application for the registration of the award in the same court in terms of Article 36 of the Model Law in the Arbitration Act.

The matters were consolidated by consent of the parties.

The court a quo noted, that, the appellant was challenging the registration of the award on the basis that it was not sounding in money and thus could not be registered because it was incomplete.

The court found, that, the ground was devoid of merit as Article 36 of the Model Law in the Arbitration Act does not list the fact that an award is not sounding in money as one of the grounds upon which a court may refuse to recognise and register an arbitral award.

In the result, the court granted the application for registration of the arbitral award. It dismissed the application for the setting aside of the same award.

Dissatisfied, the appellant filed the present appeal on the following ground:

“The court a quo erred and misdirected itself on the law by registering an arbitral award that was incomplete, and, in particular, it was not sounding in money and not enforceable."…,.

ISSUE

The crisp issue for determination is: whether or not the court a quo was wrong in granting the application for the registration of the arbitral award.

THE FACTS AND THE LAW

On appeal, it is the appellant's argument that the court a quo erred in finding that an arbitral award which does not sound in money could be registered. It is averred that such an order is unenforceable.

The case of Matthews v Craster International (Pvt) Ltd SC151-20 is pertinent in this regard.

In dealing with the issue whether or not the High Court was correct in declining to register an award made under the Model Law in the Arbitration Act, which did not sound in money, GOWORA JA had the following to say at p16 of the cyclostyled judgment:

“The same is not true of the Model Law. The law does not require that an award sound in money for purposes of recognition under Article 36. Sight must not be lost of the import of the Model Law and its application. Under Article 35, the law provides for the recognition of awards emanating from beyond our borders in addition to our own. It provides:

'ARTICLE 35 RECOGNITION AND ENFORCEMENT

(1) An arbitral award, irrespective of the country in which it was made, shall be recognised as binding, and, upon application in writing to the High Court, shall be enforced subject to the provisions of this Article and of Article 36.

(2) The party relying on an award or applying for its enforcement shall supply the duly authenticated original award or a duly certified copy thereof and the original arbitration agreement referred to in Article 7 or a duly certified copy thereof. If the award or agreement is not made in the English language, the party shall supply a duly certified translation into the English language.'

Suffice it to state, that, the matter proceeded to the High Court for the recognition of an award under Article 35 of the Model Law.

Refusal for the recognition of the award can only be premised on what the law permitting such recognition provides for.

The court a quo was wrong to find that an arbitral award under the Model Law must sound in money for purposes of recognition. The law does not require it.

In any event, awards under the Model Law arise under a myriad of agreements and may take the form of orders ad per cuniam solvendum or ad factum praestandum. For these reasons, the dismissal of the application, premised on a reading of section 98(14), is, in my view, a misdirection on the part of the court a quo.”.…,.

In casu, it is common cause that the arbitral award sought to be registered is not an award made under the Labour Act [Chapter 28:01], rather, it is one made in terms of the Model Law in the Arbitration Act [Chapter 7:15].

It is now settled, that, an award under the Model Law which does not sound in money is capable of registration and enforcement.

As such, the appellant's argument to the contrary is without merit and must be dismissed.

At the hearing of the appeal, counsel for the appellant also sought to argue, that, the arbitral award at the centre of this dispute was unenforceable.

Counsel argued, that, the second respondent granted the principal relief and alternative relief which were not compatible with each other. She submitted further that both reliefs directed two different courses of action to be taken by the appellant, the first one being specific performance in terms of the contract, and the second requiring it to pay monies to "diverse third parties.”

The arbitral award reads as follows, in relevant part:

“38 Final Order

This is an order for specific performance made, whereby the respondent be and is hereby directed to supply the balance of 4,353=20mt at RTGS$1,135 per tonne (sic)

Alternatively, the Respondent is directed to pay the lowest or cheapest supplier of flour within the jurisdiction, the difference or shortfall from the contract price to the supplier on a monthly basis for the supply of 4,353=10mt of flour….,."

A proper interpretation of the above award does not support the appellant's contention that the relief granted by the second respondent was unenforceable.

In our view, the main and alternative reliefs are complementary, because, if the appellant is unable to supply the flour itself, it could do so in terms of the alternative relief.

There is merit in the first respondent's contention, that, the second respondent could not quantify the order for specific performance as the lowest or cheapest prices of flour could only be ascertained at the time of procurement of the flour and thus the main and alternative relief were complete and properly granted by the second respondent.

The fact that the enforcement of the award may entail the institution of contempt of court proceedings against the appellant is not a ground for refusing its registration.

The appellant is bound by the agreement it entered into with the first respondent in terms of the caveat subscriptor rule. Simply put, parties must exercise extreme caution in entering into and signing contracts. Consequently, a party to a contract who appends his or her signature to a document does so at his or her own peril.

The rationale for this rule was captured by RH CHRISTIE in his book Business Law in Zimbabwe, 1998, Juta & Co…, where the learned author says:

"The business world has come to rely on the principle that a signature on a written contract binds the signatory to the terms of the contract, and, if this principle were not upheld, any business enterprise would become hazardous in the extreme. The general rule, sometimes known as the caveat subscriptor rule, is therefore that a party to a contract is bound by his signature whether or not he has read and understood the contract…,."

It is common cause, that, the appellant freely entered into the agreement that it now seeks to attack at this stage.

It cannot do so.

In Magodora v Care International Zimbabwe SC24-14 PATEL JA had the following to say with regards to the principle of sanctity of contract…,:

"It is not open to the courts to rewrite a contract entered into between the parties or to excuse any of them from the consequences of the contract that they have freely and voluntarily accepted - even if they are shown to be onerous or oppressive. This is so as a matter of public policy. Nor is it generally permissible to read into the contract some implied or tacit term that is in direct conflict with its express terms."

The remarks in Magodora v Care International Zimbabwe SC24-14 above are entirely apposite to the matter at hand. It is not open to this Court to excuse the appellant from the consequences of its actions in voluntarily and freely signing the agreement.

We find that the decision of the court a quo, to recognise the second respondent's award, cannot be faulted.

In casu, the appellant did not provide a lawful basis, in terms of Article 36 of the Model Law, upon which it was resisting the registration of the arbitral award in the court a quo. The appellant, rather, argues that the award is "incomplete and unenforceable” as it does not have a specific sum quantified by the second respondent in granting the specific performance.

It also bears mention, that, at the hearing of the appeal, after full argument from both parties, counsel for the appellant sought to amend, from the bar, the sole ground of appeal in this matter.

This came after the realisation that Matthews v Craster International (Pvt) Ltd SC151-20, which counsel was not aware of, effectively destroyed the appellant's argument that an arbitral award that does not sound in money is not registrable.

Counsel sought to amend the ground so as to sever that part of the ground of appeal.

Rule 44(3) of the Supreme Court Rules 2018 allows for the amendment of grounds of appeal, on application, before the hearing or at the hearing by notice of amendment duly served on the respondent.

In casu, it cannot be gainsaid that the appellant's application to amend the ground of appeal was not only late in the proceedings but was also made without notice to the respondent. It clearly does not comply with the Rules and seems to have been a last ditch attempt by the appellant to salvage its un-meritorious appeal.

DISPOSITION

In the result, the following order is made:

"The appeal be and is hereby dismissed with costs."

HH497-17 : RICHARD MATTHEWS vs CASTER INTERNATIONAL (PVT) LTD
Ruled By: CHATUKUTA J

The applicant is an ex-employee of the respondent.

A dispute between the applicant and the respondent was referred for arbitration. On 28 June 2012, Justice Smith issued an arbitral award in favour of the applicant. The award set the amounts due to the applicant as salary for August 2007 and severance package in the sum of US$7,000 and US$42,000 respectively.

The applicant was also awarded cash-in-lieu of leave. However, the amount due was not quantified in the award.

The applicant filed an application, in 2012, under case number HC11614/12 seeking the registration of the arbitral award.

The application was dismissed with costs, on 19 August 2015, on the basis that the arbitral award, in so far as it related to payment of cash-in-lieu of leave, was not sounding in money.

The award was not severable, and, therefore, not capable of registration.

The applicant referred the matter to Justice Smith for quantification of the award. On 13 October 2015, the arbitrator amended the award with the addition of the amount due as cash-in-lieu of leave in the sum of US$26,329=55.

This is an application for the registration of the amended award. The draft order reads:

“1. The arbitral award issued on 28 June 2012 by Arbitrator L G Smith, and as amended by his award of 13 October 2015, be and is hereby registered.

2. The Respondent shall pay net of PAYE the following amounts:

(a) US$7,000 being Applicant's salary for August 2007.

(b) US$42,000

(c) US$26,329=55 being cash in lieu of leave.

3. The Respondent shall pay interest on the above amounts from the date of registration of the award to the date of full payment.

4. The Respondent shall pay the costs of this application.”

The applicant contended that P.A.Y.E was required to be deducted from the award as the award arose from his employment with the respondent. The amounts awarded were therefore deemed to exclude P.A.Y.E.

The applicant abandoned this argument and sought an amendment to the draft order with the deletion of any reference to P.A.Y.E in paragraph 2 of the draft.

The abandonment was, in my view, proper as the award issued by the arbitrator did not include any reference to P.A.Y.E. Consequently, it serves no purpose to consider the arguments by both parties on the issue.

After the abandonment of the question of P.A.Y.E, the application was opposed on the ground that it was contrary to public policy as envisaged in Article 36 of the Model Law in the Arbitration Act [Chapter 7:15].

The respondent submitted, firstly, that, the arbitrator did not have the jurisdiction to render the arbitral award.

In terms of Article 33 of the Model Law, he could only interfere with his award upon request by either party, within 30 days of the issuance of the order, failing which he could only do so with the consent of both parties.

The award was handed down on 28 June 2012. The amendment was effected on 15 October 2015 - over three years later. The respondent did not give its consent to the amendment.

The arbitrator was functus officio.

The award was therefore a nullity and not registrable.

Secondly, it was not clear which order the applicant sought to be registered, the award issued on 28 June 2012 or the amendment of 15 October 2015.

Thirdly, the claim for cash in lieu of leave had prescribed, and that the award, not being an order of court, and having been issued on 28 June 2012, had superannuated.

In response, the applicant submitted that he had met the requirements for registration of the award. The application before the arbitrator was not for the amendment or correction of the award issued on 28 June 2012.

The arbitrator therefore had jurisdiction to proceed with the quantification. It was for quantification following the decision by MAFUSIRE J in case number HC11614/12 that the award was incomplete.

The amount due as cash-in-lieu of leave was common cause as it would be derived from a pay slip issued to the applicant by the respondent.

The award that was sought to be registered is apparent. It was the award issued on 28 June 2012 as quantified on 13 October 2015 following the decision by MAFUSIRE J in HC11614/12.

The claim had not prescribed as a determination had been made by the arbitrator and the applicant had been awarded cash in lieu of leave. The entitlement of the applicant to cash-in-lieu of leave had been asserted and determined. Only the quantification thereof remained, which quantification was supposed to be common cause.

There is a prethora of decisions of this court that deal with the requirements for registration of an arbitral award as set out in section 98(4) of the Labour Court Act [Chapter 28:01]: see Greenland v Zimchre HH93-13; Tapera v Fieldspark (Pvt) Ltd HH102-13; NSSA v Mandiringa HH98-05; Mvududu v Agricultural and Development Authority (ARDA) 2011 (2) ZLR 449; Samudzimu v Dairibord Holdings Ltd 2010 (2) ZLR 357.

In Mvududu v Agricultural and Development Authority (ARDA) 2011 (2) ZLR 449 BHUNU J..., remarked at 451F–452B that:

“The respondent is resisting the registration on the basis, that, the applicant cannot seek to enforce a judgment he has appealed against. There are two cardinal issues for determination in this application. The first issue is whether the applicant is automatically, as a matter of right, entitled to register an award upon satisfying the conditions specified in section 98(14) of the Act. In order to qualify for registration, all what an applicant has to do is to satisfy the court that:

(a) He is a party to the arbitral proceedings.

(b) The award relates to him.

(c) The copy he is presenting for registration has been duly certified by the arbitrator in terms of subsection (13).

Once the applicant has satisfied the above three requirements, he is entitled, as of right, to register the arbitral award in terms of section 98(14) as read with subsection (13).

Any opposition to registration is therefore limited to showing, that, the applicant has not satisfied any one or more of the three prescribed requirements for registration.”

In fact, the respondent referred with approval, in paragraph 22 of its supplementary heads of argument, to the following remarks of CHIWESHE JP in Samudzimu v Dairibord Holdings Ltd 2010 (2) ZLR 357, at 360D-E, that:

“Accordingly, for as long as the arbitral award has not been suspended or set aside, on review or appeal, in terms of the Labour Act, there is no basis upon which this court may decline registration of the same.”

It is my view, that, the three requirements for registration, with an additional requirement that the award must be extant, have been met in the present application.

It is not in issue that all the issues raised by the respondent in the present application are issues that it raised before the arbitrator.

The arbitrator deliberated on the issues and made a finding that they all lacked merit.

The course of action available to the respondent ought to have been to challenge the decision of the arbitrator on appeal.

It failed to do so, and, it is an abuse of court process for the applicant to circumvent that process by raising the same issues through the back door.

Both parties rightly submitted, that, in the event that this court was to decline to register the award, the same would remain extant.

The respondent would still be required to comply with the award.

The submission by the respondent, that the award is extant, is inconsistent with its submission that the award is a nullity.

In any event, it is surprising that the respondent has not taken the initiative to take the appropriate action to challenge the award. Its inaction, and its opposition to the registration of the award, is clearly an attempt to avoid the unavoidable.

The question of cash-in lieu of leave has been resolved by the quantification by the arbitrator.

The respondent has not appealed against the award or sought its setting aside.

It is accordingly ordered that:

1. The Arbitral Award issued by Justice Smith on 28 June 2012, and fully quantified 13 October 2015, be and is hereby registered as an order of this court.

2. The respondent be and is hereby ordered to pay costs.

HH539-15 : TATENDA MUKAMBA and ODWELL STANLEY vs UNIBAX INVESTMENTS T/A ARUNDEL VILLAGE SPAR
Ruled By: MATANDA-MOYO J

The doctrine of public policy was dealt with by GUBBAY CJ…, in the case of ZESA v Maposa 1999 (2) ZLR 452…,.;“The approach to be adopted is to construe the public policy defence, as being applicable to either a foreign or domestic award, restrictively, in order to preserve and recognise ...

HH626-15 : TIAN ZE TOBACCO COMPANY (PRIVATE) LIMITED vs VUSUMUZI MUNTUYEDWA
Ruled By: MATHONSI J

In terms of Article 36 of the Model Law, contained in the Arbitration Act [Chapter 7:15], the recognition or enforcement of an arbitral award may only be refused at the request of the party against whom it is invoked if that party can show proof that:1. A party to an ...

HH707-15 : RICHARD MATTHEWS vs CRASTER INTERNATIONAL (PRIVATE) LIMITED
Ruled By: MAFUSIRE J

Article 36 of the Arbitration Act provides the grounds upon which the recognition or enforcement of arbitral awards may be refused by this court....,.Article 33 of the Arbitration Act provides for the correction and interpretation of an award within thirty days of the receipt of the award, or within a ...

HH102-13 : JOSEPH TAPERA and 17 OTHERS vs FIELD SPARK INVESTMENTS (PVT) LTD
Ruled By: MATHONSI J

This is an application for registration of an arbitral award made by arbitrator N.M. Tichiwangana on 6 February 2012 which award remains extant.

The application is opposed by the respondent, and, the thrust of such opposition is contained in paragraph 4 of the opposing affidavit of Peter Matemba which reads;

“The quantum of damages payable to the applicants is strongly disputed by the respondent. The respondent failed to timely (sic) submit its submissions for quantification of damages in issue. The award referred to was only granted in default. Subsequently, the respondent filed an application for rescission of default judgment before the arbitrator. The application is still pending.

In light of this, the present chamber application is premature as the applicants were duly served with the application for rescission of default judgment.

Instead of responding to the application for rescission of default judgment, the applicants chose to register, to prematurely register the award (sic) which has the potential of being adjusted if the application for rescission of default judgment is successful.”

I find myself having to repeat what I stated in Greenland v Zimbabwe Community Health Intervention Research Project (Zichre) HH93-13…, that;

“A party which finds itself faced with an arbitral award it is challenging should take advantage of the provisions of section 92E(3) of the Labour Act [Cap 28:01] which empowers the Labour Court to make an interim determination for the stay or suspension of an arbitral award. Where the award has not been stayed or suspended in terms of section 92E(3) and remains extant, this court will, as a matter of principle, register the award for enforcement unless there are grounds for not doing so as provided for in Article 36 of the Model Law contained in the Arbitration Act [Cap 7:15].”

Article 36 of the Model Law provides, that, recognition or enforcement of an arbitral award may only be refused at the request of the party against whom it is invoked if that party shows the court proof that;

1. A party to an arbitration agreement was under some incapacity or the agreement was invalid under the law to which the parties subjected it to or under the law of the country where the award is made.

2. The party was not given proper notice of the appointment of an arbitrator or the arbitral proceedings or was otherwise unable to present his case.

3. The award deals with a dispute not contemplated or not falling within the terms of reference to arbitration.

4. The composition of the arbitral tribunal or the procedure was not in accordance with the agreement of the parties or the law of the country where the arbitration took place.

5. The award has not yet become binding on the parties or has been set aside or suspended by a court of law.

6. The court finds, that, the subject matter of the dispute is not capable of settlement by arbitration under the law of Zimbabwe or recognition or enforcement will be contrary to the public policy of Zimbabwe.

The grounds for opposition set out by the respondent, which I have reproduced above, are not covered by Article 36 of the Model Law.

It is myopic for the respondent to think, that, an application for rescission of judgment submitted to the arbitrator, who clearly is functus officio and cannot reverse his own decision, can prevent the registration of an arbitral award which is extant.

The respondent should have sought the suspension of the award.

There is therefore no merit in the opposition. In the result, I make the following order, that:

1. The arbitral award of N.M. Tichiwangana, dated 6 February 2012, is hereby registered as an order of this court.

2. The respondent shall pay the applicants the respective sums set out in that award totalling the sum of US$38,851.

HH125-15 : CONFEDERATION OF ZIMBABWE INDUSTRIES vs RITA MBATHA
Ruled By: MATHONSI J

This application is made in terms of Article 34 of the Uncitral Model Law which is a schedule to the Arbitration Act [Chapter 7:15] for the setting aside of an arbitral award issued by the arbitrator, K. Segula, on 29 July 2014, in terms of which she quantified the respondent's damages in lieu of reinstatement as $87,640 made up of:

(i) $1,400 May 2003 salary;
(ii) $50,400 damages;
(iii) $35,000 pension contributions; and
(iv) $840 cash in lieu of leave.

The applicant employed the respondent as a Personal Assistant to its President and Chief Executive Officer from 2 September 2002. The relationship between the parties deteriorated when the respondent complained of sexual harassment by her immediate superior. The employment contract was terminated giving rise to a labour dispute which eventually went to arbitration.

On 24 March 2014, the arbitrator issued an arbitral award, the import of which was that the respondent had been unfairly dismissed.

It is not clear from the papers why the matter took almost 10 years to finalise if indeed the respondent had been dismissed on 19 June 2003.

Whatever the case, the applicant did not reinstate the respondent, necessitating a second hearing before the arbitrator for purposes of quantification of damages due to the respondent.

The quantification hearing occurred on 10 June 2014, but not before the applicant had, on 17 April 2014, noted an appeal against the initial award to the Labour Court.

At the conclusion of oral submissions, the parties agreed to make written closing submissions.

The applicant's legal practitioner undertook to submit his on 16 June 2014 after which the respondent was to submit hers. The period was later extended by the arbitrator as a result of which the applicant's submissions were to be filed by 25 June 2014 with the respondent obliging on 30 June 2014.

The closing submissions were eventually filed by both parties and the arbitrator quantified the damages and delivered her award aforesaid on 29 July 2014.

Problems started again.

The applicant appealed against the second award to the Labour Court. The applicant also launched this application for the setting aside of the award.

In its founding affidavit, deposed to by its Finance Manager, McShaman Kembo, the applicant stated that the award ought to be set aside on two (2) grounds, namely:

(i) That, it deals with a dispute not contemplated by or not falling within the terms of the arbitration, or contains decisions on matters beyond the scope of the arbitration in that while the arbitrator was only seized with the issue of damages in lieu of reinstatement, she had gone beyond her mandate by dealing with and awarding a sum of $35,000 in respect of pension contributions.

(ii) The second ground is that the award is in conflict with the public policy of Zimbabwe in the sense, that, there was a breach of the rules of natural justice, in particular, the audi alteram partem rule, in that, after the parties had made oral submissions, the arbitrator allowed the respondent to produce further evidence which she went on to rely upon without according the applicant an opportunity to respond.

The evidence was in the form of a lengthy document with the title “Application in support of quantification of damages.” The write up itself is ten (10) pages to which is attached another eight (8) paged document called 'Zimbabwe All Industry Salary Survey.'

The applicant complains, that, the documents contain evidence which was not made available at the oral hearing of 10 June 2014, and that, as a result, it did not respond to it. Significantly, the arbitrator went on to rely on that un-rebutted evidence in awarding the respondent damages in lieu of reinstatement and $35,000 as pension contributions.

The respondent opposed the application, and, in her lengthy opposing papers, she complained about the non-joinder of the arbitrator in the proceedings and disputed having introduced new evidence to the prejudice of the applicant.

According to her, all that is contained in her submissions dated 30 June 2014, which I have already cited, was available at the hearing on 10 June 2014.

If the applicant had chosen not to address those issues in its closing written submissions, that should certainly not be her problem.

To the respondent, the application is another ruse being employed by the applicant to deny her justice and to wear her down.

At the hearing, the respondent, however, conceded that the issue of pension contributions was not only outside the scope of the arbitration, it had also not been brought up at the hearing on 10 June 2014.

That notwithstanding, the arbitrator made an award for it....,.

Regarding the existence of an appeal to the Labour Court, I agree with counsel for the applicant, that, an Article 34 application is available to a litigant outside the appeal procedure and now that section 171(1)(a) of the Constitution of Zimbabwe has reinstated the jurisdiction of this court on labour matters which had been ousted by the provisions of section 89(6) of the Labour Act [Chapter 28:01] there is nothing stopping me from exercising jurisdiction.

Section 171(1)(a) of the new Constitution provides:

“The High Court has original jurisdiction over all civil and criminal matters throughout Zimbabwe.”

To the extent that the Constitution overrides any Act of Parliament, there can scarcely be any doubt that section 171(1)(a) of the Constitution overrides section 89(6) of the Labour Act.

What this means is that, by clear constitutional provision, this court has original jurisdiction over all matters, including those of a labour nature, where prior to the new constitutional order, the Labour Court enjoyed exclusivity.

Considering that this matter has been set down and argued before me, while the appeal is still pending in the Labour Court, it is expedient that I indulge the parties and determine the matter.

In terms of Article 34(2)(a)(ii) of the Uncitral Model Law:

“An arbitral award may be set aside by the High Court only if the party making the application furnishes proof that the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decision on matters submitted to arbitration can be separated from those not submitted, only that part which contains decisions on matters not submitted to arbitration may be set aside.”

That Article allows a severance of the offending part of the award where appropriate. It is therefore apparent that this court is empowered to set aside a portion of an award and uphold another portion in appropriate circumstances.

The respondent has conceded that the issue of pension fell outside the terms of reference of the matter to arbitration; the arbitrator having only been requested to determine the respondent's damages in lieu of reinstatement.

Indeed, pension contributions cannot, by any measure, be regarded as falling within the ambit of damages, which Van WINSEN J…, in Myers v Abramson 1952 (3) SA 121 (C)…, (quoted with approval by GUBBAY CJ in Gauntlet Security Services (Pvt) Ltd v Leonard 1997 (1) ZLR 583 (S)…,.) defined as:

“The measure of damages accorded such employee (a wrongfully dismissed one) is, both in our law and in English law, the actual loss suffered by him, represented by the sum due to him for the unexpired period of the contract less any sum he earned or could reasonably have earned during such latter period in similar employment.”

In my view, the concession made by the respondent, in respect of the award for pension contributions, was proper.

I would otherwise set aside only that part of the award, but, there is also merit in the submissions made by counsel for the applicant regarding the evidence which was allowed by the arbitrator post hearing of the matter.

As I have said, after the parties had agreed to make written closing submissions, the respondent went on to submit further evidence, including documentation attached to the written submissions.

There was really nothing wrong with that, considering that she was self-acting and a lay person. It was, however, incumbent upon the arbitrator, having taken such evidence, to allow the applicant to respond.

She did not. Instead, the arbitrator went on to rely upon such evidence in determining the matter.

A whole array of correspondence was thrown in after the hearing, including allegations of publication of the matter in the Daily News of 6 September 2002 and other issues relating to outstanding leave.

I do not agree with the respondent, that, all this information was already available at the time of the hearing. If it was, there would have been no need to re-submit it via the written closing submissions.

Article 34(5) of the Model Law seeks to clarify what would be regarded as being in conflict with the public policy. It provides:

“For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this article, it is declared that an award is in conflict with the public policy of Zimbabwe if -

(a) The making of the award was induced or effected by fraud or corruption; or

(b) A breach of the rules of natural justice occurred in connection with the making of the award.”

One of the basic tenets of the rules of natural justice is the audi alteram partem rule, which enjoins every adjudicating authority to hear the other side before determining the matter.

There can be no doubt that the arbitrator fell foul of that rule. To that extent, there is no alternative but to interfere with the award.

I must, however, express my profound disappointment at the unacceptable delays that have occurred in this matter.

This dispute started more than 10 years ago and is still simmering now. Surely, there can be no excuse for delaying a labour dispute for such a lengthy period of time.

The respondent, who I must add, presented very sound and reasoned arguments, which, on any day, may turn a lot of legal practitioners green with envy, complains bitterly about the delay which she says has been orchestrated by the employer to frustrate her into abandoning her claim.

She has drawn my attention to the sentiments made in Khoza v Sasol Ltd where the court stated:

“I am satisfied, that, Mr Hinds and his office were grossly remiss, and that the employee, who all of this time was wallowing in poverty and in unemployment, was more than justified in approaching this court for relief rather than wait for the rusty old train of Sasol that takes its own time in its delivery of justice. I have yet to encounter a worse case where there is a more callous disregard of the prejudice that an employee suffers when the wheels of justice are deliberately slowed down by a resort of obfuscation by those who flaunt their financial muscle in what appears to be an obscene game of cat and mouse in which the only loser can be the employee.

In the unequal contest between a multi-billion rand empire that the employer is, and an unemployed person, as was submitted by Mr Spoor, all you have to do is to wear down the resolve of your less endowed opponent, tire him out and hope that he will go away, his quest for justice abandoned. Delay the day when he can get justice, and you can then thereby deny him justice.

I disagree.

As long as the courts are open, and as long as they purport to be the arbiters of fairness and justice between the powerful and the relatively powerless, so long will they not allow the sort of conduct displayed by the employer in this case to go without consequences.”

I associate myself fully with those remarks.

This matter ought to be brought to finality without further delay. The respondent has done everything within her power to achieve that, including the binding of the record, the application for set down, and payment of security for service of the notices of set down - as if she was the applicant. Throughout all that process, the applicant remained unconcerned, giving credence to the view that the applicant would like to perpetuate the matter endlessly.

The basis of setting aside of the award cannot be blamed on the respondent. She therefore cannot be visited with costs. The arbitrator, who is to blame, was not cited.

In the result, IT IS ORDERED THAT:

1. The arbitral award issued by the arbitrator K. Segula, dated 17 July 2014, is hereby set aside.

2. The quantification of damages in lieu of reinstatement is hereby remitted to the same arbitrator for a hearing de novo within fourteen days of this order.

3. Each party shall bear its own costs.

SC13-24 : UNKI MINES (PRIVATE) LIMITED vs SHURUGWI TOWN COUNCIL and JUSTICE A. EBRAHIM N.O.
Ruled By: UCHENA JA

This is an opposed chamber application in terms of Rule 43 of the Supreme Court Rules 2018, for condonation and extension of time within which to note an appeal.BACKGROUND FACTSThe applicant and the first respondent entered into an agreement of sale of land belonging to the first respondent. The land ...

This is an opposed chamber application in terms of Rule 43 of the Supreme Court Rules 2018, for condonation and extension of time within which to note an appeal.

BACKGROUND FACTS

The applicant and the first respondent entered into an agreement of sale of land belonging to the first respondent. The land is held under Deed of Transfer 1989/08. The first respondent proposed a subdivision of the piece of land. The proposed subdivisions were never taken out of the original land identified under Deed of Transfer 1989/08.

The proposed subdivisions were made the subject of a sale agreement between the applicant and the first respondent.

It was a term of the agreement, that, in the event of a dispute, the parties would refer the matter for arbitration.

The merx of the sale were the proposed subdivisions, as depicted on the map.

The said map was later found to be invalid as it identified wrong portions of the land. A new map was produced which identified land which is different from the land identified in the agreement of sale itself.

A dispute arose concerning the number of Stands or sub-divisions bought by the applicant.

The dispute was brought before an arbitrator, who is the second respondent in this matter. The arbitrator's award held, that, there was a binding agreement between the parties.

The first respondent was aggrieved by the arbitrator's award.

It filed an application for the setting aside of the arbitrator's award before the court a quo, on the basis that the arbitral award is contrary to public policy.

At the hearing of the matter, the first respondent raised a point in limine to the effect, that, the arbitrator failed to keep a complete record of proceedings with regards to the matter.

It also averred, that, the applicant's counter application was incompetent as it was lodged through an opposing affidavit.

It averred, that, an application in the High Court is made in the form of a founding affidavit and under Form 29.

On the merits, the first respondent argued, that, the award given by the arbitrator is a brutum fulmen in that the disposition of the award is incapable of enforcement as it did not make an enforceable order.

It argued, that, the arbitrator did not give a formal order directing either party to do anything.

It further argued, that, the arbitrator failed to comply with the provisions of Article 31 and 33 of the Arbitration Act. It further argued, that, the arbitral award is contrary to public policy because the order interfered with the sanctity of the parties agreement and the agreement is contrary to mandatory provisions of the law.

On the contrary, the respondent, who is the applicant in this case, raised a point in limine to the effect, that, the application for the setting aside of the arbitral award could not be heard before its application for dismissal for want of prosecution is heard and completed.

On the merits, it argued that there was no basis for the setting aside of the arbitral award as the findings of the arbitrator were factually and legally correct. It disputed that the first respondent bought individual Stands. It contended, that, it bought the whole subdivision through an addendum to the Main Agreement.

The court a quo ruled, that, in the absence of the arbitrator's record, it would not be possible for it to scrutinize the proceedings in terms of Article 34 and 36. It held, that, at law, any tribunal whose proceedings may be challenged before another tribunal ought to keep and maintain a record of proceedings.

Regarding the applicant's counter-application, the court struck it off on the basis that it was not filed in the prescribed form.

It found, that, the arbitral award was contrary to public policy in that it made additions to the express terms of the parties agreement which was itself made contrary to mandatory provisions of the law.

The court a quo therefore set aside the arbitrator's award.

The applicant wishes to appeal against the decision of the court a quo but it is out of time, hence, the application for condonation and leave to note the appeal out of time.

SC13-24 : UNKI MINES (PRIVATE) LIMITED vs SHURUGWI TOWN COUNCIL and JUSTICE A. EBRAHIM N.O.
Ruled By: UCHENA JA

In the case of ZESA v Maposa 1999 (2) ZLR 452 (S)…, GUBBAY CJ, commenting on how to determine issues of public policy, said:“An award will not be contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in fact and or in law. In ...

SC66-23 : NATIONAL PHARMACEUTICAL COMPANY vs DRAX CONSULT SAGL
Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

This is an appeal against the whole judgment of the High Court (the court a quo) sitting at Harare, dated 30 November 2021, setting aside paragraph 84A of the arbitral award given under the hands of arbitrators retired Justice A.M. Ibrahim, retired Justice M.H. Chinhengo, and Advocate F. Girach on 1 March 2021.

Under paragraph 84A of the award, the arbitrators declared that the agreement of procurement entered into between the parties did not have the prior approval of the Procurement Regulation Authority of Zimbabwe (PRAZ) as required by section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act [Chapter 22:23] (the Act).

It is that declaration that was reviewed and set aside by the court a quo.

Aggrieved by the decision of the court a quo, the appellant has noted the present appeal.

THE PARTIES

The appellant is a company incorporated in terms of the laws of Zimbabwe. The Government of Zimbabwe is its major shareholder. Its objects and functions are defined in section 4 of the Government Medical Store (Commercialisation) Act No.13/2000 and they include the purchase and sale, dealing in and storing medicines, medical equipment and other goods and articles for use in hospitals, clinics, pharmacies and other medical establishments.

The respondent is a foreign company established in terms of the laws of Switzerland.

FACTUAL BACKGROUND

On 11 December 2019, the parties entered into an agreement in terms of which the respondent was to supply to the appellant certain medicines and medical sundries under Tender number NAT DP 19/2019.

The respondent delivered medical supplies worth US$2,733,480 to the appellant.

Of the above figure, the appellant refused to take delivery of some medicines to the value of US$210,000 arguing that the contract was concluded in contravention of section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act which provision reads as follows:

“15(1) A procurement entity shall not initiate or conduct any procurement requirement proceedings in which the value of the procurement requirement is at, or above, the prescribed threshold, unless such procurement entity has been generally authorized by the Authority to conduct such proceedings.

(2) Authorization in terms of subsection (1) shall be given in writing.”

It was for that reason, that, the appellant refused to pay for the medicines and medical sundries supplied to it by the respondent - even though it had taken delivery of the bulk of the medicines and proceeded to consume same.

The appellant formally cancelled the above quoted tender for the supply of medicines and sundries. It did so on 9 June 2020.

The respondent's view was that the cancellation was unlawful.

The arbitrators found, that, the contract was illegal on the grounds that it was concluded without the authority required in terms of the Public Procurement and Disposal of Public Assets Act.

Displeased with that finding, the respondent approached the court a quo with an application for the setting aside of that arbitral award. It did so under Article 34 of the first schedule to the Arbitration Act.

The court a quo granted the application and proceeded to set aside the arbitral award for being in conflict with the public policy of Zimbabwe.

It is that decision that is the subject of this appeal.

GROUNDS OF APPEAL

The appellant relies on four grounds of appeal as follows:

“1. The High Court grossly erred in finding that paragraph 84A of the award issued by Justice A.M. Ebrahim (Rtd), Justice M.H. Chinhengo (Rtd), and Advocate Firoz Girach, dated 1 March 2021, was contrary to the public policy of Zimbabwe and proceeding to set it aside when no authority to enter into the contracts in issue had been given by the Procurement Regulatory Authority of Zimbabwe in accordance with section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act [Chapter 22:23].

2. The High Court further erred in considering the approval of the contract by the Special Procurement Oversight Committee, in terms of section 54 of the Act, to have been sufficient for purposes of section 15 of the Act when it was clear that the two legal provisions served different purposes.

3. The High Court further grossly misdirected itself in taking into account irrelevant factors in interpreting the letter of 6 November 2019 and concluding, that, the said letter had been issued by the Procurement Regulatory Authority of Zimbabwe in accordance with section 15 of the Act.

4. The High Court further erred in relating to an interpretation of the letter of 6th November 2019, taking into account factors which had neither been pleaded nor argued by the parties, and proceeding to make a finding against the appellant on the basis of such factors.”

RELIEF SOUGHT

The appellant seeks the following relief:

“The present appeal be allowed with costs and the judgment of the High Court be set aside and substituted with the following:

(1) The application in case number HC2713/21 be and is hereby dismissed.

(2) The applicant shall pay the costs of suit.”

ISSUES

The grounds of appeal only raise one issue, namely, whether or not the contract of procurement was approved by the Procurement Regulation Authority of Zimbabwe (PRAZ) in terms of section 15(1) of the Public Procurement and Disposal of Public Assets Act.

Surprisingly, the grounds of appeal do not challenge the substantive finding of the court a quo, namely, that the arbitral award was contrary to the public policy of Zimbabwe.

ANALYSIS

After considering case law as to how the High Court should exercise its powers under Article 34 or 36 of the Arbitration Act, the court a quo correctly came to the following conclusion:

“From the above decision, the settled position of the law is that an arbitral award ought to be set aside if its enforcement would offend the public policy of Zimbabwe.”

See Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S).

The court a quo also correctly stated the law in so far as the converse position is acceptable, that is, an arbitral award should not be set aside unless the arbitrator's reasoning or conclusion is so flawed as to violate some fundamental principle of law or morality or justice.

See Delta Corporation (Pvt) Ltd v Origen Corporation (Pvt) Ltd 2007 (2) ZLR 81 (S).

The court a quo further observed, that, an award may be set aside as being contrary to the public policy of Zimbabwe if it is so outrageous in its defiance of logic or recognized moral standards that a sensible and fair-minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award: see Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S).

It is also trite, that, the mere faultiness or incorrectness of an arbitral award cannot, on its own, be the basis upon which an award may be set aside. The award must, in addition, offend the public policy of Zimbabwe.

PUBLIC POLICY

It is necessary to define public policy in the context of the present case.

The public policy of Zimbabwe, in cases of this nature, is defined by section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act, namely, that, a State procurement authority shall not entertain the procurement of goods or services whose value is equal to, or exceeds, the prescribed threshold without the prior approval of the regulatory authority, the Procurement Regulation Authority of Zimbabwe (PRAZ).

Thus, section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act constitute both the law and the public policy of Zimbabwe in cases of this nature.

If, for example, procurement is made without the requisite authority, such procurement would be deemed contrary to the law and the public policy of Zimbabwe. Conversely, if the procurement entity obtains the Procurement Regulation Authority of Zimbabwe (PRAZ) approval and enters into a legally binding contract, it would be contrary to the law and the public policy of Zimbabwe to declare such contract illegal and proceed to set it aside.

DECISION OF THE COURT A QUO

The court a quo found in favour of the respondent on the basis of a letter dated 6 November 2019 written by the Chief Executive Officer of the Procurement Regulation Authority of Zimbabwe (PRAZ) addressed to the Managing Director of the appellant.

The appellant argued, that, the letter does not constitute authority given in terms of section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act.

It argued, that, the letter was written on behalf of the Special Procurement Oversight Committee (SPOC), a subcommittee of the Procurement Regulation Authority of Zimbabwe (PRAZ), which cannot exercise the powers of PRAZ.

The respondent argued to the contrary, insisting that the letter originates from the Procurement Regulation Authority of Zimbabwe (PRAZ) itself.

The relevant part of the letter reads as follows:

“Your minute dated 29 October 2019 refers.

At the Special Procurement Oversight Committee (SPOC) round robin meeting held on 6 November 2019:

Members observed the following:

(i) The direct procurement method has been done to address the urgent need of the requirements in view of the current crisis at medical institutions countrywide.

(ii) The current requirements are a stop gap measure to address the current crisis.

(iii) On the medicines, the accounting officer is proposing to award all 85 costs except for 32 imipramine 25mg tablets that has been recommended for cancellation since the drug is no longer being used in public health institutions.

(iv) On medical sundries, the accounting officer proposed to award 15 items out of the 18 items as follows:

…,.

…,.

Therefore, the accounting officer's recommendations are consistent with the provisions of the PPDPA Act.

Accordingly, SPOC resolution 0519 of the same date, having reviewed the Accounting Officer's submission, in terms of section 54(10) of the Public Procurement and Disposal of Public Assets (PPDPA) Act, resolved on the founder as follows:

To award Tender NAT DP 19/20 for the supply and delivery of registered medicines and surgical sundries to Natpharm regional stores to Drax Consult SAGL.

…,.

…,.

You are therefore advised to proceed as follows:

1. Take all necessary steps as directed by the resolution.

2. In all communication, please quote the above SPOC resolution number and the date.

N. Chizu
Chief Executive Officer

PROCUREMENT REGULATORY AUTHORITY OF ZIMBABWE”

This letter was the subject of intense scrutiny by the court a quo. It noted, in particular, what it referred to as “four crucial points” in need of attention:

(i) Firstly, it was observed that the letter was written on the Procurement Regulation Authority of Zimbabwe (PRAZ) letter head. Effectively, reasoned the court a quo, that meant that PRAZ “had unequivocally assumed ownership of the letter.”

(ii) Secondly, the court a quo observed that the letter had been written and signed by the Chief Executive Officer of the Procurement Regulation Authority of Zimbabwe (PRAZ), which makes it clear that the letter had been written on behalf of PRAZ itself and the Special Procurement Oversight Committee (SPOC), its sub-committee.

(iii) Thirdly, it was noted that the letter gave Natpharm (the appellant) authority to procure medicines and surgical sundries from Drax Consult Sagl (the respondent).

(iv) Fourthly, in the letter, the Chief Executive Officer advised the respondent to “take all necessary steps as directed by the resolution” and to quote the above SPOC resolution number and the date.”

Based on these observations, the court a quo came to one conclusion – that, the letter emanated from the Procurement Regulation Authority of Zimbabwe (PRAZ) not the Special Procurement Oversight Committee (SPOC), and that the letter, whose wording is clear and un-ambiguous, constitutes the PRAZ authority required under section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act.

That finding of fact, on the part of the court a quo, cannot be faulted. It is based on the evidence placed before it.

This court will not interfere with the finding of fact made by the court a quo save under the parameters described in Reserve Bank of Zimbabwe v Granger and Anor SC34-01 where this Court held:

“An appeal to this Court is based on the record. If it is to be related to the facts, there must be an allegation that there has been a misdirection on the facts which is so unreasonable that no sensible person who applied his mind to the facts would have arrived at such a decision. And misdirection of facts is either a failure to appreciate a fact at all, or a finding of fact that is contrary to the evidence actually presented. See Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S) at p670 and S v Pillay 1977 (4) SA 531 (AD) at p353C-E.”

In casu, the appellant argues that the letter of 6 November 2019 originated from the Special Procurement Oversight Committee (SPOC) and could not have been the authority required under section 15 of the Public Procurement and Disposal of Public Assets Act.

This view is not supported by the evidence.

As correctly observed by the court a quo, the letter originated from the Procurement Regulation Authority of Zimbabwe (PRAZ). The fact that the letter makes reference to the Special Procurement Oversight Committee (SPOC) resolutions does not alter the fact, that, it was the Chief Executive Officer of PRAZ who wrote on behalf of that authority.

There was no misdirection on the part of the court a quo - certainly not of the magnitude referred to in Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S) warranting interference on the part of this Court.

We note in passing, that, it is inconceivable that a procurement authority of the stature of the appellant could have engaged in procurements of this magnitude without the approval of the Procurement Regulation Authority of Zimbabwe (PRAZ). Surely, they must have relied on the letter from PRAZ, of 6 November 2019, which letter was addressed to their Managing Director, with detailed instructions as to how the appellant should proceed.

One wonders why the appellant now seeks to resile from that arrangement!

The fact, that, the arbitrators erred when they found that the contract between the parties was illegal and unenforceable for want of compliance with section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act is now established.

The question that needs to be addressed is whether the award is contrary to the public policy of Zimbabwe, and, therefore, liable to be set aside in terms of section 34 of the First Schedule to the Arbitration Act [Chapter 7:15].

The respondent argues, that, the award offends the public policy of Zimbabwe in that it declared as illegal and unenforceable a contract authorized by the relevant body.

The court a quo took the view, that, the award offends public policy in that it is so outrageous in its defiance of logic or accepted moral standards that a sensible and fair-minded person's conception of justice in Zimbabwe would be intolerably hurt by the award. It asserts that “it is illogical for any fair-minded person to conclude that a contract which has been sanctioned in terms of the law, by the body empowered to give its blessing, is unlawful.”

The court a quo noted, that, public policy dictates that a contract done within the terms of the law should be respected. For that proposition, it relied on the decision in Delta Corporation (Pvt) Ltd v Origen Corporation (Pvt) Ltd 2007 (2) ZLR 81 (S).

The court a quo noted, that, the letter of 6 November 2019 was one of the papers placed before the arbitrators and would have been one of the documents to be considered before issuing the award. If it was not considered, then, the Arbitrators did not take into account relevant information before them.

In that respect, the court a quo was of the view, that, the Arbitrators failed to apply their minds to the import of the letter hence wrongly arrived at the decision that the contract was illegal for non-compliance with section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act.

Where the arbitrator has not applied himself to the question, or has totally misunderstood the issue, and the resultant injustice reaches intolerable prejudice, then, the arbitral award must be set aside.

The court a quo concluded, correctly in our view, that, the award would have been made against the evidence.

In casu, the respondent stood to lose substantial sums of money under circumstances where the appellant had refused to pay for the medicines it received, and consumed, under the guise of non-compliance with section 15(1) and (2) of the Public Procurement and Disposal of Public Assets Act.

The court a quo found, that, the injustice arising from a finding of illegality reached the point of offending the public policy of Zimbabwe.

We therefore find no fault with the court a quo's findings of fact and law.

DISPOSITION

The court a quo's reasoning cannot be faulted. It must be upheld. The appeal has no merit. Costs shall follow the cause.

Accordingly, it is ordered as follows:

1. The appeal be and is hereby dismissed.

2. The appellant shall pay the costs of suit.

SC69-23 : ZESA HOLDINGS (PRIVATE) LIMITED vs CLOVEGATE ELEVATOR COMPANY (PRIVATE) LIMITED and JUSTICE L.G. SMITH N.O.
Ruled By: MATHONSI JA, KUDYA JA and MWAYERA JA

The appellant appeals against the whole judgment of the High Court (the court a quo) dated 17 November 2021. The court a quo found, that, the arbitral award by the second respondent (the arbitrator), dated 2 December 2020, was not in conflict with the public policy of Zimbabwe.

On 2 December 2020, the arbitrator held, that, he had the jurisdiction to determine the quantification of damages in lieu of his earlier arbitral award against the appellant for specific performance that had been registered by the High Court on 10 June 2020.

Consequent upon assuming jurisdiction, the arbitrator further directed the appellant to file further affidavits and submissions in response to the respondent's replication on the quantification of damages.

THE BACKGROUND

The salient facts relevant to the dispute between the parties are as follows:

The parties concluded a contract on 30 September 2013. The first respondent undertook to supply, fix, and maintain four (4) elevators by 14 August 2015, at the appellant's Electricity Centre in Harare. It only managed to supply and fix a single elevator by the due date. The appellant, consequently cancelled the contract on 25 October 2015 and re-tendered the outstanding works a year later.

Irked by the cancellation, the first respondent referred the dispute to arbitration in terms of clause 10 of the contract.

The clause mandated the parties to refer to arbitration any disputes arising from or in connection with the contract. The provisions of the Arbitration Act [Chapter 7:15] would apply. The arbitrator, whose decision would be final, would be appointed by the Commercial Arbitration Centre in Harare at the request of the aggrieved party.

The arbitrator was appointed in terms of clause 10.

On 25 July 2017, the arbitrator issued an award in which he found the cancellation to be unlawful, reversed it, and reinstated the contract. Even though the first respondent had, in the alternative to specific performance, claimed for damages, the arbitrator did not relate to the alternative claim. Firstly, because the first respondent did not motivate the alternative claim. Secondly, because specific performance could be performed.

Dissatisfied, the appellant sought the setting aside of the award by the High Court. The first respondent also applied to the same court for the registration of the award. The two applications were consolidated.

On 10 June 2020, the High Court dismissed the appellant's application and granted the first respondent's application.

When the first respondent sought compliance from the appellant, it was advised, by letter dated 20 June 2020, that, the outstanding works had been completed by a third party. Thereafter, the parties failed to agree on the extent of the appellant's liability and the consequential damages for breaching the award for specific performance.

The failure to agree prompted the first respondent to file an application to the arbitrator entitled:

“Application for Quantification of Registered Arbitral Award” on 31 July 2020.

It sought the payment of contractual damages and damages for loss of the maintenance business in the aggregate sum of US$1,910,318=12, arbitration fees, and legal costs on the higher scale.

The appellant opposed the application.

It raised four preliminary points relating to jurisdiction, functus officio, finality in litigation, and incompetence of the relief sought.

After hearing argument on these points, the arbitrator issued a written award on 2 December 2020. He dismissed all the preliminary points and directed the appellant to make a rejoinder to the replication within a prescribed period, failing which he would proceed to determine the application on the merits.

The appellant was aggrieved by the award and direction.

On 17 March 2021, the appellant applied to the court a quo for the setting aside of the interim award on the sole ground, that, it was contrary to the public policy of Zimbabwe. It premised its application on Article 34(1)(b)(ii) of the Model Law to the Arbitration Act.

During the pendency of the hearing a quo, the appellant also sought and obtained, in a separate urgent chamber application, an interim interdict against the continuation of the quantification pending the determination of its application for the vacation of the interim award.

The interim interdict prompted the arbitrator, on 20 April 2021, to file a quo a “Withdrawal of Award” which he copied to the two protagonists.

It was common cause between them that, the tenor of the document strongly suggested that it related to the registered arbitral award for specific performance. In the document, the arbitrator pertinently remarked that:

“It is the responsibility of the arbitrator to make an award that can be implemented. Accordingly, I have made an interim award, that, the second respondent could make a claim for damages. A final award will be made when the applicant responds to the request I made. Accordingly, I withdraw the arbitral award that I handed down.”

THE CONTENTIONS IN THE COURT A QUO

The appellant argued, that, as the arbitral award on specific performance was final and definitive, the arbitrator, having exhausted his jurisdiction, became functus officio.

It contended, that, the admission recorded in the interim award, by the arbitrator, that he had re-opened what the appellant termed a “completed process” further confirmed that the arbitrator had fully and finally exercised his jurisdiction over the earlier arbitral award.

It further argued, that, the application for quantification of damages constituted an amendment or correction of the earlier arbitral award, which could only have been invoked within the period prescribed in Article 33 of the Model Law.

The appellant also argued it was improper for the arbitrator to direct it to file a rejoinder refuting the evidence on quantum that was belatedly attached to the first respondent's replication.

The first respondent made the contrary submissions, that, the interim award was an interim procedural order that was incapable of impeachment before the conclusion of the quantification proceedings.

It contended, that, such an award was not dispositive of the quantification proceedings and could not, therefore, be set aside under the provisions of Article 34(1)(b)(ii) of the Model Law.

It further argued, that, the arbitrator had the jurisdiction to entertain and complete the quantification process under clause 10 of the arbitral agreement.

The first respondent also contended, that, the failure to claim, and prove, an alternative in damages during the earlier arbitral proceedings constituted an error of law which would not make it contrary to public policy.

It also contended, that, quantification was an independent process that did not fall within the ambit of an amendment or correction envisaged by Article 33 of the Model Law. This was, so the argument went, because damages could be awarded in tandem with an order for specific performance, but could, in terms of Mandiringa & Ors v NSSA 2005 (2) ZLR 239 (S), be quantified subsequent to the order for specific performance.

It also contended, that, the appellant could not be permitted to benefit from its perverse conduct of deliberately subverting the specific performance award by turning it into a brutum fulmen.

The first respondent strongly argued, that, the revival of jurisdiction by the arbitrator was the only avenue by which an injustice occasioned by the appellant could be effectively corrected.

It also contended, that, the interests of justice pertaining to the expeditious and inexpensive resolution of the quantification dispute could best be served by an arbitrator who was familiar with the dispute.

Regarding the direction, the first respondent contended that it was not in conflict with the public policy of Zimbabwe as it affirmed the appellant's fundamental right to be heard, in compliance with the rules of natural justice.

THE FINDINGS OF THE COURT A QUO

The court a quo basically made three findings:

(i) The first was that clause 10.1 of the arbitration agreement conferred jurisdiction on the arbitrator to complete the specific performance award by quantifying it. It however regarded quantification proceedings to be “another arbitration” incurred by the appellant's failure to comply with the first arbitral award.

(ii) The second was that the arbitrator's finding, that he had jurisdiction and was therefore not functus officio to determine the quantification application, was an interim award with final effect on the question of jurisdiction, which could be and was properly challenged under Article 34(2)(b)(ii) of the Model Law.

(iii) The third was that the direction constituted a mere procedural order that was interlocutory in nature and not be dispositive of the quantification dispute, and which did not constitute either an interim or a final order. It could not thus be impeached under Article 34 of the Model Law.

The court a quo, therefore, held that the requisite public policy threshold for impugning the interim award, which has been pronounced in a plethora of cases by our superior courts, had not been breached. It accordingly dismissed the appellant's application and discharged the provisional order.

THE GROUNDS OF APPEAL

The appellant was aggrieved by these findings. It appealed to this Court on the following grounds:

1. The court a quo erred at law in dismissing the application for setting aside the arbitral award on the basis that it was not contrary to public policy.

2. The court a quo erred in finding, that, the appellant had failed to satisfy the requirements for setting aside an arbitral award on the basis of public policy.

3. The court a quo erred at law in not finding, that, the second respondent had no jurisdiction to hear the matter and that he was functus officio.

4. The court a quo erred at law in finding that the withdrawal of the arbitral award by the second respondent was of no consequence.

5. The court a quo erred at law in failing to find, that, the arbitral award by the second respondent had the effect of re-opening the hearing.

6. The court a quo erred in law in splitting the arbitral award into two, and, erroneously finding, that, as an interim award, it is susceptible to challenge at this stage, but, on the other hand, it is a procedural award and not susceptible to challenge; when, in actual fact, it was dealing with one arbitral award issued on 2 December 2020.

7. The court a quo erred at law in discharging the provisional order and not finding that public policy had been affronted to the appellant's prejudice.

The relief sought is:

“1. The appeal succeeds with costs.

2. The judgment a quo is set aside, and, in its place, substituted with the following:

“(a) The arbitral award issued by the second respondent on the 2nd of December 2020, in the arbitration proceedings between the applicant and the first respondent, be and is hereby set aside as being against public policy.

(b) The arbitral proceedings before the 2nd respondent, between the applicant and 1st respondent, be and is (sic) hereby set aside.

(c) The 1st respondent pays costs of this application on a legal practitioner and client scale.”

THE ISSUES

The first five (5) grounds of appeal speak to one issue: it is whether the court a quo was correct in holding that the reopening, by the arbitrator, of completed arbitral proceedings, was not contrary to the public policy of Zimbabwe.

The second issue raised by the sixth ground of appeal is whether the court a quo was correct in splitting the interim award into, firstly, an interim award on jurisdiction that could properly be challenged, and, secondly, an interlocutory procedural direction that was not open to challenge before the completion of the impugned arbitral proceedings.

The third and last issue, emanating from the seventh ground of appeal, is whether the court a quo ought to have confirmed rather than discharged the provisional order.

THE CONTENTIONS BEFORE THIS COURT

Counsel for the appellant submitted, that, the impugned interim award was contrary to public policy.

He contended, that, the repeated assertions in the interim award by the arbitrator that he was “re-opening” his earlier award confirmed that he had revived his jurisdiction. He argued, that, having issued a final and definitive award on specific performance, which had been registered for enforcement by the High Court, the arbitrator became functus officio as he had completed his mandate. In the circumstances, he could not re-open the completed proceedings and revive the jurisdiction that the parties had previously conferred on him. He therefore contended, that, the twin principles of functus officio and finality to litigation militated against the resumption of his earlier jurisdiction, which, by operation of law, had been exhausted.

He strongly argued, that, the resumption of jurisdiction in these circumstances was repugnant to the public policy of Zimbabwe.

He also submitted, that, it was erroneous for the court a quo to split the unitary interim award into two. He, however, failed to demonstrate how the split affronted the public policy of Zimbabwe.

While he conceded that clause 10 of the contract allowed the first respondent to commence fresh arbitral proceedings premised on the unenforceable arbitral order for specific performance, he was adamant that it could not seek the revival of the arbitrator's exhausted jurisdiction.

He further argued, that, the arbitrator could not also mero motu revive the jurisdiction he had fully exercised.

He also contended, that, while the withdrawal of the completed specific performance award was a nullity, it constituted a belated realization, by the arbitrator, that, he could not revive jurisdiction in completed proceedings.

He finally submitted, that, the court a quo ought to have confirmed and not discharged the provisional order.

He moved for the success of the appeal with costs on the ordinary scale.

Per contra, counsel for the first respondent submitted that the interim award was not in conflict with the public policy of Zimbabwe.

He contended, that, as the arbitral award for specific performance was derailed by the wrongful conduct of the appellant, the arbitrator's jurisdiction to further determine the quantification of the first respondent's damages, arising from such conduct, was not only extant but was automatically re-activated by such conduct.

He further contended, that, the continuing power of the arbitrator in these circumstances was also prescribed by section 24(1) and (2) of the Interpretation Act [Chapter 1:01], as applied in Zesa v Utah SC32-18 and Mhlanga v Mtenengari & Anor 1992 (2) ZLR 431 (S) and obliquely recognized by this Court in OK Zimbabwe Ltd v ArdMbare Properties (Pvt) Ltd SC55-17.

He also argued, that, the above cited case authorities held that an arbitrator who determined a previous matter between the same parties ought to decide any other aspects of the same matter that may arise in future.

He vehemently disputed that the quantification matter constituted an amendment or correction of the award for specific performance.

He, therefore, maintained that the arbitrator was not functus officio and that his jurisdiction had not been exhausted. He moved for the dismissal of the appeal with costs on the higher scale.

ANALYSIS

The law on the setting aside of arbitral awards is settled in this jurisdiction. An arbitral award, whether interim or final, may be set aside if it is contrary to the public policy of Zimbabwe: see Wallen Holdings (Pvt) Ltd v Lloyd & Anor 1996 (2) ZLR 383 (H)…, where CHINHEGO J correctly stated that:

“A party is, in a proper case, entitled to bring to this court an application in which an arbitrator's interim award is challenged, and, the court has the jurisdiction to entertain and determine the application.

An interim award is final and binding in respect of those matters referred to the arbitrator and which are agreed shall be the subject of such an award (see Butler & Finsen [Arbitration in South Africa: Law and Practice] op cit p262). This position may however be altered by the parties if they agree that neither of them may institute review proceedings before the arbitration proceedings were completed.”…,.

The passage in BUTLER & FINSEN [Arbitration in South Africa: Law and Practice], that CHINHENGO J relied upon, states that:

“The award must be final; in the sense, that, it must deal with all the matters submitted to the arbitrator and leave no matter unsettled. It must therefore be complete. There is a partial exception in the case of an interim award. While an interim award does not deal with all the matters referred to the arbitrator, it must deal with all the matters which the parties have agreed shall be the subject of the interim award, and is final and binding in respect of those matters.”..,.

The above view accords with that of REDFERN and BUTLER in The Law and Practice of International Commercial Arbitration, 2nd ed…, that:

“In a sense, all awards may be said to be 'final' in that (subject to the possibility of challenge in the courts) they dispose of one or more of the issues in dispute between the parties. For instance, an interim (or preliminary) award by an arbitral tribunal in an arbitration under the UNCITRAL Rules, to the effect that it does have jurisdiction to determine the dispute before it, is a final decision on the issue of jurisdiction, subject to any appeal to the competent court.”

The concept of public policy, in this regard, is restrictively construed in order to uphold the sanctity of contracts of the parties and bring a dispute to finality in an inexpensive and expeditious manner.

In Zimbabwe Electricity Supply Authority v Maposa 1999 (2) 452 (S)…, GUBBAY CJ said:

“An arbitral award will not be contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in fact or in law. In such a situation, the court would not be justified in setting the award aside. Under Article 34 or 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognise and enforce an award by having regard to what it considers should have been the correct decision….,. Where, however, the reasoning or conclusion in an award goes beyond mere faultiness or correctness, and constitutes a palpable inequity that is so far reaching and outrageous in its defiance of logic or acceptable moral standards that a sensible and fair minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award, then, it would be contrary to public policy to uphold it. The same applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue, and the resultant injustice reaches the point mentioned above.”

The import of the above remarks was clarified by MALABA DCJ…, in Alliance Insurance v Imperial Plastics (Pvt) Ltd & Anor SC30-17…, thus:

“The question that should be in the mind of a Judge who is faced with this ground for setting aside an arbitral award is that, in light of all the submissions and evidence adduced before the arbitrator, is it fathomable that he would have come up with such a conclusion? If the answer is in the affirmative, there is no basis upon which to set aside the award. The appellant's submissions should be considered in the light of these remarks.”

In OK Zimbabwe Ltd v ArdMbare Properties (Pvt) Ltd SC55-17…, PATEL JA…, further explained the meaning in Zimbabwe Electricity Supply Authority v Maposa 1999 (2) 452 (S) in the following way:

“The reviewing court does not exercise an appeal power by having regard to what it considers should have been the correct decision. It will only intervene to set aside an award on the ground of public policy where the reasoning or conclusion in the award…, constitutes a palpable inequity, gross irrationality, moral turpitude, or resultant grave injustice, either in the procedure adopted by the arbitrator, or in his substantive findings on the merits of the matter, so as to warrant the setting aside of the impugned award. In the absence of any perverse conduct or outlandish aberration on the part of the arbitrator, or in the affirmation of his award by the High Court, the appellant is not entitled to the relief that it craves.”

See also Ropa v Rosemart Investments (Pvt) Ltd & Anor 2006 (2) ZLR 283 (S)…,.; Delta Operations (Pvt) Ltd v Origen Corporation (Pvt) Ltd 2007 (2) ZLR 81 (S)…,.; and Peruke Investments (Pvt) Ltd v Willoughby's Investments (Pvt) Ltd & Anor 2015 (1) ZLR 491 (S).

The real question for determination in this appeal is whether the arbitrator's reasoning or conclusion on jurisdiction goes beyond mere faultiness or incorrectness and constitutes a palpable inequity that is so far reaching and outrageous in defiance of logic or accepted moral standards that a sensible and fair-minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the impugned interim award.

In our law, jurisdiction denotes the power or competence of a court to hear and determine an issue brought before it. HERBSTEIN and Van WINSEN: The Civil Practice of the High Courts of South Africa, 5th ed…, opine that:

“A court of law will not entertain legal proceedings unless it is satisfied, that, it is competent (in other words, has jurisdiction) to do so, that the proceedings have been instituted in the proper form, and that they are being conducted in the proper manner.”

While it is settled, that, an arbitral tribunal is not a court of law, the above principle applies with equal force to it.

An arbitrator cannot act without jurisdiction. If he does so, the arbitral proceedings that ensue will be a nullity.

The exercise of jurisdiction, where none exists, would intolerably and mortally hurt the very concept of justice in Zimbabwe and thus be contrary to the public policy of Zimbabwe.

Similarly, the revival or resumption of jurisdiction on a finalized matter in which the judicial officer or arbitrator has fully and finally exhausted his jurisdiction would injure the public policy concept of finality to litigation: see Stambolie v Commissioner of Police 1989 (3) ZLR 287 (S)…,.; Bheka v Disability Benefits Board 1994 (1) ZLR 353 (S)…,; and Ndebele v Ncube 1992 (1) ZLR 288 (S)…,. In the latter case this Court held that:

“It is the policy of the law, that, there should be finality in litigation.”

To similar effect is HERBSTEIN and Van WINSEN: The Civil Practice of the High Courts of South Africa, 5th ed …,.:

“The general principle, now well established in our law, is that once a court has duly pronounced a final judgment or order, it has itself no authority to correct, alter, or supplement it. The reason is that the court thereupon becomes functus officio: its jurisdiction in the case having been fully and finally exercised, its authority over the subject matter ceases. The other equally important consideration is the public interest in bringing litigation to finality. The parties must be assured, that, once an order of court has been made, it is final and they can arrange their affairs in accordance with that order.”

The importance for an arbitrator to act with jurisdiction is indeed underscored by the nature and scope of Articles 16 and 17 of the Model Law, which, inter alia, imbue an arbitral tribunal with the power to dispose of the question of whether or not it has jurisdiction, as a preliminary point, before considering the merits of the arbitration.

An arbitrator is, consequently, permitted to make an interim award on the question of jurisdiction, which, in any event, constitutes a final and definitive award.

The functus officio concept is an aspect of jurisdiction.

It is a concept which expresses the termination of the jurisdiction of any person or body charged with the duty and responsibility of exercising a statutory or common law power or authority.

The jurisdiction conferred on an arbitrator by the parties, in their arbitration agreement, terminates when the arbitrator has completed his or her mandate. The academic writers posit, that, such termination takes place after the happening of either of the following events:

(i) The first is at the stage when the arbitrator publishes his award to the parties.

(ii) The second is when he or she corrects any errors in computation, syntax, or errors of a similar nature or makes an additional award in the manner and within the timeframe envisaged in Article 33 of the Model Law.

(iii) The third concerns a determination subsequent to a remittal by a superior court of competent jurisdiction under Article 34(4) of the Model Law.

In Arbitration in South Africa: Law and Practice: BUTLER & FINSEN (Juta 1993), at p103, the learned authors underscore the point, that, the completion of the mandate terminates the jurisdiction of an arbitrator. The learned authors write that:

“An arbitrator derives his powers from his acceptance of a reference from the parties to an arbitration agreement. He thereby undertakes to hear their dispute and to make an award. When he has completely discharged his duty to them and made an award which is complete in all respects and disposes of all the matters in dispute, his powers automatically desert him and he is said to be functus officio. This termination of his powers is so complete, that, if he finds he has made a mistake in his award, he has no power to correct it. Voet 4.8.23 and Table Bay Harbour Board v Metropolitan and Suburban Railway Company (1892) 9 SC 437 at 438.”

They further observe, at p295, that:

“The effect of setting aside of the award is that everything that has happened since the arbitrator entered into the reference is nullified. His jurisdiction ceased on the publication of his award and is not revived by its setting aside. But, the arbitration agreement itself is not affected and its provisions remain binding on the parties, unless, by mutual agreement or by order of court, it is terminated or set aside. The dispute must, on the application of either party, be submitted to a new arbitration tribunal constituted in the manner directed by the court. But, where the pleadings and discovery for the first arbitration have not been tainted by the circumstances that led to the setting aside of the award, the parties could agree, or in the absence of agreement, the new arbitrator could direct that the pleadings should be re-used in the new reference and that discovery need not be repeated.”

The revival of jurisdiction in casu is almost analogous to that of the arbitrator in Re: Stringer and Riley Bros [1901] 1 QB 105 who omitted to deal with certain issues and delivered an award on others. He was, thereafter, alerted of his error and proceeded to mero motu vacate the award before issuing a fresh one. The court therein held, that, having made the first award, he became functus officio and his second award was invalid. The court, however, acted in terms of section 30 of the English Arbitration Act 42 of 1965 to set aside the second award and remit the matter to him to consider the omitted issues.

In Russell on Arbitration, 20th ed (1982), WALTON & VICTORIA observe that:

“The arbitrator is not functus officio until he has made an award. Until then, either party can make any application to him, and the arbitrator, still having jurisdiction, must deal with such application. Though the case has been formally closed, it is in the discretion of the arbitrator whether he will re-open it and receive further evidence.”

To the same effect is JACOBS, The Law of Arbitration in South Africa, Juta, 1977…,.:

“Once an award has been made, the arbitrator is functus officio. However, prior to making an award, the arbitrator has the power to entertain an application for leave to re-open and receive further evidence. It is submitted, that, the same principles that would apply to a reopening before judgment in a court of law are applicable to an arbitration.”

In The Law of Arbitration South African and International Arbitration, Juta, 2009…, RAMSDEN cautions that:

“An award requires finality to be achieved. A situation where the arbitrator's award directs that further works are to be executed under the supervision of a third party, cannot constitute an award in the sense required. It is not final in any sense of the word. The arbitrator's status is one of functus officio (has discharged his office) after his delivery of the award, yet, the determination of the issues is not complete.”

Lastly, REDFERN and HUNTER in The Law and Practice of International Commercial Arbitration, 2nd ed.., confirm the above position in the following manner:

“However, the term 'final award' is customarily reserved for an award which completes the mission of the arbitral tribunal. Subject to certain exceptions, the issue of a final award renders the arbitrators functus officio. They cease to have any further jurisdiction over the dispute; and the special relationship that exists between the arbitral tribunal and the parties, during the currency of the arbitration, ceases.”

In our law, Article 32(1) and (3) of the Model Law clearly state that “the arbitral proceedings are terminated by the final award” and “the mandate of the arbitral tribunal terminates with the termination of the arbitral proceedings, subject to the provisions of Articles 33 and 34(4).”

Article 33 prescribes the arbitral tribunal's power to correct its award mero motu, or on request, on 30 days notice or any agreed period of extension after the delivery or publication of the award, but, within the prescribed period of 60 days or any extended period set by such a tribunal…,.

Article 34(4) vests in the High Court the power to stay an application for the vacation of an arbitral award at the request of a party to the arbitration for a specified time determined by the High Court “to give the arbitral tribunal an opportunity to resume the arbitral proceedings or take such other action as in the tribunal's opinion will eliminate the grounds for setting aside.”

In casu, the factors envisaged by Articles 33 and 34(4) of the Model Law are absent.

The arbitrator granted a final award for specific performance on 25 July 2017. The appellant sought the vacation of that award, while the respondent, conversely, prayed for its registration.

In a consolidated judgment, dated 10 June 2020, the High Court dismissed the application by the appellant and registered that arbitral award.

The attempted appeal by the appellant against that order was not pursued; hence, the registered arbitral order constituted the final award granted by the arbitrator.

The academic writers, such as WALTON & VICTORIA, Russell on Arbitration, 20th ed (1982), at p311 of their above cited work, rely on the old English case of Simmons v Swaine (1809) 1 Taunt 549 to posit, correctly in our view, that:

“An award in the alternative may be sufficiently certain and final. If an award directs one of two things to be done, and one of them is uncertain or impossible, the award is nevertheless sufficiently certain and final if the second alternative is certain and possible; and it will be incumbent on the party to perform the second alternative.”

On the same page, the learned authors make the further point that:

“An arbitrator cannot, in his award, reserve either to himself or delegate to another, the power of performing in future any act of a judicial nature respecting the submitted matters. His duty is to make a final and complete determination respecting them by his award, and it is in breach of that duty to leave anything to be determined hereafter.”

An exception to this rule is enunciated in Cogstad v Newsum [1921] AC 528 where it was held, that, an arbitrator is permitted to make an interim award on liability leaving the reference of the question of quantum open to him - if the parties fail to agree thereon.

This is what happened in OK Zimbabwe Ltd v ArdMbare Properties (Pvt) Ltd SC55-17, with the exception that, the parties vested the arbitrator, after determining the question of liability, with the power to determine quantum if the parties subsequently failed to agree on the measure thereof.

Again, in Mathews v Craster International (Pvt) Ltd HH497-17…, per CHATUKUTA J…, and Muchenje & Ors v Stuttaffords Removals (Pvt) Ltd HH374-13…, per TSANGA J, the High Court held that quantification was not the same as an amendment or a correction. The High Court further upheld the quantification subsequent to an earlier award on the discernible ratio, that, the earlier award was merely a partial award which the same arbitrator could re-open.

In the present matter, the arbitrator reasoned that he was not functus officio because:

“The award I made cannot be effected, and, therefore, the award has to be amended in order to enable the claimant to quantify the damages it has sustained. Because the award cannot be complied with, it must be amended. I have to deal with that issue, so, I am not functus officio. No one else can make the award effective.”…,.

The considerations that are spelt out in OK Zimbabwe Ltd v ArdMbare Properties (Pvt) Ltd SC55-17 and Cogstad v Newsum [1921] AC 528, contrary to counsel for the first respondent's submissions, do not apply to the award of 25 July 2017 for two reasons:

(i) Firstly, while the respondent sought specific performance of the contract from the appellant and the alternative relief of damages, the arbitrator only granted the main relief sought.

It was competent of him to do so.

According to VISSER et al in Gibson's South African Mercantile and Company Law, 8th ed (Juta)…, it would have been competent, however, for the arbitrator to award both the main relief of specific performance together with the alternative relief of damages. The learned authors state that:

“A party to a contract, who is in breach, may be compelled to perform the obligation in the manner required by the terms of the contract. The necessary court order may be enforced by contempt of court proceedings if specific performance has been decreed absolutely. But, very often, the court orders specific performance with an alternative in damages - if this relief is claimed. (The magistrates court has no jurisdiction to order specific performance unless it is coupled with an alternative order for damages, except in respect of the rendering of an account or the delivery of property (s46 of the Magistrates Courts Act 32 of 1944)).”

Secondly, the specific performance award was neither an interim award nor a partial award. It was a final one.

It is common cause, notwithstanding the prevarication of the first respondent on the point, that, the present award, on jurisdiction, was an interim award.

The issue of jurisdiction cannot be revisited by the same arbitrator when he eventually determines the merits of the substantive issue of damages.

The interim award was therefore properly challenged a quo.

The most important legal consequence of a valid award that is underscored by BUTLER & FINSEN, Arbitration in South Africa: Law and Practice (Juta 1993)…, was approved by this Court in Ropa v Rosemart Investments (Pvt) Ltd & Anor 2006 (2) ZLR 283 (S). The learned authors state that:

“The most important legal consequence of a valid final award is that it brings the dispute between the parties to an irrevocable end: the arbitrator's decision is final and there is no appeal to the courts. For better or worse, the parties must live with the award, unless, their arbitration agreement provides for a right of appeal to another arbitral tribunal. The issues determined by the arbitrator become res judicata and neither party may reopen those issues in a fresh arbitration or court action. The effect of a valid award by an arbitrator will usually be to create new rights and obligations between the parties and it will dissolve existing rights, or bring an end to a dispute as to whether certain rights existed or not.”

It seems to us, that, the arbitral award on specific performance, granted on 25 July 2017, was a final award. It brought the arbitrator's jurisdiction to an end.

However, it created new rights and obligations between the parties under which the first respondent could invoke the arbitration clause in the contract between the parties: see The Cold Chain (Pvt) Ltd t/a Sea Harvest v Makoni CC08-17…,.

The respondent could not, without the appellant's consent, properly seek to revive the arbitrator's jurisdiction nor could the arbitrator revive his own jurisdiction, which had been exhausted at the time the arbitrator published the award for specific performance.

The provisions of section 24(1) and (2) of the Interpretation Act, which vests a person or authority with the continuing power, jurisdiction, right or duty to exercise such power, jurisdiction, right or duty from time to time, as the occasion requires, applies during the pendency of such a person or authority's mandate.

It does not apply to a person or authority who is functus officio.

In the circumstances, the first five grounds of appeal are meritorious and ought to succeed. The arbitrator did not have jurisdiction to re-open the case. He could only do so either with the appellant's consent, or after the first respondent had invoked the arbitral process prescribed in clause 10 of the contract between the parties.

The exercise of jurisdiction by the arbitrator, in the circumstances of this case, was therefore contrary to the public policy of Zimbabwe.

The contrary finding by the court a quo was incorrect. We, accordingly, agree with counsel for the appellant's submissions, that, it should be set aside.

In view of this finding, it is not necessary to relate to the second issue raised in the sixth ground of appeal.

Regarding the third issue, which relates to the seventh ground of appeal, the determination of the application for vacating the interim order, whether in favour of the appellant or against it would result in the discharge of the provisional order.

This is because the fate of the interim award could only be determined under Article 34(4) the Model Law and not under the common law.

The interim interdict, having served its purpose, cannot, at the behest of the court a quo nor in the substitutionary order of this court, be confirmed. It falls to be discharged. The court a quo therefore correctly discharged the provisional order in question.

COSTS

In view of the conduct of the appellant, which necessitated the erroneous re-opening of the earlier arbitral award, it is appropriate that each party bears its own costs.

DISPOSITION

The arbitrator could not revive his jurisdiction nor amend his earlier order, as he purported to do, as he had fully and finally exhausted his jurisdiction. He could only do so with the appellant's consent, which, as is apparent from the proceedings, was never given.

The arbitrator should have upheld the appellant's preliminary point on jurisdiction. The court a quo, in turn, should have found the finding of the arbitrator to have been in breach of the public policy of Zimbabwe.

In the circumstances, the following order will ensue:

1. The appeal succeeds in part.

2. Para (i) of the order of the court a quo is set aside and substituted with the following:

“(i) The application in HC722/21 be and is hereby granted.”

3. Each party shall bear its own costs.

SC93-23 : AUGUR INVESTMENTS and DOOREST PROPERTIES vs FAIRCLOT INVESTMENT and THE SHERIFF and THE REGISTRAR OF DEEDS
Ruled By: BHUNU JA, CHIWESHE JA and MWAYERA JA

This is an appeal against the whole judgment of the High Court (the court a quo) sitting at Harare, handed down on 9 May 2023, dismissing the first appellant's application for a declaration under case HC5989/19 and granting the first respondent's application to set aside the second respondent's decision to uplift judicial attachment on Stand 654 Pomona Township, under case HC10315/19.

Aggrieved by the decision of the court a quo, the appellants have noted the present appeal.

The Facts

The first respondent obtained an arbitral award against the first appellant in the sum of US$4,800,000 excluding interest. The award was granted on 19 March 2015.

The first appellant appealed the arbitral award, which appeal was dismissed on 11 February 2019.

The award was ultimately registered as an order of the court a quo on 26 June 2019.

A writ of execution was issued by the first respondent leading to the attachment of Stand No.654 Pomona Township held under Deed of Grant No.2884/10 (“the property”).

Thereafter, the first appellant paid the sum of RTGS $4,800,000 as the judgment debt and RTGS $1,078,040=21 as interest thereon.

Following these payments, the second respondent advised the judgment creditors (ie the first respondent) that the debt had been discharged and he was thus proceeding to remove the property from judicial attachment.

He did so through letters to the first respondent dated 21 and 25 November 2019, respectively.

The first respondent protested this move, arguing that the property should not be removed from attachment as the judgment debt had not been extinguished because the amount should be paid at the prevailing inter-bank rate between the US$ and the RTGS, and not at the rate of 1US$ to 1RTGS$.

The second respondent did not heed that advice.

It was then that the first respondent approached the court a quo, under HC10315/19, for an order setting aside the second respondent's decision to remove the property from attachment. It also sought consequential relief.

At the close of submissions, the court a quo found in favour of the first respondent who had sued, under HC10315/19, for the setting aside of the second respondent's decision to remove the property from attachment.

Under HC5989/19 the court a quo dismissed the first appellant's application for a declaration that the judgment debt be extinguished at the rate of 1:1 between the US$ and the RTGS$.

For convenience, the two applications were heard together.

The appellants appeal the decisions of the court a quo on the following grounds:

“GROUNDS OF APPEAL

1. The court a quo erred in failing to hold that the Arbitral Award dated 19 August 2015, granted in favour of the first respondent, constituted a liability affected by the provisions of section 4(1)(d) of Statutory Instrument 33 of 2019 (subsequently section 22 of the Finance Act No.2 of 2019).

2. Concomitantly, the court a quo also erred in determining that the Arbitral Award issued on the 19th of March 2015 only became effectual upon its registration on the 26th of June 2019. At law, an arbitral award constitutes a binding obligation as at the date of its grant and not its registration.

3. With respect, the court a quo also grossly misdirected itself in holding that the first appellant's RTGS payments did not fully discharge its indebtedness to the first respondent in respect of the registered arbitral award dated 19th March 2015. Such payments fully discharged what was lawfully due.

4. The court a quo also erred in determining that the second respondent had acted unlawfully in uplifting the judicial attachment on Stand 654 Pomona held under Deed of Grant 2884/10. The voiding of such uplifting was anomalous at law given that the first appellant had discharged its indebtedness, thereby obviating the continuation of execution.

5. Additionally, the court a quo erred in cancelling 'any and all' transfers effected on Stand 654 Pomona Township in circumstances where the second appellant had received title by operation of an extant Deed of Settlement and court order handed down by the court a quo under HC4528/19.

6. The court a quo also erred in ordering the advertisement and sale in execution of Stand 652 Pomona Township held under Deed of Grant No.2884/10 after the cancellation of all subsequent transfers. Such determination is anomalous, in that, after the aforesaid cancellation of subsequent transfers, the land reverts to being State land, incapable of being sold in execution.”

The appellants seek the following relief:

“1. That, the instant appeal succeeds with costs.

2. That, the order of the court a quo be set aside and be substituted with:

Case No. HC5989/19

(i) The application for a declaration order be and is hereby granted.

(ii) The liability arising from the Arbitral Award dated 19th March 2015, in favour of the first respondent, be and is hereby declared executable in RTGS dollars at the rate of one to one to the United States dollars in accordance with section 4(1)(d) of Statutory Instrument 22 of 2019.

(iii) The first respondent to pay costs of suit.

Case No. HC10315/19

(i) The application is dismissed with costs.”

The grounds of appeal raise only one issue, that is, whether the arbitral award in issue, is subject to the provisions of SI 33 of 2019 in terms of which all assets and obligations denominated in United States dollars immediately before the effective date of 22 February 2019 shall be redeemed at the rate of 1US$ to 1RTGS$.

If that question is answered in the affirmative, then, the appeal should succeed. If not, then, the appeal stands to be dismissed....,.

APPELLANTS SUBMISSIONS IN THIS COURT

It is now trite, that, all assets and liabilities that were denominated in United States dollars immediately before 22 February 2019, must, on or after that date, be valued in RTGS dollars on a one is to one rate. This is the effect of section 4(1)(d) of SI 33 of 2019, and, subsequently, section 22 of the Finance Act No.2 of 2019.

This position was confirmed by MALABA CJ in the seminal case of Zambezi Gas Zimbabwe P/L v N.R. Barber P/L and Anor SC03-20.

The appellants submit, that, the court a quo erred in interpreting the above provisions in that it treated a judgment debt as if it was separate from the definition of “debt”.

It also erred in taking the date of registration of the arbitral award as if it was the date on which the debt came into existence. It failed to appreciate, that, prior to the registration of the award, a debt already existed, as confirmed by the arbitration award of 2015, paving the way for enforcement. This debt arose before 22 February 2019, the effective date under S.I.33 of 2019.

The court a quo also erred in treating an arbitration award as of no force or effect as long as it was not registered. It misunderstood the existence of an award embodying a debt and its enforcement.

The appellants further submitted, that, the law is clear that the registration of an award in the court a quo is purely for purposes of execution through the Sheriff. To that end, the registration of an award, as an order of the court a quo, does not create a new debt nor does it, at law, change the status of the debt.

The appellant relied in this regard on the words of BHUNU JA in the case of Gwanda Rural District Council v Botha SC174-20 wherein he had this to say:

“Before delving into the merits or otherwise of the grounds of appeal, l pause to observe that when presiding over the registration of an arbitral award, the court a quo had very limited jurisdiction. This is mainly because its function was merely to register the arbitral award for purposes of enforcement. To that end, it did not, in the main, exercise its appellate or review jurisdiction.”

Accordingly, argue the appellants, the High Court does not enquire into anything when registering an award. It is merely permitting the applicant access to its enforcement mechanism.

The court a quo was thus in error when it held, that, an arbitral award, dated 19 March 2015, only became effective when it was registered by the court a quo on 26 June 2019 - well after the effective date fixed under Statutory Instrument 33 of 2019.

The appellants reiterate that such registration by the court a quo was for purposes of execution only.

It was because of that error that the court a quo determined, that, the arbitral award was not affected by the provisions of section 4(1)(d) of SI 33/2019, a finding contrary to law.

The appellants further relied on the case of Air Zimbabwe Holdings v Chiweshe and Others 2019 (1) ZLR 311 (S) where GOWORA JA had this to say by way of dicta:

“Once rendered, an arbitral award is binding upon everyone to whom it pertains until set aside.”

In other words, the first appellant's liability to pay arose on the date of issue of the award, that is, on the 19th March 2015 and not on the date of registration in the court a quo.

Reliance was placed on the case of Dudka & Ors v Cheni Investments (Pvt) Ltd 2011 (1) ZLR I where MAKONI J…, remarked that:

“An award takes effect upon its grant. Its execution has no effect on whether it is binding or not. A party can choose to obey an award, such that there would not be need for the award to be registered.”

The court a quo, according to the appellants, was wrong when it held that the first appellant was only obligated to pay the respondent after the arbitral award was registered.

Further, under our law, the registration of an arbitral award does not turn such an award into an order of the High Court. Arbitral awards are registered and enforced as is without being transformed into court judgments: see Thornton v Mckenzie 2006 (2) ZLR 91 (H)…,.

The registration of an arbitral award does not create new obligations, further submitted the appellants.

In Ropa v Reosmart Investments (Pvt) Ltd 2006 (2) ZLR 283 (S)…, the finality of arbitral awards was explained by GWAUNZA JA…, in the following terms:

“In addition to this, I found to be persuasive the submission made by the respondent, that, the effect of the arbitral award is to bring to finality the dispute between the parties.”

At law, therefore, no new rights and entitlements are obtained by the holder of an arbitral award upon recognition and enforcement.

Accordingly, submit the appellants, the registration of the 19 March 2015 arbitral award did not create a new liability or circumstances that allowed it to escape the jaws of section 4(1)(d) of SI 33/19.

The appellants further argue that “the novation upon registration” that the first respondent refers to is erroneous at law. It is that submission that led the court a quo astray.

Counsel for the Sheriff (the second respondent) filed heads of arguments titled:

“SECOND RESPONDENT'S/CROSS APPELLANT'S HEADS OF ARGUMENTS INCORPORATING SECOND RESPONDENT'S HEADS OF ARGUMENTS IN RESPECT OF THE MAIN APPEAL”

Counsel for the Sheriff (second respondent) stated in his heads of arguments, that, the second respondent had been served with the Notice of Appeal filed by the appellants on 12 May 2023. The second respondent filed a cross-appeal in terms of Rule 45(1) as read with Rule 45(2) of the Supreme Court Rules 2018 on 22 May 2023.

The cross appeal is on three critical errors of law and fact made by the court a quo:

(i) Firstly, the court a quo grossly misdirected itself and erred in failing to consider or address, in its judgment, the Sheriff's report which had been filed of record on 23 June 2020, at pages 373-374 of the record. The report was filed in case No. HC10315/19 and bears the full citation of the case.

The second respondent contends, that, it is a valid Sheriff's Report compiled, and filed, in terms of the rules of the court a quo. The report is comprehensive in that it sets out the background of the matter, the steps taken by the Sheriff, and the reasons therefor. It explains how the amount of RTGS4,800,000 had been paid out, and how the property had been transferred to the second appellant. The report is quoted from p8 as follows:

“8. We proceeded to uplift the caveat and transferred the property to Doorest Properties as per court order by Justice Mushore.

9. Our actions led to Messrs Mutumbwa Mugabe Legal Practitioners filing the current application as they believed we failed to execute our mandate properly.

10. It is our belief that the $4,800,000 paid constitutes the judgment debt in full.

11. Our decision to act in the manner we did was informed by the legal position prevailing with regards to execution of court orders denominated in USD dollars, in light of SI 33/2019 and Finance Act 2 of 2019.

12. If our position was wrong, it was because of the lack of clarity with regards to the interpretation of the relevant statutes.

13. The matter was once directed to the Judicial Service, as a complaint, and the position taken was that the Sheriff had not acted improperly.

14. We believe our decision was not irrational. The case arises from different interpretations of available statutory instruments. We are now aware of the Supreme Court judgment which vindicates the position that we took.

15. We pray that no costs are levied against the Sheriff as we believe we acted reasonable in terms of the law.

M. Madhega, Sheriff of the High Court of Zimbabwe, Harare.”

Thus, the Sheriff's report constitutes a full and proper response to the issues raised by the first respondent in the court a quo. It does not, argues the second respondent, in any way constitute disrespect of the court proceedings nor a failure to respond nor is it an improper pleading.

The second respondent asserts, that, the application in the court a quo, under HC10315/19, was, to all intents and purposes, a review of the action taken by the Sheriff. The Sheriff was thus functus officio. The Rules do not require him to file opposing affidavits. He is only required to file a report informing the court as to what he did and the reasons therefore.

In such situations, the Sheriff is not a litigant but an officer of the court, charged with the execution of court orders.

The Sheriff's report having been tendered to the court a quo, in conformity with its Rules, should have been given due regard before the court a quo arrived at its decision. If the court a quo had applied its mind to this report, it would have arrived at a different decision.

That the application before the court a quo was for review of the second respondent's decision is confirmed by the court a quo when it states:

“The applicant in the first instance, Fairclot Investments, seeks a review of the decision of the second respondent, of 21 November 2019, to uplift the judicial attachment of Stand 654 Pomona Township….,.”

The second respondent further argues, that, it is common cause that the Sheriff gave notice to all parties that the judgment debt had been discharged in full, and, for that reason, he was removing the attachment.

Nothing was done clandestinely or maliciously as all concerned were informed beforehand.

In the circumstances, there was no basis for the levying of costs against the Sheriff (which, on its own, is unusual on an officer of the court) let alone on the legal practitioner and client scale.

The court a quo misdirected itself on the facts when it held:

“Given the history of the case, and the manner in which the Sheriff handled the case, refusing to heed the call not to uplift the caveat, when advised that the writ had not been satisfied, the defiance requires a sanction be imposed upon the Sheriff. Most disturbing is the fact, that, despite being cited in an application where costs are claimed on the attorney/client scale, the Sheriff made no effort to defend himself/herself.

Without any submission from the Sheriff as to why costs on a higher scale should not be imposed, the court is left with no option but to accede to the prayer for costs against the Sheriff.”

Clearly, the court a quo, argues the second respondent, did not take into account the contents of the Sheriff's report giving reasons why the court should not levy costs against it. The finding on costs is therefore without basis.

With regards the interpretation of SI 33/2019 as read with the Finance Act 2/2019, the second respondent agreed with the first and second appellants, that, the award granted in March 2015 is payable in RTGS$ at the rate of 1 to 1 with the US$, and, further that the registration of the award in the court a quo was only for purposes of execution. Such registration does not novate or change the status of the arbitral award.

SUBMISSIONS BY THE FIRST RESPONDENT

On the merits, counsel for the first respondent submitted, that, an arbitral award does not become final as long as it is being challenged. He submitted further, that, it does not become final if it has not been recognized (ie registered as an order of the court a quo) or the party against whom it is made has not paid in accordance with its terms.

In other words, although in casu the arbitral award was granted in 2015, it was not final until the challenges brought against it, by the first appellant, had been resolved, and it had been registered by the court a quo.

Reliance was placed in this regard on the provisions of Article 34(4) of the Model Law which provides:

“The High Court, when asked to set aside an award, may, where appropriate, and so requested by a party, suspend the setting aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal's opinion will eliminate the grounds for setting aside.”

For that reason, it is argued, that, for as long a party has challenged an award, finality cannot be achieved. Matters will remain fluid until the award has been finally recognized.

It is further argued, that, Article 36 of the Model Law sets out the grounds upon which the court a quo may decline to register an award. This is a clear sign that the arbitral award is not final until it is registered.

The gravamen of the first respondent's argument is that because of the continued litigation, at the instance of the first appellant, there was still a live dispute between the parties such that the debt could not have been affected by the provisions of SI 33 of 2019.

For this proposition, the first respondent has relied on the cases of Lock v Lock and Another SC127-22 and Lugalulu Investments and Another v National Railways of Zimbabwe SC43-22.

It must be noted, that, these cases dealt with High Court judgments (therefore judgments debts) as opposed to arbitral awards.

The first respondent submits, that, since the award in casu was registered after the effective date, in terms of SI33 of 2019, the award is not affected by the provisions of that statutory instrument. In other words, the debt is payable in United States dollars converted to RTGS at the prevailing bank rate.

The first respondent concedes, that, an arbitral award is not a judgment debt. It submits, however, that once registered as an order of the court a quo it becomes a judgment debt.

ANALYSIS

Both parties have cited authorities tending to show, on behalf of the appellants, that an arbitral award is final upon its grant, and, on behalf of the first respondent, that it is not final until it is registered.

We note that there is no legislative provision that says that the filing of a challenge to an arbitral award suspends the operation of the award.

That being the case, we would agree with counsel for the first and second appellants, that, an arbitral award is effective upon its grant until it is set aside.

In any event, it does not matter when the arbitral award may be regarded as being final. The point is, whether, at the time of ultimate registration in the court a quo, such an award becomes a judgment of the court a quo.

We agree with counsel for the first and second appellants, that, registration of an award in the court a quo does not change the status of the award. The award is registered simply for the purpose of execution. The court a quo, at registration, does not determine the rights and obligations of the parties. These have already been determined by the arbitrator. The court a quo does not, and cannot, determine the matter on the merits.

For that reason, the order for registration does not become a judgment debt because it is not a judgment of the court a quo. The fact that the court a quo may refuse to register an award, on any of the grounds set out under Article 36 of the Model Law, is irrelevant to the issue at hand, namely, whether the registration of an arbitral award transforms it into a judgement debt.

The rights and obligations of the parties were determined by the arbitrator in 2015. The award/debt is fully covered by the provisions of S.I. 33 of 2019 notwithstanding its registration after 22 February 2019 (the effective date).

The position would have been different if proceedings in a court of law had been instituted in 2015 but concluded after the effective date. The order given would be a judgment debt. In such a scenario, the rights and obligations of the parties would have been determined by a court after the effective date, and, therefore, the judgement debt so arising would be payable in Unites States dollars converted to RTGS at the prevailing bank rate.

An arbitral award granted in 2015 cannot assume a similar status merely because it was registered by the court a quo after the effective date.

The court a quo therefore misdirected itself in treating the order for registration of the award as a novation of the arbitral award giving rise to a judgment debt. Having so misdirected itself, it wrongly concluded, that, the debt was not covered by SI 33 of 2019 and disregarded the payment in full in RTGS dollars made by the first appellant.

There is no evidence in the judgment of the court a quo, that, it took into account or noted the Sheriff's report filed of record. There is absolutely no reference to it. If it had had regard to the Sheriff's Report, it would not have issued an order for costs against him on the higher scale, or, indeed any costs at all.

As already indicated, the Sheriff is an officer of the court, not a litigant. He is not required to file opposing papers. His report is sufficient to inform the court, and the parties, as to his actions and the reasons therefor.

We agree that the Sheriff, when in doubt, should seek directions from the court. He should have done so.

As it turns out, however, he was right in his assertion that the debt had been fully discharged in RTGS at the prescribed rate of one is to one to the United States dollar.

For that reason, the order granted against him cannot stand.

In any event, the Sheriff acted in terms of an order granted by MUSHORE J.

DISPOSITION

The appeal has merit. The registration of an arbitral award does not create a judgment debt. Registration is a vehicle through which parties may access the services of the Sheriff to execute arbitral awards. It is a procedure designed solely for purposes of execution. In that regard, the court a quo does not inquire into or determine the merits of the matter as it is a mere vehicle for enforcement.

Thus, the arbitral award, granted in 2015, is subject to the provisions of SI 33 of 2019, notwithstanding its late registration after the effective date. The debt is therefore payable at the prescribed rate of 1US$ to 1RTGS$. The first appellant has thus fully discharged its debt.

The order for costs against the Sheriff is not justifiable. It must be set aside. Costs will follow the cause.

In the result, it is ordered as follows:

1. That the appeal succeeds with costs.

2. That the order of the court a quo in case No. HC5989/19 and case No. HC10315/19 be set aside and be substituted with the following:

“Case No. HC5989/19

(i) The application for a declaratory order be and is hereby granted.

(ii) The liability arising from the arbitral award, dated 19th March 2015, in favour of the first respondent, be and is hereby declared executable in RTGS dollars at the rate of one to one to the United States dollar in accordance with section 4(1)(d) of Statutory Instrument 33 of 2019.

(iii) The first respondent to pay costs of suit.

Case No. HC10315/19

The application is dismissed with costs.”

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Zimbabwe

Final Orders re: Nature, Amendment, Variation, Rescission and the Final and Conclusive Rule iro Quasi Judicial

SC34-22 : NICHOLAS MUKARATI vs PIONEER COACHES (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

SC43-22 : LEGACY HOSPITALITY MANAGEMENT SERVICES LIMITED vs AFRICAN SUN LIMITED and HON. JUSTICE MTSHIYA (RTD) N.O.
Ruled By: MAKONI JA, MATHONSI JA and MWAYERA JA

SC56-22 : CENTRAL AFRICAN BUILDING SOCIETY vs FINORMACG CONSULTANCY (PRIVATE) LIMITED and RETIRED JUSTICE L.G. SMITH
Ruled By: GUVAVA JA, CHATUKUTA JA and MUSAKWA JA

Appealed
SC27-22 : ZIMBABWE CRICKET vs HARARE SPORTS CLUB and ADVOCATE DANIEL TIVADAR (ARBITRATOR)
Ruled By: MALABA CJ, GUVAVA JA and MAVANGIRA JA

View Appeal
HH398-19 : HARARE SPORTS CLUB CASE NO. HC9909/18 and ZIMBABWE CRICKET CASE NO HC10011/18 vs ZIMBABWE CRICKET and HARARE SPORTS CLUB and ARBITRATOR ADVOCATE DANIEL TIVADAR
Ruled By: MATHONSI J

Appealed
HHHH262-10 : ZIMBABWE POSTS (PVT) LTD vs COMMUNICATION AND ALLIED SERVICES WORKERS UNION OF ZIMBABWE
Ruled By: MUTEMA J

View Appeal
SCSC20-16 : ZIMBABWE POSTS (PRIVATE) LIMITED vs COMMUNICATION AND ALLIED SERVICES UNION
Ruled By: MALABA DCJ, GOWORA JA and HLATSHWAYO JA

HH92-15 : CAPRI (PVT) LTD vs HOWARD MAPONGA
Ruled By: MATHONSI J

HH260-14 : UZ – UCSF COLLABORATIVE RESEARCH PROGRAMME vs ISDORE HUSAIWEVHU and WALTER MUTOWO and FUNGAI ZINYAMA and THE SHERIFF FOR ZIMBABWE
Ruled By: MAFUSIRE J

HH494-13 : PATRICIA MAPINI vs OMNI AFRICA (PVT) LTD
Ruled By: TSANGA J

SC30-21 : GRAIN MARKETING BOARD vs ARENEL (PVT) LTD and GORDON GEDDES N.O.
Ruled By: GWAUNZA DCJ, MATHONSI JA and KUDYA AJA

HH497-17 : RICHARD MATTHEWS vs CASTER INTERNATIONAL (PVT) LTD
Ruled By: CHATUKUTA J

HH539-15 : TATENDA MUKAMBA and ODWELL STANLEY vs UNIBAX INVESTMENTS T/A ARUNDEL VILLAGE SPAR
Ruled By: MATANDA-MOYO J

HH626-15 : TIAN ZE TOBACCO COMPANY (PRIVATE) LIMITED vs VUSUMUZI MUNTUYEDWA
Ruled By: MATHONSI J

HH707-15 : RICHARD MATTHEWS vs CRASTER INTERNATIONAL (PRIVATE) LIMITED
Ruled By: MAFUSIRE J

HH102-13 : JOSEPH TAPERA and 17 OTHERS vs FIELD SPARK INVESTMENTS (PVT) LTD
Ruled By: MATHONSI J

HH125-15 : CONFEDERATION OF ZIMBABWE INDUSTRIES vs RITA MBATHA
Ruled By: MATHONSI J

SC13-24 : UNKI MINES (PRIVATE) LIMITED vs SHURUGWI TOWN COUNCIL and JUSTICE A. EBRAHIM N.O.
Ruled By: UCHENA JA

SC13-24 : UNKI MINES (PRIVATE) LIMITED vs SHURUGWI TOWN COUNCIL and JUSTICE A. EBRAHIM N.O.
Ruled By: UCHENA JA

SC66-23 : NATIONAL PHARMACEUTICAL COMPANY vs DRAX CONSULT SAGL
Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

SC69-23 : ZESA HOLDINGS (PRIVATE) LIMITED vs CLOVEGATE ELEVATOR COMPANY (PRIVATE) LIMITED and JUSTICE L.G. SMITH N.O.
Ruled By: MATHONSI JA, KUDYA JA and MWAYERA JA

SC93-23 : AUGUR INVESTMENTS and DOOREST PROPERTIES vs FAIRCLOT INVESTMENT and THE SHERIFF and THE REGISTRAR OF DEEDS
Ruled By: BHUNU JA, CHIWESHE JA and MWAYERA JA

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Law Portal Zimbabwe

Final Orders re: Nature, Amendment, Variation, Rescission and the Final and Conclusive Rule iro Quasi Judicial

SC34-22 : NICHOLAS MUKARATI vs PIONEER COACHES (PRIVATE) LIMITED Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

SC43-22 : LEGACY HOSPITALITY MANAGEMENT SERVICES LIMITED vs AFRICAN SUN LIMITED and HON. JUSTICE MTSHIYA (RTD) N.O. Ruled By: MAKONI JA, MATHONSI JA and MWAYERA JA

SC56-22 : CENTRAL AFRICAN BUILDING SOCIETY vs FINORMACG CONSULTANCY (PRIVATE) LIMITED and RETIRED JUSTICE L.G. SMITH Ruled By: GUVAVA JA, CHATUKUTA JA and MUSAKWA JA

Appealed SC27-22 : ZIMBABWE CRICKET vs HARARE SPORTS CLUB and ADVOCATE DANIEL TIVADAR (ARBITRATOR) Ruled By: MALABA CJ, GUVAVA JA and MAVANGIRA JA

View Appeal HH398-19 : HARARE SPORTS CLUB CASE NO. HC9909/18 and ZIMBABWE CRICKET CASE NO HC10011/18 vs ZIMBABWE CRICKET and HARARE SPORTS CLUB and ARBITRATOR ADVOCATE DANIEL TIVADAR Ruled By: MATHONSI J

Appealed HHHH262-10 : ZIMBABWE POSTS (PVT) LTD vs COMMUNICATION AND ALLIED SERVICES WORKERS UNION OF ZIMBABWE Ruled By: MUTEMA J

View Appeal SCSC20-16 : ZIMBABWE POSTS (PRIVATE) LIMITED vs COMMUNICATION AND ALLIED SERVICES UNION Ruled By: MALABA DCJ, GOWORA JA and HLATSHWAYO JA

HH92-15 : CAPRI (PVT) LTD vs HOWARD MAPONGA Ruled By: MATHONSI J

HH260-14 : UZ – UCSF COLLABORATIVE RESEARCH PROGRAMME vs ISDORE HUSAIWEVHU and WALTER MUTOWO and FUNGAI ZINYAMA and THE SHERIFF FOR ZIMBABWE Ruled By: MAFUSIRE J

HH494-13 : PATRICIA MAPINI vs OMNI AFRICA (PVT) LTD Ruled By: TSANGA J

SC30-21 : GRAIN MARKETING BOARD vs ARENEL (PVT) LTD and GORDON GEDDES N.O. Ruled By: GWAUNZA DCJ, MATHONSI JA and KUDYA AJA

HH497-17 : RICHARD MATTHEWS vs CASTER INTERNATIONAL (PVT) LTD Ruled By: CHATUKUTA J

HH539-15 : TATENDA MUKAMBA and ODWELL STANLEY vs UNIBAX INVESTMENTS T/A ARUNDEL VILLAGE SPAR Ruled By: MATANDA-MOYO J

HH626-15 : TIAN ZE TOBACCO COMPANY (PRIVATE) LIMITED vs VUSUMUZI MUNTUYEDWA Ruled By: MATHONSI J

HH707-15 : RICHARD MATTHEWS vs CRASTER INTERNATIONAL (PRIVATE) LIMITED Ruled By: MAFUSIRE J

HH102-13 : JOSEPH TAPERA and 17 OTHERS vs FIELD SPARK INVESTMENTS (PVT) LTD Ruled By: MATHONSI J

HH125-15 : CONFEDERATION OF ZIMBABWE INDUSTRIES vs RITA MBATHA Ruled By: MATHONSI J

SC13-24 : UNKI MINES (PRIVATE) LIMITED vs SHURUGWI TOWN COUNCIL and JUSTICE A. EBRAHIM N.O. Ruled By: UCHENA JA

SC13-24 : UNKI MINES (PRIVATE) LIMITED vs SHURUGWI TOWN COUNCIL and JUSTICE A. EBRAHIM N.O. Ruled By: UCHENA JA

SC66-23 : NATIONAL PHARMACEUTICAL COMPANY vs DRAX CONSULT SAGL Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

SC69-23 : ZESA HOLDINGS (PRIVATE) LIMITED vs CLOVEGATE ELEVATOR COMPANY (PRIVATE) LIMITED and JUSTICE L.G. SMITH N.O. Ruled By: MATHONSI JA, KUDYA JA and MWAYERA JA

SC93-23 : AUGUR INVESTMENTS and DOOREST PROPERTIES vs FAIRCLOT INVESTMENT and THE SHERIFF and THE REGISTRAR OF DEEDS Ruled By: BHUNU JA, CHIWESHE JA and MWAYERA JA

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SC34-22 : NICHOLAS MUKARATI vs PIONEER COACHES (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

SC43-22 : LEGACY HOSPITALITY MANAGEMENT SERVICES LIMITED vs AFRICAN SUN LIMITED and HON. JUSTICE MTSHIYA (RTD) N.O.
Ruled By: MAKONI JA, MATHONSI JA and MWAYERA JA

SC56-22 : CENTRAL AFRICAN BUILDING SOCIETY vs FINORMACG CONSULTANCY (PRIVATE) LIMITED and RETIRED JUSTICE L.G. SMITH
Ruled By: GUVAVA JA, CHATUKUTA JA and MUSAKWA JA

Appealed
SC27-22 : ZIMBABWE CRICKET vs HARARE SPORTS CLUB and ADVOCATE DANIEL TIVADAR (ARBITRATOR)
Ruled By: MALABA CJ, GUVAVA JA and MAVANGIRA JA

View Appeal
HH398-19 : HARARE SPORTS CLUB CASE NO. HC9909/18 and ZIMBABWE CRICKET CASE NO HC10011/18 vs ZIMBABWE CRICKET and HARARE SPORTS CLUB and ARBITRATOR ADVOCATE DANIEL TIVADAR
Ruled By: MATHONSI J

Appealed
HHHH262-10 : ZIMBABWE POSTS (PVT) LTD vs COMMUNICATION AND ALLIED SERVICES WORKERS UNION OF ZIMBABWE
Ruled By: MUTEMA J

View Appeal
SCSC20-16 : ZIMBABWE POSTS (PRIVATE) LIMITED vs COMMUNICATION AND ALLIED SERVICES UNION
Ruled By: MALABA DCJ, GOWORA JA and HLATSHWAYO JA

HH92-15 : CAPRI (PVT) LTD vs HOWARD MAPONGA
Ruled By: MATHONSI J

HH260-14 : UZ – UCSF COLLABORATIVE RESEARCH PROGRAMME vs ISDORE HUSAIWEVHU and WALTER MUTOWO and FUNGAI ZINYAMA and THE SHERIFF FOR ZIMBABWE
Ruled By: MAFUSIRE J

HH494-13 : PATRICIA MAPINI vs OMNI AFRICA (PVT) LTD
Ruled By: TSANGA J

SC30-21 : GRAIN MARKETING BOARD vs ARENEL (PVT) LTD and GORDON GEDDES N.O.
Ruled By: GWAUNZA DCJ, MATHONSI JA and KUDYA AJA

HH497-17 : RICHARD MATTHEWS vs CASTER INTERNATIONAL (PVT) LTD
Ruled By: CHATUKUTA J

HH539-15 : TATENDA MUKAMBA and ODWELL STANLEY vs UNIBAX INVESTMENTS T/A ARUNDEL VILLAGE SPAR
Ruled By: MATANDA-MOYO J

HH626-15 : TIAN ZE TOBACCO COMPANY (PRIVATE) LIMITED vs VUSUMUZI MUNTUYEDWA
Ruled By: MATHONSI J

HH707-15 : RICHARD MATTHEWS vs CRASTER INTERNATIONAL (PRIVATE) LIMITED
Ruled By: MAFUSIRE J

HH102-13 : JOSEPH TAPERA and 17 OTHERS vs FIELD SPARK INVESTMENTS (PVT) LTD
Ruled By: MATHONSI J

HH125-15 : CONFEDERATION OF ZIMBABWE INDUSTRIES vs RITA MBATHA
Ruled By: MATHONSI J

SC13-24 : UNKI MINES (PRIVATE) LIMITED vs SHURUGWI TOWN COUNCIL and JUSTICE A. EBRAHIM N.O.
Ruled By: UCHENA JA

SC13-24 : UNKI MINES (PRIVATE) LIMITED vs SHURUGWI TOWN COUNCIL and JUSTICE A. EBRAHIM N.O.
Ruled By: UCHENA JA

SC66-23 : NATIONAL PHARMACEUTICAL COMPANY vs DRAX CONSULT SAGL
Ruled By: BHUNU JA, CHIWESHE JA and MUSAKWA JA

SC69-23 : ZESA HOLDINGS (PRIVATE) LIMITED vs CLOVEGATE ELEVATOR COMPANY (PRIVATE) LIMITED and JUSTICE L.G. SMITH N.O.
Ruled By: MATHONSI JA, KUDYA JA and MWAYERA JA

SC93-23 : AUGUR INVESTMENTS and DOOREST PROPERTIES vs FAIRCLOT INVESTMENT and THE SHERIFF and THE REGISTRAR OF DEEDS
Ruled By: BHUNU JA, CHIWESHE JA and MWAYERA JA