GOWORA
J:
On
1 January 2003 the applicant and the first respondent executed an
agreement for the “supply of primary beverage transport services.”
In
terms of clause 8 of the agreement the first respondent, Delta,
appointed the services of the applicant, Pioneer, to distribute and
deliver products on its behalf to various destinations.
In
order to perform its obligations under the agreement Pioneer
undertook to supply vehicles to Delta for use in the distribution
aforesaid. To that end Pioneer had to make available to Delta twelve
mechanical horses which would be used to draw thirty four trailers,
these being supplied by Delta.
The
agreement also provided for the supply of additional horses by
Pioneer on an ad hoc basis as the exigencies of the situation would
have demanded.
As
sometimes happens, the parties had a falling out.
The
agreement, in terms of clause 18 thereof, provided for the settlement
of disputes through an arbitration process.
In
due course the second respondent was appointed as arbitrator to the
dispute and the matter referred to him. The parties were called
before him and on 16 January 2010 he issued an award. The applicant
has through these proceedings brought an application to have the
award set aside by this court in terms of Chapter VII Article 34 of
the First Schedule to the Arbitration Act [Cap
7:15].
The applicant also seeks costs against the first respondent.
The
founding affidavit has been deposed to by a John Groves. He states
that he is employed as a Managing Director by the applicant and that
he is authorised to depose to the affidavit.
He
states therein that the application was being brought to court in
accordance with the provisions of section 2 of Article 34.
The
dispute is centred around the effect to be given to clause 9(f) of
the agreement, in terms of which, upon termination of the agreement,
Pioneer was supposed to return the trailers to Delta, and such return
to be in “good working condition” and order fair wear and tear
excepted.
The
deponent states that on 26 September Delta commenced arbitration
proceedings in terms of a statement of claim filed of record. Pioneer
opposed the claim and the matter was set down for hearing before the
arbitrator. Both parties adduced viva
voce
evidence.
According
to the deponent to the affidavit the crystal issue before the
arbitrator was the duration of the agreement.
The
arbitrator found that the claim by Delta had not prescribed at the
time that it submitted the dispute to arbitration. The deponent
contends therefore that the arbitrator acted outside the enabling
provisions of the agreement. He contends further that the finding by
the arbitrator that the agreement between the parties terminated on
30 November 2005 was not rationally linked to either the evidence
adduced by the parties or submissions made by the same on the papers
or during the hearing. He contends further that in finding as he did
that the agreement terminated on 30 November instead of 31 December
as provided for in clause 2 of their agreement, the arbitrator had
created a new contract for them.
In
addition to the above, the applicant contended that the mandate of
the arbitrator was limited to the duration of the agreement, and that
consequently he was supposed to ascertain the obligations of the
parties as at the date of termination of the agreement.
However,
contends the applicant, the arbitrator seemed to have extended the
applicant's obligations under the contract beyond the lifespan of
the agreement.
It
is further contended that the applicant's liabilities ought to have
been ascertained as at the date. According to the applicant the award
is not limited to the termination date as found by the arbitrator,
that is 30 November 2005, but goes beyond that. Therefore, the
applicant contends, even on his own version, the arbitrator has acted
outside the provisions of the contract. This, he suggests is contrary
to the Zimbabwean substantive law on the privity of contracts and
therefore contrary to public policy.
The
deponent also avers that by awarding specific performance in favour
of a party who had in terms of the contract bilateral obligations
which it had itself not performed and was not in a position to
perform the arbitrator had unjustly enriched one of the parties at
the expense of the other contrary to the positive law in Zimbabwe
regarding bilateral obligations and further that this was contrary to
public policy.
In
the event, the applicant prayed for the setting aside of the arbitral
award.
The
first respondent has opposed the application. It has raised a number
of points in limine.
(i)
Firstly, the first respondent contends that the applicant has
approached the court with dirty hands and ought not to be accorded a
hearing by this court until such time as it would have purged its
default.
The
first respondent contends that the filing of an application for
review has not suspended the operation of the award by the arbitrator
but that the applicant has not complied with the award.
A
letter was addressed to the applicant's legal practitioners by the
respondent's legal practitioners putting them on terms to abide by
the arbitration award by a specified date. To date there has been no
compliance and the respondent is of the view that the applicant has
approached the court with dirty hands and should not, as a
consequence be heard by the court.
Effectively
therefore, this court must find that the applicant has dirty hands
and should as a consequence refuse to hear the applicant until such
time as it would have complied with the award.
The
first respondent argued that the decision of the Supreme Court in
Associated
Newspapers of Zimbabwe
(Pvt)
Ltd
v The
Minister of State for Information and Publicity & Ors
2004 (1) ZLR 538 is apposite herein. This is what CHIDYAUSIKU CJ had
to say:
“… That
case does not seek to define the extent of that principle. It
certainly is not an authority for the proposition that denial of
relief will be confined only to those litigants whose conduct lacks
probity or honesty or is tainted with moral obliquity. In S
v Nial
and S
v Nkosi
the court refused to hear appeals of the appellants who had absconded
or failed to comply with bail conditions. Defiance of a court order
does not involve dishonesty or moral obliquity, yet litigants in
defiance of court orders, more often than not, are denied relief by
the court until they have purged their contempt. In my view, there is
no difference in principle between a litigant who is defiance of a
court order and a litigant who is in defiance of the law. The court
will not grant relief to a litigant with dirty hands in the absence
of good cause being shown or until such defiance or contempt has been
purged.”
The
applicant on the other hand, denies that it has dirty hands as
contended by the first respondent, and suggests that the contention
by the first respondent that it, the applicant, should have first
complied with the award before instituting these proceedings is
ill-conceived.
It
disputes the application of the dirty hands principle to this dispute
and to the refusal by itself to first comply with the award before
applying for the award to be set aside. It contends that to deny the
applicant audience and opportunity to be heard would defeat the very
basis of Article 34 of the Model Law upon which the applicant seeks
recourse.
It
contends further that if the applicant were requested by the court to
comply with the arbitral award first and then seek an order for its
setting aside any court order granted to it thereafter would be of
academic interest especially in circumstances such as this where the
first respondent had sought and obtained an award for specific
performance.
The
application has been brought under Article 34 of the Model Law which
has been incorporated in our Arbitration Act.
I
am in agreement with the contention by the applicant that the right
of an aggrieved party under Article 34 is not qualified except for
the provision that a party is not entitled to bring an application
thereunder after the lapse of three months after the award has been
made.
The
Act bestows upon a party the right to apply for the setting aside of
an award on the grounds set out therein.
To
require a party to comply with the award before launching an
application under the Article would be tantamount, in my view, to
denying such party the right to have recourse in terms of the
Article. In the circumstances of this case the award against the
applicant was one for specific performance.
I
am also of the view that the first respondent is taking a simplistic
and narrow view of the dicta in Associated
Newspapers of Zimbabwe
v The
Minister of State for Information and Publicity & Ors
(supra).
In
that case what was at issue was whether a party could be heard by a
court whilst refusing to comply with a statutory provision of the Act
which required that media houses be registered. There was in that
case an open and clear defiance to comply with a statutory provision
applicable to the litigant to permit it to operate as a media house.
The applicant was despite the requirement operating without a licence
or permit as required under the enabling Act.
So
too was the situation in Commercial
Farmers Union & Ors
v Minister
of Lands and Rural Resettlement and Ors
SC31/10. CHIDYAUSIKU CJ had this to say at p26 of the cyclostyled
judgment:
“Apart
from this there is the principle that a litigant who is acting in
open defiance of the law cannot approach a court for assistance. See
Associated
Newspapers of Zimbabwe
(Private)
Limited v The
Minister of State for Information and Publicity and Ors
SC110/04. Indeed, if this point had been raised as a preliminary
point, the probabilities are that this application would have been
dismissed on that point alone. A former owner who is in occupation of
acquired land in open defiance of the law cannot approach the courts
for assistance.”
Again
as in the case of ANZ
v Minister
of State for Information and Publicity & Ors
(supra)
the issue before the court was the clear and open defiance by the
applicant in complying with a statutory provision of an Act of
Parliament.
In
casu,
the applicant has taken on review an arbitral award in terms of a
right accorded under an Act which does not require compliance with
the award before approaching the court for redress. The situation of
the applicant herein is distinguishable from the authorities referred
to above. Therefore, in the circumstances of this case I am not
persuaded to find that the applicant has dirty hands and that it is
not entitled to be heard.
(ii)
In relation to the second point in
limine
the first respondent contends that clause 18 of the agreement
provides that the parties irrevocably agreed that the decision of the
arbitrator in any arbitration proceedings brought under the agreement
would be binding upon each of them and that this was in respect of
any dispute arising out of or in connection with the agreement
including any dispute regarding its existence, validity or
termination.
Accordingly,
the first respondent contends, the parties are bound by the
provisions of clause 18 of the agreement and consequently, the
applicant cannot have recourse against the award by virtue of these
proceedings.
The
first respondent contends further, that, assuming that the parties do
have recourse against the award notwithstanding the provisions of
clause 18, the application filed in casu
does not disclose a cause of action as contemplated in Chapter 7
Article 34 of the First Schedule to the Arbitration Act as modified
by S I 208/1996.
The
first respondent contends that in terms of Article 34(5) it is only
if the award was induced or effected by fraud that it can be said to
have been contrary to public policy. However, so the argument goes,
the applicant has made no such allegation. Accordingly, so contends
the first respondent, there is no cause of action exhibited on the
papers.
A
party to an agreement which provides for relief by way of an award by
an arbitrator has a right to have the award set aside as provided for
in Article 34. It has been given legislative imprimatur under the
Act, and the respondent has not pointed out any authority which
allows parties to an agreement to override provisions that have been
spelt out in an Act of Parliament.
In
this connection I would want to quote from comments I made in Recoy
Investments
(Pvt)
Ltd
v
Tarcon
(Pvt)
Ltd
HH159/11 to the following effect:
“In
my view, the respondent has a misapprehension of the law. The court
has the jurisdiction to hear the matter where none of the parties has
applied for a stay of the proceedings and a consequential referral to
arbitration. Article 8 is clear and admits of no ambiguity. I am
bolstered in this view by dicta from CLOETE JA in PCL
Consulting (Pty)
Ltd v
Tresso
Trading 119 (Pty)
Ltd 2009
(4) SA 68 at 71G-72C to the following effect:
'The
mere fact that parties have agreed that disputes between them shall
be decided by arbitration does not mean that court proceedings are
incompetent. If a party institutes proceedings in a court despite
such an agreement, the other party has two options:
(i)
It may apply for a stay of the proceedings in terms of s6 of the
Arbitration Act 42 of 1965; or
(ii)
It may in a special plea (which is in the nature of dilatory plea)
pray for a stay of proceedings pending the final determination of the
dispute by arbitration.'
The
definitive statement of the law in this regard is to be found in
Rhodesian
Railways Ltd v
Mackintosh 1932
AD 359 at 370-371 where WESSELS ACJ said:
'All
that s6(1) lays down is that you cannot adopt the cheaper and
speedier procedure therein provided when once you have delivered
pleadings or taken any other step in the proceedings. If you have
taken any step in the proceedings, then you can no longer adopt the
speedier and less costly procedure of applying to the court to stay
proceedings but you must file your pleadings in the ordinary way. In
pleading however, you can raise the defence that the case ought to be
decided by arbitration, this can be done by a special preliminary
plea'”.
The
High Court, being a superior court of jurisdiction has the power to
hear any matter and any party unless its jurisdiction has been
specifically ousted by statute.
In
addition Article 8 of the Arbitration Act permits the parties who
have submitted a dispute for arbitration and which process has now
been brought before this court for the setting aside of any award
resulting from such process to apply to the court for a stay of those
proceedings.
The
powers granted to the court under such application are as follows:
“Arbitration
agreement and substantive claim before court
(1)
A court before which proceedings are brought in a matter which is the
subject of an arbitration agreement shall, if a party so requests not
later than when submitting his first statement on the substance of
the dispute, stay those proceedings and refer the parties to
arbitration unless it finds that the agreement is null and void,
inoperative or incapable of being performed.
(2)
Where proceedings referred to in para (1) of this article have been
brought, arbitral proceedings may nevertheless be commenced or
continued, and an award may be made, while the issue is pending
before the court.”
A
reading of Article 8 above makes it clear that the court must stay
proceedings upon the application of a party who wishes that the
matter proceed to arbitration for resolution on the dispute. That in
my view appears to be the only reason for the court's jurisdiction
to be temporarily suspended.
Once
the parties have referred the dispute to arbitration and an award has
been made the jurisdiction of the court to decide on the award is
unfettered.
This
court is however seized with an application for the setting aside of
an arbitral award. I therefore hold that this court has the
jurisdiction to determine this matter on its merits.
Article
34 of the First Schedule to the Arbitration Act [Cap
7:15]
allows for the setting aside of an arbitral award by this court in
very restricted circumstances.
In
casu,
the applicant contends that the award deals with a dispute not
contemplated by or not falling within the terms of the submission to
arbitration, or that it contains decisions or matters beyond the
scope of the submission to arbitration and that the award itself is
contrary to the public policy of Zimbabwe.
Clause
18.1 of the service contract made a provision for the reference of
any dispute there under to arbitration and that such arbitration
proceedings would be final and binding upon the parties herein.
The
exercise of power by the High Court under Article 34 has already been
discussed in the case of Zimbabwe
Electricity Supply Authority
v Maposa
1999
(2) ZLR 452 (S) where GUBBAY CJ said the following:
“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 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.
Although
no moral turpitude whatsoever attached to the conduct of the
arbitrator, I am satisfied that his award bears the adverse
characteristics I have referred to. It is my belief that, in the
circumstances pertaining, the award made results in so palpable and
substantial an injustice to ZESA that for this court to uphold it
would be to sanction a conflict with the public policy of Zimbabwe.”
The
principle enunciated in this judgment was confirmed in Delta
Operations
(Pvt)
Ltd
v Origen
Corporation
SC86/06.
It
is therefore trite that under the law the court is empowered to set
aside an arbitral award if the applicant who wishes to have it set
aside can establish that the award is in conflict with the public
policy of Zimbabwe.
The
applicant has attacked the award on three prongs;
(i)
Firstly that the arbitrator acted outside the provisions of the
enabling agreement;
(ii)
That the claim was prescribed; and
(iii)
That the order for specific performance was contrary to the public
policy of Zimbabwe regarding bilateral and reciprocal obligations and
the principle of unjust enrichment.
According
to the applicant the award should therefore be set aside on the
following grounds:
1.
That the arbitrator acted outside the provisions of the enabling
agreement;
2.
That the claim was prescribed in terms of s14 of the Prescription
Act; and
3.
That the order for specific performance in the circumstances of this
case was contrary to the public policy of Zimbabwe regarding
bi-lateral reciprocal obligations and the principles of unjust
enrichment.
In
relation to the first issue the applicant contended that the
arbitrator had acted outside the provisions of the enabling
agreement.
It
is contended that the first respondent had an onus
to establish the duration of the agreement between the parties.
Contrary to the provisions of the contract, so the applicant
contends, the arbitrator placed the onus
on the applicant to disprove the contentions of the claimant.
The
applicant contends that before the arbitrator it put up the case that
the agreement commenced on 1 January 2003 and terminated on 31
December 2004 and that the respondent, had contrary to that
assertion, contended that the agreement had not terminated up to the
time that it instituted proceedings.
The
applicant contends that the arbitrator disagreed with the versions
that both parties placed before the arbitrator and that in
approaching the matter as he did he created a new contract between
the parties based on what he termed practical considerations.
The
applicant contends in this regard that the arbitrator unilaterally
extended the duration of the contract where he held the date of
termination as 30 November 2005.
The
applicant contends therefore that the award is liable to set aside on
the grounds that it is in conflict with the public policy of
Zimbabwe.
The
applicant suggests that there was ambiguity in the contract and that
in fact the arbitrator did confirm that the contract was ambiguous
and that therefore he should have invoked the contra
proferentum
rule in favour of the applicant and this error on his part
constituted a gross error on his part which further rendered the
award unenforceable.
He
suggests that the arbitrator must have found that clause 8(d) was
ambiguous and contrary to the clear provisions of clauses 1 and 2 of
the agreement which stated the commencement and termination dates. He
suggests that the contract was prepared by the Delta and as it was
ambiguous in relation to clause 8(d) the arbitrator should have been
guided by the contra
proferentem
rule and find that the contract had terminated as provided for in
clause 2.
He
stated that the arbitrator failed to apply the clear and positive
principles of Zimbabwean law in resolving the dispute and that in the
circumstances the award was contrary to the public policy of
Zimbabwe.
The
first respondent has contended that it is not for this court to
decide whether or not the arbitrator was correct to find that the
agreement would have terminated on the date that the arbitrator said
it terminated. It was suggested by the respondent that what this
court must ask itself is whether the conclusions reached by the
arbitrator offends the public policy of Zimbabwe in the sense of
being so far reaching and outrageous in its defiance of logic or
accepted moral standards that a sensible and fair-minded person would
consider the conception of justice in Zimbabwe would be intolerably
hurt by the award. See ZESA
v Maposa
(supra).
The
critical issue for determination before the arbitrator was the
duration of the contract.
It
is trite that the original UNCITRAL Model did not define the concept
of public policy. It is accepted however that the concept covers
fundamental principles of law and justice in substantive as well as
procedural law.
In
casu,
the standard set in the Maposa
case has not been met.
The
applicant has chosen not to place the record of proceedings before
for the court resulting in the court being unable to judge for itself
whether or not the conclusions of the arbitrator are so outrageous in
defiance of logic and accepted moral standards as to lead a fair
minded person to believe that justice in Zimbabwe would be
intolerably hurt by the award in favour of the first respondent.
The
applicant has not, in the affidavit on which the application is
premised, even alleged that the conclusions reached by the arbitrator
defied logic to such unacceptable standards.
Instead,
the applicant has sought to deal with the matter as if it were an
appeal or application for review.
In
ZESA
v Maposa
(supra)
the court stated:
“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 decline to recognise an award
having regard to what it considers should have been the correct
decision.”
Whether
or not the arbitrator arrived at the wrong decision is not an issue
that this court is empowered in terms of Article 34 to decide.
What
the applicant should have established is that the decision and
conclusions reached, based on the standard set in the Maposa
case was so outrageous in its defiance of logic and reasoning that
any fair minded person would have a conception that justice in
Zimbabwe would be hurt by that award.
This
is not the case of the applicant.
There
is no suggestion anywhere in the heads of argument pointing me to an
aspect of the award that breached the rules of natural justice.
In
any event, there is no principle that says that an arbitrator can
have his award set aside on the basis that he erred or was wrong. If
it is there I have not been made aware of it.
In
Telcordia Technologies Inc v Telcom SA 2007 (3) SA 266 HARMS JA
stated:
“...
An arbitrator 'has the right to be wrong' on the merits of the
case, and it is a perversion of the language 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 far cry from saying that they constitute a misconception
of the nature of the inquiry. To adopt the quoted words of HOEXTER
JA; it cannot be said that the wrong interpretation of the Integrated
Agreement prevented the arbitrator from fulfilling his agreed
function or from considering the matter left for him for decision. On
the contrary, in interpreting the Integrated Agreement the arbitrator
was fulfilling the function assigned to him by the parties, and it
follows that the wrong interpretation of the Integrated Agreement
could not afford any ground for review by the court.”
The
next point to consider is whether or not the claim before the
arbitrator had prescribed and that the award by the arbitrator
therefore in the circumstances was contrary to the public policy of
Zimbabwe.
The
deponent to the founding affidavit contends that the agreement
terminated on 31 December 2004. Prescription then started running on
1 January 2005 and completed its course on 31 December 2008.
The
claim was instituted on 26 September well after it had become
prescribed.
He
states that the date of termination of the agreement cannot be in
doubt as the first respondent sought a renewal in a letter dated 12
September 2005. It is further contended by the applicant that the new
contract, save for alterations to the dates for commencement and
termination, is in exactly the same terms as that concluded on 1
January 2003.
The
applicant has argued that the arbitrator correctly identified the
critical issue for determination as being the duration of the
agreement and that once this had been established the issue of
liability would be settled. It was in the view of the applicant, up
to the claimant to establish the duration of the agreement but that
surprisingly the onus
appeared to have been placed on the applicant.
The
applicant further contends that it is against the public policy of
Zimbabwe to enforce obligations which have become extinguished
through prescription. Therefore, the applicant contends, the relief
granted to the first respondent was contrary to the provisions of
ss14 and 15 of the Prescription Act [Cap
8:11].
Further
to this, the applicant is alleged to have admitted liability in terms
of two documents admitted as exhibits before the arbitrator.
These
documents, according to the first respondent, served to interrupt any
alleged prescription as claimed by the applicant.
In
addition to this, the first respondent contended that despite the
protestations by the applicant, the parties had not executed a
subsequent agreement and yet they continued to deal with each leading
to the conclusion that the contract did not terminate on 31 December
2004 as alleged by the applicant but continued beyond the stipulated
date as found by the second respondent.
The
respondent denied that the second respondent had sought refuge in
clause 8(d) of the contract and it denies further that this clause
contradicts clauses 1 and 2 of the same.
In
the premises, the first respondent denied that there had been a
contravention of ss14 and 15 of the Prescription Act.
Clauses
1 and 2 of the agreement provide for a commencement as well as a
termination date. However, clause 8(d) also speaks of the duration of
the agreement notwithstanding the provisions of the two clauses
referred to above.
This
is what it provides:
“Notwithstanding
the date of signature of this agreement, this agreement shall be
deemed to have commenced on the commencement date and shall be
relevant after two years. After this review period, the agreement
shall continue indefinitely save that either party may withdraw from
this agreement on giving three months notice in writing to the
other.”
In
addition the evidence adduced before the arbitrator seemed to suggest
that the parties continued trading with each other long after the
agreement would have been terminated.
If
indeed the arbitrator came to the conclusion that the matter had not
prescribed when in fact it had, such a finding is not in my view a
breach of s14 of the Prescription Act. The Act does not create a
criminal offence in the event that a debt that has prescribed is
found by a court or tribunal not to have prescribed.
As
to the alleged date of termination of the agreement, the first
respondent denies that the agreement terminated on 31 December 2004
and contends that the finding by the second respondent cannot be
faulted.
The
first respondent contends that the allegations by the applicant in
regard to this aspect amount to an appeal.
It
also contends that the evidence adduced before the arbitrator
confirmed that the agreement continued beyond 31 December as the
applicant did not return any of the trailers by that date. The first
respondent makes reference to evidence given by one Dawson of the
applicant who stated that the parties carried on dealing with each
other until mid 2007. This witness is alleged to have confirmed under
cross examination that no trailers were handed back to the first
respondent on 31 December 2004.
Despite
an allegation in the opposing papers over this issue the applicant
did not find it necessary to adduce evidence by way of affidavit to
contradict the averment.
One
Kevin Motsi of the applicant is also alleged to have given evidence
that he had been employed by the applicant in 2005 and that at the
time the applicant was towing the first respondent's trailers. The
relationship according to him, had continued until 2007.
The
applicant states that the claim presented to the arbitrator was for
specific performance and that is what the first respondent got in the
award from the arbitrator.
However,
argues the applicant the agreement relied upon imposes bi-lateral and
reciprocal obligations on the parties. Specific reference is made to
clause 14 in this regard. Specifically the applicant contends that
the maintenance of the trailers was a recoverable cost from Delta and
that this would depend upon the mileage covered on a monthly basis.
The
applicant suggests that the arbitrator must have found that due to
the deteriorating economic situation in Zimbabwe the parties were
unable to perform on the contract as from 2005.
The
applicant contends further that the maintenance of the trailers was
intrinsically linked to the first respondent's ability to provide
the stipulated monthly mileage in respect of each horse in accordance
with the provisions of clause 14 of the agreement for the applicant
to recover the full maintenance costs for the availed trailers in
accordance with the costing module.
The
applicant contends that it had furnished to the arbitrator schedules
which showed that from December 2004 the parties had operated on an
ad hoc basis as opposed to the strict terms of the agreement and that
in view of that evidence the arbitrator had found that the first
respondent was not providing the requisite mileage post 31 December
2004.
Therefore,
contends the applicant, in ordering specific performance
retrospectively as he did, the arbitrator acted outside the positive
law of Zimbabwe regarding the enforcement of bi-lateral obligations
between the parties. Put differently, the applicant contends that it
is against the law of contract of Zimbabwe to direct a party to
specifically perform on a contract where the other party thereto was
unable and remained unable to perform in terms of that contract.
In
addition, it is contended that the order for specific performance
amounts to unjustified enrichment in that the first respondent was
now unjustly enriched retrospectively in respect of a contract which
itself did not specifically perform. This was due to the fact that in
order to comply with the award the applicant would have to incur
pecuniary loss in multi-currency as opposed to the Zimbabwe dollar
which was the currency for performance and payment under the
agreement. Accordingly, the order for specific performance would
again be contrary to the public policy of Zimbabwe and the relief
should not have been granted to the first respondent in the first
place.
The
first respondent contended that the applicant had been expected to
return the trailers in good working order, fair wear and tear
excepted. The tyres were however required to have, upon the return of
the trailers, the same amount of rubber as at the date of take over
by the applicant.
Further
it is denied that the second respondent ordered specific performance
retrospectively.
It
is averred that all the second respondent did was to give effect to
the contract and determine the obligations of the applicant in terms
of clause 9(f) of the service contract. It is consequently denied
that the order for specific performance was contrary to public policy
as the applicant did not allege undue influence, fraud or a breach of
the rules of natural justice.
It
is averred that there were no bilateral obligations as at the date of
termination of the contract as the applicant had the obligation to
restore the trailers in good working condition and order. The first
respondent's obligation had been defined in clause 9(c) to ensure
that all the trailers were validated by a certificate of fitness. By
providing the certificates the first respondent contends that it had
complied with its obligations under the contract.
In
so far as the jurisdiction of the second respondent is concerned the
first respondent contends that it was wide and was not limited to
ascertain the obligations of the parties as at the date of the
termination of the agreement but included any questions regarding the
existence, validity or termination of the same.
The
first respondent accepts that the claim it filed with the arbitrator
was for specific performance and that this was in terms of the
agreement between the parties.
The
respondent is of the view that the applicant is raising issues that
are specifically dealing with an appeal which issues should not be
entertained by this court.
The
point is also made that the applicant had not filed a counter
application before the arbitrator to the effect that the first
respondent had not performed its obligations in terms of the
contract. The court is being urged as a result not to have regard to
any suggestion that the maintenance of the trailers was a recoverable
cost in terms of the contract as that was not one of the factors for
consideration under Article 34.
It
is contended that the applicant's real grievance is that the second
respondent came to a wrong conclusion on the facts and the law.
It
is denied that the award unjustly enriched the first respondent at
the expense of the applicant.
The
nature of a contract is that two or more parties thereto reciprocally
promise or one of them promises to the other or others to give some
particular thing or to do or refrain from doing some particular act.
There
is consequently, a presumption that in every bilateral or
synallagmatic contract the common intention is that neither should be
entitled to enforce the contract unless he has performed or is ready
to perform his own obligations.
The
parties to this dispute entered into a contract in terms of which
each of them assumed obligations to the other and in return also
acquired rights flowing from the assumption of such obligations.
In
terms of clause 8(d) of the contract herein, Pioneer was to assume
the responsibility for the maintenance, licensing and annual
certificates of fitness in relation to the trailers supplied to it by
Delta. In the event that Pioneer incurred any additional expenses in
relation to this obligation arising from the structural defects from
the trailers then Delta would consider meeting part of a particular
expense.
On
termination of the agreement, the clause in (f) provided that Pioneer
would return the trailers in good working condition, fair wear and
tear excepted.
I
am somewhat hampered by not having been provided with the record of
the proceedings.
The
first respondent has however availed copies of two letters which had
been placed before the arbitrator and specifically dealt with the
issue of prescription. The first is an e-mail written by Kelvin Motsi
of the applicant on 24 October 2007 and is addressed to the first
respondent. The pertinent part of the e-mail reads as follows:
“As
per last mail below and discussion with Delta yesterday we are still
working on your trailers and all efforts are being made to make such
trailers available. Trailers T6554 and T6555 went to VID this weekend
and did not pass the inspection, the issues raised have been
rectified now and the trailers (sic) due for inspection again today.
T6244
and T6245 are also getting ready for VID. As per our discussion once
back from VID and passed (sic) we will advise your (Delta) workshops
for a handover.
I
fully understand the pressure you are going through to supply the
country. We at Pioneer are putting in 100% to try and get these
trailers ready under the difficult conditions of getting in the
spares and other items required to bring them up to spec. if you have
other ideas on how best we can source these items then we are open to
discuss.
I
however also do not take lightly the comments raised against myself
on this issue, the reasons for the delays are not known by me alone.
May I propose we sit round a table and air out all issue involved and
identify responsibility to both parties in the smooth handover of
such trailers and relations going forward.”
The
second is a letter dated 27 March 2008 addressed to a Mr M Sekerani
of Delta by Mark Dawson from Pioneer. It is appropriate to quote the
full text of the letter;
“With
great embarrassment I write to you yet again apologising (sic) for
the delay in the return of your trailers to you. We wish to state
that we are not in any way trying to ignore or escape our obligation
to you and are fully aware that we are testing your patience and
leniency on this issue. We are still trying to recover from a huge
hole that was left by previous employees as well as a huge skills gap
that has emerged due to a skills flight of artisans.
We
however intend to be delivering on trailer per week to you as from
this week, whereas previously we had committed to two per month.
To
achieve this we have employed two coach builders from Deven
Engineering who will start on our payroll on 1 April. We have
imported a sand blaster from South Africa. We are also importing
paint from South Africa.
We
thank you for the loan of the paint and will return what we have
borrowed next week. We thank you for your leniency so far and look
forward to making good our obligation to you.”
I
am persuaded that from the tenor of the two letters that were
submitted to the arbitrator by the first respondent it was never in
doubt that the applicant was aware of its obligations under the
contract and that it had expressed every intention to fulfil those
obligations.
The
e-mail from Motsi and the letter from Dawson both clearly spelt out
the acceptance by the applicant of returning the trailers to the
first respondent in good working condition.
If
the applicant had not accepted the obligation or had misunderstood
the obligation, it would not have taken upon itself the expense of
hiring coach builders and a sand blaster to work on the trailers. It
had also ensured that each of the trailers prior to delivery to Delta
had to pass a fitness test with VID.
This,
in my view, was clearly in accordance with the requirement in the
contract that the trailers be returned to Delta in good working
condition, fair wear and tear excepted.
I
do not understand the applicant to suggest that the trailers should
not have been returned.
The
argument is that the second respondent should not have required that
the applicant be made to perform in terms of the contract when the
first respondent had itself not performed its own part of the
contract.
The
obligation of the first respondent was to provide the applicant with
trailers to enable the latter to utilise them in the distribution of
products on behalf of Delta. The parties' reciprocal obligations
during the life of the contract are not in dispute. Once the
agreement is terminated, the status quo
ante
had of necessity to be restored. This necessitated the return by the
applicant of the first respondent's trailers in good working
condition, fair wear and tear excepted.
I
am of the view that the reasoning by the arbitrator in requiring the
applicant to comply with this contractual obligation cannot be
faulted.
I
am unable to accept as cogent the argument by the applicant that the
agreement had envisaged bilateral obligations on the parties and that
in awarding specific performance in the first respondent's favour
the arbitrator had imposed an obligation upon one party when the
other party to the contract was clearly not in a position to perform
its own part of the obligation.
I
accept that during the currency of the agreement the first respondent
was obliged to allocate trailers for the facilitation of the
transportation of its goods by the applicant. Charges raised by the
applicant for this service would permit the applicant to ensure that
its horses and the first respondent's trailers would be maintained
in a roadworthy condition and be certified fit by VID. Upon
termination of the agreement however it was the responsibility of the
applicant to return the first respondent's trailer in good working
condition, fair wear and tear excepted.
I
cannot see how by giving effect to the letter of the agreement
regarding the obligation imposed upon the applicant to return the
trailers in good and working condition it can be suggested that the
arbitrator imposed an obligation upon one party to the agreement.
The
first respondent contends further that it has been advised by its
legal representatives that no appeal lies against an arbitral award.
It
contends that the applicant wants the award set aside on the premise
that the arbitrator came to a wrong conclusion on the facts and on
the law. The applicant is however camouflaging these proceedings to
have the aspect of a review when what the applicant seeks is an
appeal. There is not a single ground for review on the papers.
Accordingly, the first respondent prays that the application be
dismissed on that ground alone, specifically that the applicant does
not have a cause of action.
Finally,
the first respondent avers that the applicant has embarked on
vexatious and frivolous litigation and that in order for the court to
show its displeasure, it is only proper that the applicant be mulcted
with an appropriate order of costs on a punitive scale.
The
record of proceedings of the arbitration process was not before the
court.
The
submission from the applicant's counsel was that it was understood
that it was the responsibility of the second respondent, the
arbitrator, to furnish the record to the Registrar of this court. As
matters stand the arbitrator did not appear or file any documents.
The
arbitration process is completely separate from the court system and
without any effort expended by the applicant to secure the provision
of the record of proceedings by the arbitrator I am not aware how
else this was to be achieved.
The
applicant has failed to establish that the award given in favour of
the first respondent was contrary to public policy in any of the
respects alleged. I am therefore not persuaded that there is any
merit in the application.
As
for the costs, the first respondent prayed for a punitive order of
costs. I have not been addressed on the reasons why the first
respondent considers the application frivolous and meriting an award
of costs on the higher scale.
The
mere fact that a party has decided to take on review a decision it is
not happy with does not reflect in my view a frivolous attitude. The
first respondent needed to show that the applicant did not have faith
in its litigation and had instituted such litigation mala fide with
an intention other than a desire to have the award properly set
aside. There is no abuse of court process alleged on the papers and
in the event I persuaded that an order of costs on the higher scale
is warranted.
The
application is dismissed with costs on an ordinary scale.
Kantor
&Immerman,
legal practitioners for the applicant
Gill,
Godlonton & Gerrans,
legal practitioners for the first respondent
1.
1982
(1) ZLR 142 (H)
2.
1963 (4) SA 87 (T)
3.
At 466F-467A
