This
is an application for registration of an arbitral award as an order
of this court for purposes of enforcement in terms of Article 35(1)
of the Arbitration Act [Chapter 7:15].
The
arbitral award was obtained following the referral of a commercial
dispute between the parties for arbitration. The award orders the
respondent to pay the applicant US$1,492,970=88, interest,
applicant's costs of the arbitration and the arbitrator's fees.
It was granted on 26 May 2017 by HONOURABLE MOSES H. CHINHENGO.
Attached to the founding affidavit, as an annexure, are the detailed
reasons for the award given by the Honourable arbitrator. In his
reasons he gives a detailed narration of what transpired throughout
the arbitration proceedings from the time they commenced in November
2015 up to the time he granted the award in May 2017. His narration
is more or less the same as the narration that is given by the
applicant in its answering affidavit in response to the respondent's
opposing affidavit.
In
its opposing papers, the respondent averred that this court should
not register this arbitral award in terms of Article 36(1)(a)(ii) and
(v)1(b)(ii) as read with Article 36(3)(b) and Article 36(1)(v). It
averred its reasons as follows:
(a)
The award is not yet binding on the parties
The
respondent averred that it filed an application for the review of the
matter in this court under HC3266/17 for the setting aside of the
whole arbitral award process and that matter is still pending. It was
filed in April 2017, and, as it is, the applicant, which is the
respondent in that review application, filed its notice of opposition
out of time and is yet to regularise its defective process which it
is taking long to do after being given fair warning to make right its
default. The respondent suspects that the applicant is delaying in
purging the default in order to ensure that it gets the award
registered first. The respondent averred that if its application for
review succeeds the registration of the award would have been a
futile exercise as it will be set aside.
In
short, the respondent wants registration suspended pending
determination of the review application.
(b)
The respondent was not able to present its case to the arbitrator
before the award was made
The
respondent averred that it was denied an opportunity to present its
case before and by the arbitrator in that on 16 March 2017, during
the hearing, the arbitrator exhibited clear and prejudicial bias
against it. An application for the recusal of the arbitrator was made
but was refused with reasons to follow. It approached this court for
review in terms of section 26 of the High Court Act [Chapter 7:06].
The arbitrator refused an application for the postponement of the
hearing pending the furnishing of the reasons for dismissal of the
application for recusal and the availability of its witness who was
not in attendance. The arbitrator proceeded in terms of Article 25(c)
after telling the respondent's counsel that they could excuse
themselves as he was proceeding in default. That could not have been
the intention of the legislature for the hearing to proceed in
default. Despite a letter having been written to the arbitrator
requesting for the reasons of the recusal he did not furnish same.
The award was granted in default and should not be recognised for
registration purposes because it can cause serious financial problems
to the respondent. A decision should be made on the merits of the
matter. The application for postponement of the matter was denied in
an injudicious manner. The decision to proceed in terms of Article
25(c), while the respondent's counsel was in attendance, was not
proper.
(c)
Recognition and enforcement of the award will be contrary to Public
Policy or there was a breach of the rules of natural justice
The
respondent averred that the recognition of this award is contrary to
the public policy of Zimbabwe in the sense that when it was made
there was a blatant breach of the rules of natural justice by the
arbitrator and this seriously prejudiced the respondent. The
arbitrator did not conduct himself in a manner that did not show
dis-interest or impartiality. He had formed prejudicial conclusions
about the respondent's employee who was yet to come before him to
give evidence on behalf of the respondent. This made the respondent
lose all confidence in the arbitrator. An application for the recusal
of the arbitrator was made in terms of Article 12(2) as read with
Article 13(2) of
the Arbitration Act [Chapter 7:15]
and it was dismissed with reasons to be availed later. The arbitrator
then ordered the hearing to proceed with the full knowledge that the
respondent's witness was not available. An application for a
postponement pending the supply of reasons for dismissing the
application for recusal and the availing of the witness was again
dismissed. The hearing proceeded in terms of Article 25(c) of
the Arbitration Act [Chapter 7:15],
despite the respondent's counsel being present, before he excused
himself. The respondent was denied the opportunity to rebut the
evidence relied upon to make the award. The arbitrator was thus
biased against it and denied it the opportunity to be heard. The audi
alteram partem rule, that is, the 'hear both sides' rule was not
observed and the audiatur el altera pars principle which means 'no
man should be condemned unheard' was not observed. The award should
therefore not be recognised.
The
respondent averred that, but for the default, the award would not
have been granted.
The
respondent went on to point out where the arbitrator arrived at wrong
findings. It said that had it been given a full opportunity all those
issues would have come out clearly. It averred that these issues
could not be ventilated because the arbitrator decided to proceed in
terms of Article 25(c) of
the Arbitration Act [Chapter 7:15].
The breach of the rules of natural justice resulted in the granting
of the award following wrong findings which were made by the
arbitrator in default of the respondent.
Should
this court recognise and enforce the award, the respondent will
suffer irreparable harm. It has been asked to pay $1,492,970=88 to
the applicant, which is a huge amount. The respondent can be pushed
out of existence thereby bringing to a halt the lives of millions of
innocent Zimbabweans who are earning a living through its existence.
The respondent has already paid all that it was contractually
supposed to pay had the applicant delivered in terms of the contract
of which it did not, so it was overpaid.
The
respondent further averred that recognition and enforcement of this
award will be contrary to public policy considering the way it was
procured. This is a matter which cannot be sufficiently dealt with by
the arbitration process but by this court (High Court). The issues
should be dealt with holistically in a public setting.
The
respondent further averred that it was never happy with the
arbitrator from the beginning i.e. the way he was appointed and how
he handled the matter. Justice must not only be done, it must be seen
to be done.
The
applicant is seeking to reap where it did not sow. The Government
had, without the applicant, paid the respondent as per the RBZ Debt
Assumption Bill. Public Policy does not allow people to get
undeserved credit. The respondent averred that a recognition and
enforcement of this award will perpetuate the breach of the rules of
natural justice and it will be a denial of justice to it. Its
constitutional right to equal protection of the law and its rights to
property would be greatly impaired.
In
its answering affidavit, the applicant made the following averments
and gave the background facts of this matter as follows:
On
27 December 2013, the parties entered into an agreement with the
respondent mandating the applicant to facilitate the repayment of a
debt due to it by the Reserve Bank of Zimbabwe. It was a term of the
agreement that any dispute arising between the parties in connection
with the agreement would be resolved through arbitration. After a
successful completion of the mandate by the applicant, a dispute
arose regarding how the applicant was to be remunerated whether in
treasury bills or in cash. For close to a year the dispute could not
be resolved as the parties adopted diametrically opposed views.
Consequently, the applicant approached the Commercial Arbitration
Centre for the appointment of an arbitrator. Resultantly, on 11
November 2015, the Honourable Mr Moses Hungwe Chinhengo was appointed
as arbitrator by the Commercial Arbitration Centre. Subsequently, a
pre-arbitration meeting was held on 19 November 2015. Time lines
within which to file pleadings were set and agreed upon by the
parties. On 24 November 2015, the applicant filed its statement of
claim with the arbitrator and served a copy on the respondent. The
claim was for a payment of US$2,077,436= being the principal
commission together with interest arising from successfully carrying
out its mandate and recovering the applicant's long overdue debt
from the Reserve Bank of Zimbabwe of US$90,861,092=33.
In
response, the respondent filed a preliminary point taking issue with
the procedural appointment of the arbitrator, arguing that the
agreement between the parties stipulates that the Commercial
Arbitration Centre shall appoint an arbitrator where parties are
unable to appoint one, that, in the circumstances, the parties had
never attempted to appoint a mutually preferred arbitrator and were
unable to reach an agreement. A hearing was conducted, and, on 15
December 2015, the arbitrator dismissed the preliminary point.
Despite
this, the respondent sat on its laurel and did not file its
opposition to the claim despite knowing that the matter was
continuing. On 27 January 2016, the applicant beseeched the
arbitrator to finalise proceedings. On the other hand, the respondent
applied for stay of proceedings on the basis that it had filed a High
Court application for review in terms of Article 13 of the
Arbitration Act [Chapter 7:15]. It was argued that although the
application for review had been filed, it did not meet the grounds
stated in Article 12 which is a precursor to an Article 13
application.
The
respondent conceded and withdrew the incompetent High Court
application.
On
that same day, the arbitrator dismissed the respondent's
application for stay of proceedings and ordered the respondent to
file its opposition to the merits of the claim by 9 February 2016.
The matter was supposed to be heard on 17 February 2016. Thereafter,
the respondent filed another High Court application, in HC1032/16,
arguing that the appointment of the arbitrator was ultra vires the
provisions of the arbitration clause in the agreement and that the
arbitrator's ruling, dismissing the application that he recuses
himself from hearing the matter, was contrary to the public policy of
Zimbabwe. At about the same time, the respondent filed an urgent
chamber application, in HC1107/16, in this court for stay of
arbitration proceedings.
Both
applications failed.
As
these matters were being determined the respondent expressed its
intention to resolve the matter amicably and the parties mutually
agreed to suspend arbitration proceedings in order to come up with a
settlement. However, the respondent kept on bidding for time until
the applicant realised that it was being taken for a ride. The
respondent found excuses to stall the matter until March 2017 by
giving endless excuses which ranged from unavailability of its
attorney to unavailability of its witnesses. When the matter was
finally dealt with, on 16 March 2017, it was after the respondent had
requested for that date. However, on 14 March 2017, the respondent
had another excuse why the matter could not proceed on 16 March 2017,
namely, that its witnesses would be in South Africa. It was proposed
to the respondent that the matter be dealt with on the papers but
that proposal was turned down.
On
16 March 2017, the respondent's counsel finalised cross-examination
of the applicant's witness at about mid-day and the applicant
closed its case. The matter was stood down to 1400 hours in order to
allow the respondent to lead its evidence after its counsel had
failed to contact representatives of his clients through the phone.
At 1400 hours the respondent's counsel came back armed with
correspondence which showed that the respondent's witness, Mr
Tabani Mpofu, had been invited to a meeting on that day at the
Attorney General's Office. The letter was used as the basis for the
unavailability of the respondent's witness. This was now a
different reason from the one proffered previously that the witness
would be in South Africa on that day. It was argued, on behalf of the
applicant, that the respondent was merely being dilatory. However, it
was eventually agreed that the matter be postponed. Again, the
parties could not agree on a mutually convenient date until the
applicant insisted that in the absence of good cause shown, the
matter be rolled over to the following day, 17 March 2017. The
arbitrator ruled that in the absence of good cause shown, the matter
would proceed on 17 March 2017 and that should good cause be shown on
17 March, the matter would be postponed to 3 April 2017. On 17 March
2017, no good cause was shown, but, nonetheless, the respondent was
further indulged and the matter was postponed to 3 April 2017.
Realising that the day of reckoning was imminent, the respondent
wrote a letter to the Commercial Arbitration Centre claiming that the
arbitrator had already formulated an opinion over its witness, Mr
Tabani Mpofu, who was yet to appear before the tribunal.
Apparently,
it is Mr Tabani Mpofu who wrote that letter.
The
letter was followed up by an application for recusal of the
arbitrator. The application was dismissed with the respondent being
afforded a chance to prosecute its defence, but, again, the
respondent chose not to avail its witness, the same Mr Tabani Mpofu.
Naturally, the law took its course and the matter proceeded in terms
of Article 25 of the Arbitration Act. The arbitrator then made a
decision on the basis of the pleadings filed by both parties and the
evidence led by the applicant's witness which evidence or testimony
was subjected to cross examination by the respondent's counsel.
Thereafter,
the respondent filed an application, under HC3266/17, to review the
decision of the arbitrator dismissing the application for recusal.
Same was opposed, but no answering affidavit was filed. Consequently,
the applicant moved for the dismissal of that application for want of
prosecution under HC5711/17. The applicant attached a court order
which regularized its opposing papers in HC3266/17.
It
further averred that the respondent's allegation that the award is
contrary to the public policy of Zimbabwe cannot be sustained in the
circumstances. The arbitration was carried out in terms of the law
and the respondent's tricks to stall proceedings and throw spanners
in the whole process are a huge exercise in futility.
The
applicant further averred that no proper grounds have been put across
to justify claims that the arbitral award is not binding on the
parties nor that it is contrary to the public policy of this country.
An
order for the registration of the award can be properly granted as
prayed for.
The
Law and its application
Registration
of an arbitral award of this nature is made in terms of Article 35 of
the Arbitration Act [Chapter 7:15] which provides that one must make
an application, in writing, to the High Court for its registration.
Article 36 of the Arbitration Act lays down a host of grounds upon
which this court may refuse to grant an order for the registration of
an arbitral award. The Article provides as follows:
“Article
36 Grounds for refusing recognition or enforcement
(1)
Recognition or enforcement of an arbitral award, irrespective of the
country in which it was made, may be refused only -
(a)
At the request of the party against whom it is invoked, if that party
furnishes to the court, where recognition or enforcement is sought,
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 thereon, under the law of the country where the award was
made; or
(ii)
The party against whom the award is invoked was not given proper
notice of the appointment of an arbitrator or 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 it 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, that part
of the award which contains decisions on matters submitted to
arbitration may be recognised and enforced; or
(iv)
The composition of the arbitral tribunal or the arbitral procedure
was not in accordance with the agreement of the parties or, failing
such agreement, was not in accordance with the law of the country
where the arbitration took place; or
(v)
The award has not yet become binding on the parties or has been set
aside or suspended by a court of the country in which, or under the
law of which, that award was made; or
(b)
If the 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 recognition or enforcement of the award would be contrary to the
public policy of Zimbabwe.
(2)
If an application for setting aside or suspension of an award has
been made to a court referred to in paragraph (1)(a)(v) of this
article, the court where recognition or enforcement is sought may, if
it considers it proper, adjourn its decision and may also, on the
application of the party claiming recognition or enforcement of the
award, order the other party to provide appropriate security.
(3)
For the avoidance of doubt, and without limiting the generality of
paragraph (1)(b)(ii) of this article, it is declared that the
recognition or enforcement of an award would be contrary to 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.”
Under
Article 36 of
the Arbitration Act [Chapter 7:15], the
court ceased with an application for registration of the award does
not exercise an appeal power or review power and decline to recognize
and enforce an award by having regard to what it considers should
have been the correct decision. See Zimbabwe Electricity Supply
Authority v Maposa 1999 (2) ZLR 452 (SC).
In
this same case…, it was also held that an 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 case, the
court would not be justified in setting the award aside. It was
further held that;
“Natural
justice embraces the requirement that there must be fairness in the
procedure.
Therefore,
both parties must be treated equally. Each must be given a full
opportunity to present his case. (this is a mandatory requirement
under Article 18) and be afforded an opportunity of answering the
case against him by meeting his opponent's evidence and
contentions.
See
FSI Holdings Ltd v Rio Tinto Zimbabwe Ltd & Anor 1997 (1) ZLR 31
(S).
It
is also a rule of natural justice that the arbitrator must not be a
judge in his own case; nor must he act with bias against a party. He
should scrupulously disclose any interest he has in the dispute or
might reasonably be thought to have.
See
Leopard Rock Hotel Co (Pvt) Ltd v Walenn Construction (Pvt) Ltd 1994
(1) ZLR 255 (S) at 270 E-G; and, generally, CHRISTIE, Business Law in
Zimbabwe at 474; BUTLER and FINSEN, Arbitration in South Africa at
165."
In
terms of Article 35(1) of the Arbitration Act an arbitral award
becomes binding upon being granted and it becomes enforceable upon
being registered by the High Court. The provision reads;
“An
arbitral award, irrespective of the country in which it was made,
shall be recognized 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.”
In
Dudka v Cheni Investments (Pvt) Ltd & Ors 2011 (1) ZLR 1 (H), in
the interpretation of Article 35 of
the Arbitration Act [Chapter 7:15] it
was held that an award takes effect upon its grant. Its execution has
no effect on whether it is binding or not. Registration only allows
for execution.
It
therefore follows, in the circumstances of this case, that the award
became binding on 26 May 2017, which is the day it was granted by
Honourable CHINHENGO. In the absence of an order which set it aside
or suspended it, it remains binding. The mere filing of an
application for review does not affect the binding nature of the
award and does not detract from its registration. As was correctly
submitted by counsel for the applicant, the filing of an application
for review is not a bar to its registration. It does not matter that
the review application might succeed.
This
is why Article 36(2) of
the Arbitration Act [Chapter 7:15] says
if an application for setting aside or suspension of an award has
been made to a court, the court where recognition or enforcement is
sought may, if it considers proper, adjourn its decision. This means
that the court has discretion on whether or not to register the award
taking into account various factors in the circumstances of the case.
The
issue that recognition and enforcement of the award will be contrary
to public policy in that there was a breach of the rules of natural
justice goes hand in hand with the issue that the respondent was not
able to present its case to the arbitrator before the award was made.
I
will thus deal with the issues together.
It
is common cause that the arbitrator dealt with this matter in terms
of Article 25(c) of
the Arbitration Act [Chapter 7:15]
which says;
“Unless
otherwise agreed by the parties, if, without showing sufficient
cause, any party fails to appear at a hearing or to produce
documents, the arbitral tribunal may continue the proceedings and
make the award on the evidence before it.”
The
provision deals with a situation where the other party defaults or
fails to produce documents without sufficient cause. The tribunal may
continue with the proceedings and make an award on the basis of the
evidence presented to it.
In
casu, it is not disputed that on the day the applicant's only
witness…,, was cross-examined and the applicant closed its case,
the respondent's one and only witness was not in attendance. An
explanation for his non-attendance was proffered by the respondent's
counsel. Both the tribunal and the applicant were not happy with this
turn of events considering that the hearing had been postponed to
this date at the request of the respondent itself. The arbitrator
raised a query about the explanation that had been given for the
witness' absence. Be that as it may, the hearing was postponed to
the following day for continuation. On the next day, the same witness
was said to have gone to South Africa on respondent's business.
Over and above that, the same witness had written a letter to the
Commercial Arbitration Centre chronicling the events that had
happened on the previous day. The witness was alleging bias on the
party of the arbitrator in that he (the arbitrator) had tried to
secure the attendance of the witness at the hearing. The witness, Mr
Tabani Mpofu, indicated that, as a result, both the respondent and
himself had lost confidence in the fairness and impartiality of the
arbitration process. As such, they were seeking the recusal of the
arbitrator. They wanted the Commercial Arbitration Centre to appoint
another, or a different, arbitrator to the process. In the same
letter, Mr Tabani Mpofu stated that should Mr Chinhengo insist on
proceeding with the matter, the respondent would apply for his
recusal. He further said that the respondent's counsel was now
under instructions not to participate in any process chaired by the
current arbitrator.
It
is common cause that the respondent went on to make the application
for the recusal of the arbitrator in the matter. When the arbitrator
dismissed it, with reasons to follow, and ordered that the hearing
should continue with the respondent leading its evidence, the
respondent's counsel indicated that the respondent wanted to be
furnished with the reasons first before the hearing could proceed.
Honourable Chinhengo, in his award, says that he insisted that the
hearing should proceed and the respondent's counsel requested for
time to contact or secure his witness. When he returned he is said to
have said;
“I
communicated with Mpofu. His indication is that he wants reasons
before he testifies. He is not coming.”
The
arbitrator ruled that the matter would continue.
At
the request of the applicant's counsel that is when the arbitrator
ruled that the matter was going to be dealt with in terms of Article
25(c) of the Arbitration Act [Chapter 7:15] in default of the
respondent.
There
is a dispute as to whether thereafter the respondent's counsel
excused himself or whether he was excused by the arbitrator. That, to
me, is neither here nor there because the bottom line is that the
hearing was continuing on that day and the respondent's witness,
who was the key and only witness, was not in attendance. Even if the
respondent's counsel had remained in attendance that was not going
to change the complexion the proceedings had taken. No postponement
of the matter had been sought or granted. The applicant corroborated
what the arbitrator said in his award that the respondent chose not
to avail its witness when it was called to do so.
The
respondent stated that its counsel made an application for a
postponement of the matter pending the furnishing of the reasons of
dismissal of the application for recusal and for its witness to be
made available.
My
analysis of the matter leads me to the conclusion that the
respondent's counsel never made an application for a postponement
of the matter in order to secure the attendance of the respondent's
witness. I say this because the arbitrator, in his award, quotes
verbatim what Mr Mpofu is said to have said - that he was not coming
for the hearing.
The
respondent did not refute that in its opposing affidavit.
Even
the applicant said that the respondent's witness chose not to come.
I do not believe that both the applicant and the arbitrator lied
against the Mr Tabani Mpofu.
In
any case, the letter that Mr Mpofu wrote to the Commercial
Arbitration Centre seeking the recusal of Honourable CHINHENGO and
the appointment of a different arbitrator says it all. It
categorically states that should the arbitrator insist on proceeding
with the matter, the respondent's counsel was under instructions
not to participate in any process chaired by him. Mr Mpofu had made
it clear that the respondent was no longer going to participate in
the proceedings. So it does not make sense for the respondent to say
a postponement was then sought in order to secure the attendance of
the same Mr Tabani Mpofu who had made it clear that there was not
going to be any more participation in the matter by the respondent.
The letter in question is quoted in full in the award which forms
part of the applicant's application.
The
respondent, therefore, chose, mero motu, not to participate in the
hearing.
The
history of the matter, as given by both the applicant, in its
answering affidavit, and by the arbitrator, in his award, which forms
part of the applicant's application, shows that the respondent was
very difficult right from the start of the hearing in November 2015
up to April 2017 when it then chose not to participate any further in
the arbitral proceedings. It made two applications for the recusal of
the arbitrator and a number of applications for review before this
court. Over and above that it made a number of applications for the
postponement of the hearing and on all those occasions it was being
indulged. What is also pertinent, which the respondent has not
denied, is that right from the time the arbitral proceedings
commenced, in November 2015, up to April 2017, its representative and
key witness, who happens to be its Company Secretary and deponent to
its opposing affidavit, Mr Tabani Mpofu, never attended a single
hearing, not even when the applicant's witness was giving evidence.
As the hearing was ongoing he would be busy attending to other
business of the respondent. He would not have the decency and
courtesy to excuse himself yet the hearing dates in question would
have been granted at the behest of the respondent.
The
conduct of the respondent, as represented by Mr Tabani Mpofu, shows a
complete disrespect and contempt of the arbitrator.
If
Mr Mpofu had any respect for the arbitrator he would have been in
attendance, ready to testify, on the day the ruling on the
application for recusal was being made just in case the ruling did
not go the respondent's way. No explanation is given by the
respondent as to why Mr Tabani Mpofu was not in attendance on that
day. Mr Mpofu himself, being the deponent to the respondent's
opposing affidavit, does not even explain himself. It is clear that
he was not in attendance because he had already made it clear in his
letter to the Commercial Arbitration Centre, that, after making an
application for the recusal of the arbitrator, the respondent's
counsel was under instruction not to participate in any further
proceedings chaired by the Honourable CHINHENGO. It is therefore not
surprising that he was not there.
This
being the case, the respondent cannot cry foul now. It cannot allege
that it was denied the opportunity to present its case before and by
the arbitrator. The arbitrator cannot be faulted for having proceeded
in terms of Article 25(c) of the Arbitration Act [Chapter 7:15] in
default of the respondent. The respondent's witness failed to
appear at the hearing to give evidence without sufficient cause. In
that regard, the tribunal was right in proceeding to determine and
make the award on the evidence that was before it. The respondent, by
the conduct of its representative and witness, waived its right to
challenge evidence given by the applicant. It chose not to give its
defence in the matter to its own prejudice by playing difficult.
A
party who deliberately absents himself from a hearing or walks out
without sufficient cause, cannot, at a later stage, allege that he
was denied an opportunity to present his case. See Moyo v Rural
Electrification Agency SC04-14.
In
the circumstances of this matter, it cannot be said that the rules of
natural justice were breached. The audi alteram partem principle
entitles both parties in the matter to be heard, but if a party is
given or granted that opportunity and it willfully refuses to
participate like what happened in the present matter, there is no
breach of the principle.
The
tribunal was correct in following the provisions of Article 25(c) of
the Arbitration Act [Chapter 7:15] because it had no other choice. A
party cannot willfully absent itself from a hearing and then cry foul
that the rules of natural justice were not followed. Such an attitude
exhibits a gross misconception of the rules of natural justice.
That
the arbitrator insisted on the attendance of the respondent's
witness on the day the applicant closed its case is not evidence of
bias, interest, and lack of impartiality in the matter. Matters are
supposed to be brought to finality expeditiously. This is why Article
25(c) of the Arbitration Act provides that parties cannot absent
themselves from appearing at a hearing without sufficient cause. It
is meant to curb situations where parties willfully and willy-nilly
choose to absent themselves.
If
an application for recusal of a presiding officer in a matter is
dismissed, it does not entitle the aggrieved party to refuse to
participate in the matter. It should still participate, and, at the
same time, make use of the legal remedies available to it to
challenge the decision of the presiding officer.
In
casu, the respondent, by refusing to participate any further in the
arbitration proceedings, it denied itself the opportunity to answer
the case against it. If its representative and sole witness had
attended the hearing and given evidence, all the issues it is trying
to raise now in this application would have been properly ventilated.
If the arbitrator made wrong findings of law and facts because the
respondent did not give its side of the story, then it has no one to
blame but itself.
In
any case, an award is not contrary to public policy merely because
the arbitrator made wrong conclusions in fact or in law. See Zimbabwe
Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (SC).
That
the respondent will suffer irreparable harm by the huge amount that
was granted against it is immaterial. The award of a huge amount in
the present matter is not contrary to public policy.
The
respondent's counsel relied on the case of Tel-One (Pvt) Ltd v
Communications and Allied Services Union of Zimbabwe HH74-07 for the
argument that a huge award, which clearly pushes the respondent into
liquidation, is contrary to public policy.
The
case is distinguishable from the present one in that in Tel One (Pvt)
Ltd v Communications and Allied Services Union of Zimbabwe HH74-07
the dispute involved the employer and its employees. They failed to
agree on salaries and wages negotiations. When the arbitrator then
determined the matter, upon the parties reaching a deadlock, he did
not invite the parties to set out the issues for determination. He
determined the matter as he perceived it and awarded exorbitant
salary and wage increments which the employer was not able to
sustain. The salaries and wages bill was going to have the effect of
crippling all the employer's operations and drive it into
insolvency. It threatened the very existence of the employer. The
financial position of the company could not sustain the huge salaries
and wages bill. The employer applied to this court for the setting
aside of the award. In setting it aside, this court held that the
substantive effect of the award was to cripple the employer and drive
it into insolvency as this was beyond its resources. It held that on
those grounds the award was contrary to public policy.
The
facts in casu are however nowhere near the facts in TelOne (Pvt) Ltd
v Communications and Allied Services Union of Zimbabwe HH74-07.
In
the present matter, the applicant recovered money owed to the
respondent by the Reserve Bank of Zimbabwe pursuant to a contract the
parties had entered into voluntarily. The amount was, or is, in the
region of US$90 million and out of that amount the respondent was
ordered to pay close to US$1.5 million for services rendered by the
applicant in recovering the money in question in terms of an
agreement the parties entered into. Taking away US$1.5 million from
US$90 million cannot drive the respondent into insolvency. Moreover,
it voluntarily agreed to pay that amount in a contract it entered
into.
The
doctrine of sanctity of contract provides that once a contract is
entered into freely and voluntarily, it becomes sacrosanct and courts
should enforce it. A person cannot enter into a contract freely,
obtain a benefit from it, and then be allowed to repudiate from the
obligations he has undertaken.
In
casu, the respondent entered into this contract with its eyes wide
open, it cannot now allege that paying US$1.5 million to the
applicant will drive it into liquidation when the applicant collected
about US$90 million on its behalf. It cannot, therefore, in the
circumstances, be argued that the award is contrary to public policy.
In
Tel One (Pvt) Ltd v Communications and Allied Services Union of
Zimbabwe HH74-07 it was a salaries and wages increase that was
granted by the arbitrator without the consent of the employer. The
increase was not sustainable and it was way beyond the financial
resources of the employer.
The
two cases are not comparable.
In
conclusion, refusing to recognize the award in the present case will
be allowing the respondent to take advantage of the situation it
deliberately engineered. It deliberately chose not to proceed with
the matter despite being given an opportunity to present its case.
There was no breach of the rules of natural justice, and, as such,
the award is not contrary to public policy. The award is binding on
the parties.
In
the result, I will grant the application to register the arbitral
award. It be and is hereby ordered that:
1.
The arbitral award made in favour of the applicant by the Honourable
Arbitrator Mr. Moses Hungwe Chinhengo, on 26 May 2017, is registered
as an order of this court.
2.
The respondent shall pay to the claimant the sum of US$1,492,970=88
together with interest at the rate of 5% per annum from 23 November
2015 to the date of full payment.
3.
The respondent shall pay one half of the claimant's costs of the
arbitration.
4.
The respondent shall pay the arbitrator's fees, but the liability
of the parties to the arbitrator for such fees shall be joint and
several, the one paying, the other to be absolved.
5.
The respondent shall pay the costs of this application.
