This
is an application for setting aside of an arbitral award in terms of
Article 34(2) of the Model Law as set out in the Arbitration Act
[Chapter 7:15].
The
applicant bases his application on the following grounds;
(1)
That the Arbitrator made decisions on matters not placed before him;
(2)
That once the Arbitrator made a finding that the contract had not
been cancelled, that should have been the end of the matter; and
(3)
That the arbitral award offends against the public policy of
Zimbabwe.
The
first respondent opposed the setting aside of the arbitral award on
the basis that the award is not contrary to the public policy of
Zimbabwe. It argued that the debt is due and owing and a decision
that such a debt be paid can never be said to be contrary to the
public policy of Zimbabwe. The first respondent denies that the
Arbitrator decided on issues not placed before him. All issues
determined by the Arbitrator were properly placed before him for his
determination.
The
brief facts are that the applicant is a company incorporated
according to the laws of Mauritius. The applicant is carrying on a
business of property finance and property development in Zimbabwe. In
that regard, the applicant was contracted to manage the upgrading and
extension of the Airport Road by the City of Harare. In turn, the
applicant sub-contracted the first respondent to carry out civil
engineering works on the Airport Road. An agreement to that effect
was entered into between the two parties on 25-26 March 2013.
Subsequent
to that agreement, the first respondent carried out works on the
Airport Road to the tune of $4.8 million. A dispute arose as payment
had not been made for almost two years culminating in the first
respondent referring such dispute for arbitration. The applicant
admitted owing the amount. The parties' bone of contention was
whether payment should be by way of cash or by way of land transfer.
After
hearing the parties, the Arbitrator made the following award;
(1)
That the applicant pay the first respondent the sum of $3,340,500=
(three million three hundred and forty thousand and five hundred
dollars) not later than Friday 4 April 2015.
(2)
That the applicant pay to the respondent the sum of $1,459,500= (one
million four hundred and fifty nine thousand and five hundred
dollars) not later than Thursday 4 June 2015. This payment may be
made by way of transferring land to the first respondent but not
later than 4 June 2015.
The
above is the award which the applicant seeks its setting aside on the
basis that it offends against the public policy of Zimbabwe.
Firstly,
the applicant complained that the Arbitrator made a determination on
issues not placed before it. The applicant submitted the only issues
referred for determination were;
(1)
Whether the agreement between the parties had been terminated; and
(2)
That the land was not registered in the applicant's name and hence
the applicant could not settle the sums due by way of transferring
such land.
Instead
of dealing with the above issues, the applicant contended that the
Arbitrator found that the main contract between City of Harare and
the applicant had been terminated and such termination had the effect
of bringing to an end the agreement between the applicant and the
first respondent. The applicant submitted that it was never heard on
the aspect of its contract with City of Harare.
I
have perused the Statement of Claim and response. It is the
applicant, in its response, which introduced the issue of its
contract with City of Harare, in particular paragraph 6 of its
response where is said:
“6….,.
6.2.
At all material times claimant was aware that the title deeds in the
custody of C.W & G had been made available to the respondent by
the City of Harare in consequence of the contract entered into it
with the City of Harare for the construction of the Airport Road;
6.3….,.
6.4
Accordingly, respondent could not be the registered owner of the land
held as security.”
On
p299 of the record is an agreement between City of Harare and the
applicant, entered on 30 May and 9 June 2008.
I
therefore fail to understand the complaint by the applicant. It is my
view that the Arbitrator did not deal with issues outside referral.
Let
me now proceed to deal with the real issue; that is, whether the
award is contrary to public policy.
The
issue of setting aside of an arbitral award on the basis that it is
against the public policy of Zimbabwe is now settled. Article
34(2)(b)(ii) of the Model Law, as set out in the Arbitration Act
[Chapter 7:15], provides:
“2
An arbitral award may be set aside by the High Court only if –
(a)…,.
(b)
The High Court finds that;
(i)….,.
(ii)
The award is in conflict with the public policy of Zimbabwe.”
For
this court to set aside the arbitral award on the basis that it is
contrary to public policy, the applicant must show that some
fundamental principle of the law, morality or justice was offended.
In ZESA v Maposa 1992 (2) ZLR 452 (S)…, GUBBAY CJ made this now
most used remark about public policy:
“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 standard 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.”
An
arbitral award is not said to be contrary to public policy for the
reason that it is wrong in law or fact. An arbitral award still
stands despite its being erroneous in law and in fact. For it to be
set aside on the basis that the conclusion reached is wrong, such
conclusion should constitute an injustice between the parties.
Can
the same be said of the current award in the question to be answered
by this court?
As
I have noted above, that the figures are outstanding and due is
common cause. The applicant's complaint is that as per their
agreement with the first respondent payment was only to be effected
by way of transfer of land.
I
didn't hear the applicant complaining that the facts before the
Arbitrator were false. Whilst accepting the facts as correct, the
applicant submitted that their agreement with the first respondent
provided for payment by way of “transfer of land” and not cash.
The Arbitrator went on to order payment of cash after making a
finding that the land used as security did not belong to the
applicant. That finding by the arbitrator cannot be said to be
outrageous. From the evidence placed before the Arbitrator (in the
form of the title deed) it is common cause Stand 654 Pomona Township
is registered in the name of “The President of Zimbabwe its
Successors or Assigns.”
In
terms of the agreement between the parties, in particular paragraph 6
thereof, the above property was used as security by the applicant. In
terms of the first respondent's case before the Arbitrator, the
first respondent challenged the applicant's authority to use land
not owned by itself as security. I do not therefore agree with the
applicant's submission that, that particular issue was not before
the Arbitrator. The applicant purportedly ceded its rights in the
Pomona Property. To date, it is not clear that the applicant had or
has any rights in that piece of land. No agreement was produced
ceding any rights of that property to the applicant. The decision by
the Arbitrator that the applicant could not cede rights not vested
into it cannot therefore be said to be contrary to public policy of
Zimbabwe.
As
was enunciated in ZESA v Maposa 1992 (2) ZLR 452 (S), this court does
not sit as an Appeal Court. It is not concerned with the correctness
of the decision unless if such incorrectness constitutes a grave
inequity. See also Muchaka v Zhanje and Anor 2009 (2) ZLR 9 (H)…,.
I
am of the view that the Arbitrator's award cannot be said to be
contrary to public policy. Accordingly, the application for setting
aside the arbitral award be and is hereby dismissed with costs.
