Special
Plea
CHITAKUNYE
J:
On
4 February 2011 the plaintiff sued defendant for the payment of a sum
of $41,466-59 being a sum owing by the defendant to plaintiff in
terms of a written acknowledgment of debt dated 26 June 2010.
The
defendant in his plea admitted the main claim and raised a counter
claim.
The
plaintiff raised exception to the counter claim alleging that the
counterclaim was incomprehensible and it left the plaintiff unable to
determine just what the defendant was suing on or why.
The
defendant conceded to that allegation and filed an amended counter
claim by consent of the plaintiff. From that amended counter claim it
is clear that the defendant's counter claim is in contract and is
founded upon a written agreement.
The
plaintiff persisted with the exception alleging that in terms of
clause 6.5 of the written agreement between the parties the dispute
defendant raised is supposed to be referred to arbitration. The
defendant has thus brought the counter claim in the wrong forum. The
counter claim must therefore be stayed and the main claim ought to
proceed notwithstanding the mandatory stay of the counter claim.
Both
counsel for the parties were agreed that indeed defendant's counter
claim was founded on the written agreement. That agreement provides
in clause 6.5, inter
alia,
that:-
“In
the event that an irreconcilable difference of opinion arises over
the interpretation or implementation of this Agreement, the Parties
shall submit themselves to the determination of a mutually agreed
Arbitrator and shall bind themselves to accept the decision of such
Arbitrator...”
Plaintiff's
counsel argued that plaintiff has already denied being indebted to
the defendant on any basis arising from the implementation of that
contract and so his counter claim is a dispute which he must refer to
arbitration.
Counsel
for the defendant, on the other hand, contended that on the present
record there is nothing establishing the existence of a dispute.
The
first issue is thus when is a dispute said to have been shown to
exist?
In
Cargill
Zimbabwe v
Culvenham Trading (Pvt) Ltd
2006 (1) ZLR 381 (H) at 382 F-G MAKARAU
J (as
she then was) had this to say on the point:-
“For
a court to stay its proceedings and refer the matter to arbitration
there must be a dispute between the parties apparent ex
facie
the pleadings. This appears to me to be a settled position of our
law. See
PTA Bank v Elanne (Pvt) Ltd & Others
2000 (1) ZLR 156 (H) and Zimbabwe
Broadcasting
Corporation
v Flame Lily Broadcasting (Pvt) Ltd t/a Joy TV
1999 (2) ZLR 448 (H).”
At
page 383D-F the learned judge alluded to the manner a dispute must be
raised and concluded thus:-
“In
my view, a dispute between the parties can only arise ex
facie
the pleadings filed with the court. It cannot be assumed or presumed
from the mere fact of the entry of an appearance to defend. It is my
further view that the dispute cannot be brought to the attention of
the court in the heads of argument for counsel cannot plead on behalf
of the parties. It is trite that heads of argument are counsel's
conclusions and opinion of the facts and law applicable to the facts
of the matter. They are not part of the pleadings.
From
the above, it appears to me that before raising a special plea
staying proceedings in this court and referring the matter to
arbitration, the defendant must file a plea as to the merits of the
matter for the dispute between the parties to arise ex facie the
pleadings. It further appears to me that any practice short of this
will result in the special plea being dismissed as having been
prematurely filed.”
I
concur with the above expose of the law. There is need for defendant
in the counter claim to plead on the merits and show that there is a
dispute.
The
record before me shows that after defendant raised the counter claim
plaintiff requested for further particulars on the counter claim and
these were furnished on 19 August 2011. It is apparent that pleadings
were later closed and the parties filed pre-trial conference
documents including effecting discovery.
The
issues suggested by the parties included the issue in dispute.
On
27 June 2012 the parties through their respective legal practitioners
signed a joint pre-trial conference minute. The issues referred to
trial therein pertained exclusively to the contract in question. It
is clear from the joint pre-trial minute that parties were clear that
there was a dispute between them regarding the interpretation and
implementation of the agreement in question.
The
matter was thereafter referred to trial.
I
did not hear either counsel to suggest any other reasons for the
preparation of the joint pre-trial minute and reference of the matter
to trial other than that the parties had examined their respective
pleadings and noted a clear dispute that needed to be resolved in a
trial. Such dispute could not have arisen if plaintiff had not
tendered a defence to the counter claim. I am thus of the view that a
dispute was shown to exist hence issues referred to trial.
In
the circumstances, as per clause 6.5 of their written agreement, the
parties agreed that such a dispute must be referred to arbitration
and that should be so.
As
both counsel acknowledged Article 8(1) of the Model Law (Arbitration
Act) [Chapter 7:15], First Schedule enjoins court to refer the matter
to arbitration. See Waste
Management Services v
City of Harare
2000 (1) ZLR 172 (H) at 178A-C.
Since
plaintiff has requested that the counter claim be referred to
arbitration in terms of clause 6.5 of the parties' agreement, this
court will refer the matter to arbitration.
It
must however be made clear that reference to arbitration does not
ouster court's inherent jurisdiction. As stated by MAKARAU
J in Cargill
Zimbabwe v
Culvenham Trading (Pvt) Ltd.
(supra)
at 383G -384:-
“It
is only the proceedings that are stayed pending referral of the
dispute to arbitration. An arbitration clause does not have the
effect of ousting the jurisdiction of the court. It merely seeks to
complement the court process in resolving disputes by engaging in an
alternative dispute resolving process but remains under the control
of the courts.”
In
view of the fact that the matter will remain before the court even
though referred to arbitration, defendant's counsel argued that
court must consider the effect of a counter claim and not refer the
matter for arbitration. Reference to arbitration will be clogging the
courts with a matter that could have been decided at the same time as
the main matter.
I
am however not persuaded by his argument.
In
my view the parties were very clear as to which forum they desired
their dispute to be referred to. That clause states that:
“In
the event that an irreconcilable difference of opinion arises over
the interpretation or implementation of this Agreement, the Parties
shall
submit themselves to the determination of a mutually agreed
Arbitrator and shall bind themselves to accept the decision of such
arbitrator...” (emphasis is mine)
In
as far as it is agreed that the main claim is based on an
acknowledgement of debt such indebtedness is clear. Defendant
admitted same. Judgment will thus be granted in that sum.
It
is also common cause that the main claim and the counter claim are
intertwined such that, but for the arbitration clause, it would have
been most appropriate to deal with the two at the same time. It is my
view that the execution of the judgement in the main matter will be
stayed pending the outcome of the arbitration.
Accordingly
it is ordered that:-
1.
Judgment
be and is hereby entered for the plaintiff in the sum of US$41,466-59
in respect of the main claim with interest and costs of suit.
2.
The execution of this judgement be and is hereby stayed pending the
determination of the arbitration in terms of clause 6.5 of the
written agreement between the parties.
Honey
& Blanckenberg,
plaintiff's legal practitioners.
Chingore
& Associates,
respondent's legal practitioners
