OMERJEE AJA: At
the conclusion of submissions for both parties the court allowed the appeal
with costs. It was indicated at the time that reasons for the decision would
follow in due course. These are they.
The appellant is a company registered in terms of the laws
of Zimbabwe and operating a railway transportation business. The first
respondent is a registered trade union for the railway industry. The second
respondent is an independent arbitrator registered in terms of the laws of
Zimbabwe. In June 2009, owing to viability challenges the appellant engaged its
employees and the first respondent with a view to reducing its workforce
through a process of retrenchment. The parties failed to secure an agreement.
As a result the appellant decided to proceed in terms of the Labour Act [Cap
28:01] in order to achieve a retrenchment of some of its labour force. A
notice together with a list of employees to be retrenched accompanied by the
reasons for seeking retrenchment was prepared by the appellant.
As of the 3July 2009, a total of 35 employees in their
individual capacities negotiated and mutually agreed on an exit package with
the appellant with the knowledge and consent of the respondent. Separately, a
group of employees numbering 35 were represented by the respondent in regard to
their proposed retrenchment. A dispute arose between the appellant and the
respondent as to whether it had followed the correct procedure in seeking to
effect retrenchment.
In September 2009, by agreement of the parties the
second respondent was appointed to conciliate over the dispute. The following
were her terms of reference:
“The agreed terms of reference are:
1.
This arbitration is a voluntary submission to arbitration by the two parties.
2.
Mrs. Mpemba be and is hereby appointed to arbitrate on the matter referred to
in terms of reference hereunder.
3.
The decision or award shall be made as soon as possible at the conclusion of
the hearing and in any event within fourteen days.
4.
The award shall be binding upon the parties and that no appeal can be made
against the award.
5.
The two parties shall submit their cases in writing and will be able to support
their cases at the hearing if required to do so by the arbitrator.
6.
The BBR Works Council to meet the arbitration fees.”
The question for determination before the arbitrator
was whether or not the employer had followed the correct procedure in proposing
to retrench the workers. On 23 September 2009 the arbitrator ruled that the
appellant had followed the correct procedure in seeking to effect the
retrenchment. She made the following award:
“IT IS ORDERED THAT:
1.
The employer (Beitbridge Bulawayo Railways (Pvt) Ltd) followed
the correct procedures in wanting to retrench and even coming up with the Terms
and Conditions of such retrenchment.
2.
The employer be and is hereby authorized to retrench the remaining thirty five
(35) employees on the same Terms and Conditions stated herein, with effect from
23rd September 2009.
3.
The Works Council no longer has jurisdiction to deal with this matter as notice
given on 18th June is still valid but because of the 30 days time
limit, the parties cannot convene.
4.
The award is binding on both parties and no appeal shall be made against it as
agreed between parties themselves.
5.
The costs of this Arbitration shall be borne by the Beitbridge Bulawayo
Railways (Pvt) Limited Works Council.”
Aggrieved by the arbitrators' finding the respondent filed
an application in the High Court in October 2009 for an order to set aside the
arbitral award. This application was opposed by the appellant. The court a
quo found that the arbitrator had erred and granted the following order:
“1.In conclusion I am
satisfied that the determination made by the arbitrator in this case should not
be allowed to stand and it is set aside.
2. The 1st respondent is to pay the
costs.”
It is against this order that the appellant has now
appealed to this court.
The grounds of appeal as set out in the notice of appeal
are repetitive. They can be addressed comprehensively by dealing with two
issues. Firstly whether or not there was a proper application before the court a
quo. Secondly, whether or not the court a quo misdirected itself
in setting aside the arbitral award?
Whether or not there was a proper application
before the court a quo
It was contended on behalf of the appellant that the
award issued by the second respondent was not reviewable by the High Court
since it resulted from a voluntary arbitration. Such an award, it was contended,
could only be set aside in terms of Article 34 of the Model law prescribed in
the 2nd Schedule of the Arbitration Act [Cap 7:15]. Article 34
provides as follows:
“(1) Recourse to a court against an arbitral award may be
made only by an application for setting aside in accordance with paragraphs (2)
and (3) of this article.”
The appellant submitted that the respondent filed an
ordinary application for review on grounds of review as set out in s 27 of the
High Court Act [Cap. 7:06]. The application did not state whether it
was in terms of s 27 of the High Act or in terms of Article 34 of the Model
law. A perusal of the grounds for review contained in the founding affidavit
indicates that the first respondent was relying on the ground of review as contained
in Article 34 (2) (a) (iii) of the Model Law which provides that:
“(2) An arbitral award may be set aside by the High
Court only if—
(a) the party making the application furnishes
proof that—
(i) ……………
(ii) …………
(iii) the award deals with a dispute not contemplated by or
not falling within the terms of the submissions to arbitration, or contains
decisions on matters beyond the scope of the submission to arbitration,
provided that, if the decisions on matters submitted to arbitration can
be separated from those not so submitted, only that part of the award which
contains decisions on matters not submitted to arbitration may be set aside.”
It is trite that the High Court cannot set aside an
arbitral award on the grounds set out in s 27 of the High Court Act. In Catering
Employers Association of Zimbabwe v Zimbabwe Hotel and Catering Workers
Union & Anor 2001 (2) ZLR 388 (S) SANDURA JA at p 392E said:
“The suggestion by the learned
Judge is that in addition to the grounds set out in Article 34(2) of the Model
Law, an arbitral award may be set aside by the High Court on review on the
grounds set out in section 27 of the High Court Act (Chapter 7:06). I
respectfully disagree. In my view, Article 34(2) of the Model Law sets out the
sole ground on which an arbitration award may be set aside by the High Court.
That is what Article 34(2) says and that is what this court said Zimbabwe
Electricity Supply Authority v Maposa 1999 (2) ZLR 452(S) at 458F.”
The court a quo in its judgment, clearly relied on
the provisions of Article 34 of the Model law, and stated that the provisions
of the Arbitration Act applied to the application before it. There can be no
question that the application before the court a quo was made and
determined in terms of Article 34 of the Model law. It is my view that the
correct procedure was used to challenge the arbitral award. The judgment of the
court a quo shows that the court relied on Article 34(2) (a) (iii) in
reaching its decision. The High Court therefore had jurisdiction in terms of
Article 34 to entertain the application. There was thus a proper application
before the court a quo.
Whether or not the court a
quo misdirected itself in setting aside the arbitral
award?
The legal standard for setting aside a voluntary arbitral
award is high. Even in cases of misconduct of the proceedings by an
arbitrator, a court will be reluctant to interfere save in limited instances.
In NetOne Cellular (Pvt) Ltd v Communications and
Allied Services Workers Union of Zimbabwe and Anor SC-89-05CHIDYAUSIKU CJ
at p 5 of the cyclostyled judgment stated as follows:
“A proper reading of Article 34 of the Arbitration
Act, in my view, reveals that it prescribes the power of the High Court in
relation to the setting aside of arbitration awards. A
litigant who wishes to set aside an arbitral award by way of an application to
the High Court has to satisfy the stringent requirements of Article 34 of the
Arbitration Act.” (Emphasis added)
In setting aside the arbitral award the court a
quo relied on the provisions of the said Article and came to the
conclusion that the second respondent had gone beyond her terms of reference.
The appellant contends that the second respondent did not exceed her mandate.
The second respondent was required to answer the question referred for
arbitration and to provide a remedy. She did so by finding the process of
retrenchment lawful.
The arbitrator answered the question referred to her
for consideration by the parties in the affirmative namely whether or not the
employer had followed the correct procedure in wanting to retrench. Mr Majoko
for the first respondent accepted that the arbitrator had answered the question
in the affirmative. In effect Mr Majoko accepted that the
employer had followed the correct procedure. I find that there is no issue in
this respect. The further remarks of the second respondent, properly construed,
are merely by way of elucidation or guidance to the parties on ancillary
matters concerning the main issue.
This court finds that the court a quo misdirected
itself in finding that the arbitrator had gone beyond the scope of her terms of
reference on the issue referred to her for determination. Such finding is not
justified by the circumstances of the case.
In the result and for the aforementioned reasons the
court allowed the appeal and granted the following order:
1.
The appeal succeeds with costs.
2.
The judgment of the court a quo is set aside and substituted with the
following:
“The application is dismissed
with costs.”
MALABA DCJ:
I agree
GOWORA JA:
I agree
Messers Dube, Manikai and Hwacha, appellant's
Legal Practitioners
Messers Majoko and Majoko,
first respondent's Legal practitioners
