PATEL AJA:
This is an
appeal against the decision of the High Court (HH 147-2012) handed down on
4 April 2012. The appeal was dismissed at the end of the hearing of
the matter. The reasons for that dismissal are as
follows.
BACKGROUND
Since 1978 the appellant has occupied the basement at
the first respondent's premises in Linquenda House, Harare, and operates a
nightclub thereat. The last lease agreement between the parties was
concluded in October 1997.
In 2009, the parties were unable to agree on the
rentals to be paid for the premises. The matter was then referred to one
Angelbert Nyandoro to determine a fair rental. He proceeded to do so and
set out his determination in a report. In the report he refers to himself
as a “Valuer acting as an Expert”. He also chronicles his appointment by
the Chairman of the Royal Institute of Chartered Surveyors, Harare Group, “to
act as an expert in the settlement of the dispute between [the parties]
regarding basic rentals payable”. According to the report, he wrote to
both parties and requested submissions on each party's position.
Thereafter, following various communications and meetings, he made his
determination based on commercial open market rentals in Harare's Central
Business District.
This rent determination was not challenged by either
of the parties and has never been set aside by any legal process. In any event,
the appellant did not pay any rentals whatsoever, not even in the amounts that
it believed it should have paid.
In August 2010, the first respondent cancelled the
lease for non-payment of rent. The appellant disputed the arrear rentals
claimed by the first respondent and the cancellation. The first
respondent then invoked clause 31(b) (iv) of the lease agreement and the matter
was referred to arbitration by consent. The issues for determination by
the arbitrator, the second respondent, related to the cancellation of the lease
agreement, the rentals due and the eviction of the appellant.
The second respondent handed down his award on 30
March 2011. He found that Nyandoro's rent determination was binding on
the parties and that the appellant was in breach of the lease agreement by
reason of its failure to pay rentals and operating costs. He awarded the
payment of outstanding arrear rentals, operating costs and holding over
damages, as well as all legal costs and arbitrator's fees incurred by the first
respondent. He also ordered the appellant to give vacant possession
within one month, failing which it was to be evicted by due process.
Subsequently,
the first respondent applied for the registration of the second respondent's
award in Case No. HC 4137/11. Conversely, the appellant applied through
Case No. HC 5575/11 to set aside the same award. Both matters were
consolidated by consent.
The High Court found that
the rental due had been properly determined by Nyandoro and that the appellant
had fully participated in that process. That determination had not been
set aside and was therefore binding. The court also found that the second
respondent had properly determined all the issues referred to him for
arbitration with the full participation of both parties. It was therefore
held that his award did not offend public policy and that there was no basis
for setting it aside. Consequently, the application in Case No. HC 5575/11 was
dismissed and the award was registered as an order of the court under Case No.
HC 4137/11.
The present appeal is
lodged against those decisions. Despite the rather vague and catch-all
phraseology employed in the notice of appeal, it was accepted by both counsel
that the only issues for determination in this appeal are whether the first
respondent's award was founded on the existence of a proper rental payable by
the appellant and, if it was not, whether it offended public policy.
DETERMINATION BY EXPERT VALUER
As the record shows, and as was
correctly conceded by Adv. Uriri, the appellant fully participated in
the rental assessment proceedings before Nyandoro, as an expert valuer, as well
as the arbitration proceedings before the second respondent. Adv. Uriri
also concedes that Nyandoro's determination was not reviewed or set aside
before the matter was referred to the second respondent.
In these circumstances, it
does not matter that Nyandoro chose to designate himself an expert valuer,
rather than as an arbitrator, or that he did not conduct the proceedings before
him within the strict confines of the Model Law (Schedule to the Arbitration
Act [Cap 7:15]). Arbitration is an alternative form of dispute
resolution designed to avoid the technicalities and formalities of litigation.
In essence, it is a flexible process that is controlled by the parties
involved. That is precisely what occurred in this instance.
In keeping with his
mandate, Nyandoro invited submissions from both parties and duly made his
determination. I fully endorse the submission by Adv. Girach
that the appellant cannot both approbate and reprobate proceedings in which it
fully participated and the outcome of which it did not challenge on
review. It is therefore clear that there was a rental dispute between the
parties, within the meaning of clause 5(a) of the lease agreement, and that the
rent was duly determined by an arbitrator appointed for that purpose.
ARBITRATION AWARD BY SECOND RESPONDENT
Turning to
the arbitral award itself, what was referred to the scond respondent is spelt
out in his terms of reference, which I have alluded to earlier.
Nyandoro's status, qua expert valuer or arbitrator, or the correctness
or otherwise of his rental assessment were clearly not matters that were
referred to the second respondent for determination. Consequently, he was
perfectly entitled to proceed on the basis that it was a binding assessment for
the purpose of resolving the issues before him. His decision, in this
regard and in all other material respects, is unassailable.
Accordingly, there is absolutely
no basis for setting aside his arbitral award in terms of Article 34 of the
Model Law. By the same token, I can perceive no ground for impugning its
registration under Article 35 of the Model Law. It follows that the decisions
of the court a quo, dismissing the application to have the award set
aside and granting the application for its registration, are unimpeachable and
must be upheld.
For the
aforestated reasons, the appeal was held to have no merit and was therefore
dismissed with costs.
MALABA DCJ:
I agree.
ZIYAMBI JA:
I agree.
Venturas & Samukange, appellant's legal
practitioners
Gill Godlonton & Gerrans,
respondent's legal practitioners
