The applicant seeks an order setting aside an arbitral award handed down by the second respondent on 16 August 2010. The applicant avers that the award is in conflict with the public policy of Zimbabwe in the following material respects:

(a) “The Arbitrator made a determination on the issues not placed before him for adjudication.”

(b) “A breach of the rules of natural justice occurred in connection with the making of the award.”

(c) “The award conflicts with the substantive law of Zimbabwe in material respects.”

The applicant substantiates these averments as follows:

(a) Issues not before the arbitrator for determination

(i) A determination was made on a claim for realised proceeds. This claim had not been placed before the arbitrator (second respondent) for determination.

(ii) The arbitrator did not consider the first and second issues placed before him and erroneously held that they were alternative claims, where no such alternative claims had been made and placed before him. In the result, he awarded an amount in excess of what the first respondent had claimed.

As a result, the applicant submits that the arbitrator had gone “on a frolic of his own” making a determination outside his terms of reference. The award, argues the applicant, is procedurally improper and should be set aside on that basis.

(b) Breach of the Rules of Natural Justice

The applicant further submits that the arbitrator made a determination on an issue that was improperly introduced by the first respondent; that is the claim on realised proceeds. This claim was single-handedly introduced by the first respondent in its heads of argument. The first respondent's claim in the procedure document should have been amended to accommodate this new claim. The issue of this claim had not been included and agreed to by the parties. In the result, the applicant was prejudiced in the conduct of its defence as it was not accorded an opportunity to fully present its defence on this claim. This amounts to a breach of the rules of natural justice argues the applicant.  For that reason the award must be set aside on the grounds that it is in conflict with the public policy of Zimbabwe.

(c) Award conflicts with the substantive law of Zimbabwe

It is averred that the award conflicts with the substantive law of Zimbabwe in that the dispute was not determined in terms of the governing contract between the parties in that with regards the 2005 Tobacco Agreement.

(i) The arbitrator, in awarding the first respondent all the proceeds generated from the scheme, failed to apply the exchange rates agreed to by the parties in terms of the agreement. He gave a remedy which was not provided for in the contract. He, accordingly, acted outside the law of Zimbabwe thus the award must be set aside as being contrary to the public policy of Zimbabwe.

(ii) Alternatively, in awarding all the proceeds to the first respondent, the arbitrator's reasoning “went beyond mere faultiness or incorrectness and constituted a palpable inequity that was so far reaching in its defiance of logic or accepted moral standards that a sensible and fair minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award.”

(iii) With regards the 2006 Tobacco Agreement, the applicant attacks the award on the same grounds as the 2005 Agreement with the inclusion of an additional ground, namely, that the arbitrator failed to take into account any trade usage of the tabacco industry. In particular, that the tobacco auction rate was different from the interbank rate, a notorious fact at the time.

(iv) The arbitrator awarded, according to the applicant, the remedy of specific performance in circumstances where the other party had admitted to breaching the 2006 agreement in material respects, namely, the partial funding of the establishment of the grower scheme and the procurement of inputs.

(v) Alternatively, the arbitrator entertained a point raised in the first respondent's heads of argument for the first time, namely, that first respondent had met its obligations in terms of the contract and was therefore not in breach, when in fact, the first respondent had, in its admissions of fact, admitted that its funding was only partial with regards establishment of growers' scheme and nil with regards the purchase of green tobacco. This argues, the applicant, amounted to a breach of the rules of natural justice in that the applicant was not afforded the opportunity to address the issue introduced by the first respondent belatedly.

(vi) The arbitrator failed to make a determination as to the legality of the agreements entered into by the parties, despite extensive arguments on the point, says the applicant. For that reason, the applicant avers that the arbitrator gave a blind eye to illegality, a fact which is contrary to the public policy of Zimbabwe. In particular, a ruling should have been made as to whether the Reserve Bank had authorised the transactions, argues the applicant.

(d) Arbitrator had no power to act outside the Procedure Document….,.

In its opposing affidavit, sworn to by Hampton Mhlanga, its Acting Managing Director, the first respondent avers that the award is not in conflict with public policy. Instead, it is based on sound principles of law consistent with the dictates of public policy. The respondent's understanding of the award is that with regards both the 2005 and 2006 agreements, the applicant had a duty to account to the respondents all monies advanced to it. It rendered its account, which the first respondent accepted, from which account arose the relief sought. The relief sought was not based only on the admissions made by the applicant nor was it confined only to such admissions. It was, instead, based on the full accounts given by the applicant with regards funds disbursed to it in terms of both agreements. As for the applicable exchange rate, the arbitrator found, on the evidence presented to him by the parties, that the rate of exchange had been agreed by the parties. Further, the first respondent argues that its initial statement of claim was amended by agreement of the parties under the stewardship of the arbitrator. It is also denied that the rules of natural justice were breached in view of the fact the “new” issue alleged to have been brought up belatedly arose when the applicant, which hitherto had denied its obligations to account for all the funds availed to it in terms of the two agreements, later, during the course of the arbitration, admitted to such obligation. This was a separate admission from the ones previously made by it. Naturally, the papers were amended to capture this new development occasioned by the applicant's own conduct. The applicant cannot, in the circumstances, cry foul, contends the first respondent. It also denies that the arbitrator made a determination on an issue outside his terms of reference. On the contrary, all the issues determined by the arbitrator are captured in the first respondent's amended claim and the parties' agreed issues.

The first respondent further argues that the arbitrator determined the issues before him by reference to the terms of the agreements entered into by the parties and analysis of the evidence adduced by both parties, including findings on the credibility of the witnesses. It cannot, in the circumstances, be said that, in doing so, the arbitrator acted in conflict with the substantive laws of Zimbabwe….,.

These submissions by the first respondent constitutes the basis of its defence to this application.

A perusal of the record of arbitration vindicates the first respondent's assertions as to how the proceedings were conducted and the basis upon which the award was granted. I find nothing untoward in the manner in which the hearing was conducted, both in terms of procedural propriety, evidential analysis, and interpretation of the laws governing contractual relationships.

In support of this application, the applicant has relied, inter alia, on the case of Delta Operations (Pvt) Ltd vs Origen Corporation (Pvt) Ltd SC86-06.

It is clear that a court will only set aside an arbitral award where the “reasoning or conclusion in 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 standards 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.  The same consequence applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue and the resultant injustice reached the point mentioned above.”

By any stretch of the imagination, it cannot be said that the present award constitutes a palpable inequity in the proportions envisaged in the Delta Operations (Pvt) Ltd vs Origen Corporation (Pvt) Ltd SC86-06 case. On the contrary, as already indicated, I do not find any faultiness or incorrectness in the arbitration proceedings let alone of the magnitude described by the applicant. The award, in my view, is in accordance with the substantive and procedural laws of Zimbabwe. Both parties were afforded a fair hearing in accordance with the rules of natural justice. In particular, it has not been shown in what way the award is in conflict with the public policy of Zimbabwe.

Accordingly, the application cannot succeed. For these reasons, I order as follows:

(1) That the application be and is hereby dismissed in its entirety.

(2) The applicant shall pay the costs.

In this application the following relief is sought;-

“It is ordered that:-

1. The award of quantification of damages made by the second respondent on 28 October 2011 be and is hereby set aside.

2. The first respondent pay the costs of suit.”

The background to this application is that in August 2011 the applicant and the first respondent reached a deadlock in their negotiations for minimum wages/salaries in the textile industry for 2010. The parties then agreed to refer the matter to Voluntary Arbitration. Messrs Mordicai Mahlangu and Munyaradzi Gwisai were appointed arbitrators. A letter dated 12 August 2011, and addressed to the two arbitrators, reads as follows;-

“RE: Deadlock on Wage/ Salary Negotiations for the Appropriate Minimum Wage/ Salary in the Textile Industry for 2010

1. The employees of the Textile Industry, represented by the Zimbabwe Textile Workers Union, (ZTWU), and the employers of the Textile Industry, represented by the Zimbabwe Textiles Textile Manufacturers Association, (ZIMTA), have deadlocked in their negotiations for minimum wages for the Textile Industry for 2010 and they have agreed to have the matter settled by means of Voluntary Arbitration.

2. The Trade Union (ZTWU) have demanded that the minimum wage/salary for the industry be increased from US$150= per month to $211= i.e 40.6% per month for Level 1, with the same percentage increase across the board effective from 01 January 2011, for 12 months.

3. The employers association (ZIMTA) have stated that even though the Textile Industry is still severely distressed they could offer to increase across the board, with effect from 01 July 2011, for 12 months.

4. Each party agreed to nominate their own arbitrator and both Honourable Arbitrators will meet to agree a common position.

5. Both parties agreed to deliver their position papers to the Honourable Arbitrators, and the other party, on or before 8:00am on 05 September 2011.

6. The decision of the Honourable Arbitrators is required within 14 days of this date i.e 19 September 2011.

7. Should the Honourable Arbitrators be unable to agree on a common position they are to agree on a third arbitrator and to appoint the same who shall endeavour to get the Honourable Arbitrators to agree on a common position within the above period.

8. Each party shall be responsible for the costs of their nominated arbitrator.

9. Should it be necessary to appoint the third arbitrator, the costs will be met by the NEC.

10.  It is agreed that no decision will be released to any party by any arbitrator until such time as all arbitration debts have been paid in full. Both parties agree to settle their own arbitration fees by the due date of the award.

11. The Employers Association and the Trade Union hereby bind each other to the terms and conditions as set out in the Arbitration award and that the decision of the Arbitrators shall be binding on both parties.”

Although dated 12 August 2011, the above letter was signed by both the applicant and the first respondent on 15 August 2011.

The two appointed arbitrators reached a deadlock. That led to the appointment of the second respondent as the third arbitrator. That appointment was in accordance with paragraph 7 of the above letter.

On 28 October 2011, the second respondent delivered his award, which, for the sake of clarity, I produce here below in full. The said award was couched in the following terms;-

“Arbitral Award

5.1 While the distress characterizing the Textile Industry is acknowledged, it is also important to bring some relief to the workers, especially given the long delay in finalizing the negotiations. How to achieve a mutually beneficial outcome in a typical catch 22 situation that faces the industry is not an easy task. However, guided by the fact that ordinarily, the award granted in April 2009 would have applied for 12 months, it means some adjustment should be factored in to cover the cost of living adjustments experienced in 2010 (May-December), 2011 and the projected levels for 2012. On average, inflation increased by 4.3% between May and December 2010, rising to a projected 4.6% in 2011 and is anticipated between 5% and 6% in 2012. This gives a cumulative cost of living adjustment of almost 15%.

5.2 It is therefore resolved that the minimum wage be increased by 15% from US$150= to $173= per month and that the levels for the other grades be reworked based on existing differentials.

5.3 The next challenge is to set the effective date, bearing in mind the state of the industry and problems associated with backdated awards. We are guided by the suggestion of the Employers' Association as indicated in its position paper of September 2011 addressed to the two arbitrators, where it was proposed that the effective date be 01 July 2011 (page19). One would therefore expect that there has been some anticipation on the employers' side of such an eventuality.

5.4 Since there appears to be consensus between both parties that the collective bargaining agreement should run for 12 months, it is taken that the agreement is effective from 1 July 2011 and will be in force until end of June 2012 when a new agreement is implemented.

Conclusion 

The challenges facing the Textile Industry associated with the influx of imports, shortages of working capital, obsolete equipment among others cannot be resolved by the two parties alone as it requires Government involvement. We therefore pray that the stakeholders come together to find lasting solutions to the problems bedeviling the sector as a matter of urgency to salvage an already difficult situation. Useful lessons could be drawn from other experiences such as South Africa where the parties have adopted a mutual gains approach to addressing the problems facing the sector.”

Although the applicant is already complying with the terms of the above award, it believes the award is contrary to the public policy of Zimbabwe.

In paragraphs 7.1, 7.2, 7.3 and 9 f its founding affidavit the applicant argues as follows:-

“7.1 The Arbitrator awarded a 15% increase on the basis that this was a cumulative cost of living adjustment for the relevant period.

7.2 The 15% was stated as the cumulative cost of living adjustments from 01 April 2010 to 30 June 2012; when he was required to give an award for a twelve month period from the date of his award. His award was accordingly outside the scope of his terms of reference.

7.3 The arbitrator also wrongly calculated 15% of US$150= as taking the minimum wage to US$173= when it really is US$172=50.

9. The arbitration award is therefore incorrect on the figures, and it would be contrary to the public policy of Zimbabwe to uphold an award which is clearly incorrect on the figures.” 

This is an application in terms of Article 34(2)(b)(ii) of the Arbitration Act [Chapter 7:15] for the setting aside of an arbitral award rendered by the second respondent in favour of the first respondent.

It is common cause that on 23 October 2008, the arbitrator, granted an interim arbitral award which, inter alia, interdicted the transfer of the property and that the order be served on the Registrar of Deeds. The order was served on the same day. Although the award was made in respect of the second and third applicants, it barred the selling or disposing of the whole property which included the Units of the other applicants.

It was submitted, on behalf of the applicants, that the interim award constituted the caveat and is a judgment in rem. It stands on the same footing as an order of court and it must be obeyed unless it is set aside. The arbitral award took effect upon its grant.

It was submitted, on behalf of the third, fourth and fifth respondents that an award, standing on its own does not have the force of a judicial order. It has to be registered with the appropriate court for purposes of execution. If the court were to find that the caveat was in the form of the award, then the fraud or negligence on the part of the Registrar of Deeds cannot be attributed to the respondents. The balance of convenience favoured that the application be dismissed as the respondents purchased the properties for value. The applicants have not established a basis for averring that the respondents had knowledge of the sale from the first and second respondents to them.

In terms of Article 17 of the Schedule to the Arbitration Act [Cap 7:03] an arbitrator has power to order interim measures which, inter alia, include an interdict. In terms of Article 35 an arbitral award shall be recognised as binding and upon application in writing to the High Court shall be enforced.

Voluntary arbitration proceedings are governed by the Arbitration Act [Chapter 7:15].

In McKelvey v Abrahams & Anor 1989 (2) ZLR 251 (SC) GUBBAY CJ…, said:

“The object of arbitration, as expressed in para 13 of the Schedule to the Act, is to arrive at an award that is final and binding on the parties. Thus, an award is not subject to appeal. It may be set aside on any of the four grounds. First, that it does not fall under para 13 as not being “made in terms of the Submission”. Second, if the arbitrator has misconducted the proceedings, as envisaged in s12(2) of the Act. Third, where it has been improperly procured (vide the same subsection). Fourth, where the arbitrator's mistake is so gross and manifest that it could not have made without some degree of misconduct.” 

See McKenzie NO v Basha 1951 (3) SA 783 (N)…,.

The parties agreed that the award would be final. The award would not be final if any of the parties had a right to appeal. In Ropa v Reosmart Investments (Pvt) Ltd & Anor 2006 (2) ZLR 283 (S) GWAUNZA JA…, said:

“In addition to this, I found to be persuasive the submission made for the respondent that the effect of the arbitral award is to bring to finality the dispute between the parties. The respondent relied for this submission on the following passage set out in BUTLER and FINSEN “Arbitration in South Africa; Law & Practice” at p271:

'The most important legal consequence of a valid final award is that it brings the dispute between the parties to an irrevocable end; the arbitrator's decision is final and there is no appeal to the courts. For better or worse, the parties must live with the award unless the arbitration agreement provides for a right of appeal to another arbitral tribunal. The issues determined by the arbitrator become res judicata and neither party may reopen those issues in a fresh arbitration or court action.'

This position applies with equal force in Zimbabwe.”

See also Monticello (Pvt) Ltd v Edgerton 1981 ZLR 292 (GD).

It is trite that where parties make submissions to arbitration on the terms that they choose their own arbitrator(s), formulate their own terms of reference to bind the arbitrator, and agree that the award will be final and binding on them, the court of law will proceed on the basis that the parties have chosen their own procedure and that there should not be any interference with the results. See Zesa v Maposa 1999 (2) ZLR 452 (SC). Even in cases of misconduct of proceedings by the arbitrator, the court would be reluctant to interfere, save in certain limited instances in which an award is against public policy.

The standard is high.

What public policy entails has been subject to judicial comment. In Zesa v Maposa 1999 (2) ZLR 452 (SC) it was held that:

“An award would be contrary to public policy if –

(a) It was induced by fraud or corruption;

(b) A breach of natural justice occurred. The substantive effect of an award may also make it contrary to public policy, if, for example, it endorsed the break up of a marriage or some criminal act.

It was held, further, that the approach to be adopted is to construe the public policy defence, as being applicable to either a foreign or domestic award, restrictively in order to preserve and recognise the basic objective of finality in all arbitrations, and to hold such defence applicable only if some fundamental principle of the law, or morality, or justice, is violated. 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. 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 standards 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. The same consequences apply where the arbitrator has not applied his mind to the question or has totally misunderstood the issue, and the resultant injustice reaches the point mentioned.”

The Arbitration Act [Chapter 7:15] is clear that the only court that has jurisdiction in those limited circumstances is the High Court, not the Labour Court, and expressly grants jurisdiction to the High Court. Article 34 of the Model Law provides recourse against voluntary arbitration awards. It 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.

(2) An arbitral award may be set aside by the High Court only if -

(a) The party making the application furnishes 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 on that question, under the law of Zimbabwe; or

(ii) The party making the application 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 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; or

(b) The High 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 award is in conflict with the public policy of Zimbabwe.

(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the award or, if a request had been made under article 33, from the date on which that request had been disposed of by the arbitral tribunal.

(4) The High Court, when asked to set aside an award, may, where appropriate and so requested by a party, suspend the setting aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal's opinion will eliminate the grounds for setting aside.

(5) For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this article, it is declared that an award is in conflict with the public policy of Zimbabwe if -

(a) The making of the award was induced or effected by fraud or corruption; or

(b) Breach of the rules of natural justice occurred in connection with the making of the award.”

It is clear that the court a quo did not have jurisdiction to entertain the appeal and application for review of the award made in voluntary arbitration proceedings.

For these reasons, the appeal was allowed and the following order given:

1. The appeal succeeds with costs.

2. The judgment of the court a quo is set aside and substituted with the following order:

This appeal arises from the application of two retrenchment agreements that were entered into between the parties on 23 January 2009. The first agreement stipulated the payment of specified terminal benefits, while the second provided for various payments in kind, i.e. fuel coupons and pork bones. The latter package was duly paid out and accepted without controversy. 

The dispute in casu relates to the first agreement.

The appellant paid out the first retrenchment package in Zimbabwe Dollars on 13 February 2009, following the introduction of the multi-currency regime on 2 February 2009. Some four months later, on 16 June 2009, the respondents applied to a Labour Officer for the enforcement of their retrenchment benefits. Following the failure to settle the matter, it was referred to arbitration on 9 July 2009.

The arbitrator found that the appellant had wrongfully paid the package with un-usable Zimbabwe Dollar currency that had become defunct with effect from 3 February 2009. The appellant was, accordingly, ordered to recalculate the retrenchment package in the correct multiple currency of South African Rands or United States Dollars and to deposit the recalculated amounts into the respondents' bank accounts.

On appeal against this award, the Labour Court found that the delay of several months in enforcing the retrenchment package was not inordinate and that the respondents had not waived their rights. The arbitrator was entitled to hear further evidence to supplement the agreement as to when the packages were to be paid. There was no need for the respondents to make a specific claim for damages as the appellant had committed an unfair labour practice. The relief sought, i.e. payment in currency other than that agreed, was not incompetent and the arbitrator did not thereby rewrite the contract for the parties.

In effect, the court found that the arbitrator had not exceeded his terms of reference and had, in accordance with equity, correctly awarded payment in acceptable as opposed to valueless currency. Consequently, the retrenchment package was confirmed for payment in United States Dollars at a rate of conversion to be agreed between the parties or, failing such agreement, to be determined by the court.  The appellant was also ordered to pay the respondents' costs.

The grounds of appeal herein are manifold, with most of them being tangential to the crux of the matter, and not having been pursued during the course of argument at the hearing of the appeal. In essence, the principal issue to be addressed is whether or not the arbitrator exceeded his terms of reference and thereby arrived at the wrong conclusions. Flowing from this is the correctness or otherwise of the decision of the Labour Court in upholding the arbitrator's award.

The Material Facts

The retrenchment agreements in question were both concluded on 23 January 2009. The first agreement states that “the Works Council has come up with its own minimum wage rates for the purposes of calculating the package” and that “the minimum wage for A1 Grade was pegged at ZWD2 quadrillion.” 

The agreement does not provide a specific date for payment. 

In contrast, the second agreement stipulates the payment of “USD90= worth of fuel coupons flat figure per every employee retrenched, USD200= worth of fuel coupons per every year served, 20 kilograms of pork bones per every year served” to be “settled in two lots, with the first payment being by end of January 2009 and the remainder in February 2009.” Having regard to these material distinctions between the two agreements at the time when they were concluded, the parties appear to have envisaged that the retrenchment package under the first agreement would be discharged in Zimbabwe Dollars.

Both agreements were approved by the Ministry of Public Service, Labour and Social Welfare on 30 January 2009.

On 11 February 2009, the appellant effected payment of the first retrenchment package in the new Zimbabwe Dollar currency. This was done by RTGS payments into the respondents' bank accounts; which payments were duly reflected in those accounts on 13 February 2009. It appears that the respondents did not access or utilise their respective payments at any stage. However, they did not immediately lodge any complaint and only applied to the Labour Officer to enforce their retrenchment benefits four months later.

The arbitral award indicates that other employees who were not retrenched were paid their wages in United States Dollars at the end of the month on 28 February 2009. However, no evidence to that effect appears to have been placed before the arbitrator nor was any evidence led to show what currency these employees received as wages between 11 and 13 February 2009.

After the retrenchment agreements were concluded and approved, but before they were implemented, certain critical developments took place on the monetary plane. On 2 February 2009, the Reserve Bank issued its Monetary Policy Statement (the MPS), which introduced a multi-currency regime permitting free trade in any convertible currency and, at the same time, retaining the local currency as re-valued. This was accompanied by the promulgation, on the same date, of the Presidential Powers (Temporary Measures)  (Currency Revaluation and Issue of New Currency) Regulations 2009, S.I.6 of 2009 (the Regulations)….,.

Terms of Reference and Grounds of Appeal

Where a dispute is referred to compulsory arbitration by a Labour Officer, section 98(4) of the Labour Act [Chapter 28:01] enjoins the officer to determine the arbitrator's terms of reference after consultation with the parties to the dispute. In casu, the sole issue to be determined by the arbitrator, as framed by the labour officer qua referring authority, was as follows:

“Whether or not the respondent [appellant herein] paid the mutually agreed retrenchment package in time.”

On 16 August 2009, the arbitrator found that the payment of the retrenchment package in Zimbabwe Dollars contravened a Government directive requiring the use of South African Rands or United States Dollars for all money transactions in Zimbabwe. Consequently, he held that:

“The employer wrongfully paid the retrenchees bank accounts with unusable Zim dollar currency which had ceased to be used by Government directive with effect from 3^rd February 2009. Therefore, that transaction in Zim dollars is declared null and void as referred to [sic] my issued terms of reference.”

Although this finding does not directly address the stipulated term of reference, it does, arguably, indirectly answer the question framed, by the implication that the package should have been paid before 3 February 2009. However, by way of remedy, the arbitrator then proceeded to order the appellant:

“To recalculate the retrenchees package in the correct multiple currency of either Rand or US dollars as directed by the Government's directive dated 3^rd February 2009, using the N.E.C. Food Allied Industries Memorandum of Agreement for Salary/wages scale A1 to C4 as basis for recalculations.”

By making this award, the arbitrator clearly exceeded his terms of reference.

He was simply required to determine whether or not the retrenchment package had been timeously paid within the contemplation of the parties as captured in the retrenchment agreement. It was not within his remit, in the event that he answered the question posed in the negative, to prescribe the remedy to be applied and the specific manner in which the agreement should be implemented. In effect, the arbitrator misdirected himself by making a new contract for the parties.

On appeal from the arbitrator, the Labour Court also fell into the same error.

What the appellant sought in the appeal was the setting aside of the arbitral award. The respondents did not lodge any cross-appeal and did not move the court to vary the arbitral award. They simply prayed for the dismissal of the appeal with costs. The court found for the respondents but did not expressly dismiss the appeal. Instead, it confirmed the retrenchment agreement and ordered as follows:

“1. The retrenchment package between the parties is confirmed.

2. The Zimbabwean Dollars payable are to be converted and paid in United States Dollars.

3. The rate of conversion is to be agreed between the parties.

4. Should the parties fail to agree on the conversion rate, either party can approach the court for the determination of the applicable rate.

5. The Appellant will pay the Respondents' costs.”

The court a quo clearly misconceived and misapplied its adjudicative function and powers on appeal.  What it did was to fundamentally alter the arbitral award instead of simply upholding it. Furthermore, unlike the arbitrator, it disregarded the fact that the appellant had already paid the retrenchment package in Zimbabwe Dollars. More significantly, it completely failed to address the principal question at the core of the dispute between the parties, i.e. whether or not the mutually agreed retrenchment package had been paid on time. And, in so doing, it made a new contract for the parties, purportedly as relief for the alleged breach of the retrenchment agreement. As is appositely cautioned by CHRISTIE: The Law of Contract in South Africa (5 ed.)…,:

“The fundamental rule that the court may not make a contract for the parties is a salutary one, the principle of which has probably never been seriously questioned. It is unthinkable that the courts should not only tell the parties what they ought to have done but then make them do it by enforcing the court's idea of what the contract ought to have been.”

In addition, at law, the arbitrator was only competent to determine the dispute between such parties as had been referred to him by the labour officer. Thus, he was confined to his terms of reference. He had no mandate beyond that which had been referred to him. 

It is not in dispute that the other twelve respondents were not subjected to disciplinary procedures. It is also not in dispute that the matter of the first-mentioned of these respondents is in the arbitral process. The second to thirteenth respondents were therefore not properly before him. There was no claim for the arbitrator to adjudicate on and the award was irregularly made. In addition, the arbitrator proceeded to award damages to the twelve in the absence of a claim or evidence to substantiate the award of damages as they never appeared in person. 

The award granted in their favour has no legal basis….,.

Taking these irregularities into account, the court a quo should have found that the award in respect of the other twelve had been granted without lawful basis and ought therefore to have set it aside.

Whether the Arbitrator correctly found the appellant to have committed an unfair labour practice

The arbitrator was required to enquire into the lawfulness of the transfer and the remedy. He found the transfer to be unlawful and void and declared the appellant to be guilty of an unfair labour practice.

This is an appeal against the whole judgment of the High Court dismissing an application to set aside an arbitral award in terms of section 34 of the Arbitration Act [Chapter 7:15].

The facts in this matter are that the first respondent owned a plastic processing plant which was insured by the appellant under an assets all risk policy.

On 11 August 2013, a fire occurred on the premises of the first respondent which destroyed its building. The first respondent issued a claim with the appellant for the replacement of the building, stock and other movables which were covered under the insurance policy. In order to assess the damage, the appellant, on behalf of its auditors KPMG, requested a list of information from the first respondent. After the audit, KPMG came up with an assessment of the amount to be paid as compensation. The audit report was not made available to the first respondent and a payment was made. The first respondent considered that the payment was far below the sum insured and proceeded to engage its own auditors, BDO, which came up with a different computation of the value of stock to be insured.

A dispute arose between the appellant and the first respondent concerning the value of the stock, whether the crane was to be considered a fixture in the building and whether the electrical connections were covered by the insurance policy. In terms of the insurance policy, any dispute arising in respect of a claim under it should be referred to arbitration. In other words, the parties when they signed the insurance contract voluntarily submitted to the jurisdiction of an arbitrator in the event that a dispute arose between them.

The first respondent instituted a claim before an arbitrator, who is the second respondent. It claimed the following:

1. That the insurer replaces the insured's crane and/or pay a sum equivalent to the value of the crane, which could be sourced from suitable suppliers.

2. That the forensic report by BDO Audit Firm be adopted and the insurer pays the replacement value of stock as per the BDO report.

3. That the Bill of Quantities for electricals be prepared by a reputable contractor appointed by the arbitrator, at the insurer's expense, to replace the damaged electricals and the value thereof be paid to the insured.

4. Reimbursement of all costs incidental to the arbitration, including costs on an attorney/client scale.

The appellant opposed the claim on the grounds that the crane was not indemnified under the policy, that there was no basis for relying on the BDO report in respect of the stock, and that the electricals were already paid for.

The first respondent adduced evidence, through witnesses who testified that though the crane was detachable it constituted an integral part of the building and therefore was insured. The appellant's witnesses testified that the crane was a detachable fixture and was not covered by the insurance policy.

The arbitrator held that the crane was part of the building and even if that was not the case it was covered by the policy because it was a tangible asset that was owned by the first respondent. He ordered the appellant to replace the crane or pay the sum equivalent to the value of the crane.

In respect of the stock, the appellant insisted that the valuation given by KPMG should be accepted and that the BDO valuation should be ignored because it was done after the settlement of the claim. The appellant, however, did not challenge the admissibility of the BDO report as evidence. It merely challenged the figures that BDO came up with and that the audit was conducted at the instance of the first respondent.

From the evidence adduced by the parties, the arbitrator observed that the KPMG report was defective as it omitted some elements in its valuation. He also considered the fact that the appellant did not lead evidence from a member of the KPMG team which had conducted the audit. He held that the BDO assessment was more accurate and ordered the appellant to pay the sum of $188,815=90 as the balance of the amount paid for stock that was destroyed. Evidence was also led in respect of the electricals and the claim was dismissed.

The arbitrator ordered the appellant to pay costs on a legal practitioner/client scale.

Aggrieved by the arbitral award, the appellant approached the High Court for an order setting it aside in terms of Article 34 of the Arbitration Act. Article 34(2) of the Arbitration Act provides grounds upon which an arbitral award may be set aside by the High Court. It states:

“(2) An arbitral award may be set aside by the High Court only if -

(a) The party making the application furnishes 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 an indication on that question, under the law of Zimbabwe; or

(ii) The party making the application 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 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; or

(iv) The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Model Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Model Law; or

(b) The High 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 award is in conflict with the public policy of Zimbabwe.”

The salient feature of the provision is that it prohibits any recourse against an arbitral award other than in terms of its requirements and limits the grounds on which the award can be assailed. The rationale behind the provision is that voluntary arbitration is a consensual adjudication process which implies that the parties have agreed to accept the award given by the arbitrator even if it is wrong, as long as the proper procedures are followed. The courts therefore cannot interfere with the arbitral award except on the grounds outlined in Article 34(2) of the Arbitration Act.

An application brought before the Court under this provision is, in essence, a restricted appeal and the applicant should prove the grounds set out in order to succeed in its application.

In this case, the appellant's grounds for setting aside the arbitral award were that it contained decisions on matters that went outside the scope of submissions for arbitration and also that it violates the public policy of Zimbabwe.

The court a quo considered whether or not the appellant proved sufficient grounds upon which it could set aside the arbitral award as the matter before it was not an appeal or a review but that the award could only be set aside in accordance with Article 34 of the Arbitration Act.

In respect of the first ground advanced by the appellant, the court a quo found that, after carefully considering the papers before it, it was unable to find where the arbitrator exceeded the terms of reference. The learned Judge said at page 6 of the cyclostyled judgment:

“Clearly, the second respondent was guided by the BDO report in dealing with the value of the stock.

Given the above, I do not see how a person who accepts the formula suggested in the BDO report, can then fail to order payment of a specific sum as replacement value for the stock.”

The second ground advanced by the appellant was also dismissed after the learned judge made a finding that the award was not “so unreasonable” as to offend the public policy of Zimbabwe.

The appellant then appealed to the Court on the following grounds:

“1. Article 34 of the Arbitration Act [Chapter 7:15] is unconstitutional as it fails to uphold the right to equal protection and benefit of the law guaranteed in accordance with section 56(1) of the Constitution of Zimbabwe Amendment (No. 20) Act, 2013.

2. The court a quo erred by concluding that the arbitral award does not contain decisions on matters beyond the scope of the submissions to arbitration.

3. The court a quo erred by ignoring the fact that no contract of insurance existed in respect of the crane and, by upholding the arbitral award in this regard, is allowing the first respondent to be unjustly enriched, which in itself is contrary to the public policy of Zimbabwe.

4. The court a quo erred by disregarding the principles of sanctity of contract and freedom of contract and relied on the BDO report in upholding the award on the stocks, notwithstanding that the said report was not presented to the appellant in breach of the insurance policy conditions and consequently in violation of the public policy of Zimbabwe.”

The question for determination is whether or not the court a quo erred when it dismissed the application to set aside the arbitral award….,.

In order to determine the issue before the Court, the grounds upon which the appellant sought to have the arbitral award set aside should be examined.

WHETHER OR NOT THE ARBITRAL AWARD CONTAINED DECISIONS ON MATTERS THAT WENT BEYOND THE SCOPE OF SUBMISSIONS FOR ARBITRATION

Article 34(2)(a)(iii) of the Arbitration Act [Chapter 7:15] states that an arbitral award can be set aside if it contains submissions on matters beyond submissions for arbitration. In Inter-Agric (Pvt) Ltd v Mudavanhu & Ors SC09-15…, GOWORA JA said:

“In addition, at law, the arbitrator was only competent to determine the dispute between such parties as had been referred to him by the labour officer. Thus, he was confined to his terms of reference. He had no mandate beyond that which had been referred to him.”

In casu, the terms of reference were agreed on and submitted by the parties.

For this ground to succeed, the appellant should have shown that the arbitrator did not address the matters before him or that, in addressing the matters before him, he proceeded to exceed his mandate and dealt with other extraneous issues.

It was the appellant's argument in the court a quo that the first respondent, in its claim, prayed for an order that the audit report by BDO be adopted but the arbitrator went on to award a specific amount of US$188,815=90. It argued that by making such an award he went beyond the scope of the submissions for arbitration.

The first respondent, on the other hand, submitted that the arbitrator specifically awarded the sum that had to be paid arising out of the evidence and therefore did not go outside the scope of the submissions for arbitration.

This question can only be answered by analysing the relief sought by the first respondent in its statement of claim in respect of the stock. It was to the effect that:

“The forensic audit report by BDO Audit firm be adopted and the insurer pays replacement value of the stock as per the BDO report.”

Essentially, the relief sought under this paragraph was that the second respondent finds that the value of stock, as assessed by BDO, is payable to the first respondent by the appellant. The amount payable to the first respondent, in light of the BDO report, is US$184,815=90. This specific amount was claimed by the first respondent in its written submissions before the arbitrator. The arbitrator merely ordered the payment of that specific amount upon making a finding that the BDO assessment should be accepted as the value of the stock.

This is not tantamount to making an award beyond the submissions for arbitration.

The arbitrator, however, made an error, which error is conceded by the first respondent, in awarding US$188,815=90 instead of US$184,815=90. The error should, however, not have the effect of setting aside the arbitral award.

Article 33(1)(a) of the Arbitration Act [Chapter 7:15] provides for recourse where an error is made in the arbitral award. It states:

(1) Within thirty days of receipt of the award, unless another period of time has been agreed upon by the parties -

(a) A party, with notice to the other party, may request the arbitral tribunal to correct in the award any errors in computation, any clerical or typographical errors or any errors of similar nature.”

This provision provides a method by which an error in the arbitral award can be rectified. It is not for the courts to set aside the award based on an error that can be corrected in terms of the Act.

The appellant failed to show that the arbitrator acted outside his mandate and therefore the decision of the court a quo dismissing this ground for setting aside the arbitral award is upheld.

WHETHER OR NOT THE AWARD OFFENDS THE PUBLIC POLICY OF ZIMBABWE

The appellant's third and fourth grounds of appeal succinctly state that the award offends the public policy of Zimbabwe.

Article 34(2)(b)(ii) of the Arbitration Act [Chapter 7:15] provides that the High Court can set aside an arbitral award if it finds that the award is in conflict with the public policy of Zimbabwe. Guidance on how a court should proceed when faced with this ground for setting aside an arbitral award was given by GUBBAY CJ in the case of Zesa v Maposa 1999 (2) ZLR 452 (S). At 466E, the learned CHIEF JUSTICE said:

“An arbitral 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 situation, the court would not be justified in setting the award aside. Under Article 34 or 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognise and enforce an award by having regard to what it considers should have been the correct decision.”

The import of these remarks is that the Court should not be inclined to set aside the arbitral award merely on the basis that it considers the decision of the arbitrator wrong in fact or in law. If the courts are given the power to review the decision of the arbitrator on the ground of error of law or of fact, then it would defeat the objectives of the Act. It would make arbitration the first step in a process which would lead to a series of appeals. The learned CHIEF JUSTICE went on further to say, at p 466F–G:

“Where, however, the reasoning or conclusion in an award goes beyond mere faultiness or correctness and constitutes a palpable inequity that is so far reaching and outrageous in its defiance of logic or acceptable moral standards 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.

The same applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue, and the resultant injustice reaches the point mentioned above.”

These remarks ought to guide the Court in determining whether the award by the first respondent is contrary to public policy. The question that should be in the mind of a judge who is faced with this ground for setting aside an arbitral award is that, in light of all the submissions and evidence adduced before the arbitrator, is it fathomable that he would have come up with such a conclusion. If the answer is in the affirmative, there is no basis upon which to set aside the award.

The appellant's submissions should be considered in the light of these remarks.

It was submitted for the appellant that the court a quo and the second respondent tampered with the sanctity and freedom of contract. This submission is hinged on two allegations.

(i) First, that there is a clause in the insurance policy placing an obligation on the first respondent to furnish all information regarding a claim and it failed to comply by withholding information that it submitted to BDO.

(ii) The second allegation is that the payment of a premium is a condition precedent to any indemnity and by ordering the appellant to replace the crane, the second respondent violated the sanctity of the contract. 

In Book v Davidson 1988 (1) ZLR 365 (S), the sanctity of contracts was discussed as follows at 378G-379C:

“'There is, however, another tenet of public policy, more venerable than any thus engrafted onto it under recent pressures, which is likewise in conflict with the ideal of freedom of trade. It is the sanctity of contracts.' (Roffey v Catterall, Edwards & Goudre (Pty) Ltd 1977 (4) SA 494 (N) at 504-505E)…,.

'If there is one thing which more than another public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice. Therefore you have this paramount public policy to consider - that you are not lightly to interfere with this freedom of contract.' (Printing and Numeric Registering Co v Sampson (1875) LR 19 Eq 462 at 465).

'[T]o allow a person of mature age, and not imposed upon, to enter into a contract, to obtain the benefit of it, and then to repudiate it and the obligations which he has undertaken is, prima facie at all events, contrary to the interests of any and every country.' (E Underwood and Son Ltd v Barker (1899) 1 CH 300 (CA) at 305).'”

The above dictum shows that the principle of sanctity of contracts confines the court only to interpreting a contract and not creating a new contract for the parties. It entails that the court should respect the contract made by the parties and give effect to it.

In both instances which the appellant alleges that the second respondent violated the principle of sanctity of a contract, it is the Court's view that the appellant misconstrued the principle. There is a distinction between creating a new contract between the parties and interpreting a contract in a manner which is unfavourable to a party.

In casu, the second respondent did the latter and that has given rise to the appeal.

The determination of whether or not, in terms of the policy, the crane was a fixture in the building and covered by the policy is a factual finding which was made by the second respondent. Both parties adduced evidence before the arbitrator, through their witnesses, and he made a finding that the crane is part of the building and was therefore insured. This also applies to the determination whether the first respondent supplied information to the appellant as part of its claim. 

In light of this, the Court cannot make a finding that the second respondent and the court a quo violated the doctrine of sanctity of contract.

The appellant also claimed that the award violates the public policy of Zimbabwe because the first respondent was unjustly enriched by being compensated for the crane which was not insured and allowing it to be indemnified for stock when it had failed to timeously furnish the insurer with information relating to the claim.

It is the Court's view that, as highlighted above, the award in respect of these two items was made after the arbitrator had made factual findings and therefore the Court cannot interfere with these findings.

The award by the arbitrator was made after a consideration of the evidence that was before him. It cannot be said that the conclusions reached by him constitute a palpable inequity that is so far reaching and outrageous in its defiance of logic or acceptable moral standards that a sensible and fair minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award. The appellant has not shown that the arbitrator took leave of his senses in making the award. As categorically stated above, an award cannot be set aside merely on the basis of a difference of opinion.

The appellant's third ground of appeal is therefore without merit and should be dismissed.

Accordingly, the following order is made;

This application is made in terms of Article 34 of the Uncitral Model Law which is a schedule to the Arbitration Act [Chapter 7:15] for the setting aside of an arbitral award issued by the arbitrator, K. Segula, on 29 July 2014, in terms of which she quantified the respondent's damages in lieu of reinstatement as $87,640= made up of $1,400= May 2003 salary, $50,400= damages, $35,000= pension contributions and $840= cash in lieu of leave.

The applicant employed the respondent as a Personal Assistant to its President and Chief Executive Officer from 2 September 2002. The relationship between the parties deteriorated when the respondent complained of sexual harassment by her immediate superior. The employment contract was terminated giving rise to a labour dispute which eventually went to arbitration.

On 24 March 2014, the arbitrator issued an arbitral award, the import of which was that the respondent had been unfairly dismissed. It is not clear from the papers why the matter took almost 10 years to finalise if indeed the respondent had been dismissed on 19 June 2003. Whatever the case, the applicant did not reinstate the respondent necessitating a second hearing before the arbitrator for purposes of quantification of damages due to the respondent.

The quantification hearing occurred on 10 June 2014, but not before the applicant had, on 17 April 2014, noted an appeal against the initial award to the Labour Court. At the conclusion of oral submissions, the parties agreed to make written closing submissions. The applicant's legal practitioner undertook to submit his on 16 June 2014 after which the respondent was to submit hers. The period was later extended by the arbitrator as a result of which the applicant's submissions were to be filed by 25 June 2014 with the respondent obliging on 30 June 2014. The closing submissions were, eventually, filed by both parties and the arbitrator quantified the damages and delivered her award aforesaid on 29 July 2014.

Problems started again. The applicant appealed against the second award to the Labour Court. The applicant also launched this application for the setting aside of the award.

In its founding affidavit deposed to by its Finance Manager, McShaman Kembo, the applicant stated that the award ought to be set aside on two (2) grounds, namely;

(i) That it deals with a dispute not contemplated by or not falling within the terms of the arbitration, or contains decisions on matters beyond the scope of the arbitration in that while the arbitrator was only seized with the issue of damages in lieu of reinstatement she had gone beyond her mandate by dealing with and awarding a sum of $35,000= in respect of pension contributions.

(ii) The second ground is that the award is in conflict with the public policy of Zimbabwe in the sense that there was a breach of the rules of natural justice, in particular the audi alteram partem rule in that after the parties had made oral submissions the arbitrator allowed the respondent to produce further evidence which she went on to rely upon without according the applicant an opportunity to respond. The evidence was in the form of a lengthy document with the title “Application in support of quantification of damages.” The write up itself is ten (10) pages to which is attached another eight (8) paged document called 'Zimbabwe All Industry Salary Survey.'

The applicant complains that the documents contain evidence which was not made available at the oral hearing of 10 June 2014 and that, as a result, it did not respond to it. Significantly, the arbitrator went on to rely on that unrebutted evidence in awarding the respondent damages in lieu of reinstatement and $35,000= as pension contributions.

The respondent opposed the application, and, in her lengthy opposing papers, she complained about the non-joinder of the arbitrator in the proceedings and disputed having introduced new evidence to the prejudice of the applicant.

According to her, all that is contained in her submissions dated 30 June 2014, which I have already cited, was available at the hearing on 10 June 2014. If the applicant had chosen not to address those issues in its closing written submissions, that should certainly not be her problem. To the respondent, the application is another ruse being employed by the applicant to deny her justice and to wear her down.

At the hearing, the respondent, however, conceded that the issue of pension contributions was not only outside the scope of the arbitration, it had also not been brought up at the hearing on 10 June 2014. That notwithstanding, the arbitrator made an award for it….,.

Regarding the existence of an appeal to the Labour Court, I agree with counsel for the applicant that an Article 34 application is available to a litigant outside the appeal procedure and now that section 171(1)(a) of the Constitution of Zimbabwe has reinstated the jurisdiction of this court on labour matters, which had been ousted by the provisions of section 89(6) of the Labour Act [Chapter 28:01], there is nothing stopping me from exercising jurisdiction.

Section 171(1)(a) of the new Constitution provides:-

“The High Court has original jurisdiction over all civil and criminal matters throughout Zimbabwe.”

To the extent that the Constitution overrides any Act of Parliament, there can scarcely be any doubt that section 171(1)(a) overrides section 89(6) of the Labour Act [Chapter 28:01].

What this means is that by clear Constitutional provision, this court has original jurisdiction over all matters, including those of a labour nature, where, prior to the new Constitutional order, the Labour Court enjoyed exclusivity.

Considering that this matter has been set down and argued before me while the appeal is still pending in the Labour Court, it is expedient that I indulge the parties and determine the matter.

In terms of Article 34(2)(a)(ii) of the Unictral Model Law:

“An arbitral award may be set aside by the High Court only if the party making the application furnishes proof that the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decision on matters submitted to arbitration can be separated from those not submitted, only that part which contains decisions on matters not submitted to arbitration may be set aside.”

That Article allows a severance of the offending part of the award where appropriate.

It is therefore apparent that this court is empowered to set aside a portion of an award and uphold another portion in appropriate circumstances. The respondent has conceded that the issue of pension fell outside the terms of reference of the matter to arbitration; the arbitrator having only been requested to determine the respondent's damages in lieu of reinstatement.

Indeed, pension contributions cannot, by any measure, be regarded as falling within the ambit of damages, which VAN WINSEN J…, in Myers v Abramson 1952 (3) SA 121 (C)…, (quoted with approval by GUBBAY CJ in Gauntlet Security Services (Pvt) Ltd v Leonard 1997 (1) ZLR 583 (S)…, defined as:-

“The measure of damages accorded such employee (a wrongfully dismissed one) is, both in our law and in English law, the actual loss suffered by him represented by the sum due to him for the unexpired period of the contract less any sum he earned or could reasonably have earned during such latter period in similar employment.”

In my view, the concession made by the respondent in respect of the award for pension contributions was proper. I would otherwise set aside only that part of the award but there is also merit in the submissions made by counsel for the applicant regarding the evidence which was allowed by the arbitrator post hearing of the matter.

As I have said, after the parties had agreed to make written closing submissions, the respondent went on to submit further evidence - including documentation attached to the written submissions. There was really nothing wrong with that considering that she was self-acting and a lay person. It was, however, incumbent upon the arbitrator, having taken such evidence, to allow the applicant to respond.

She did not.

Instead, the arbitrator went on to rely upon such evidence in determining the matter. A whole array of correspondence was thrown in after the hearing, including allegations of publication of the matter in the Daily News of 6 September 2002 and other issues relating to outstanding leave. I do not agree with the respondent that all this information was already available at the time of the hearing. If it was, there would have been no need to re-submit it via the written closing submissions.

Article 34(5) of the Model Law seeks to clarify what would be regarded as being in conflict with the public policy. It provides:-

“For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this article, it is declared that an award is in conflict with 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.”

One of the basic tenets of the rules of natural justice is the audi alteram partem rule, which enjoins every adjudicating authority to hear the other side before determining the matter. There can be no doubt that the arbitrator fell foul of that rule. To that extent there is no alternative but to interfere with the award….,.

The basis of setting aside of the award cannot be blamed on the respondent. She therefore cannot be visited with costs. The arbitrator, who is to blame, was not cited.

In the result, IT IS ORDERED THAT:-

1. The arbitral award issued by the arbitrator, K Segula, dated 17 July 2014, is hereby set aside.

2. The quantification of damages in lieu of reinstatement is hereby remitted to the same arbitrator for a hearing de novo within fourteen days of this order.

3. Each party shall bear its own costs.

The applicant seeks an order setting aside the arbitral award made by an independent arbitrator, Justice A M EBRAHIM, on 4 December 2013, on the ground that it offends the public policy of Zimbabwe in terms of Article 34 of the Unicitral Model Law contained in the Arbitral Act [Chapter 7:15]. The said arbitration was conducted in terms of Clause 11 of the agreement entered into between the parties which provides:

“Any dispute arising from the interpretation or implementation of this agreement shall be forwarded to a mutually agreed arbitrator and the parties shall submit and bind themselves to the decision of such arbitrator. In the event that the parties are unable to agree on the appointment shall be made by Commercial Arbitration Centre in Harare under the terms and conditions of the Commercial Arbitration Centre in Harare.”

The facts leading to the arbitration appear ex-facie the arbitral award.

The applicant issued summons against the first respondent in the High Court in July 2012 claiming the sums of $1,227,557=; $155,534= and $150,000= together with interest. The first two (2) claims arose out of the supply of crop inputs for two (2) consecutive seasons, namely, 2010-2011 and 2011-2012 growing seasons in terms of an agreement of the parties for the production of tobacco. The applicant maintained that those sums, save for a negligible amount of $9,924= selling commission, were not repaid. The claim of $150,000= arose as a result of the applicant standing as surety and co-principal debtor for the first respondent's faithful performance of its obligations in terms of a loan agreement it entered into with ZB Bank which the applicant was obliged to pay as a result of the first respondent's failure to repay the loan.

When the first respondent excepted to the High Court action on the basis that the dispute had to be resolved by arbitration, the parties agreed to proceed by arbitration. They agreed that the arbitration deals with both the applicant's claim and the first respondent's counter-claim, and that the second respondent, who is a Director of the first respondent, be joined as a party to the arbitration.

The arbitrator received the parties' respective statements of claim and took the viva voce evidence of the parties' witnesses and on that evidence. He drew the following conclusion at pages 1-2 of the award:

“In this matter, most of the facts are established by the pleadings or the evidence of Mr Muller. The only witness called by the claimants legal practitioner during the hearing gave evidence which took the matter no further forward. The claimants' principal representative, who was the person with whom the second respondent dealt with, was Mr James Liu. He was said to be unavailable and was not called to give evidence. This failure to call such an important witness did not assist the claimants' case.

There was nothing inherently improbable about Mr Muller's evidence, though he was a little vague or confused on a few points. I am satisfied, though, that there was no intent on his part to mislead me. In so saying, I am not thereby casting Mr Liu in the role of villain of the piece. Mr Muller himself did not see Mr Liu as a villain; on the contrary, he found Mr Liu charming and persuasive, and he felt that Liu wanted the venture to succeed. Whether the fact that the venture did not succeed was because of dishonesty, incompetence, circumstances beyond the control of either party, or just bad luck is not necessary to decide.”

The arbitrator thoroughly considered the evidence and submissions made by the parties. He concluded that both claims must fail and dismissed them.

The applicant had argued, before the arbitrator, that in March 2009, it had entered into an agreement with the first respondent in terms of which it supplied crop inputs for the productions of flue cured tobacco. Clause 6 of that agreement provided that the applicant was to supply inputs worth $350,000= to support tobacco production on 70 hectares of land for the 2010 season. For the 2011 season, the applicant was to supply $320,000= to support tobacco production on 60 hectares of land.

Despite those agreements, the applicant submitted that for the 2010-2011 planting season it granted a loan in the form of inputs to the first respondent valued at $132,499= for production of tobacco on 70 hectares of land. Although the first respondent made profit, it only repaid a sum of $9,924= during that season in breach of the agreement between the parties. It demanded the balance of $122,575=.

In respect of the 2011-2012 season, the applicant argued that it supplied further crop inputs to the first respondent valued at $155,534=.

Note that it had committed to supply $320,000= worth of inputs for production on 60 hectares.

The applicant asserted that although the first respondent had made a profit, it had not repaid the loan, in breach of the contract, thereby entitling the applicant to a payment of $155,534= which was advanced.

The applicant's third claim related to a loan obtained by the first respondent from ZB Bank Limited in March 2010 in which the applicant was forced to pay to the Bank the sum of $150,000= on 11 November 2011 as it had stood as surety and co-principal debtor for the due repayment of the loan, the first respondent having failed to honour its obligations. The dispute over the ZB Bank loan is still pending in this court.

The applicant's claim was strongly contested by the respondents who made the point that the applicant had failed to supply inputs in terms of the agreement; only succeeding in making sporadic supplies which came nowhere near the values that had been agreed by the parties. Although the applicant was clearly in breach, the first respondent had religiously paid all the sums due until the applicant's defaults rendered it impossible for it to do so. It then cancelled the agreement.

Prior to that, at the instance of the applicant, the first respondent had been forced to take a loan of $630,000= from ZB Bank Limited to assist the applicant meet its obligations to it as it was unable to do so being out of funds.

The agreement between the parties for the 2010-2011 and part of 2011-2012 seasons had continued in terms of the agreement signed in March 2009 which is why the agreements produced by the applicant had not been signed.

According to the respondent, the working capital that should have been supplied by the applicant for the initial agreement should have been $350,000=, but, in breach of the agreement, the applicant only supplied $132,499= inputs. For May 2011, the applicant had agreed to supply $320,000=. It only supplied $155,534=06 worth of inputs.

The applicant's failure to provide adequate inputs resulted in lower yields of tobacco than would have been achieved. The situation was exacerbated by the applicant's failure to buy the tobacco from the respondents on time as it had no money. The respondents' bales were therefore held at Tobacco Sales Floor for extended periods affecting the quality and weight of the tobacco as the applicant battled to raise money. When it finally did, the applicant wanted to buy at ridiculously low prices. At some point, because of its precarious cash low position, the applicant was constrained to authorise the respondents to sell their tobacco elsewhere as it simply did not have the funds.

As a result of the applicant's flagrant breach of contract, the respondents suffered heavy losses. They counterclaimed for payment of the sum of $711,823= representing the loss incurred less the amounts of the loans claimed by the applicant.

Having considered the evidence and the submissions made by the parties, the arbitrator found as proven that the applicant had breached the agreement. At page 8 of the award, he reasoned as follows:

“It seems to me that GDI (applicant herein) breached the contract in two ways. The first is that it did not provide the inputs it said it would, nor did it provide them timeously. The evidence, both from Mr Muller and in the Statement of Claim, shows that sums of money were paid sporadically. They did not total what had been promised, and they often did not arrive in time to be of real benefit. All in all, the haphazard way in which the inputs were provided made it impossible for Willemse Farming to produce the crop it should have.

If I am wrong in finding above that there was performance per acquipollens in respect of the year 2010-11 was not permissible, the second fundamental breach of the contract was GDI's failure to pay the full price for the tobacco for that season. The fact that it did not do so because it could not do so is irrelevant. This was a self-created impossibility which -

'does not discharge the contract, but leaves the party whose act created the impossibility liable for the consequences. This will be so whether the impossibility is complete or partial, and whether or not the act that causes the impossibility is wrongful:' (Christe op cit p 493).

A party who has caused the other's breach by making it impossible or nugatory to perform cannot found any claim on the breach he has thus precipitated: Christie op cit p 516. If GDI wished to claim that it had not breached the requirements to pay the full price for the grade, it could only do so by saying that there had been an agreement by Willemse Farming to accept a lower price, a position which would be quite incompatible with the approach it has taken in these proceedings.”

The applicant was aggrieved by that award and made this application to have it set aside in terms of Article 34 of the Model Law…, on the basis that it offends against the public policy of Zimbabwe.

The applicant stated that in dismissing its claim, the arbitrator had not taken into account the undisputed fact that the first respondent received various sums of money from the applicant, as, in terms of the contract, there was no fixed sum to be provided to the first respondent. Having been provided with the inputs, the first respondent failed to remit proceeds of the tobacco except for $9,924=. The dismissal of the applicant's claim was contrary to the principle against unjust enrichment.

The applicant maintained that the arbitrator had not considered that the first respondent had requested inputs outside the normal tobacco season meaning that there was no legal obligation on the part of the applicant to perform as demanded. The arbitrator had also pre-empted the decision of the High Court in respect of the claim of money paid to ZB Bank Limited and the decision on that aspect obliges the applicant to meet that loan without regard to how the High Court will determine the matter.

In their opposition, the respondents took the view that the issue of unjust enrichment had not been part of the applicant's case before the arbitrator; the applicant having premised its claim on breach of contract, the applicant can therefore not raise an argument in this application which was not before the arbitrator. The respondents also drew attention to the non-joinder of the arbitrator in this application which has incapacitated the court by reason that the record of proceedings before the arbitrator has not been availed to the court.

The respondents maintained that what is contrary to public policy in the award has not been explained, save for the vague reference to unjust enrichment, which argument was not made before the arbitrator. There is nothing in the reasoning of the arbitrator which is contrary to public policy. Given that the applicant had not led any evidence regarding the dispute, the evidence of Mr Muller had stood uncontroverted and the arbitrator correctly relied upon it.

Counsel for the respondents, while taking a number of points in limine in her heads of argument, appeared to abandon them in submissions. She had raised the issue of non-joinder of the arbitrator, the filing of the application outside the requisite three (3) months after the award was made, and the deposition of the founding affidavit by Tapiwa Moga, the applicant's Projects Manager, when he had not been involved in the agreement of the parties….,.

This application has been brought in terms of Article 34 of the Model Law - it had to because the applicant, having contracted out of all other rights it may have had by the inclusion of clause 11 in the agreement binding the parties to the decision of the arbitrator, it had no other remedy. Article 34 of the Unicitral Model Law contained in the Arbitration Act [Chapter 7:15] provides:

“(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.

(2) An arbitral award may be set aside by the High Court only if –

(a)…,.

(b) The High 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 award is in conflict with the public policy of Zimbabwe.”

Article 34 takes the issue further by declaring what is contrary to the public policy of Zimbabwe. It states:

“For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this article, it is declared that an award is in conflict with the public policy of Zimbabwe if -

(a) The making of the award was induced or effected by fraud or corruption;

(b) A breach of the rules of natural justice occurred in connection with the making of the award.”

Counsel for the applicant drew attention to paragraph 17 of the first respondent's response to the applicant's Statement of Claim before the arbitrator in which the first respondent appeared to admit owing a sum of $155,534= and suggested that it be deducted from its counter-claim, as a pointer to the fact that the arbitrator did not apply his mind. If he had, he would have granted that which was admitted instead of dismissing the entire claim.

I do not agree.

In fact, the entire case of the applicant misses the point. The arbitrator dismissed the applicant's claim because the applicant had, admittedly, breached the contract between the parties. He drew the conclusion, correctly in my view, that having breached the contract thereby inducing the respondents to also commit a breach, the applicant could not “found any claim on the breach he has thus precipitated?” In other words, the applicant caused the first respondent to commit a breach by breaching the agreement itself, failing to supply adequate inputs, supplying inputs late, and failing to purchase the product.

On the basis of contract, unjust enrichment had not been relied upon, the applicant could not claim from the first respondent as it did. The breach it committed vitiated any remedy it may have had. This is a basic principle of the law of contract which the arbitrator impressively propounded and relied upon it. I did not hear counsel for the applicant to argue that it was a wrong or faulty conclusion of the law.

It was stated in Zesa v Maphosa 1999 (2) ZLR 452 (S)…, that:

“Under Articles 34 and 36, the court does not exercise an appeal power and either upholds or sets aside or declines to recognise and enforce an award by having regard to what it considers should have been the correct decision. Where, however, the reasoning or conclusion in any 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 acceptable moral standards that a sensible or 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. The same consequence applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue and the resultant injustice reaches the point mentioned above.”

See also Delta Operations v Origen Corp (Pvt) Ltd 2007 (2) ZLR 81 (S)…,.; Provincial Superior Jesuit Province of Zimbabwe v Kamoto & Ors 2007 (2) ZLR 8 (S)…,.; Decimal Investments (Pvt) Ltd v Arundel Village (Pvt) Ltd & Anor 2012 (1) ZLR 581 (H).

Clearly, the standard set in the above authorities has not been matched by the applicant in this matter. Quite to the contrary, the reasoning of the arbitrator cannot possibly be faulted at all.

Parties who submit to arbitration agreeing that the decisions of the arbitrator shall be final and binding upon them should desist from such footling litigation the moment the outcome is not favourable to them. This court finds itself inundated by endless such applications which are informed, not by a desire to obtain justice but merely by obvious unwillingness to commit to what parties would have agreed upon. The time has come to admonish such litigants with an award of costs on a punitive scale.

Accordingly, the application is hereby dismissed with costs on a legal practitioner and client scale.

The appellant lodged an appeal against the Magistrates Court decision wherein the court a quo registered an arbitral award….,.

It is not in dispute that registration of an award in the Magistrate or High Court is for purposes of having the order registered as an order of the respective court in order to facilitate enforcement.

The appellant, in the face of an arbitral award issued after due process, did not comply with same and this necessitated the approach to the Magistrates Court. The Magistrate's Court was not sitting as an Appellate Court to determine the labour dispute but the Magistrate Court sat to register an arbitral award which was granted after following due process. The circumstances of the matter clearly spell out the step by step progression of the matter leading to the registration of the award by the court a quo. The matter was referred to a Designated Agent who issued a certificate of no settlement, and, in compliance with the Labour and Arbitration Act, the matter was referred to an arbitrator. The arbitrator was to determine whether or not the employee was owed outstanding salaries and was to determine the appropriate remedies. The dispute was properly referred to the arbitrator in terms of section 93(5)(c) of the Labour Act [Chapter 28:01].

The award by the arbitrator, given the circumstances of the case, was simply a determination against unfair labour practice and the jurisdiction of the arbitrator was not excluded by the mere fact that the matter started from a Designated Officer. In any event, the issue of jurisdiction did not fall for determination by the arbitrator and the court a quo.

The court a quo dealt with registration of the award for purposes of enforcement and the record does not reveal the court a quo delved into the merit of the labour disputes. The court a quo was not sitting as an Appeal Court and it rightly registered the arbitral award which fell within its jurisdiction. Contrary to the appellant's submission that the subject matter of the dispute could not be resolved by arbitration the dispute on unfair labour practice and issue of wages and salary is properly capable of settlement by arbitration under the law of Zimbabwe. There is no merit in holding that the court a quo misdirected itself in registering the arbitral award presented before it for registration.

The distinction of an arbitral award and determination on merit or appeal against an arbitral award should not be understated. It appears the appellant's argument is on the substantive appeal against the arbitral award which was not the matter before the court a quo.

The court a quo was tasked to register the arbitral award wherein the arbitrator had made a determination of unfair labour practice and ordered a remedy in payment of an award to the respondent. It is that award which the court a quo presently registered as there were no substantive reasons to justify decline of registration. All the grounds of appeal outlined by the appellant cannot stand given there is nothing that barred the arbitrator from granting the award which was properly registered by the Magistrates Court for enforcement purposes. The last ground of appeal that the magistrate did not give reasons for his judgement also cannot stand as the court a quo gave its reasons as reflected on page 6 of the record.

The appeal has no merit. It is ordered that -

1. The appeal be and is hereby dismissed.

2. The appellant shall pay the respondent's costs.

It has been noted that in the Labour Court the appellant unsuccessfully argued that Arbitrator Manase lacked the jurisdiction to determine the lawfulness or otherwise of the award by Arbitrator Bvumbe. In other words, Arbitrator Manase, who, at law, enjoyed parallel jurisdiction with Arbitrator Bvumbe, could not competently interfere with the latter's award.

The appellant, on appeal to this Court, did not directly allude to the matter in its grounds of appeal. In my view, however, the question of Arbitrator Manase's jurisdiction to hear the matter is an important question of law whose determination may effectively dispose of the appeal. In any case, it is also important to consider the effect his award had on Arbitrator Bvumbe's award. It was also helpful to the court that detailed submissions on the matter were made by both parties in their heads of argument and in argument during the hearing of this appeal.

Relying on the case of Williams & Anor v Msipha NO & Ors SC22-10, the appellant correctly argued, in its heads of argument, that an Appeal Court:

“Must be able to intervene not only against the direct dictates of a judgment of the lower court but also against its effect. See MacDonald v Canada (AG) (1994) 1 SCR 311 at 329.”...,.

This brings me to the second issue to be determined in this matter:

Did Arbitrator Manase have jurisdiction to determine the lawfulness or otherwise, of the process that culminated in the package of benefits being paid to the respondent?

Neither the parties nor Arbitrator Manase dispute that no appeal was filed against Arbitrator Bvumbe's award. This was the award on the basis of which the package terminating the employment of the respondent was worked out, paid, and accepted.

The award is therefore extant and has been fully implemented.

In paragraph (c) of his award, Arbitrator Manase correctly stated as follows:

“Given the fact that Arbitrator Bvume's award was neither challenged and set aside it remains binding...,. I, as an Arbitrator, cannot properly set aside a subsisting arbitral award by a brother arbitrator. The award, however, was not conclusive and there were outstanding items for resolution and clarification.”...,.

He, clearly, was aware of the legal position regarding his competency, or lack thereof, to interfere with a fellow arbitrator`s decision. Despite this, he seemed to have entertained the notion that he could vary, amend or supplement the latter's award. This is evidenced by the latter part of the statement cited above. This is clearly not permissible at law as illustrated by the authorities cited below.

Section 98(9) of the Labour Act [Chapter 28:01] provides that:

“(9) In hearing and determining any dispute an arbitrator shall have the same powers as the Labour Court.”

Thus, when an arbitrator makes an award, his position is akin to that of a court of law.

A court is defined to mean all its judges sitting alone or with other judges. This is because they have the same powers and exercise parallel jurisdiction. Arbitrators are no different in this respect. Accordingly, the res judicata and functus officio legal principles will apply should the matter be brought before the same or a different judge, or in this case, arbitrator.

The learned authors HERBSTEIN & VAN WINSEN “The Civil Practice of the High Courts and the Supreme Court of Appeal of South Africa” 5^th ed state that:

“The general principle, now well established in our law, is that once a court has duly pronounced a final judgment or order, it has itself no authority to correct, alter or supplement it. The reason is that the court thereupon becomes functus officio: its jurisdiction in the case having been fully and finally exercised its authority over the subject matter ceases. The other equally important consideration is the public interest in bringing litigation to finality. The parties must be assured that once an order of court has been made it is final and they can arrange their affairs in accordance with that order.”

In the case of Kassim v Kassim 1989 (3) ZLR 234 (H)..., the court held that:-

“In general, the court will not recall, vary or add to its own judgment once it has made a final adjudication on the merits. The principle is stated in Firestone South Africa (Pvt) Ltd v Genticuro Ag 1977 (4) SA 298 (A) at 306, where TROLLIP JA stated:

'The general principle, now well established in our law, is that, once a court has duly pronounced a final judgment or order, it has itself no authority to correct, alter, or supplement it. The reason is that it thereupon becomes functus officio: its jurisdiction in the case having been fully and finally exercised, its authority over the subject matter has ceased.'”

Furthermore, in Unitrack (Pvt) Ltd v Telone (Pvt) Ltd SC10-18, MAVANGIRA AJA..., held as follows:

“It is a general principle of our law that once a court or judicial officer renders a decision regarding issues that have been submitted to it or him, it or he lacks any power or legal authority to re-examine or revisit that decision. Once a decision is made, the term “functus officio” applies to the court or judicial officer concerned.”...,.

In his award, Mr Manase sought to reinstate into his former employment, an employee (the respondent) who had freely and consciously signed an agreement to terminate such employment and accepted the benefits agreed to between the parties. He thus purported to revive a moribund employment contract as well as reverse the import of Arbitrator Bvumbe's determination on the benefits payable to the respondent in terms of the supposed retrenchment agreement signed by the parties. No evidence was tendered that the respondent had paid back the amounts that he received. Arbitrator Manase's award, therefore, would have resulted in the respondent being paid, essentially, the same benefits twice.

Since Arbitrator Manase was not sitting as an Appeal Court, it was clearly not open to him to do as he purported….,.

I find, in the result, that the court a quo misdirected itself in upholding Mr Manase's award. The appeal therefore has merit and ought to succeed....,.

DISPOSITION

In the premises, it is ordered as follows:

1. The appeal succeeds with costs.

2. The judgment of the court a quo is set aside and substituted with the following:

“(i) The appeal succeeds with costs.

(ii) The arbitral award by Arbitrator Manase, dated July 2013 be and is hereby set aside.”

In Conforce (Pvt) Ltd v City of Harare 2000 (1) ZLR 445 (H)…, the following was stated:

“I agree that a court should not interfere with the Arbitrator's Award so as to alter it to accord with what the court thinks the Arbitrator actually decided.”

The applicant stated that it was trite that a court has no jurisdiction and should be wary of interfering with an arbitral award except in a limited sense…, and relied on the following cases as authorities for this proposition: Schoeman & Schoeman v Schoeman 1928 LPD 564; Keen v Durban City Council 1951 (2) SA 548 (N); and Jacoba Law of Arbitration in South Africa…,.

The applicant also cited the case of Conforce (Private) Limited v City of Harare 2000 (1) ZLR 445 where the court stated that:

“I agree that a court should not interfere with an Arbitrator's award so as to alter it to accord with what the court thinks the Arbitrator actually decided.”

That an application under Article 34 of the Model Law must be made in terms of Order 32 and not Order 33 of the High Court Rules, 1971 was put beyond doubt by GWAUNZA JA in Mtetwa and Anor v Mupamhadzi 2007 (1) ZLR 253 (S)…,. The words of the learned Judge of Appeal, in that case, bear useful repetition for clarity. She said:

“It is contended, for the appellants, that they were perfectly within their rights to file an application for review/setting aside of the decision of the arbitrator in terms of Order 33 Rule 256 of the High Court Rules since there is nothing in that rule which precluded them from bringing such an application.

This contention, I find, has no validity. As discussed below, the Model Law, in its Article 34(1), makes it clear that recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paras (2) and (3) thereof. Specifically, the relevant provision reads as follows:

“ARTICLE 34

Application for setting aside an exclusive recourse against arbitral award

(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paras (2) and (3) of this article.”…,.

The use of the words “exclusive” and “only”, in my view, suggest that there is to be no compromise when it comes to an attempt to have an arbitral award set aside. The application must be made in terms of the provision cited. That provision quite simply and effectively precludes the applicants from filing their application for the setting aside of an arbitral award otherwise than in terms of paras (2) and (3) of Article 34.”

The applicant is the employer of members of the respondent union. In early 2009, the parties engaged each other in negotiating wage and salary adjustments. The respondent was advocating for a minimum wage of US$490= per month on behalf of each of its members. The applicant argued that it could not afford to pay any adjustment above that which was already being paid. These negotiations yielded an agreement that wages would be pegged at US$100= while other benefits, including transport and housing, would be $50= for each employee for April 2009 only.

Subsequent negotiations yielded no positive results and a deadlock was declared at NEC level. The parties then agreed to submit the dispute for arbitration. The Commercial Arbitration Centre chose Mr Mordecai Mahlangu to be the arbitrator. Following submissions by the parties he handed down his award on 23 February 2012. That award is reasoned and couched in these words:

“The determination of this matter requires something of the wisdom of Solomon in that there are two competing and patently legitimate interests to be reconciled.

While it is clear to me that the US$490= which has been sought by the claimant, on behalf of its lowest paid members, is not easily afforded, it is equally clear to me that I cannot, with a clear conscience, simply leave matters as they are in respect of the period between May and December 2009…,.

For the period between 1 May and 31 August 2009, the salary of the lowest earning employee of the respondent company should receive an adjustment of US$25= in respect of each month and for the period between 1 September 2009 and 31 December 2009 a further US$25= should be effected. The effect of this, on the lowest earning employee of the respondent, is that, in total, the back pay payable to him or her will be US$300=.

In doing this, I realize that further financial strain will be added to respondent company but believe that this is necessary in fairness to the claimant.”

The applicant was dissatisfied with the outcome of the arbitration hence this application seeking the setting aside of the arbitral award. The application is being made in terms of Article 34(2)(b)(ii) of the Model Law whose relevant provision 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.”

The gravamen for challenging the content of the award is predicated upon the premise that recognition of the award, either in its present form or its substantive effect, would be contrary to the public policy of Zimbabwe. The award, so the argument went, plunges the apple cart over the cliff; it has the effect of killing the goose that lays the golden egg.

The learned arbitrator found that the applicant was operating at a loss and would continue to do so even in the foreseeable future. He agreed that the applicant had no ability to pay as it was in a precarious financial position and any adjustment will simply contribute to the already existing deficit and funding gap. But, in spite of all these findings, he went ahead and made an award which was certain to drive the applicant into insolvency. The overall effect of the award is therefore contrary to public policy of Zimbabwe.

The respondent argued to the contrary submitting that it is for the applicant to show that some fundamental principle of law or morality or justice was violated. The learned arbitrator's reasoning cannot be faulted. The respondent had claimed a minimum salary of $490= but the award was much less with the arbitrator reasoning:

“It seems to me that a fair and sensible compromise is to grant claimant an adjustment in recognition of the plight of its members, but for this to be in such an amount that it does not break the back of respondent company and drive it to complete insolvency.”

This reasoning does not constitute a palpable inequity. That inability to pay or comply with the award makes the award contrary to public policy is both erroneous and mischievous. If the applicant is unable to pay its debts it must go into liquidation or judicial management.

When, then, is an award in conflict with the public policy of Zimbabwe?

Article 34(5)(a) and (b) of the Model Law spells out instances when an award is in conflict with the public policy of Zimbabwe, viz, 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.

The foregoing provision, however, clearly states that the two instances are not exhaustive hence should not be taken as “limiting the generality of paragraph (2)(b)(ii) of this article.” What this boils down to, therefore, is that the determination of other instances as falling under the category of being contrary to the public policy of Zimbabwe is a question of value judgment; for the words public policy are a wide and vague concept.

Below are some of the instances where an award has been or could be held to be in conflict with the public policy of a country:

(i) Where the substantive effect of the award, after a consideration of the merits of the dispute, endorsed immorality or crime: ZESA v Maposa 1999 (2) ZLR 452 (SC)…,.;

(ii) Where there has been a violation of fundamental principles of the forum State's legal order, hurting intolerably the feeling of justice: Leopold Lazarus Ltd (UK) v Chrome Resources SA reported in (1979) 4 Yearbook of Commercial Arbitration 311…, quoted with approval in ZESA v Maposa 1999 (2) ZLR 452 (SC)…,.;

The list, I must say is also not exhaustive.

As GUBBAY CJ stated in ZESA v Maposa 1999 (2) ZLR 452 (SC)…, the difficulty is not with the formulation of an appropriate and acceptable test but with the application of that test in an endeavour to determine whether the arbitral award should be set aside, or enforcement of it denied, on the ground of a conflict with the public policy of Zimbabwe. The court went on to hold that the approach to be adopted is to construe the public policy defence restrictively in order to preserve and recognize the basic objective of finality in all arbitrations.

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. 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 standards 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.

In Telone (Pvt) Ltd v Communications and Allied Services Workers Union of Zimbabwe HH74-07, the award was held to be contrary to the public policy of Zimbabwe on the basis that its effect would be to drive corporations into insolvency thereby destroying the economic fabric of the nation.

The respondent contended that that case is distinguishable from the current one on the ground that, in the former, facts before the court showed that the wage bill would result in 130% of Telone (Pvt) Ltd's income being committed to salaries and wages, which is not the scenario in the latter.

While that may be so, I remain un-persuaded by the respondent's contention.

The facts which were common ground were that the applicant was in the red in 2009 by US$2,000,000=. Its shareholder, the Government, was not prepared to bail it out as it also had no money and could not even afford to pay its own employees (civil servants) a minimum wage of more than US$150= per month. The applicant's staff costs contributed 52% of overall expenditure and consumed 67% of total revenue. This precarious financial position of the applicant was not expected to improve in the foreseeable future. The learned arbitrator found the foregoing as a fact.

The applicant is a quasi public entity.

It would be too simplistic and too onerous, on the part of its shareholder, to argue that the shareholder (which on its part was also broke) should bail it out, a fortiori to argue, as the respondent did, that if the applicant is unable to pay its debts then it should go for liquidation. Such a result is untenable and too ghastly to contemplate as it would result in dire consequences for the very employees who are seeking wage increment as well as for their families.

On the common cause facts, I am thoroughly persuaded that even applying the public policy defence restrictively, the substantive effect of the arbitral award, upon the applicant, never mind that the awarded increments are not substantial, would be to drive it into insolvency with the inevitable consequence of liquidation with massive loss of jobs for all its employees and mass suffering for their dependants. All these affected people will be rendered destitute with little or no prospects of getting alternative employment in a tight job market, starvation, and school drop-outs for their children. Certainly, this will constitute a palpable inequity and the conception of justice in Zimbabwe would be intolerably hurt by this substantive effect of the award. That the award will be viewed as being in conflict with the public policy of Zimbabwe would be beyond caevil.

In the event, the arbitral award made by the learned arbitrator, Mr Mordecai P. Mahlangu, on 23 February 2010 be and is hereby set aside with costs.

In terms of Article 35(1) of the Arbitration Act [Chapter 7:15] 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.

This is an application to set aside the arbitral award granted by the second respondent on 15 December 2015. The application is opposed.

The applicant's founding affidavit states:

“This is an application 13(3), 34(2)(a)(iv) and 34(2)(b)(ii) of the Schedule of the Arbitration Act [Chapter 7:15] (“the Act”). It seeks an order that invalidates the appointment of the Honourable Justice Moses Hungwe Chinhengo as arbitrator in a dispute between the parties.”

The relevant sections of the Articles under which the application is made provide as follows:

“Article 13(3)

(1)…,.

(3) If a challenge under any procedure agreed upon by the parties or under the procedure of paragraph (2) of this article is not successful, the challenging party may request, within thirty days after having received notice of the decision rejecting the challenge, the High Court to decide on the challenge, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings and make an award.”

Article 34(2)(a)(iv) and 34(2)(b)(ii)

“(1)…,.

(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)…,.

(iv) The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a proviso of this Model Law from which the parties cannot derogate, or failing such agreement, was not in accordance with this Model Law; or

(b) The High Court finds that -

(i)…,.

(ii) The award is in conflict with the public policy of Zimbabwe.”

On 16 April 2014, the applicant and the first respondent entered into an agreement whose purpose was given as:

“To secure the services of CS to secure repayment of the funds due to Meikles by the Reserve Bank of Zimbabwe/Ministry of Finance in respect of Meikles Limited United States Dollar deposit with the Reserve Bank of Zimbabwe (“the Deposit”).”

Clause 9 of the Agreement provided, in full, as follows:

“9. ARBITRATION

9.1 Any dispute between the Parties, arising out of or in connection with this Agreement, including any question regarding its existence, interpretation, validity or termination or the enforcement of any of the provisions hereof, shall be referred to and resolved by arbitration. The Parties hereby irrevocably agree that the decision of the arbitrator in such arbitration shall be final and binding upon each them.

9.2 The arbitrator shall be chosen by the Parties provided that if the Parties are unable to agree on the appointment of the arbitrator, the appointment shall be made by a Director of the Commercial Arbitration Centre in Harare, or any successor to that Centre, on the written request of either of the parties.

9.3 The place of arbitration shall be Harare, but the Parties may agree, or failing such agreement, the arbitrator may direct that any hearing or proceedings be held elsewhere.

9.4 In determining any dispute between the Parties, both the substantive and the procedural law of Zimbabwe shall apply.

9.5 Any arbitration in terms of this clause shall be administered by the Commercial Arbitration Centre in Harare. The administrative procedures and the schedule of costs of the Commercial Arbitration Centre in Harare in force at the time of commencement of the Arbitration shall apply.

9.6 No party shall be precluded from approaching the High Court as a matter of urgency for the purpose of obtaining urgent relief against another.”…,.

Following a dispute between the parties, the Commercial Arbitration Centre, upon a request from the first respondent, appointed the second respondent as an Arbitrator. When arbitration proceedings commenced, the applicant raised a preliminary issue. It argued that the appointment of the second respondent was irregular in that “the parties never engaged in the process of choosing an arbitrator for the dispute. They did not disagree on the choice of arbitrator. This much is clear from the following...,.:”

Clearly, the above argument was anchored on clause 9.2 (quoted above) of the Agreement between the parties.

On 15 December 2015, after a hearing of the preliminary issue, the second respondent made the following award:

“19. In the result, my ruling on the preliminary objection is -

(a) The preliminary objection raised by the respondent is dismissed.

(b) Each party shall bear its own costs.

(c) Each party shall pay, out the arbitrator's fees, the quantum of which was agreed at conclusion of the hearing of the preliminary point.”

On 3 February 2016, the applicant then filed this application seeking the following relief:

“1. The appointment of the 2^nd respondent as arbitrator in the contractual dispute between the applicant and 1^st respondent be and is hereby set aside.

2. The 1^st respondent be and is hereby ordered to pay the costs of this application.”

Generally, in this jurisdiction, where the court is called upon to interfere with an arbitral award, it, in addition to grounds laid out in Article 34 of the Arbitration Act [Chapter 7:15], is also guided by the principles set out in Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S) where GUBBAY CJ…, said:

“Under Article 34 or 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognise and enforce an award by having regard to what it considers should have been the correct decision. 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 in its defiance of logic or accepted moral standards 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. The same consequence applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue, and the resultant injustice reaches the point mentioned above.”

The second respondent's ruling, which should be examined against the relevant provisions of the Act (i.e Article 34 of the Arbitration Act [Chapter 7:15]) and the principles of law laid out in the above passage, was crafted in the following terms:

“15. To sum up: I am satisfied that the interaction of the parties, in particular the emails exchanged between them in the period July to September 2015 justify the inference that the parties were unable to agree on the appointment of an arbitrator. The inability to do so arose principally from the deterioration in their relationship. This was a case in which the parties could not reasonably be expected, because of the polarization of their relationship, to meet or consult each other with any prospect that they would be able to agree on the appointment of an arbitrator. They had reached the stage in their relationship at which it could legitimately be concluded that they were unable to agree on the appointment. That constrained the claimant to write to the CAC for it to appoint an arbitrator. The claimant was, in the circumstances, justified in doing so.

16. I am emboldened in my conclusion by the fact that there is absolutely no perceivable prejudice to either party from the fact that the CAC appointed, in its absolute discretion, as provided in clause 9.2, an arbitrator that it considered suitable to adjudicate in this matter. Additionally, the parties had all the opportunity they needed to agree on a suitable arbitrator - even as they were before me on this preliminary objection. The fact that they could not accommodate each other speaks to the correctness of the inference I have drawn, from their interaction, that they were unable to appoint an arbitrator. I do not agree with Mr Tshuma that the claimant acted dishonestly. In my view, the claimant considered the circumstances and reached a conclusion that the parties were unable to mutually appoint an arbitrator, which conclusion I have found to be reasonable, and then asked the CAC to make the appointment. For these reasons I would dismiss the preliminary objection raised by the respondent.

17. I am further emboldened by the facts that the respondent candidly acknowledged, as recorded in paragraph 1 of the pre-arbitration minutes of 19 November, that I was not disqualified on any basis, and that similarly Mr Mpofu's affidavit, attached to the papers originating the objection, acknowledged the same.”

I must immediately point out that, given the circumstances of this case, I find nothing unreasonable in the above reasoning. To that end, in order to fully appreciate the second respondent's reasoning, I shall, in this judgment, quote extensively from his award.

The main thrust of the applicant's argument is that clause 9.2 of the agreement between the parties was not complied with when the arbitrator was appointed and that the first respondent lied when it said the parties were unable to agree on the appointment of an arbitrator. That, according to the applicant, amounted to a mispresentation.

In addressing that argument, the second respondent reasoned as follows:

“5. The respondent's contention is that, in terms of clause 9.2, any dispute between the parties under the Agreement, is to be resolved by an arbitrator chosen by the parties by mutual agreement. If the parties are unable to agree on the appointment of an arbitrator, either of them may approach the CAC for it to make the appointment.

The respondent characterizes the claimant's statement that the parties were unable to agree on the appointment of the arbitrator as a “misrepresentation of facts”; “a well-calculated misrepresentation of facts”; “a fraudulent and/or reckless misrepresentation of facts”;“a false statement…, made deliberately and/or recklessly by the claimant.”

The respondent stated that it had no objection to the person of the arbitrator and that it was objecting only to the unprocedural manner in which the appointment was made. It, accordingly, contends that the appointment is invalid, and, as such, the arbitrator has no jurisdiction in the matter.

I think, however, that whilst the claimant's letter to the CAC may have misrepresented the factual position, the representation therein made was not fraudulent. There is no evidence before me that the claimant used, if it did, a false representation to gain an unjust or unfair advantage. The parties agreed that they would refer any dispute between them to arbitration and where such reference has been made no unjust advantage is gained merely by making the reference so that the dispute can be resolved by arbitration. I think that the respondent mis-characterized the representation made by the claimant by calling it fraudulent. A false representation is not necessarily fraudulent.”

The second respondent went further to say:

“12. The claimant's email was clear intimation to the respondent that it would resort to arbitration.

From this correspondence, it is clear to me that the parties were in disagreement not only over the liability of the respondent but also over how to progress their dispute to finality. The respondent had clearly indicated that it was prepared to settle the dispute “elsewhere”; and “elsewhere”, in the circumstances, meant only by arbitration.

The claimant's email of 2 September was an unequivocal indication to the respondent that the claimant would refer the matter to the CAC for the appointment of the arbitrator. No party shouldered, on its own, the burden to propose a formal meeting to appoint an arbitrator, which was the only reasonable route left for the parties to take in the circumstances. The parties had, in relation to each other, adopted intransigent positions which could be handled only by referring the dispute to arbitration. It seems to me that the respondent was unwilling to progress the matter so that it could be finalised and was also opposed to the reference of the dispute to arbitration even though it had indicated that it was agreeable to the dispute being settled elsewhere. If the respondent was keen on the arbitration route, it was an easy enough matter for it to have proposed a meeting to appoint an arbitrator.

From the foregoing, an inference can be drawn that the parties were unable to agree on the appointment of an arbitrator. I find, also, that the respondent was unwilling to have an arbitrator appointed thus constraining the claimant to write to the CAC for it to appoint an arbitrator.”

A proper reading of the above passages informs that the second respondent accepted the fact that there was, indeed, never any formal agreement on the issue of appointment of an arbitrator. However, the conduct of the parties clearly demonstrated that the parties were not agreeing on anything. The second respondent, in his ruling, took into account the correspondence between the parties and that correspondence indicated that the parties were, above all, agreed that arbitration was the only route remaining for the resolution of the dispute.

Whilst I agree that Article 13.3 of the Arbitration Act [Chapter 7:15] and clause 9.2 of the Agreement may not have been strictly adhered to, the one crucial fact is that the parties had agreed that after the collapse of negotiations arbitration was the process to follow. The absence of a formal disagreement on the appointment of an arbitrator is an issue that, in my view, and as spelt out in his ruling, the second respondent reasonably and adequately dealt with. It would, therefore, be totally absurd for this court to fault the practical and robust approach adopted by the second respondent in dealing with the application of clause 9.2 in the Agreement, as read with Articles 13 and 34 of the Arbitration Act [Chapter 7:15].

It is also important to take into account that, in its founding affidavit, the applicant clearly stated:

“5.4. The applicant then raised the objection before the 2^nd respondent. It was based on the same ground that, while not impugning the 2^nd respondent's qualification and suitability for appointment, Clause 9.2 had not been complied with. On that basis, the applicant prayed that the 2^nd respondent had no jurisdiction.”…,.

Furthermore, the applicant, having raised the preliminary issue, accepts that the second respondent was prepared to discuss his own appointment, which, in any case, they were not opposed to. To that end, the applicant itself states:

“Respondent, indeed, wrote a letter of protest to the claimant's lawyers dated 18^th November 2015. Attached hereto is the said letter as Annexure C. Having not received a reply from the claimant, Respondent, through its legal practitioner, informed the Tribunal that there is s a preliminary point that the parties needed to discuss before the matter is heard. Indeed, the Honourable Arbitrator was kind enough to leave the parties in the Board Room to try and resolve the preliminary point and the way forward regarding to the issue of the appointment of the current tribunal.

There was no agreement as to the way forward.

The Commercial Arbitration Centre has since written to the claimant in relation to the respondent's letter of protest and attached hereto are the correspondences which were delivered to the respondent by the Commercial Arbitration Centre.”…,.

Surely, given the opportunity to engage before arbitration commenced in earnest, I am at pains to fully understand the genuineness of the applicant's real problem. The applicant clearly states that it was not against the appointed arbitrator but only the procedure. Once given the opportunity to discuss the problem, one would have expected the parties to agree. They were unable to; yet the applicant still says:

“(20) The respondent would like to categorically state that it has absolutely nothing against the arbitrator chosen by the Commercial Arbitration Centre as it has read about him being an eminent former Judge of the High Court of Zimbabwe.”

Failure to even ask the second respondent to give the parties more time to consider the issue, and yet, at the same time, have the applicant pronounce that it had nothing against the credentials and suitability of the second respondent, clearly points to the fact that the parties were unable to agree. That being the case, and for the sake of progress, the intervention of the Commercial Arbitration Centre, as provided for in their agreement was, therefore, in my view, called for.

In any case, on 23 November 2013, the Commercial Arbitration Centre had said:

“Please clear with your counterparts, Chinamasa, Mudimu & Maguranyanga, the various issues canvassed in their letter under reference. One you have done so, please revert accordingly to the Centre so that the arbitral process may continue without any undue delay.”

The above clearly indicates that the Commercial Arbitration Centre did not ignore the applicant's stated problem. However, the parties never went back to it as had been requested.

In view of the foregoing, I am unable to fault the reasoning of the second respondent. The application cannot therefore succeed. The application is dismissed with costs.

This is an application in terms of Article 34 of the Schedule to the Arbitration Act [Chapter 7:15] for the setting aside of an arbitral award dated 20 December 2011. The award was rendered by the first respondent in a dispute between the applicant, the second and third respondents.

The application is opposed by the second and third respondents….,.

Article 34(2)(b)(ii) of the UNCITRAL Model Law contained in the Schedule to the Arbitration Act [Chapter 7:15] provides as follows:

“An arbitration award may be set aside by the High Court only if –

(a)..,.

(b) The High Court finds that –

(i)…; or

(ii) The award is in conflict with the public policy of Zimbabwe.”

Article 34(5) provides the following:

“For the avoidance of doubt, and without limiting the generality of paragraph (2)(b)(ii) of this article, it is declared that an award is in conflict with the public policy of Zimbabwe if –

(a) The making of the award was induced or affected by fraud or corruption; or

(b) A breach of the rules of natural justice occurred in connection with the making of the award.”

The approach of the courts has been to interpret the above provisions restrictively in order to give efficacy to the need for finality in arbitrations. In the case of Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S)…, that approach is underscored in the following terms:

“In my opinion, the approach to be adopted is to construe the public policy defence, as being applicable to either a foreign or domestic award, restrictively in order to preserve and recognise the basic objective of finality in all arbitrations; and to hold such defence applicable only if some fundamental principle of law or morality or justice is violated. This is illustrated by dicta in many cases…,.”

See also Beezley NO v Kabell & Anor 2003 (2) ZLR 198 (S); City of Harare v Harare Municipal Workers Union 2006 (1) ZLR 491 (H)…,.

Consistent with the interpretive approach articulated above, the court recognises that, in exercising the powers given in terms of Articles 34 and 36, it is not sitting as an Appellate Court. It is not, therefore, required to embrace what it would consider to have been the correct decision. It is only when “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 standards that a sensible and fair-minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award” that the court would interfere with the award on the ground of it being contrary to the public policy of the country.

ZESA v Maposa 1999 (2) ZLR 452 (S)…,.; Delta Operations (Pvt) Ltd v Origen Corp (Pvt) Ltd 2007 (2) ZLR 81 (S)…,.; Beezley NO v Kabell & Anor 2003 (2) ZLR 198 (S)…,.; Muchaka v Zhanje & Anor 2009 (2) ZLR 9 (H)…,.

What emerges from the authorities referred to above is that not every mistake, be it of fact or law, warrants the setting aside of an arbitral award in terms of Article 34 on the grounds of it being contrary to the public policy of Zimbabwe. For it to merit the intervention of the court, the incorrectness must be so serious as to constitute a subversion and negation of justice and fairness.

On 21 June 2012 the respondent (as applicant), in Case No.5936/11, instituted proceedings in terms of Article 35 of the Arbitration Act for the registration of an arbitral award. It was opposed by the applicant (as respondent).

On 5 March 2013, and by consent of the parties, and in terms of a court order, the two matters were consolidated. On the day of the hearing, and with the consent of the parties, I heard arguments in respect of HC6361/11 first. The understanding was that if the matter succeeds then case number HC5737/11 will be dismissed. If it fails then the order sought in HC5731/11 will be granted.

The brief background to the matter is that in September 2009 the applicant entered into a contract with the first respondent to finance his tobacco crop for 2009-2010 tobacco growing season. In terms of the contract, the applicant was required to grow a certain hectrage of tobacco and to market the produce exclusively through the first respondent. It is common cause that the applicant cultivated the required hectare and marketed tobacco worth USD10,890=29 through the first respondent. The first respondent then demanded the sum of USD51,687=56 which it alleged was the outstanding Grower Debt. The applicant disputed liability to pay the sum alleged or at all. As a result, the dispute was referred for arbitration. The second respondent was appointed the arbitrator. He made an award in favor of the first respondent.

The applicant seeks the setting aside of the award on the following grounds as averred in the founding affidavit:

A.. The arbitrator's conclusion, in holding that the supply of sub-standard coal did not constitute a breach of the agreement is grossly irrational, and, in the circumstances of the case, it resulted in a failure of justice.

B. The arbitrator's finding that the first respondent, who had reached the agreement by supplying sub-standard coal, should be paid the whole Grower Debt, is against public policy.

C. The decision by the arbitrator to award the first respondent the full value of the coal which:

(i) By the first respondent's own admission had been reduced owing to the poor quality of the coal.

(ii) Had caused him massive losses at the curing stage of the tobacco was not only grossly irrational but also is repugnant to the basic notions of justice.

D. In any event, the arbitrator erred in a material, obvious and gross manner in creating an issue between the parties which did not arise from their submissions.

E. The arbitrator misconstrued the facts or dismally failed to apply his mind to the question regarding the Annual Production Schedule or he totally misunderstood the issue pertaining thereto and made a grossly irrational conclusion so much that the resultant injustice intolerably hurt the conception of justice in Zimbabwe and resulted in a failure of justice.

F. The Arbitrator's reasoning or conclusion in respect of the issue of Annexure E goes beyond mere faultiness or incorrectness and constitutes a palpable inequity and is outrageous in its defiance of logic or accepted moral standards. Further, acceptance by the arbitrator of Annexure E, at face value, was, considering the circumstances of the case, contrary to public policy.

G. The finding that a contract farmer, who has performed all his obligations in terms of the contract of this nature, is obliged to pay the Grower Debt, from other sources of income in case of poor harvest, is contrary to public policy.

The first respondent opposes the application on the basis that none of the grounds relied upon by the applicant for the setting aside of the award fall within the ambit of the limited grounds for setting aside an award. It further avers that the applicant failed to appreciate the proper meaning of what constitutes an award that is contrary to public policy. The arbitrator's award in this matter is in no way contrary to public policy.

1. Article 34(2) of The Model Law, in its relevant portions, provides as follows:

"An arbitral award may be set aside by the High Court only if -

(a) The party making the application furnishes proof that -

(i)…,,; or

(ii)…,.; or

(iii) The award deals with a dispute not contemplated by or not falling within the terms of the submission 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; or

(iv)….,.; or

(b) The High Court finds that -

(i)…,.; or

(ii) The award is in conflict with the public policy of Zimbabwe.”

Public policy has been defined in a number of cases in our jurisdiction. The fact that an award could be wrong, by which is meant it is at variance with the law, does not make it contrary to public policy. See Catering Employers Association of Zimbabwe v Deputy Chairman, Labour Relations Tribunal & Another HH206-00 where it was stated:

"Even when the Arbitrator made a finding that was erroneous or unreasonable the court should not interfere but it could only interfere if the decision was attended by a gross irregularity or it resulted in a failure of justice."

See also Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S).., where GUBBAY CJ stated:

“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 situation, the court would not be justified in setting the award aside.

Under Article 34 or 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognize and enforce an award by having regard to what it considers should have been the correct decision. 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 standards 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.”

In exercising its powers in terms of Article 34, the court must be cognisant of the need to preserve and recognize the basic objective of finality in the arbitration process. See Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S)…,. See also Muchaka v Zhanje 2009 (2) ZLR 9 (H).

I agree with the approach adopted by counsel for the respondent to identify the issues placed before the arbitrator, what he dealt with and how he dealt with it. After this exercise the court can then be able to determine whether a breach of public policy occurred.

Counsel for the applicant, at the hearing, in my view, totally departed from the heads of argument filed by the applicant. He contended that there are three main public considerations in this matter viz:

1. Gross errors in the arbitrators finding on both substantive and procedural issues

Under this head, he submitted that the understanding by the Arbitrator of the contract between the parties was not correct. What was agreed on by the parties to be recoverable is the value of the crop inputs and financial assistance to be agreed on by the parties. There is nowhere in the contract where reference is made to the sum of money advanced to the applicant. Nowhere in the draw-down document, Annexure C, is an amount mentioned. The assistance to the applicant was in kind and not financial. The understanding by the arbitrator of the contract therefore materially clouded the manner in which he subsequently dealt with rest of the issues.

2. The contract that the first respondent sought to enforce was contrary to the specific provisions of the law

Under this head, counsel for the applicant contended that on p107, paragraph one in the second line, the Arbitrator stated that the Annual Production Schedule (APS), attached as Annexure C to the contract, indicates that the estimated cost of the crop finance as at that date USD32,313=18. The Arbitrator relied on a wrong document as the APS only sets out the materials required to cultivate the hectrage and the quantities thereof. That error created a fundamental difficulty. The Arbitrator had to define what type of contract the parties entered into.

It could have been one of two: i.e. an agreement of sale or a loan agreement.

He contended that the arbitrator shied away from making that determination on that point but that there was a debtor and creditor relationship between the parties. At the same time, the arbitrator contradicts himself when he makes a finding that there was an agreement of sale. According to the applicants papers, the deliveries were done when there was no agreement in place. The absence of a price is critical. An agreement of sale would require a definite and certain price. From the facts, it could not be a loan. Therefore, the arbitrator made an award for a sum of money when there was no agreement in respect of that in the contract.

3. Counsel for the applicant further submitted on p111, the last paragraph, the Arbitrator made a finding in favor of the respondent in respect of an issue which had not been answered by the applicant. The arbitrator grossly erred. What was not denied by the first respondent is taken to be admitted i.e that the first respondent induced the applicant to sign the invoice on p34.

On p112, the Arbitrator made a finding that it was not necessary to sign the Annual Production Schedule (APS). This permeates from the mistake that he used the wrong Annexure C. On p113, in the last paragraph, the arbitrator found gross anomalies regarding the dates of the invoice. The invoice refers to a schedule which the arbitrator did not see. Patently, the invoice was incomplete. The person who signed on behalf of the applicant is not identified. The arbitrator makes a finding binding the applicant with those factual findings. There was no basis for the arbitrator to make the finding that he did.

On p114, the arbitrator concedes that the issue of the non-variation clause had not been argued before him but he proceeded to make a finding based on that clause.

On p116, in the last paragraph, the arbitrator made a finding that the first respondent admits to not having supplied coal of the required quality but he did not make a finding that was a breach of the contract by the first respondent.

The arbitrator failed to make a finding that the respondent failed to uphold the principles that underlie the contract it entered into i.e the contract was entered in furtherance of a Government Program to empower A1 and A2 farmers. The contract was entered into in terms of S.I 61 of 2004. The respondent was supposed to source off-shore funding and supply products at cost to the grower.

The first respondent admits that the pricing model that it adopted is less than clear, see p77 paragraph 16(2). The principles underlying the Government enacting that particular Statutory Instrument was to allow the first respondent to finance for growers and not to ensure that the respondent made un-mitigated profits at the expense of the grower. The fairness of the contract has to be measured against the expectation of the Government. It is patently unfair for a financier to trap the grower into a debt. If the applicant had known the purchase price in 2008 he would have elected whether to enter into the contract of not. Public policy in Zimbabwe would not allow international capital to take advantage of the new breed of farmers in that fashion.

The first respondent admits to providing sub-standard coal. It gives a discount but at the same time insists that it wants all its money. It is unconscionable and against good morals. The situation that the applicant finds himself in is due to sub-standard coal. The arbitrator did not invite the parties to make submission on the applicants counter claim.

Counsel for the respondent, in his opening submissions, remarked that he had listened to appeal submissions which the court cannot relate to in such an application. There is no relationship between the founding affidavit and the submissions made on behalf of the applicant. Counsel for the applicant took very fresh issues some of which should have been dealt with in the founding affidavit e.g the issue of illegality.

Counsel for the respondent contended that the issue of illegality was not raised before the Arbitrator; see the Agreed Statement of Facts. It was also not raised in the founding papers. It is an issue founded on facts. The applicant must establish how much was expended in bringing these inputs and that what was being charged is above what was being claimed.

On the issue of the supply of the sub-standard coal, counsel for the respondent submitted that the applicant must show that the type of coal made him lose so much and that the claim by the first respondent is so much and that there must therefore be a set off. This is not what the applicant did before the Arbitrator. It did not make such a claim before the Arbitrator. It is not the duty of the Arbitrator to relate to a claim that has not been made.

Regarding the issue of breach of the contract, counsel for the respondent submitted that at p130 paragraph 7.2 the applicant admits that it was not peremptory for the first respondent to supply coal. The Arbitrator made his finding based on the clause that the first respondent “will buy and secure partial grower requirements of coal” contained in the Annual Production Schedule (APS). The Arbitrator was therefore correct in making a finding that there was no breach of contract.

He further submitted that the contract between the parties was a debtor creditor contract i.e a mutuum: a loan for consumption. The issue of the type of contract was not an issue before the Arbitrator. It was not suggested before the arbitrator that there was no cause of action.

I extensively recorded the submissions by counsel for the applicant because they were a total departure from the Heads of Argument filed of record. I agree with counsel for the respondent that the submissions by counsel for the applicant were mostly appeal submissions which this court cannot relate to in an application filed in terms of Article 34. I also agree that most of the issues that he raised were fresh matters which were not alluded to in the founding affidavit and which were not before the arbitrator.

The first point raised by counsel for the applicant is that there were gross errors in the Arbitrator's findings on both substantive and procedural issues.

He also submitted that the Arbitrator grossly erred when he made a finding in favour of the first respondent on an issue which the first respondent had not contested.

The case authorities are very clear that under Article 34 or 36, the court does not exercise appeal powers. An award cannot be set aside because the reasoning or conclusion of the arbitrator was wrong in fact and in law. The Arbitrator's decision, even if erroneous, as contended by counsel for the applicant, cannot be set aside unless the reasoning or conclusions were so flawed as to violate some fundamental principle of law or morality of justice.

All the other issues raised in the applicant's submissions, such as the illegality of the contract, the nature of the contract between the parties, that the Arbitrator used a wrong Annex C, supplying coal of a substandard coal - the applicant attacked the findings made by the Arbitrator. He did not go further to establish that the reasoning in the 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 standards that a sensible and fair-minded person would not consider that the conception of justice in Zimbabwe would be intolerably hurt by the award.

On the issue of sub-standard coal, counsel for the applicant submitted that it was unconscionable and against good morals that the first respondent would insist on getting the full amount for the coal despite its admission that it provided substandard coal. He further submitted that the Arbitrator did not invite the applicant to make submissions on the counter-claims. What is unconscionable is the conduct of the first respondent not the award by the arbitrator. Failure to invite submissions does not warrant the award to be set aside. In any event, it was up to the applicant to make out his case before the arbitrator.

From the above, its clear that the applicant has not made out a case to have the award set aside. In view of that, I will dismiss the application to set aside the award and grant the application to register the award.

As a result, I will make the following order:

1. The arbitration granted by the Arbitrator, Advocate David Ochieng, dated 5 April 2011, be and is hereby registered as an order of the High Court.

2. The applicant shall pay the cost of suit.

Arbitrators and the Labour Court have no enforcement mechanisms of their awards/orders and hence the need to register same as orders of either the Magistrate Court or High Court. This is purely for purposes of enforcement. It is only when the award has been so registered that the beneficiary can then enforce it - if the other party has not yet complied.

This is an appeal against the whole judgment of the High Court dismissing the appellant`s application for the setting aside of an arbitral award in terms of Article 34(2) of the UNCITRAL Model Law as set out in the Arbitration Act [Chapter 7:15].

FACTUAL BACKGROUND

The appellant is a company incorporated in terms of the laws of Mauritius and it carries on the business of property finance and development in Zimbabwe. The first respondent is a duly registered company in terms of the laws of Zimbabwe and is in the business of performing civil contracting services. The second respondent is an arbitrator.

In June 2008, the appellant was contracted by the City of Harare to manage the upgrading and extension of the Airport Road. By agreement dated 25 and 26 March 2013, the appellant subcontracted the first respondent to carry out civil engineering works on the Airport Road. At the time of entering into the agreement, the appellant acknowledged indebtedness to the first respondent in the sum of US$3,340,500= for previous work done and equipment hire charges.

In terms of clauses 1.3 and 3.1 of the agreement, payment to the first respondent, for its services, was to be by way of land and should the land option fall away, payment was to be made in cash within a limited time period. It was also a term of the agreement that the consideration due to the first respondent was to be payable when the land pledged as security was sold or the appellant was in the position to make a cash payment. It was recorded that the appellant had commenced the rezoning of the land and would use its best endeavours to re-zone, subdivide and develop it. It is common cause that the land pledged as security was not registered in the name of the appellant, nor was it sold to realise the amount owed to the first respondent, as envisaged by the parties. Pursuant to the agreement, the first respondent carried out works on the Airport Road at the cost of US$4,800,000=. Despite demand, the appellant refused, failed or neglected to pay the debt due to the first respondent for a period of almost two years then - it is now close to five (5) years.

Aggrieved, the first respondent purported to cancel the agreement between the parties by way of a letter dated 14 April 2014, and, thereafter, a dispute arose. In terms of the contract, the matter was referred to arbitration before the second respondent. Before the arbitrator, the first respondent sought an award for payment of the US$4,800,000= debt, or, alternatively, an order of quantum meruit for work carried out on behalf of the appellant. The first respondent demanded that it be paid in cash, and, in its Statement of Claim, gave the reason that the land option had fallen away as evidenced by the appellant's failure to pay its dues by way of cash, transfer of land or a combination of the two. Further, that the appellant did not in any event, own the land it had tendered as security for the payment of the debt in question.

In response, the appellant did not contest the debt but challenged the method of repayment as well as the timing of it.

It would appear that in view of the above, the main issue placed before the arbitrator for determination was whether or not the land option had fallen away, and, if so, whether payment was to be made by way of cash. The arbitrator found for the first respondent and issued the following award:

1. That the respondent shall pay the Claimant US$3,340,500= (three million three hundred and forty thousand and five hundred United States dollars) not later than Friday 4 April 2015.

2. That the respondent shall pay the Claimant US$1,459,500= (one million four hundred and fifty-nine thousand and five hundred United States dollars) not later than Thursday 4 June 2015. This payment may be made in land of equivalent value, but, whether in cash or land, the payment must be made not later than Thursday 4 June 2015.

3. That the costs of the Arbitration, being the Arbitrator`s fee and the costs of the hearing, be paid in equal shares by the parties.

4. That the parties shall bear their own legal costs.

5. That the application for an order of quantum meruit fails.

Dissatisfied with the award, the appellant approached the court a quo with an application to set it aside in terms of Article 34(2)(b)(ii) of the Arbitration Act, on the basis that the award was contrary to public policy as the arbitrator had decided on matters which were not placed before him. This related to the issue of the effect of the cancellation of a contract relating to the land pledged by the appellant in casu, entered into between the appellant and the City of Harare.

The court a quo dismissed the application and reasoned that the arbitrator did not deal with issues outside those referred to him, and, consequently, that the award did not offend against public policy. In support of this finding, the court a quo held that it was, in fact, the appellant who had introduced the issue of the contract with the City of Harare. The court a quo further found that the second respondent's decision to award payment in cash was not outrageous since the land used as security did not belong to the appellant.

Aggrieved by this order, the appellant noted an appeal to this Court on grounds that, in my view, raise two questions for determination, and these are:

1. Whether or not the arbitrator decided on issues that were not placed before him; and

2. Whether or not the arbitral award was contrary to public policy.

THE APPELLANT`S ARGUMENTS ON APPEAL

It was argued, for the appellant, that it was common cause that payment due to the first respondent was to be made in land rather than in cash. It was also argued that the Statement of Claim by the first respondent set out the case that the agreement had been terminated and since the land used as security was not registered in the appellant`s name, the land option had fallen away. The appellant claims that this is the case it was supposed to meet and answer at the arbitration proceedings, but, however, the second respondent found for the first respondent by making out a case that had neither been pleaded nor argued. In particular, the appellant took issue with the fact that the second respondent found that as the main contract between the appellant and the City of Harare had been terminated, the agreement between the parties effectively came to an end. That was never the case that was pleaded or argued by the first respondent. It was therefore alleged that the second respondent made out a case for the first respondent and substituted the first respondent`s cause of action with his own, resulting in fundamental injustice which was also an affront to the public policy of Zimbabwe.

THE RESPONDENTS` ARGUMENTS ON APPEAL

The first respondent argued that the appellant is not disputing the debt owed to it which has been outstanding for a number of years. It was also argued that the appellant exhibited dishonourable conduct by offering land which did not belong to it as “security” for the repayment of the debt. This was because the land could not be sold and was thus never, at any point, security for the debt. The first respondent also denies that the award is contrary to public policy and stresses that the appellant undertook to pay the debt by June or July 2014 through a transfer of land but this has not been done. As a result, the US$4,800,000= remains owing. As regards the argument that the arbitrator dealt with issues not before him, the first respondent argued that the arbitrator correctly identified the issues for determination and one of these was whether or not the land option had fallen away.

WHETHER OR NOT THE ARBITRATOR DECIDED ON ISSUES THAT WERE NOT BEFORE HIM

It is the appellant`s argument that the second respondent went outside his terms of reference and raised, mero motu, the issue of the cancellation of the contract between the appellant and the City of Harare. The argument is that this issue was neither raised nor argued by the parties thus the second respondent ought not to have made a pronouncement on it or premised his arbitral award thereon.

The arbitrator did indeed find that the agreement between the parties was terminated by virtue of the termination of the main contract between the appellant and the City of Harare. However, in his award, the arbitrator pointed out that there was, on the record before him, minutes of a meeting between the appellant and a third party, which recorded the fact of such termination. Further, that the document had been prepared by the appellant, and was introduced at the hearing before the arbitrator with no objections being raised. The court a quo also noted that a copy of the agreement in question, between the appellant and the City of Harare, was part of the record before that court.

Thus, far from finding that the arbitrator had dealt with issues falling outside his terms of reference, the court a quo stated as follows in its judgment:

“I have perused the Statement of Claim and response. It is the applicant (appellant in casu), in its response, which introduced the issue of its contract with the City of Harare…,. On page 299 of the record is an agreement between City of Harare and the applicant. I therefore fail to understand the complaint by the applicant. It is my view that the arbitrator did not deal with issues outside referral.”

Against this background, it is in my view correctly argued for the first respondent that the arbitrator pronounced on, and premised his finding as to the termination of the agreement between the parties, based on evidence and submissions that were clearly placed before him.

The first respondent argues that in any case whether or not the agreement was alive was irrelevant to the question of whether payment in cash was due. In terms of clause 3.1 of the agreement, so the argument goes, the 'cash settlement' was to come into effect only upon the land option falling away - a conclusion that the arbitrator duly pronounced.

I am persuaded by this argument, not least because the appellant itself indicated that it understood the 'land falling away' option as an alternative basis for the claim filed against it. This much is made clear on a reading of paragraph 9 of the appellant's founding affidavit a quo:

“First respondent claimed payment in the sum of US$4.8 million based on a written agreement. As appears from the Statement of Claim, it was alleged that the agreement had been cancelled, or, alternatively, the land option envisaged by the parties had fallen away…,.”…,.

A perusal of the first respondent's Statement of Claim confirms the appellant's assessment of the first respondent's claim. The point was clearly made in its Statement of Claim that the land which had been used as security for the debt did not belong to the appellant and thus did not constitute valid security. Further, that as a result, the land option had fallen away. The relevant part of the statement of claim reads as follows:

“25. In an email dated 11 September 2014 (enclosed as Annexure 14) T&C offered to settle the outstanding debt with Augur by way of (a) cash payment, or (b) by way of transfer of ownership of land to T&C or (c) a combination of the two. Augur failed to respondent to this proposal.

26. In the circumstances, the “land option” has fallen away as Augur does not own the land it secured and, further, Augur has not consented to the transfer of land to T&C. In fact, T&C is unaware whether Augur owns any land.

27. Pursuant to clauses 3.1, 6.1B and 6.3 the admitted debt of US$4.8 million is due and owing.”…,.

That the issue of the land option was uppermost in the arbitrator's mind is confirmed in the following concise statement contained in his award:

“The particular issues are whether or not the 'land option' has fallen away and what is the duration of the 'limited time period' both as identified in clause 3.1. In my view, these are inextricably linked.”

Thus, while the second respondent opined that the termination of the main contract between the City of Harare and the appellant had the effect of terminating the agreement between the appellant and the first respondent, he also considered the land issue, including the timing of the cash payment. He found that the land option in respect of 'the old debt,' unlike the 'new debt,' had indeed fallen away. His conclusions are clearly premised on this finding as stated in paragraphs 5.5 and 5.5 (sic) of the arbitral award:

“5.5 As set out in 4.21 above, I consider the respondent has had more than adequate time to demonstrate progress towards settling this debt. Accordingly, I conclude that the land option has fallen away in respect of the old debt and that the time has come for a cash payment.

5.5 So far as the new debt is concerned, I consider that sufficient time has not yet elapsed to enable me to consider that the land option has fallen away and I shall make allowance for this in the award.”

It would appear from his award though, that the arbitrator used the estimated date of the termination of the contract between the parties as an aid in assessing whether or not adequate time to demonstrate progress towards settling the debt, in terms of paragraph 3.1 of the agreement, had elapsed. I do not find anything amiss in this approach, given that the evidence was there before him and that he could, in any case have made the same assessment of time without reference to the supposed date of the termination of the parties' agreement. The arbitrator was not called upon to determine the date from which the land option could be considered as having fallen away. All he had to do was determine whether 'a limited time period' had elapsed from the time events on the ground suggested to the first respondent that the land option had fallen away. The first respondent's Statement of Claim, in my view, was instructive in that respect.

It is accepted that an arbitrator, unlike a court of law, is not allowed to venture outside their terms of reference when making a determination, as highlighted as follows by FOURIE J, in Bidoli v Bidoli [2010] ZAWCHC 39...,:

“An arbitrator, unlike a court, has no inherent power to decide issues or make orders that go beyond the issues which have been referred to arbitration and the pleadings filed pursuant thereto. In Hos+Med Medical Aid Scheme v Thebe Ya Bophelo Healthcare Marketing & Consulting (Pvt) Ltd and Others [2007] ZASCA 163; 2008 (2) SA 608 (SCA), LEWIS JA put it as follows at para 30:

'In my view, it is clear that the only source of an arbitrator's power is the arbitration agreement between the parties and an arbitrator cannot stray beyond their submission where the parties have expressly defined and limited the issues, as the parties have done in this case, to the matters pleaded. Thus, the arbitrator…, had no jurisdiction to decide a matter not pleaded.'"

See also Inter Agric (Pvt) Ltd v Mudavanhu & Ors SC09-15.

The appellant itself acknowledges that the issue of mode of payment to the first respondent was key to a resolution of the dispute and stated the following in its Answering Affidavit to the application in the court a quo:

“A genuine dispute existed between the parties. The central issue was whether or not the First Respondent was entitled to payment in a form other than land, and, if so, when such payment was to be made.”

In view of the foregoing, I find that the appellant's submission that the second respondent made a case for the parties and premised his findings on issues that were not before him, to be without any basis. The point must be made that even if the arbitrator had indeed premised his award also on the finding that the contract between the City Council and the appellant automatically terminated the parties' contract, the validity of the conclusion would still stand. It is, at law, not uncommon for a single determination to be premised on more than one finding in the same dispute.

This issue is accordingly determined against the appellant.

WHETHER OR NOT THE AWARD IS AGAINST PUBLIC POLICY

In terms of the law, an arbitral award can be set aside in terms Article 34(2) of the UNCITRAL Model Law as set out in the First Schedule to the Arbitration Act [Chapter 7:15]. It reads as follows in relevant part:

“(2) An arbitral award may be set aside by the High Court only if;

(a) The party making the application furnishes proof that -

…,.

(iii) The award deals with a dispute not contemplated by or not falling within the terms of the submission 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; or

…,.

(b) The High 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 award is in conflict with the public policy of Zimbabwe.”…,.

The test to be applied in determining whether an award is in conflict with public policy was set out by this Court in Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452 (S)…, where GUBBAY CJ said:

“Under Article 34 or 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognise and enforce an award by having regard to what it considers should have been the correct decision. 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 standards 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.

The same consequence applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue, and the resultant injustice reaches the point mentioned above.”

The gravamen of the appellant`s attack on the arbitral award is that the second respondent made a case for the first respondent by considering an alternative and completely unfounded basis upon which the appellant`s liability was premised, that is the termination of its contract with City of Harare.

I have already determined, as did the court a quo, that there is no basis to the above allegation. On the evidence before the court, the arbitrator's determination clearly did not turn on the issue concerning the effect that the cancellation of the agreement between the appellant and Harare City Council might have had on the parties' agreement. This was notwithstanding the fact that the matter had been placed before the arbitrator by the appellant itself. Rather, and as demonstrated above, the determination properly turned on the issue of whether or not the land option had fallen away. That being the case, I find that the applicant failed to furnish proof, as required in terms of Article 34(2) of the Model Law, that the award dealt with a dispute not contemplated by or not falling within the terms of the submission to arbitration, nor that it contained decisions on matters beyond the scope of the submission to arbitration.

To the extent that the appellant may be questioning the correctness of the conclusions that were reached by the second respondent, it is settled that in setting aside an award, the court is not concerned with its correctness. Rather, the concern of the court is whether or not the award goes beyond mere faultiness to constitute a palpable inequity. In Peruke Investments (Pvt) Ltd v Willoughby`s Investments (Pvt) Ltd & Anor 2015 (2) ZLR 491 (S)…, PATEL JA held as follows:

“As a rule, the courts are generally loathe to invoke this ground except in the most glaring instances of illogicality, injustice or moral turpitude. In the words of GUBBAY CJ in the locus classicus on the subject, ZESA v Maposa 1999 (2) ZLR 452 (S) at 465D-E:

'In my opinion, the approach to be adopted is to construe the public policy defence, as being applicable to either a foreign or domestic award, restrictively in order to preserve and recognise the basic objective of finality in all arbitrations; and to hold such defence applicable only if some fundamental principle of the law or morality or justice is violated.'”

In that case, the learned judge went on to state that he could not find anything outrageously illogical or immoral in the reasoning or conclusions reached by the arbitrator to warrant a different conclusion.

I respectfully associate myself with the sentiments of the learned judge in this case and find that they may properly be applied to the circumstances of this case. There is no indication in casu, and based on the circumstances, that the second respondent`s award is irrational or outrageously immoral or illogical. See also Zesa v Maposa 1992 (2) ZLR 452 (S).

It is pertinent to reiterate that from the time that the dispute arose right up to the appeal before this Court, the appellant has not disputed that it owes the first respondent money for work done, in the amount of US$4,800,000=. Nor can the appellant deny that payment of this amount to the first respondent, in cash, was within the contemplation of the parties. This is put beyond doubt if regard is had to paragraph 3.1 of their agreement which reads as follows:

“Should the land option fall away, then a limited time period will apply for the cash settlement to come into effect. T & C Construction will have the option to opt out of the land security if so required.”…,.

In the premises, and given that, in terms of the arbitrator's award, the appellant was ordered to pay a sum of money that it admitted to owing, the argument that such an award is contrary to public policy is clearly not sustainable. The award is not one to be characterised as having far reaching public consequences that would hurt the conception of justice in Zimbabwe. Nor can it be said to have violated a fundamental principle of the law, morality or justice. The contrary could be said to be true, given that the first respondent performed its part of the contract, and, in the process, incurred expenses running into millions of dollars. These expenses have still not been paid close to five (5) years after the contract was entered into.

DISPOSITION

The court a quo cannot be faulted in its finding that no case had been proved for the setting aside of the arbitral award of the second respondent. As demonstrated above, the award is not in conflict with the public policy of Zimbabwe. The appeal has no merit and ought to fail.

Accordingly, it is ordered as follows:

“The appeal be and is hereby dismissed with costs.”

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.

It has further been argued on behalf of the applicant that the court a quo erred in registering an award that does not sound in money.

The award was not attached to the application and I am none the wiser as to its contents.

In opposition to this averment by the applicant I expected a vehement denial by the first respondent of the allegation. It was not there. Instead, the argument advanced was that the applicant was aware of the amount of the award, presumably from some other sources that are not the judgment nor the award itself.

Assuming that the complete information is placed before the court determining the application for condonation of late filing of the appeal and extension of time within which to note the appeal, this may be another arguable position to be referred to the Supreme Court for determination.