Augur Investments OU v City of Harare and David A Whatman N.O.

### Preamble
1
HH 725-18
HC 11570/17
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AUGUR INVESTMENTS OU

versus

CITY OF HARARE

and

DAVID A WHATMAN N.O

HIGH COURT OF ZIMBABWE

MUREMBA J

HARARE, 3 April 2018 & 7 November 2018

Opposed Application

T. Zhuwarara, for the applicant

R. Chingwena, for the 1st respondent

MUREMBA J:  This is an application which is being made in terms of s 34 (2) (b) (ii) of the Arbitration Act [Chapter 7:15] to set aside an arbitral award which was granted by the arbitrator David A Whatman the second respondent in this matter. The arbitral award was granted in favour of the first respondent, the City of Harare against the applicant on 4 December 2017. The applicant’s claim arose from a shareholder’s agreement the parties signed in September 2007. Over the years the parties were involved in various disputes resulting in the applicant referring one of the disputes to arbitration. The applicant was claiming damages for breach of contract. The arbitrator made findings that the first respondent was indeed in breach of the agreement, but he did not award damages to the applicant on the basis that its claim had prescribed in June 2013 and it had made its claim in 2017 well outside time.

The applicant wants the arbitral award set aside on the basis that it is contrary to public policy. The applicant contends that the arbitral award is contrary to public policy because it breaches the rules of natural justice and conflicts with the substantive law of Zimbabwe in respect to the issue of prescription. The applicant contends that the determination by the arbitrator on this issue goes beyond mere faultiness or incorrectness; it constitutes a palpable inequity that is so far reaching and has resulted in an injustice between the parties.

In opposing the application the first respondent raised a point in limine to the effect that the applicant’s founding affidavit is fatally defective because Michael Van Blerk who deposed to it purports to derive his authority for doing so from a company resolution which was executed outside Zimbabwe and was not authenticated in terms of r 3 of the High Court (Authentication of Documents) Rules, 1971. The rule provides:

“Any document executed outside Zimbabwe shall be deemed to be sufficiently authenticated for the purpose of production or use in any court or tribunal in Zimbabwe or for the purpose of production or lodging in any public office in Zimbabwe if it is authenticated –

By a notary public, mayor or person holding judicial office, or

In the case of countries or territories in which Zimbabwe, has its own diplomatic or consular representative, by the head of a Zimbabwean diplomatic mission, the deputy or acting head of such mission, a counsellor, first, second, third secretary, a consul-general, counsul or vice consul.”

The word authentication is defined in rule 2 as meaning the verification of any signature thereon.

In casu it is not in dispute that the company resolution attached to the founding affidavit is not authenticated.

The applicant submitted that despite the unauthenticated company resolution, the first respondent has no basis to doubt the deponent’s representation of the applicant. This deponent has always represented the applicant in the past in its dealings with the first respondent.

I am not inclined to uphold the point in limine for the simple reason that what

the first respondent has taken issue with is the unauthentication of the company resolution authorising the deponent to represent the applicant but it did not say that the deponent lacks authority to represent the applicant. It has taken no issue with the founding affidavit. In African Banking Corporation of Zimbabwe Limited t/a BancABC v PWC Motors (Pvt) Ltd & 3 Ors HH 123-13 it was held that when it comes to issues relating to a deponent’s authority to represent an incorporated entity, all the court is required to do is satisfy itself that enough evidence has been placed before it to show that it is indeed the party which is litigating and not an unauthorized person. In casu the first respondent did not challenge the deponent’s authority to represent the applicant. It placed no evidence showing that the deponent does not have authority to represent the applicant. In Keltex Holdings v Kencor Management HH 236-15 it was held that litigants should not take the requirement of an authority to represent a company too far. It was held that it is enough for the deponent or for a person representing the company to state that he has authority to represent the company. This means that it is not a requirement that a written resolution be furnished all the time. Since a written resolution can be dispensed with, failure to attach an authenticated resolution cannot possibly invalidate the opposition. It is just as good as there is no written resolution.

As was submitted by the applicant, the record shows that the deponent is well known to the first respondent as he has always represented the applicant in its dealings with the first respondent. Since there have been prior dealings between the parties it cannot be doubted that it is the applicant that is litigating. For these reasons I dismiss the point in limine.

On the merits, the applicant averred that the arbitrator made a wrong finding that the applicants’ claim had become due on at least 30 June 2010 and that the claim had prescribed in June 2013. The applicant averred that the arbitrator’s reasoning was grossly irregular, incorrect, devoid of reason and offensive to the law of the land and thus contrary to public policy. It was the applicant’s contention that right up to 2016 the parties were still in engagement with regards to the issue of zoning of properties the first respondent had transferred to the applicant pursuant to the agreement. This was the issue in contention between the parties. The applicant averred that as long as the parties were still in interaction and had not reached a deadlock prescription could not begin to run. According to the applicant the debt became due in September 2016 when the parties engaged in their last meeting regarding the issue and declared a deadlock. Three years of prescription would thus lapse in September 2019. The applicant averred that the arbitrator ought to have found that its claim had not prescribed.

The applicant further averred that in addition, in October 2014 in a meeting, the first respondent acknowledged its indebtedness which means that there was interruption of prescription. The applicant contended that the arbitrator wrongly found that prescription had occurred when it had not.

In response the first respondent contended that the arbitral award does not in any way breach the rules of natural justice and is not contrary to public policy. It averred that the arbitrator’s finding on prescription does not in any way constitute a palpable inequity that is so far reaching and results in an injustice between the parties.

I am in agreement with the first respondent. An arbitral award is not contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in law or in fact. See Zesa v Maphosa 1992 (2) ZLR 452 (S) at p 446. It is only an award that contravenes a fundamental principle of law that can be held to be contrary to public policy. See Pilime and Others v Midriver Enterprises (Pvt) Ltd HH 367 -14. In casu the arbitrator made a finding that the period of prescription expired on 30 June 2013 and that there was no evidence to demonstrate an interruption of prescription. The applicant’s contention was that prescription had been interrupted by the various engagements the parties had been involved in over the years and that in October 2014 the first respondent had actually interrupted the running of prescription by acknowledging indebtedness. The finding by the arbitrator does not amount to a breach of any rule(s) of natural justice. The applicant does not even state what rule of natural justice was breached by this finding. There is no glaring illogicality, injustice or moral turpitude in the determination that was made by the arbitrator. An arbitral award is set aside if the reasoning or conclusion 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. See Zesa v Maphosa 1992 (2) ZLR 452 (S) at 466 E –G.

The applicant contended that the arbitrator predicated his decision on an erroneous and contorted understanding of facts which is at variance with what the parties agreed upon. Obviously the applicant is asking this court to reconsider the evidence, rehear the arguments and come to a different conclusion from that of the arbitrator. In arriving at his determination the arbitrator made an analysis of the facts of the matter and applied the law relating to prescription. He applied the Prescription Act [Chapter 8:11]. He dealt with the issue of when the prescription period begins to run. He also went on to cite authorities on when a debt is due in the case of breach of contract. He made a factual finding that the applicant’s claim became due on at least 30 June 2010. He could have been right or he could have been wrong but under Articles 34 and 36 of the Arbitration Act this court does not exercise appeal powers. It thus cannot 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. See Delta Corporations (Pvt) Ltd v Origen Corp (Pvt) Ltd 2007 (2) ZLR 81 (S) at 85C-D; Breezley NO v Kabell & Anor 2003 (2) ZLR 198 (S) at 201 D and Muchaka v Zhanje & Anor 2009 (2) ZLR 9 (H) at 11D – 12B. The arbitrator could have made wrong factual findings and erred in his application of the law to the facts but that is not a basis for this court to say his determination is contrary to public policy. An arbitral award still stands despite being erroneous in law and in fact. See Muchaka v Zhanje & Anor supra. In Telcordia Technologies Inc v Telecom SA 2007 (3) SA 266 it was held that an arbitrator has the right to be wrong on the merits of the case. The arbitrator’s finding on prescription does not in any way constitute a palpable inequity that is so far reaching and results in an injustice between the parties.

The arbitral award cannot be impugned on the basis that it is factually wrong. As was correctly submitted by the first respondent’s counsel the grounds which the applicant is relying on in this application are grounds of appeal and not grounds for setting aside of the award in terms of Article 34 (2) of the Arbitration Act. There is no demonstration that some fundamental principle of law or morality or justice was violated. The fact that a party is not happy with the outcome of arbitral proceedings does not entitle it to bring an appeal before this court under the guise of an application in terms of Article 34 (2) (b) (ii) of the Arbitration Act. It is apparent that the applicant has brought a disguised appeal. Obviously this is because it is unhappy with the determination that was made by the arbitrator and at the same time it has no recourse to an appeal. In terms of clause 12.3 of the agreement the parties agreed that the decision of the arbitrator shall be final and binding upon them.

In the result, the application is dismissed with costs.

Chinawa Law Chambers, applicant’s legal practitioners

Kanokanga & Partners, 1st respondent’s legal practitioners