Judgment record
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
HH 05-25HH 05-252025
Viewing: Word Document (Legacy)
Loading document...
Full text archive
Judgment text copy
A clean reading copy is shown below. Use Download for the original formatted document.
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
1
HH 05-25
HCHC 524-24
EVER PROSPEROUS WORLDWIDE LTD
versus
XTENDA FINANCIAL HOLDINGS LTD
and
FRANCIS DZANYA
and
BEKITHEMBA MOYO
and
BINDZILE MUNATSI [In her capacity as Executrix of Estate Late
Douglas Munatsi]
and
REGIS CHAWATAMA N.O.
HIGH COURT OF ZIMBABWE
COMMERCIAL DIVISION
MAFUSIRE J
HARARE
Date of hearing: 19 November 2024
Date of judgment: 6 January 2025
Opposed application
T.W. Nyamakura, for the applicant
T. Zhuwarara, for respondents 1 to 4
No appearance for fifth respondent
MAFUSIRE J
[a] Introduction
[1] The applicant and respondents 1 to 4 are engaged in litigation in different fora and
platforms over certain indebtedness by the respondents to the applicant. Some aspects
of the dispute have been determined at arbitration. Two arbitrators, ex-judge Mr
Francis Bere and Mr Regis Chawatama, the fifth respondent herein, have, one after
the other, rendered ‘determinations’, on some aspects of the dispute.
[2] The reference to ‘determination’ instead of ‘award’ or ‘ruling’ is deliberate. Among
the several issues seriously in contention in the present matter is the character or
nature of the Chawatama ‘determination’ [henceforth “the Chawatama
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
2
HH 05-25
HCHC 524-24
determination”]. The respondents contend that it was a ‘ruling’ and not an ‘award’
and that as such, it is not capable of being set aside in the manner the applicant has
purported to do. On the other hand, the applicant contends that the Chawatama
determination was an ‘award’ or a ‘final award’ which is capable of being set aside in
the manner sought.
[3] The applicant seeks two substantive orders. The one is to set aside the Chawatama
determination in terms of Art 34 of the Arbitration Act [Chapter 7:15]. The other is to
direct Mr Chawatama to proceed to determine all the issues placed by the parties
before him. The applicant seeks costs on an attorney and client scale. Verbatim, the
applicant’s draft order reads:
“1. The application is hereby granted.
2. The Arbitral Award in the dispute between the Applicant and the 1 st to 4th
Respondents issued by Honourable Arbitrator Regis Chawatama dated 15 th
April 2024 be and is hereby set aside.
3. The proceedings before Honourable Arbitrator Regis Chawatama to proceed
and is hereby directed to determine all the issues placed by the parties for
determination.
4. The 1st to 4th Respondents shall bear the costs of this application on an
attorney client scale if they oppose it.”
[4] The applicant seeks the setting aside of the Chawatama determination on the basis
that it is in conflict with the public policy of Zimbabwe in that the making of the
award was induced by fraud and that the audi alteram partem rule of natural justice
was violated.
[5] Counsel for respondents 1 to 4 has raised two preliminary objections. The one is that
[in my own paraphrase] this court lacks the requisite jurisdiction to interfere in any
way with the Chawatama determination since what the applicant seeks to do is to
invoke a specific and special type of the court’s statutory jurisdiction, as opposed to
its general mandate under Art 34. This specific type of jurisdiction relates to the
power or capacity of the court to interfere with arbitral rulings as opposed to its
power or capacity to interfere with arbitral awards.
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
3
HH 05-25
HCHC 524-24
[6] The respondents elaborate on their first preliminary objection as follows. On the
authority of the Supreme Court case of RioZim Ltd & Anor v Maranatha
Ferrochrome [Pvt] Ltd SC 30-22, Art 34 of the Arbitration Act provides for the
setting aside of arbitral awards. It does not provide for the setting aside of arbitral
rulings. The Chawatama determination was an arbitral ruling, not an arbitral award.
This court has no jurisdiction over rulings except as provided for under Art 16.
[7] The second preliminary objection by the respondents is that, again in paraphrase, this
court cannot relate to the present application because of its prolixity. It is an
incredible 424 pages long. The applicant has deliberately thrown in irrelevant matter
to confuse. For this reason, the applicant must not be heard on the merits.
[8] The matter is convoluted. The dispute between the parties has mutated into several
facets. It is full of intrigue. It is an epic task to give a narrative that is concise and
coherent.
[9] The correct characterization of the Chawatama determination has huge legal
implications. Details over the parties’ arguments on this issue and several others
emerge later. Here is the narrative, but severely truncated.
[b] Background facts
[10] Before Mr Chawatama, the applicant claimed payment of a certain sum of money
against the respondents, jointly and severally. It also claimed, among other things, the
right to special execution of certain items of collateral security the respondents had
pledged. For the moment, the details are not important.
[11] The respondents objected to the applicant’s claim before Mr Chawatama on the basis
that the underlying agreement of loan between the applicant and the first respondent
was illegal in terms of Zimbabwean law in that, inter alia, the applicant, a peregrinus,
was conducting banking business in violation of the Zimbabwe law. It was also the
respondent’s objection that the applicant’s claim included a charge on interest,
something which allegedly is unlawful in terms of Zimbabwean law. Incidentally, the
first respondent is also a peregrinus.
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
4
HH 05-25
HCHC 524-24
[12] With regards to the claim for the special execution of the items pledged as security for
the debt, the respondents’ objection before Mr Chawatama was that the applicant had
gained access to such items by unlawful means and was therefore disentitled to levy
special execution on them.
[13] In a nutshell, that was the dispute Mr Chawatama was set to determine. He never got
to do it. There was some intriguing intervention. It was this. During the course of the
arbitration, there was a fall out between the applicant and its erstwhile counsel, one
Mr Method Ndlovu. Apparently driven by this fall out, Mr Ndlovu wrote to the
arbitrator on 26 January 2024, at the same time copying the mail to, among others, the
respondents’ legal practitioner. He advised that he was no longer representing the
applicant but that he was in possession of certain information which, ethically, he felt
obliged to disclose. The information was about certain payments and the
determination by Mr Bere [henceforth “the Bere determination”]. Mr Ndlovu sought
special audience over this aspect.
[14] The applicant objected to Mr Ndlovu’s conduct. At the same time it submitted a copy
of the Bere award to Mr Chawatama. In response, Mr Chawatama, mero motu, called
for a case management meeting with the parties. He felt that some aspects of the Bere
award had determined the issues before him, a position readily endorsed by the
respondents. At the case management meeting, Mr Chawatama directed that the
respondents should lodge before him a formal application to terminate the
proceedings. The respondents obliged.
[15] Amid spirited objections, endless counter objections and repeated rejoinders, Mr
Chawatama eventually determined that the matter before him was res judicata as it
was essentially the same dispute Mr Bere before him had adjudicated upon. As such,
he concluded, he was precluded by operation of the law to proceed with the
arbitration. He wrote a detailed judgment.
[16] The circumstances surrounding the Bere determination were also nothing short of
intrigue. The applicant had been the claimant. Only the first respondent had been the
other party. Respondents 2 to 4 were not. In the main, the applicant claimed the
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
5
HH 05-25
HCHC 524-24
delivery to it of certain items of security as had been promised in the loan agreement
between the applicant and the first respondent and which were still outstanding. In the
alternative, the applicant claimed payment of a certain sum of money.
[17] In August 2022, in the middle of the arbitration proceedings, the first respondent
demanded Mr Bere’s recusal on the basis of some alleged conflict of interest. They
went on to file a formal application before him for his recusal. However, despite Mr
Bere arranging a special hearing over this particular aspect, the first respondent did
not pursue it.
[18] But on 5 September 2022 the first respondent went on to file an urgent chamber
application before this court for Mr Bere’s recusal. Again they did not pursue it. They
subsequently withdrew the application altogether.
[19] Mr Bere rendered his award on 12 September 2022. Granting the main claim by the
applicant, he directed that the respondents should deliver the outstanding items of
security within thirty [30] days failing which the respondents would have to pay back
the loan amounts.
[20] At least by May 2023 both parties had become aware of the existence of the Bere
award even though none of them collected their copies immediately. The applicant
made disclosure of the existence of the Bere award in its Statement of Claim before
Mr Chawatama dated 16 May 2023.
[21] Further, by November 2023 the first respondent had definitely become aware that the
Bere award had been in favour of the applicant. One of its panel of legal practitioners,
Mangezi, Nleya & Partners, wrote to the applicant’s legal practitioners on 17
November 2023, among other things, imploring the applicant to desist from
proceeding with execution of the Bere award. The applicant gave no such
undertaking.
[22] On 15 March 2024 the first respondent applied to this court for the setting aside of the
Bere award on the basis that it was in conflict with the public policy of Zimbabwe,
allegedly in that the making of the award had violated the audi alteram partem rule of
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
6
HH 05-25
HCHC 524-24
natural justice and that the dispute had been incapable of settlement by arbitration.
This application was made exactly one month and six days after the application before
Mr Chawatama for the termination of the proceedings on the basis of the same Bere
award.
[23] The application to set aside the Bere award was served on the applicant’s legal
practitioners, Atherstone & Cook. They reacted by informing the respondent’s legal
practitioners that their mandate had since been terminated and that therefore they
could not accept service of process on behalf of the applicant. They suggested that the
application be served on the applicant directly. They also required that their
communication in this regard be uploaded on the Integrated Electronic Case
Management System [IECMS] that is operative in the Commercial Division of the
High Court. However, this was not done.
[24] The application to set aside the Bere award was granted with costs by this court on 11
April 2024, per CHILIMBE J, in default of appearance by the applicant.
[25] After the setting aside of the Bere award as aforesaid, the respondents failed or
neglected to inform Mr Chawatama of the fact. Apparently oblivious of the fact that
the Bere award was no longer extant, Mr Chawatama went on to render his
determination, terminating the arbitration proceedings before him on the basis, as
aforesaid, that the subject matter of the dispute before him was res judicata on
account of the existence of the Bere award.
[26] From around 16 April 2024 the applicant made a series of communication with Mr
Chawatama, copying the respondents’ legal practitioners in the process. Among other
things, the applicant informed the arbitrator of the setting aside of the Bere award by
this court on 11 April 2024. It went to allege that the respondents’ legal practitioners
had cheated him by concealing that information and allowing him to terminate the
proceedings before him on the basis of a Bere award which was no longer in
existence.
[27] However, Mr Chawatama expressed regret that he could not assist any longer as he
had become functus officio. On their part, the respondents’ legal practitioners denied
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
7
HH 05-25
HCHC 524-24
any wrong doing, but declined to wade into the merits of the applicant’s complaint.
Evidently feeling blocked on all fronts, the applicant turned to this court and filed the
present application.
[c] Ruling on respondents’ preliminary objections
[i] Jurisdiction of the court
[28] In response to the objection by respondents’ counsel that this court lacks the requisite
jurisdiction to interfere with the Chawatama determination on account of the fact that
that determination was a ruling, and not an award, allegedly as set out in the Supreme
Court case of RioZim above, applicant’s counsel has argued, as I have understood
him, that the Chawatama determination was an award, not a mere ruling. It
terminated the proceedings completely. It brought the arbitration to a definite end.
Rulings are motivated in terms of Art 16 of the Arbitration Act. The Chawatama
determination was not motivated in terms of Art 16. It was made in terms of Art 32.
As such, it is one to which Art 34 of the Act applies. The RioZim case does not apply.
[29] I note that Art 16 of the Arbitration Act, paraphrased, empowers an arbitral tribunal to
rule on, inter alia, the question of its own jurisdiction. It may make such a ruling
either as a preliminary point, or in its award on the merits. If it rules on such a
question as a preliminary point, any party may, within thirty [30] days of receipt of
the ruling, request this court to decide the matter.
[30] Art 32 of the Arbitration Act reads:
“Termination of proceedings
[1] The arbitral proceedings are terminated by the final award or by an order of the
arbitral tribunal in accordance with paragraph [2] of this article.
[2] The arbitral tribunal shall issue an order for the termination of the arbitral
proceedings when—
(a) the claimant withdraws his claim, unless the respondent objects thereto and
the arbitral tribunal recognizes a legitimate interest on his part in obtaining a
final settlement of the dispute;
(b) the parties agree on the termination of the proceedings;
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
8
HH 05-25
HCHC 524-24
(c) the arbitral tribunal finds that the continuation of the proceedings has for any
other reason become unnecessary or impossible.
[3] The mandate of the arbitral tribunal terminates with the termination of the arbitral
proceedings, subject to the provisions of articles 33 and 34 [4] .”
[31] Here now is my ruling on respondent’s counsel’s first objection on jurisdiction.
[32] The termination of the arbitration proceedings before Mr Chawatama was neither
motivated by any party, nor motivated in terms of the Arbitration Act. It was made at
the instance of the arbitrator, after he had convinced himself that the previous Bere
award had dealt with the same issues as had subsequently been placed before him. Mr
Chawatama had then invited the respondents to make a formal application for the
termination of the proceedings.
[33] When they got down to applying for the termination of the proceedings in response to
Mr Chawatama’s invitation as aforesaid, the respondents did not proceed in terms of
the Arbitration Act. They proceeded on the basis of the common law principle of res
judicata. It was only in quashing the applicant’s numerous objections on the
procedure being adopted that Mr Chawatama, with no suggestion or motivation by the
respondents, intimated that the request to terminate the proceedings was being made
in terms of Art 32[1] as read with 32 [2][c] of the Arbitration Act. He expressly and
firmly rejected the notion that the termination was being motivated in terms of Art 16
of the Arbitration Act.
[34] Thus, it is not correct for Mr Zhuwarara, for the respondents, to insist that the
Chawatama determination was a ruling made in terms of Art 16 of the Arbitration
Act. According to the arbitrator himself, he proceeded in terms of Art 32 of the Act.
Therefore, according to Mr Zhuwarara’s own logic, if it is Art 16 that gives birth to
rulings, then the Chawatama determination was not a ruling. It was either a final
award in terms of Art 32[1], or an order in terms of Art 32[1] as read with 32 [2][c].
[35] I disagree with Mr Zhuwarara on the meaning, effect and import of the Supreme
Court case of RioZim above. One aspect of the dichotomy that the Arbitration Act is,
which the appellate court clarified in its judgment, is that arbitral rulings such as are
made in terms of Art 16 of the Act, are distinct from the various other types of arbitral
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
9
HH 05-25
HCHC 524-24
awards such as are made in terms of the other provisions of the Act, like Art 31, Art
32, Art 33, Art 34, and so on.
[36] The Supreme Court went further to state that the term ‘award’ in Art 34 is used in its
generic sense. It does not exclude the other types of awards such as final awards,
interlocutory or interim awards, additional awards, corrected awards, interpreted
awards, and so on, all of which must be accorded their appropriate status. Art 34
provides for the setting aside of awards. It does not provide for the setting aside of
rulings. The word ‘award’ having been used in its generic sense, accommodates the
setting aside of all other awards specified in the Act.
[37] Plainly, the Rio Zim case above is an authority at war with the respondents’
contention herein. The termination of the proceedings before Mr Chawatama, not
having been birthed in terms of Art 16 of the Arbitration Act, or any other provision
of that Act, but the arbitrator himself having specified that he was proceeding in terms
of Art 32, the applicant having invoked this court’s jurisdiction under Art 34 to which
Art 32 is applicable and is subservient to, this court can safely exercise that
jurisdiction and interfere with the Chawatama determination. The respondents’ first
objection has no merit and is hereby dismissed.
[ii] Prolixity of application
[38] Manifestly, the application is longwinded. It lacks focus. It is cumbersome. It was
drafted without regard to brevity and concision. With attachments, but excluding the
heads of argument, the application is a whopping 429 pages long.
[39] The respondents’ complaint in this regard has merit. But it is a question of the kettle
calling the pot black. The respondents aren’t any saints themselves. Their notice of
opposition and attachments, but excluding the heads of argument, is a competitive 239
pages long.
[40] What particularly stands out in the notice of opposition, as an example of the lack of
discipline in the preparation of court documents, is the fact that quite a number of
documents attached to the application are also duplicated, sometimes triplicated and
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
10
HH 05-25
HCHC 524-24
even quadruplicated in the notice of opposition. Furthermore, lengthy and numerous
Supreme Court judgments are attached and duplicated just to prove some manifestly
innocuous point, probably only relevant at arbitration, namely that Advocate Lewis
Uriri had accepted a certain mandate in the arbitration process in circumstances in
which he ought to have declined for reason of a conflict of interest.
[41] I shall not be detained by the respondents’ second objection, save to reject the
suggestion that by reason of it the applicant has become non-suited. Whilst it is
certainly a great deal of pain and inconvenience for the court to have to wade through
the morass of unprocessed matter in order to extract the facta probanda and the real
issue for determination, in the present matter I shall pay a blind eye to that infraction
because of the complexity of the dispute between the parties. At any rate, the
respondents have made no proper application to have any matter expunged from the
record or struck out. Thus, the respondents’ second preliminary objection is also
dismissed for lack of merit and sincerity.
[d] Ruling on the merits
[42] Art 34 of the Arbitration Act permits the setting aside of arbitral awards on a number
of grounds, including a proven contravention of the public policy of Zimbabwe. The
intrinsic provision in this regard reads, unwanted detail having been excluded:
“[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.
[3] …. …. ….
[4] …. …. ….
[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
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
11
HH 05-25
HCHC 524-24
(b) a breach of the rules of natural justice occurred in connection with
the making of the award.”
[43] What an applicant needs to prove in order to succeed under Art 34 of the Act is now
an overploughed field. There is abundant case authority. But it is always good
housekeeping to lay down the test as a guide or compass to the adjudication process.
[44] Art 34 and Art 36 of the Arbitration Act are interpreted restrictively. The locus
classicus on the meaning of an arbitral award being in conflict with the public policy
of Zimbabwe and the approach of the courts is ZESA v Maposa 1999 (2) ZLR 452 (S)
The appellate court, per GUBBAY CJ, laid down the test as follows, at p 466E – G:
“An award will not be contrary to public policy merely because the reasoning or
conclusions of the arbitrator are wrong in fact or law. In such a situation the court will
not be justified in setting the award aside.
Under article 34 or 36, the court does not exercise an appeal 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 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 above .”
[45] Put in another way, for an award to be said to be contrary to the public policy of
Zimbabwe, it must ‘shock the conscience’ or ‘is clearly injurious to the public good or
[is] wholly offensive to the ordinary reasonable and fully informed member of the
public’: see the judgment of the Singapore Court of Appeal in PT Asuransi Jasa
Indonesia [Persero] v Dexia Bank SA [2007] 1 SLR(R) 597, at para 59. Only in the
most glaring instances of illogicality, injustice or moral turpitude will the court invoke
the power to set aside an arbitral award: Peruke Investments [Pvt] Ltd v Willoughby’s
Investments [Pvt] Ltd & Anor 2015 [1] ZLR 491 [S], at 499H – 500A.
[46] In this matter I am satisfied that the application meets the test. It alleges that Mr
Chawatama was “cheated” into terminating the proceedings before him on the basis of
a previous award that was no longer extant. Mr Zhuwarara submits that the fact that
the Bere award was no longer extant by the time of the Chawatama determination
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
12
HH 05-25
HCHC 524-24
does not matter because the mere existence of that award at the commencement of the
Chawatama proceedings disarmed him of the requisite jurisdiction to sit in judgment
over the same dispute.
[47] I disagree with Mr Zhuwarara for a number of reasons. Arbitration is a voluntary and
private dispute resolution mechanism chosen by the parties. It is an alternative process
to the determination of disputes through the State courts. The parties formulate the
nature and extent of their differences. They chose their own judge. They lay down the
rules of procedure. They agree on the terms of reference for the judge. They pay the
judge. Everything is governed largely by the private bilateral agreement: see
Zimbabwe Educational, Scientific, Social and Cultural Workers’ Union v Welfare
Educational Institutions’ Employers’ Association 2013 [1] ZLR 187 [S], Alliance
Insurance v Imperial Plastics [Pvt] Ltd & Anor SC 30-17 and [1] Harare Sports Club
v Zimbabwe Cricket [2] Zimbabwe Cricket v Harare Sports Club & Anor 2019 [2]
ZLR 421 [H] at p 428E – F.
[48] No appeal lies against the decision of the arbitrator. The rationale for this was aptly
summarised in the 19th century English case of Holmes Oil Co v Pumpherston Oil Co
(1891) 28 SLR 940; [1891] UKHL 940, where the court, per LORD HALSBURY LC,
said:
“Now, one of the advantages that people are supposed to get by reference to
arbitration is the finality of the proceedings when the arbitrator has once stated his
determination. They sacrifice something for that advantage – they sacrifice the power
to appeal. If, in their judgment, the particular judge whom they have selected as gone
wrong in point of law or in point of fact, they have no longer the same wide power to
appeal which an ordinary citizen prosecuting his remedy in the courts of law possess,
but they sacrifice that advantage in order to obtain a final decision between the
parties. It is well-settled law therefore, that when they have agreed to refer their
difficulties to arbitration, as they have here, you cannot set aside the award simply
because you think it is wrong.”
[49] The above remarks are quite relevant in this case. When the parties approached Mr
Chawatama for arbitration over their dispute, among other things, they were both
aware of the existence of the Bere award. Yet despite that knowledge they opted for
another determination before another arbitrator.
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
13
HH 05-25
HCHC 524-24
[50] Tellingly, in his judgment terminating the proceedings, Mr Chawatama blames both
parties for the assurance that they had given him over the Bere proceedings upon his
enquiry whether or not they were not the same as those before him. The parties had
both agreed that the Bere award had no bearing on the proceedings before him. They
had both urged him to proceed.
[51] The respondents allege that to all intents and purposes both parties had abandoned the
Bere award. However, that is not borne out by the record. On the contrary, the
respondents have complained in some aspects of the matter that the applicant was
bent on executing the Bere award.
[52] What is critical is that the parties had agreed to arbitration before Mr Chawatama in
spite of the existence or otherwise of the Bere award. What shocks the conscience or
the public good is not that Mr Chawatama decided to terminate the proceedings
before him mero motu, which he may have been entitled to do, but the fact that,
plainly, he formulated some kind of cause of action for the respondents and simply
asked them to endorse it. When they did, they feigned ignorance of the existence of
the Bere award, whose existence had been brought to their attention almost a year
before. That is not all.
[53] In my judgment, the respondents were bent on having their cake and eating it. In one
moment, they were applying for the termination of the Chawatama proceedings on the
basis of the existence of the Bere award. In another, exactly one month and six days
later, they were applying to this court for the setting aside of the same Bere award.
[54] I consider that res judicata was plainly not applicable as a basis for Mr Chawatama to
terminate the proceedings before him. To begin with, the parties before him were
different from the parties before Mr Bere in that, respondents 2 to 4 had not been
parties before Mr Bere. Even the cause of action could not be said to have been the
same.
[55] In his judgment, Mr Chawatama held that the contractual relationship between the
applicant and respondents 2 to 4 was ancillary or secondary to the contractual
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
14
HH 05-25
HCHC 524-24
relationship between the applicant and the first respondent and that, as such, the
principle of res judicata applied to them as well.
[56] I consider that Mr Chawatama’s determination went beyond ‘mere faultiness or
incorrectness’. It constitutes ‘a palpable inequity that is so far reaching and
outrageous in its defiance of logic’: see ZESA v Maposa above. Before him, the
applicant was proceeding against respondents 2 to 4 as sureties or guarantors who,
among other things, had waived the benefits of the several legal exceptions, including
de duobus vel pluribus reis debendi and ordinis seu excussionis et divisionis.
[57] Thus, on the face of it, the applicant was entitled to proceed against one or other or all
of the guarantors without first having had to exhaust its rights against the principal
debtor, the first respondent. At the very least, this was part of the dispute Mr
Chawatama had been mandated to determine. But by terminating the proceedings in
the manner he did, he left the applicant with no recourse against respondents 2 to 4
who were not part of the Bere determination.
[58] In fact, by terminating the proceedings before him in the way he did and in
circumstances in which the Bere award was no longer in existence, Mr Chawatama
left the applicant with no recourse against anyone at all. This is outrageous given that
the respondents, by their own admissions, owe the applicant several millions of
dollars in foreign currency. No court of justice can countenance that. The applicant is
justified in its complaint, among others, that the Chawatama determination breached
one of our fundamental rules of natural justice, audi alteram partem: hear the other
side. A very serious decision was taken against the applicant without its dispute
against respondents 2 to 4 being heard.
[59] The circumstances surrounding the setting aside of the Bere award by this court
justifies interference on the grounds of public policy. Apart from the fact that the
respondents neglected or failed to inform Mr Chawatama that the ground for the
termination of the proceedings before him had fallen away, there is evidence on
record to conclude that the respondents’ legal practitioners had snatched a judgment.
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
15
HH 05-25
HCHC 524-24
[60] When the respondents’ legal practitioner of record, Mr B. Mataruka, appeared before
CHILIMBE J on 11 April 2024 to move for the setting aside of the Bere award in the
absence of the applicant, not only was he aware that the applicant’s erstwhile legal
practitioners had declined to accept service of process on the ground that their agency
had been terminated, but also that he had been implored to inform the court of this
fact.
[61] Whether he liked it or not, Mr Mataruka was ethically bound, as an officer of the
court, to make such a disclosure to the presiding judge. Mr Zhuwarara dismisses the
applicant’s complaint in this regard on the basis that the applicant is free to apply for
the rescission of the order by CHILIMBE J. This is rather unfortunate. Why the
applicant has not applied for rescission of judgment is not an issue before me.
However, whatever the applicant’s reasons for not taking this step is no excuse for the
apparent breach of ethics by Mr Mataruka.
[e] Disposition
[62] I find that the termination of the arbitration proceedings before Mr Chawatama
violated the public policy of Zimbabwe in the sense contemplated by Art 34[2][b][ii],
as read with 34[5] of the Arbitration Act. As such it is liable to be set aside.
[63] Mr Zhuwarara argues that even if I set aside the Chawatama determination, it is
incompetent for the court to refer the same proceedings to the same Mr Chawatama
with a directive that he must determine all the issues as prayed for in para 3 of the
applicant’s draft order.
[64] Sight must not be lost that arbitration is a party-driven process. As I said above, the
parties choose their own judge. These ones had chosen Mr Chawatama.
Unfortunately, he decided to prematurely terminate his mandate in circumstances in
which this court has held that the decision was in breach of the public policy of
Zimbabwe.
[65] If a party does not want to submit before a particular arbitrator, and or if the selected
arbitrator declines the mandate conferred upon him, it cannot be the function of this
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
16
HH 05-25
HCHC 524-24
court to impose that person as the arbitrator for the parties. What is important though
is that the applicant’s right to have the dispute adjudicated in terms of the parties’
original agreement is respected and enforced. The matter must go back to arbitration
in terms of the original agreement. It is up to the parties to agree on the choice of the
arbitrator, failing which they are entitled to assert their rights in terms of the law.
[f] Costs
[66] The applicant seeks costs on an attorney and client scale. How and why such costs are
sometimes awarded by the court is also an over ploughed field. There is an avalanche
of cases on the point. In the present case, I am satisfied that the cumulative conduct of
the respondents, either themselves personally or through their legal practitioner of
record, justifies a penal order of costs.
[67] I am particularly concerned by the conduct of the respondent’s legal practitioner of
record, Mr Mataruka, as displayed in the papers. No matter how strongly they feel
about the merits of their clients’ case, legal practitioners must at all times maintain a
dispassionate engagement so as to be able to effectively discharge their duties as
officers of the court. A failure to do so may sometimes attract an adverse order of
costs in their personal capacities. The dignity of the court must always be maintained.
[68] However, in the final result the following orders are hereby made:
i/ The arbitral award or order by Mr Regis Chawatama on 15 April 2024 in the
dispute between the applicant and the first to fourth respondents is hereby set
aside.
ii/ The dispute between the parties is hereby referred for determination by
arbitration. The arbitrator shall determine all the issues placed before him or
her by the parties.
iii/ The costs of this application shall be borne by the first to fourth respondents
on an attorney and client scale, jointly and severally, the one paying the others
to be absolved.
6 January 2025
Ever Prosperous Worldwide Ltd v Xtenda Financial Holdings Ltd & Ors
17
HH 05-25
HCHC 524-24
Atherstone & Cook, applicant’s legal practitioners
Gill, Godlonton & Gerrans, legal practitioners for respondents 1 to 4