Grainco (Private) Limited v Gardner Magandi and Jean Maguranyanga N.O

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HH 714/25
HCHC 135/25
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GRAINCO (PRIVATE) LIMITED

Versus

GARDNER MAGANDI

And

JEAN MAGURANYANGA N.O

HIGH COURT OF ZIMBABWE

V. NDLOVU J

HARARE; 15 July & 10 November 2025

Opposed Application

Mr G. Maromo, for the Applicant

Mr V. Mhungo, for the Respondent

V. NDLOVU J:   This is an application in which the applicant seeks to register, for purposes of enforcement, an arbitral award issued by the 2nd respondent in favour of the applicant against the 1st respondent. The application is premised on  Article 35 of the Model Law as defined in section 2 of the Arbitration Act [Chapter 7:15]. These proceedings consist of two consolidated matters, under HCHC135/25 and HCH5693/24. Case number HCH5693/24 will be addressed first, as its outcome directly affects the proceedings in HCHC135/25.

FACTUAL BACKGROUND

The parties concluded a maize financing agreement under which the applicant advanced US$40,000 to the 1st respondent at the latter's specific request. Under this agreement, the 1st respondent was to deliver a minimum of 1,800 tonnes of maize for sale to the applicant.  The purchase price for the maize was to be determined based on the prevailing rates at the time, but the price was not specified. As a result, the second respondent used the price set by the Grain Marketing Board for the relevant farming season.

From this agreement, the applicant was entitled to recover the principal amount advanced, along with management fees calculated at 4% of the minimum tonnage of 1800 tonnes of maize, and the applicable interest from the proceeds of the sale of maize. It was also a term of the contract that any disputes arising from the agreement would be referred to arbitration by a single arbitrator with at least 7 years of experience, appointed by the Chairperson of the Commercial Arbitration Centre.

The 1st respondent failed to deliver the contracted maize and did not repay the funds advanced, including accrued interest and management fees. Various acknowledgements of debt were made. There had been a breach, and a dispute had arisen. This led the applicant to invoke the agreement's provisions, requesting an order compelling the 1st respondent to comply with its terms.

On 31 October 2024, the 2nd respondent issued an arbitral award in favour of the applicant, ordering the 1st respondent to pay the original sum of US$40,000 or its equivalent in Zimbabwean Currency, the management fee based on 4% of the minimum contracted tonnage and interest on both the principal and management fee at a rate of 16% per annum, compounded monthly.

The applicant asserts that this arbitral award is final and binding, constitutes a monetary award, and specifies the amounts owed by the 1st respondent.

THE REVIEW

The 1st respondent initiated review proceedings in the High Court on 13 December 2024 under case number HCH5693/24 in terms of Rule 62 of the High Court Rules, 2021. He contended that the 2nd respondent breached the rules of natural justice by dismissing his application for absolution from the instance based on insufficient evidence while allowing the applicant to introduce additional evidence without prior notice to him.

The 1st respondent further argued that the 2nd respondent acted beyond her authority by making an award that included relief which was not claimed in the applicant's statement of claim. He contended that this constituted a breach of natural justice, as the arbitrator granted relief on management fees that were not correctly supported by evidence.

Furthermore, the 1st respondent claimed that the arbitrator's actions, of permitting the introduction of new evidence after the close of the applicant's case and allowing amendments to the applicant's submissions without notice to him, were highly irregular. He also argued that the 2nd respondent failed to provide reasons for dismissing his application for absolution, thereby undermining the fairness of the proceedings.

In response to the review application, the Applicant argued that the 1st respondent's application for review was incompetent in the circumstances of this dispute. The applicant contended that this Court lacks review jurisdiction over the arbitration proceedings, emphasising that the only recourse against an arbitral award is an application to set it aside in accordance with Article 34 of the Model Law, as varied by the Arbitration Act, [Chapter 7;15]. The Applicant emphasised that the court's jurisdiction is limited to recognising and registering the arbitral award. He asserted that the court does not function as a reviewing body or a court of appeal in such matters. The Applicant moved to have the application under HCH5693/24 struck off the roll, and the sole issue before the court was the registration of the award.

The applicant further argued that, under the parties’ agreement, the arbitrator's decision is final and binding on both parties, and is therefore neither appealable nor reviewable. Any competent authority has not set the award aside; hence, the 1st respondent’s application is incompetent and should be struck off the roll, and the arbitral award should be registered.

The 1st Respondent counter-argued that no rule prohibits the procedure he adopted. He claimed that the application for review is properly before the court. Relying on Article 34(5) of the Model Law, the 1st Respondent argued that the High Court may set aside an award if there is a breach of justice. He went on to say that a party is free to choose which law to apply when seeking recourse and that he had valid reasons to have this award set aside.

ISSUE FOR DETERMINATION

Is the application for review competent in the circumstances of this matter?

THE LAW

In their agreement, the parties agreed that,

“Any dispute between the parties arising out of or in connection with this agreement, including any question regarding its existence, its validity or termination, shall be referred to and finally resolved by arbitration. The parties hereby irrevocably agree that the decision of the arbitrator shall be final and binding upon each of them.” [own emphasis]

In the case of Conplant Technology (Private) Limited v Wentspring Investments (Private) Limited HH 965/15, MAFUSIRE J had the following to say:

“In my view, and in my own words, it is now settled that a clause in a contract to refer a dispute to arbitration is binding on the parties. A party is not at liberty to resile from that clause any time he may wish to do so.”

APPLICATION OF THE LAW TO THE FACTS

Parties cannot unilaterally abandon their commitments at will. Running away from one’s signature is frowned upon, and rightly so in the corporate world. This principle reinforces the necessity for the 1st respondent to abide by the arbitral award strictly because that is what he undertook, in writing, to do. The applicant related to him on the basis of that undertaking. The parties soberly agreed that the arbitrator’s decision would be final and binding on both parties. The application for review is not available to the 1st respondent.

DISPOSITION

The application for review should fail and hereby fails, and is struck off the roll.

We now turn to the registration of the arbitral. The 1st respondent admits to all the requirements for the registration of the arbitral award. I therefore make the following order.

ORDER

The arbitral award issued by the 2nd respondent on 31 October 2024 and attached as annexure JC6 to this application is hereby registered as an order of this court.

The arbitral award issued by the 2nd respondent on 20 February 2025 and attached to this application as annexure JC8 is hereby registered as an order of this court.

The 1st Respondent shall:

pay to the applicant, the sum of USD40 000.00 or the equivalent thereof in local currency at the prevailing inter-bank rate to the United States dollar currency on the date of payment.

pay the amount of USD 24,120.00 to the applicant as management fees calculated using the GMB price per ton, being USD335.00.

pay interest on the amounts in paragraphs 2 and 3 above at the rate of 16% per annum, compounded monthly and calculated daily from 15 May 2023 to the date of full and final payment.

pay the applicant’s costs of the arbitration proceedings

The 1st respondent shall bear the costs of this suit on the punitive scale.

V Ndlovu J

Hogwe Nyengedza Attorneys, Applicants’ legal practitioners

Chasi Maguwudze Legal Practice, 1st Respondent’s legal practitioners