Tendai Savanhu v Felix Masiiwa Chinhamo

### Preamble
1
HH 719-18
(1) TENDAI SAVANHU
CASE NO HC 9484/17
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(1)	TENDAI SAVANHU                                                                      CASE NO HC 9484/17

versus

FELIX MASIIWA CHINHAMO

(2) 	FELIX MASIIWA CHINHAMO 				         CASE NO. HC 9721/17

versus

TENDAI SAVANHU

and

THE HONOURABLE ARBITRATOR-JUSTICE N.T MTSHIYA (RETIRED JUDGE)

HIGH COURT OF ZIMBABWE

TAGU J

HARARE 20 JULY and 7 NOVEMBER 2018

Consolidated Opposed Applications

Kasoko, for applicant in HC 9484/17and for respondent in HC 9721/17

P Kawonde, for applicant in HC 9721/17 and for respondent in HC 9484/17

TAGU J: The two cases were consolidated per request by counsels as the decision in one case affects the other. The parties are the same. In the first case the applicant is applying for registration of an arbitral award while the second matter is an application for setting aside of the same arbitral award handed by the Honourabe Arbitrator Justice November Tafuma Mtshiya (Retired judge) on the first of March 2017 in favour of applicant in HC 9484/17.

The applicant in HC 9484/17 submitted that the award be registered since it sounds in money and as a procedural requirement for purposes of enforcement. The applicant in HC 9721/17 submitted that the award be set aside on the basis that the second respondent made an award contrary to public policy in that a fundamental principle of law was violated in that the required standard of proof was not followed.

FACTUAL BACKGROUND

On the sixth of July 2015 parties entered into a joint venture agreement. In terms of the agreement Mr Tendai Savanhu (Tendai) agreed to allow Felix Musiyiwa Chinhamo (Felix) to use his farm called Eagle Estate for purposes of tobacco farming. Tendai Savanhu also allowed Felix Musiyiwa Chinhamo access and use of machinery and implements on the said farm. It was a further term of the agreement that Felix would remit to Tendai 13% of the gross output from the sale of tobacco. Felix alleges that Tendai committed a material breach of the joint venture agreement in that Tendai threatened to confiscate the entire tobacco crop and under heavy duress Felix was forced to accede to Tendai’s demands. A dispute ensued between the parties. It remained unresolved and the matter was referred to arbitration. An arbitral award was obtained against Felix. Felix now claims that the award is contrary to public policy in that the onus of proving that there were replacements, repairs and maintenance of Tendai’s machinery rested with Tendai but the arbitrator erred by shifting the said onus on to Felix to disprove that the sum of US$14 653.50 was the cost of the said replacement, repair and maintenance not- withstanding the fact that Tendai had not succeeded in proving the same.

After hearing the parties the Arbitrator made the following order-

“1. The respondent shall pay to the claimant:

the sum of US$18 900 being the remainder of the 13% of the gross output,

the sum of $125.80 outstanding from the payment for coal,

the sum of US$10 520.18 being repair and replacement costs for farm equipment.

2. The Respondent’s Counterclaim is dismissed.

3. Respondent shall bear the claimant’s costs.”

THE LAW

Article 34 of the Model Law (Schedule to the Arbitration Act [Chapter 7.15 prescribes the procedure for setting aside an arbitral award and the substantive grounds upon which it may be set aside. The relevant portions provides as follows:

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

(a) the party making the application furnishes proof that……..; or

(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

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

PROCEEDINGS BEFORE THE ARBITRATOR

Before the arbitrator Tendai was the Claimant against Felix. He made a claim for payment of the sums due under an agreement entered into by himself and Felix. Tendai had found some of his implements to be missing and machinery not in a state of usability due to non-maintenance and non-repair by Felix. Before the Arbitrator Tendai produced “Annexure C” of the missing, unmaintained and unrepaired machinery and implements and attached values. Tendai also indicated that he supplied Felix with coal and that there was a balance for the supply of coal amounting to US$125.80 which Felix had not paid to Tendai. The Arbitrator then asked Felix to disprove Tendai’s claims. This is the onus Felix says should have been on Tendai to prove his claims.

ANALYSIS

In the celebrated case of ZESA v Maposa 1999 (2) ZLR 452 (S) which was quoted with approval in Beazely v Kabell 2003 (2) ZLR 198 (S) at 201D-E it was said-

“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 inequality 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.”

As to what constitutes an award to be viewed as being contrary to public policy has been decided in a number of cases. In Delta Operations (Pvt) Ltd v Origen Corporation (Pvt) Ltd SC- 86-06 the superior court stated that-

“An award cannot be held to be contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in fact or in law. Moreover, even if it were to be found that the arbitrator ‘s decision was erroneous as contended by the applicant, I am not persuaded that his reasoning or conclusions were so flawed as to violate some fundamental principle of law or morality or justice. In my view, the challenged award does not constitute a palpable inequality 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.”

In the present case there is no suggestion that the arbitrator’s decision was induced or effected by fraud or corruption. As to the breach of the rules of natural justice my view is that Felix was afforded an opportunity to be heard. Felix complaints that the onus should have been on Tendai. My view is that there was nothing untoward that the arbitrator did given the fact that Tendai had produced Annexure “C” showing the missing, unmaintained and unrepaired machinery and implements and the attached values. Further Tendai had given evidence that Felix had been supplied with coal and there was a balance for the supply of coal amounting to US$125.80. There was therefore, in my view nothing wrong that the arbitrator did to ask Felix to rebut what Tendai had put before the arbitrator. That does not amount to shifting onus onto Felix.

I am unable to find any fundamental principle of the law that was violated, neither do I find anything outrageously illogical or immoral in the arbitrator’s decision to ask Felix to explain. Consequently, I find that the award does not constitute a palpable inequality contrary to public policy of Zimbabwe merely because onus shifted to Felix to rebut what Tendai had said.

It is trite that the registration of an award is a procedural step that must be taken for purposes of enforcement. The application by Tendai to have the award registered will be granted while the application by Felix to have the award set aside will be dismissed.

IT IS ORDERED THAT

The Arbitral Award handed down in Applicant’s favour on the 1st of March 2017 by the Honourable Arbitrator Justice November Tafuma MTHSIYA (Retired Judge) be and is hereby registered as an Order of this court.

Pursuant to such registration, Respondent be and is hereby ordered to pay to the Applicant the sum of US$29 545.98 (Twenty –Nine Thousand Five Hundred And Forty-Five United States Dollars And Ninety-Eight Cents) in terms of the Arbitral Award, failing which, the Applicant be and is hereby authorized to enforce the Arbitral Award aforementioned in terms of the rules of this Court.

The application to set aside the Arbitral Award made by the 2nd Respondent in favour of the Claimant on the 1st of March 2017, be and is hereby dismissed.

The Respondent in HC 9484/17 be and is hereby ordered to pay costs on a higher Scale of attorney and client.

T. Pfigu, applicant’s legal practitioners

Kawonde, respondent’s legal practitioners.