Zimbabwe Sugar Milling Industry Employers Association v Zimbabwe Sugar Milling Industry Workers Union and Honourable Arbitrator L G Smith

### Preamble
1
HH-125-18
HC 10047/17
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ZIMBABWE SUGAR MILLING INDUSTRY EMPLOYERS ASSOCIATION

versus

ZIMBABWE SUGAR MILLING INDUSTRY WORKERS UNION

and

HONOURABLE ARBITRATOR L G SMITH

HIGH COURT OF ZIMBABWE

TAGU J

HARARE, 22 February 2018 & 14 March 2018

Opposed Application

A Rutanhira, for the applicant

T Mpofu, for the respondents

TAGU J: This is an application for the setting aside of an arbitral award in terms of Article 34 of the Model Law (Schedule to the Arbitration Act [Chapter 7.15] which provides in Sub-Article 2 as follows:

“Any arbitral award may be set aside by the High Court only if-

…..

the High court finds, that –

the subject-matter of the dispute is not capable of settlement by arbitration under the law of Zimbabwe, or

the award is in conflict with the public policy of Zimbabwe.”

The facts are that on 18 October 2017 the second respondent having heard both oral and written submissions from both the applicant and the first respondent delivered his arbitral award in a matter involving the issue of disputed wage increase demanded by the first respondent. The operative part of the arbitral award read as follows-

“Accordingly, my order is as follows-

The respondent (now applicant in this matter) shall increase the wages for Zimbabwe Sugar Milling Industry Workers at the rate of 15% for Band A employees and 7.5 for Band B employees.

The wage increase shall be with effect from 1 April 2017.

The wage increment shall be recorded in the Collective Bargaining Agreement for the Sugar Milling Industry Workers Union and registered in terms of the Labour Act.”

The contention by the applicant is that the said arbitral award is contrary to public policy of Zimbabwe more particularly in that “it would render its operations unsustainable and near insolvency with the inevitable consequence of massive loss of jobs for its employees. Further, it is based on speculative reasoning, no basis is given for the percentage of wage increments granted by the second respondent, it is clearly discriminatory in its award of increments to both A and B Band members and its award of 15% to the A Band members is well above what the first respondent was actually demanding.”

The applicant is therefore seeking for an order that-

“1. 	There arbitral award delivered by the second respondent on 18 October 2017 be

and is hereby set aside.

2. 	There shall be no wage increment in the sugar milling industry for the period 2017/18.

3. 	The second respondent shall bear the costs of this application.”

The first respondent on the other hand denied that the award is contrary to the public policy of Zimbabwe. It submitted among other things that the applicant has not provided any basis for the conclusion that the arbitral award is contrary to the public policy of Zimbabwe. In particular it argued that the mere fact that an award is not favourable to a party or that it is not what that party expected does not make an award contrary to the public policy of Zimbabwe hence the applicant ought to have identified the public policy which has been offended by the award. It was its further contention that the applicant did not present any evidence before the second respondent on its revenues and expenditures hence its bold and sweeping statement that “……given the current general micro and macro –economic fundamentals in the country any wage increment would be unsustainable” is unhelpful. As to discriminations between grades the first respondent’s position was that the applicant which is not an employer but an association representing related entities such as Tongott Hullett Zimbabwe (majority shareholder), Hippo Valley Estates Limited, Triangle (Pvt) Ltd and Zimbabwe Sugar Association cannot complain on behalf of various employees who are happy with the decision.

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 the 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.”

Earlier 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.”

The applicant while accepting the position held in the above cases submitted further that the court must look at other jurisdictions for guidance. For example the court was urged to adopt the Indian approach that an award violates public policy if it is contrary to fundamental principles of Indian law, its contrary interests of India, contrary to justice and morality and patently illegal.

I agree with the submission by counsel for the first respondent that in a nutshell the Indian approach and the case cited therein is in all fours with ZESA v Maphosa supra. Neither was I convinced to adopt ruling in the Soft Drinks Manufacturing Employee Association v Soft Drink Manufacturing Workers Union & Others [2015] ZWHHC 744 to set aside the registration of the award because the award in the Soft Drinks case was not detailed as compared to the award in casu. The applicant therefore fails to prove its case.

This brings me to the issue of costs. The respondent asked for costs on a higher scale because they have been unnecessarily put out of pocket. Reference was made to the case of Chatora & Others v Chairperson Western Region Rent Board HB- 63-2011 where MATHONSI J said-

“The second Respondent has been put out of pocket unnecessarily in having to defend this application and is therefore entitled to costs on an attorney and client scale.”

The issue of costs has always been the discretion of the court. However, since this application was doomed to fail costs on a higher scale are warranted.

IT IS ORDERED THAT

The application be and is hereby dismissed.

The applicant to pay costs on a legal practitioner and client scale.

Scanlen & Holderness, applicant’s legal practitioners

Mutumbwa, Mugabe & Partners, 1st respondent’s legal practitioners