Orange Finnacial Services Limited v Kelvin Mutale Mwaba (2024/HPC/0644) [2024] ZMHC 227 (16 October 2024)

IN THE HIGH COURT FOR ZAMBIA AT THE COMMERCIAL DIVISION HOLDEN AT LUSAKA (Civil Jurisdiction) 2024/HPC/0644 IN THE MATTER OF: THE ARBITRATION ACT NO. 19 OF 2000 AND IN THE MATTER OF: AND SECTION 12 OF THE ARBITRATION ACT NO. 19 OF 2000 AS READ WITH ARTICLE 11 UNITED ON NATIONS INTERNATIONAL TRADE LAW (UNCITRAL) MODEL LAW COMMISSION IN THE MATTER OF: AN APPLICATION FOR APPOINTMENT OF AN ARBITRAL TRIBUNAL BETWEEN: ORANGE FINANCIAL SERVICES LIMITED APPLICANT AND KELVIN MUTALE MWABA Before the Hon. Lady Justice Chilombo Bridget Maka 1 RESPONDENT KA For the Applicant: tMr . C. Lungaba - Messrs. Lungu Simwanza and Company For the Respondent: Mr. M. C. Kanga - Messrs. Makebi Zulu Advocates JUDGMENT Legislation Referred to: 1. The Arbitration Act No. 19 of 2000 J1 I 1. Introduction 1. 1 This application was commenced by way of originating summons on 3 rd September, 2024.,The Applicant seeks the following reliefs: 1. 11. An order appointing an Arbitral Tribunal Costs; and 111. Any other order that the Court may deem fit and just in the circumstances. 1.2 The summons was accompanied by an affidavit and skeleton arguments. 2. Affidavit in support 2.1 The supporting affidavit was deposed to by Milingo Lungu, a Director in the Applican t:-S. C-Gmpany. 2.2 The gist of the evidence was that the parties had entered into a Loan Agreement on 10th April 2024. Clause 16.5 of the said Loan Agreement exhibited as "ML l ", provided for arbitration as the mode of dispute resolution. 2.3 That a dispute arose between the parties following a default by the Respondent to fulfil its obligations under the Loan Agreement. That the Applicant issued a notice of dispute and proposed the appointment of High Court J2 Judge Koreen Etambuyu Mwenda - Zimba as the sole Arbitrator. 2.4 The Respondent has however not responded to the proposal, which has made the applicant to conclude that the parties have failed to agree on the appointment of an Arbitral Tribunal. 2.5 It was averred that the Arbitratio greement does not provide for the mode of appoint ent of the Arbitral Tribunal. Consequently,that the parties have been unable to agree on the procedure for the appointment of the Arbitral Tribunal§ he Applicant therefore requires the intervention of the Court in the appointment of the Arbitral Tribunal that will adjudicate the dispute between the parties. 3. Applicant's Skeleton Arguments 3.1 The Applicant alluded to the legal provisions that guide the Court in the appointment of an Arbitral Tribunal. To that effect, section 12 of the Arbitration Act and Article 11 of the UNCITRAL Model Law were quoted. 3.2 The gist of the argument was that according to the cited provisions, where the parties fail to agree on the procedure for appointing an Arbitral Tribunal, or fail to appoint a sole Arbitrator, any party may request the Court to take any measures to secure the appointment of an Arbitral Tribunal. J3 3 .3 The Applicant urged the Court to appoint the Arbitral Tribunal to hear and determine the dispute between the parties. 4. Hearing of Originating Summons. 4.1 At the hearing of the matter on the 8 th October, 2024, both parties were represented by Counsel. ~ On behalf of the Applicant, Mr. C. Luyaba informed the Court that he was relying on the affidavi and skeleton arguments filed in ~ support of the summons. 4.2 In addition, Counsel submitted that the parties had agreed that disputes between them ought to b e resolved $ arbitration. Unfortunately, the arbitration agreement did not provide for mode of appointment of the ,4r-bitral 1ribunal. 4 .3 It was reiterated that whilst the Applicant had proposed the appointment of Judge Mwenda-Zimba as the sole arbitrator, the Respondent has remained mute on the issue. This has prompted the Applicant to seek Court intervention in the appointment of an arbitrator. 4.4 The Applicant also prayed for costs. 4.5 Mr. Kanga on his part informed the Court that the Respondent did not oppose the application as well as the proposed sole arbitrator. Consequently, the Respondent did not file any documents in opposition to the summons. J4 5. Consideration and Determination 5.1 I have considered the affidavit evidence and the skeleton arguments filed in support of the application. 5.2 It is trite that by clause 16.5 of the Loan Agreement, exhibited as "ML l", the parties had chosen arbitration as their mode of dispute resolution. 5.3 The relevant provision states that: "16.5 Applicable Law and jurisdiction; a) This Loan Agreement shall be governed by, and construed in accordance with, laws of Zambia.[sic] b) In the event that any dispute under this Agreement cannot be resolved between the Borrower and the Lender amicably within thirty (30) days of the date on which the relevant dispute was referred to them, such dispute shall then be settled by final and binding arbitration in Lusaka, Zambia. 5.4 It is evident that the above arbitration clause does not provide for the number of arbitrators as well as the procedure for the arbitral tribunal. I\ o.,ffulf"'I•~ Oy d\R 5 .5 Therefore, on accountpf the foregoing, recourse should be made to the law for the default provision. 5.6 Section 12 of the Arbitration Act provides for the procedure of appointing the sole arbitrator or arbitrators where parties fail to agree. The relevant sections states that:- "(3) Failing such agreement JS a) In an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator; if a party fails to appoint the arbitrator within thirty days of receipt of a request to do so from the other party, or if the two arbitrator fail to agree on the third arbitrator, within thirty days of their appointment, the appointment shall be made, upon request of a party by an arbitral institution. b) In an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, the arbitrator shall be appointed, upon request of a party, by an arbitral institution. (6) The court or arbitral institution, in appointing an arbitrator, shall have due regard to any qualifications required of the arbitrator by the agreement of the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator and, in the case of a sole or third arbitrator, shall take into account as well the advisability of appointing an arbitrator of a nationality other than any of the nationalities of the parties." 5.7 Ar ticle 11(4) of the Model Law provides that a party m ay r equest the Court or oth er a uthority named in tha t Country to make the appointment. Further wh en appoin ting an arbitrator, Article 11 (5) of th e Model Law states th at th e Court or other a uthority must consider any qu alifications required of th e arbitrator. J6 5.8 In this case, the Applicant has submitted the name of High Court Judge Kareen Etambuyu Mwenda-Zimba as the proposed sole Arbitrator for consideration. The Respondent has not opposed the proposal. 5.9 I have considered the manner in which the Applicant has presented the application before court. My considered view is that the Applicant as a matter of good practice ought to ~ availe>-~ list of arbitrators in Zambia from any arbitral institution with their attendant qualifications upon which a decision could be made to appoint an arbitrator. The exhibited "ML5, being a Notice of arbitration is not sufficient to holistically guide the Court 1n the appointment of an arbitral tribunal. 5 . 10 Additionally, the default position as stipulated under section 12(3) of the Arbitration Act, is that the request for the appointment of an arbitrator shall be made to the arbitral institution. 5.11 Therefore, on account of the foregoing, I am inclined not to appoint Judge Kareen Etambuyu Mwenda Zimba, as the sole arbitrator in the arbitration. The Applicant should make the request to the Chartered Institute of Arbitrators for the appointment of a sole arbitrator. J7 . \ 6. Conclusion 6 . 1 The Arbitration Act provides for default provisions that guide on how an Arbitral Tribunal should be appointed if the arbitration agreement is silent. The Applicant must make the request to the arbitral institution that shall make the appointment. 6.2 The request for this Court to appoint an arbitrator should only be resorted to when the aforestated arbitral institution fail to perform that function. 6.3 The application is accordingly dismissed. 6.4 On account that the Respondent did not oppose the application, I make no order as to costs. Dated at Lusaka this 16th day of October, 2024 . .-.......... . ............ .... ~ Chilombo Bridget Maka HIGH COURT JUDGE J8