Mathews v Craster Intl (Pvt) Ltd. (HC 11614 of 2012; HH 707 of 2015) [2015] ZWHHC 707 (19 August 2015)

1 HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 RICHARD MATTHEWS versus CRASTER INTERNATIONAL (PRIVATE) LIMITED HIGH COURT OF ZIMBABWE MAFUSIRE J HARARE, 13 July & 19 August 2015 Opposed Application I. Chagonda, for the applicant Adv. S. Hashiti, for the respondent MAFUSIRE J: This was an application for the registration of an arbitral award. It was opposed. Before the arbitrator, the within named applicant was the Claimant. The respondent herein was also the respondent therein. The applicant was a former employee of the respondent. The arbitration happened after the cessation of the employer-employee relationship. That cessation had been mutually and amicably agreed upon. Both parties were also agreed in principle that the applicant was due a terminal package. However, they were not agreed as to the nature and quantum of that package. It was for the determination of the appropriate terminal package that the matter was referred to arbitration. The arbitrator was a retired judge of this court, Justice Smith. The operative part of his award read as follows: “My award therefore is that the Respondent pays the Claimant- (a) USD7 000.00 being his salary for August 2007; (b) USD42 000.00 as a severance package; HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 (c) Cash-in-lieu of the leave he had acquired and not taken as at 4 September 2009 in line with the Respondent’s leave policies.” I have highlighted paragraph (c) of the award because argument for, and against registration was partly centred on it. The proceedings before me commenced by way of a chamber application. The heading to the application was: “CHAMBER APPLICATION FOR REGISTRATION OF AN ARBITRAL AWARD IN TERMS OF SECTION 98(14) OF THE LABOUR ACT” The highlighted portion was another source of argument. The applicant vehemently sought to disown the reference to s 98(14) of the Labour Act, saying it was a mistake. He said his application had been made in terms of art 35 of the Arbitration Act, [Chapter 7:15], and not in terms of the Labour Act, [Chapter 28:01]. On the other hand, the respondent sought to firmly bind the applicant to the letter of his heading. It shall soon become apparent why the parties took such positions. The opposition to the application was based on four grounds. The first was that paragraph (c) of the arbitral award did not sound in money. As such, it was unregistrable. For support the respondent cited the cases of Mandiringa & Ors v National Social Security & Ors1 and Herbert Sauramba & Ors v Mitchells Bakery Mutare2. The second ground of opposition was that the award had made no provision for Pay As You Earn tax (“PAYE”) in terms of the Income Tax Act, [Chapter 23:06]. As such, the award was incomplete and therefore not registrable. Otherwise to register it in that form, the court would be countenancing an illegality. The third ground of opposition was that the applicant had failed to attach to his application for registration, a duly authenticated original of the arbitral award or a duly certified copy thereof. As such, he had breached the peremptory provisions of the Arbitration Act. The fourth and last ground of opposition was that the respondent had earlier on obtained an arbitral award of its own against the applicant for an amount far in excess of what the applicant had been awarded in the arbitral award that he was seeking to register. As such, 1 2005 (2) ZLR 329 (H) 2 HH134-10 HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 the principle of set-off had to be applied in order to do justice between man and man. Otherwise it would be inequitable that the applicant, who was owed much less by the respondent, should seek to recover from the respondent, which was owed much more by the applicant, when the two arbitral awards in question were intrinsically linked to each other, more particularly in that they had arisen out of the same set of facts and from the same relationship. It seems logical that I should first deal with ground of objection No.3, namely, that the applicant failed to comply with the peremptory provisions of the Arbitration Act by omitting from his founding papers the duly authenticated original award or a duly certified copy thereof. Although not expressly stated as such, the substance of this ground of objection, as I understood it, was that there was no application before me. Thus, if I find for the respondent on this point then that will be the end of the matter. I will not have to deal with the rest of the other grounds. (a) Award not authenticated or certified Article 35(2) of the Arbitration Act says: “(2) The party relying on an award or applying for its registration shall supply the duly authenticated original award or a duly certified copy thereof and the original arbitration agreement …” (my emphasis) The preceding sub-article (1) says that an arbitral award shall be recognised as binding and, “… upon application in writing to the High Court …” shall be enforced, subject to the other provisions. The respondent took the objection in its notice of opposition. The applicant, in the answering affidavit, replied by saying that both the original award and a certified copy were available; that either of these would be tendered at the hearing; that it was his legal practitioner who had refrained from attaching either of them to the chamber application to avoid the risk of them getting lost or misplaced; that in any event, the Arbitration Act did not require that they be appended to the application for registration but merely that they be supplied; that therefore submitting them at the hearing would be sufficient compliance with the law. The applicant, nonetheless, attached a certified copy to his answering affidavit “… for completeness …” At the hearing the applicant tendered the original award. HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 However, none of what the applicant said or did satisfied the respondent. It stuck to its position. It argued that contrary to what he was now saying in his answering affidavit, the applicant had not mentioned in his founding affidavit that he would be tendering the original or certified copy of the award at the hearing. An application stands or falls on its founding papers. For counsel to submit the original or certified copy of the award at the hearing would be tantamount to tendering evidence from the Bar. That was inadmissible. In my view, art 35 of the Arbitration Act is clear that a party wishing to register an arbitral award with this court, does so through an application. The application procedure is governed by the Rules of Court. These Rules say in Order 32, among other things, and in my own words, that an application must consist of the written document signed by the party; an affidavit filed together with that application and to which may be attached documents verifying the facts or averments set out in the affidavit. The Rules say nothing about the nature of the documents to be attached to the affidavit, i.e. whether or not they should be originals, certified copies or otherwise. But of course, art 35 says an authenticated original or certified copy of the award is what must be “supplied”. As to when these may be supplied is not specified. Mr Chagonda, for the applicant, said they may be supplied at any time as one moves one’s application. Mr Hashiti, for the respondent, said they must be supplied at the outset when one files the application. I find for the applicant on this point. The respondent’s objection amounts to nit picking. I am satisfied that it was sufficient compliance with the law for the applicant to have attached to his application a copy of the arbitration award that had been filed with the registrar of this court, and to have tendered the original in court. I am not suggesting that this is, or shall be, the procedure for all time. I am saying that in this matter, the applicant cannot be said to be non-suited. That he may not have promised in his founding papers to produce the original or certified copy of the award at the hearing did not, in my view, preclude him from giving that promise in his answering affidavit in which he replied to the notice of opposition in which the objection had been raised. Litigation is not a game of wits. It is a serious legal process to solve serious legal disputes. In casu, I could not conceive of any prejudice suffered by the respondent by reason of the procedure that the applicant had adopted. Mr Hashiti pointed to none. He merely stressed that the law was the law. But in my view, the law on that point is not what he insisted HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 it was. At any rate, and in my considered view, an application for the registration of an arbitral award is largely an administrative process. Whilst in such an application the court is not really being called upon to rubber stamp the decision of an arbitrator, nonetheless, it is largely giving that decision the badge of authority to enable it to be enforceable. If the court is satisfied that the award is regular on the face of it, and that it is not deficient in any of the ways contemplated by articles 34 and 36 of the Arbitration Act, then the court will register it. In the circumstances, the respondent’s third ground of opposition is dismissed. I now turn to deal with the other grounds of objection. (b) Arbitral award not sounding in money As I understand them, the ratio decidendi of Mandiringa & Ors and Herbert Sauramba & Ors, supra, was that the purpose of registering an arbitral award in terms of s 98(14) of the Labour Act, is so that it can be enforced; that, as such, for one to sue out a writ of execution to enforce an arbitral award, it must necessarily sound in money, and that an award that does not specify the sum due is incomplete and incapable of registration as an order of this court. In my view, s 98(14) of the Labour Act and art 35 of the Arbitration Act are in pari materia. On the face of it, both provisions facilitate the registration of arbitral awards with the conventional courts for the purpose of enforcement. In s 98(14) of the Labour Act, any party to whom an arbitral award relates may submit for registration, to either the court of the magistrate, or the High Court, the copy of the arbitral award given to him in terms of sub- section (13). The choice of court depends on the quantum of the award. Any award in excess of the monetary jurisdictional limit of the magistrate’s court is to be submitted to this court. In art 35 of the Arbitration Act, an arbitral award, irrespective of the country in which it was made, is binding upon its registration with this court. That the purpose for registering an arbitral award in terms of s 98(14) is for enforcement is made clear by the next sub-section, namely subsection (15). It says that where an arbitral award has been registered, it shall have the effect, “… for purposes of enforcement …” of a civil judgment of the appropriate court. Similarly, with art 35 of the Arbitration Act, that the purpose for registration is enforcement is self-evident from both the intrinsic provisions of the article itself as well as HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 the heading to it. Sub-article 35(1) says that the arbitral award, upon application to the High Court, “… shall be enforced …”, subject to the other provisions. Sub-article 35(2) also provides that the party applying for the “… enforcement …” of the award has to submit the original or certified copy. The heading of the article as a whole is “Recognition and enforcement.” In casu, the applicant sought to wriggle out of the provisions of s 98(14) of the Labour Act, evidently to escape the conclusion in Mandiringa & Ors and Herbert Sauramba & Ors. In my view, for the respondent to have insisted on binding the applicant to s 98(14) of the Labour Act, just because the heading to his application said so, was to insist on form prevailing over substance. It was common cause that the reference of the dispute to arbitration had not been made in terms of the Labour Act. The arbitrator had not been appointed in terms of the Labour Act. The reference to arbitration and the appointment of the arbitrator had both been made in terms of the Arbitration Act. For the above reason, I accept the applicant’s submission that the applicant’s reference to s 98(14) of the Labour Act in the heading to his founding papers was a mistake. Furthermore, other than that the mistake may have deprived the respondent, on the face of it, the immediate opportunity to automatically rely on the case authorities aforesaid, and other than that the mistake may have inconvenienced both the respondent and the court, I find no other discernible prejudice caused to the respondent. Therefore, the applicant’s mistake in referring to s 98(14) of the Labour Act in its heading to its application is excused. The application to amend the heading by deleting the reference to s 98(14) of the Labour Act is hereby granted. However, excusing the applicant for the mistake aforesaid does not altogether determine the point in issue. If s 98(14) of the Labour Act and art 35 of the Arbitration Act are in pari materia, as I believe they are, then, in my view, a legal finding on the one should be relevant to the other. I find myself in agreement, with all due respect, with the views of MAKARAU J, as she then was, in Mandiringa & Ors, and CHIWESHE JP, in Herbert Sauramba & Ors. In casu, paragraph (c) of the arbitral award was undoubtedly incomplete. If an award is one that must sound in money and it is not, then, in my view, it is incapable of registration. HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 It is incomplete. In this case, if the parties went for arbitration to determine the nature and quantum of the terminal package due to the applicant, then it is rather surprising that they came out of that arbitration with only two-thirds of the award having been quantified. An order that an employer must pay his ex-employee cash-in-lieu of the leave due to him and not taken for the period in question is not complete. Mr Chagonda argued that it was complete, because the leave days and their sum total were both capable of easy ascertainment. But that kind of approach is precisely what was rejected in the cases referred to above. In particular, in Mandiringa & Ors, MAKARAU J said3: “The awards did not compute the loss that each employer had to make good even if he chose to reinstate the respective applicant. It is conceded that while such computations are relatively easy by comparing what a similarly placed employee received in emoluments over the same period, the issue remains that the quantum thereof is not part of the award made and was not determined as part of the arbitration proceedings in the presence of both parties. It was not agreed upon in any one of the matters.” (my emphasis) I agree with the learned judge’s approach. In casu, paragraph (c) of the arbitral award did not specify the period the leave was due to the applicant. It did not specify the number of those leave days. Naturally, it did not specify the quantum. It did not state what the respondent’s leave policies were. Before me, none of the parties said they were agreed on any of these items. Thus, the field for potential disagreement on them in the future was vast. Mr Chagonda argued that this did not render the award incapable of registration. He conceded that it was not possible to sue out a writ of execution to enforce that part of the award if it remained in that from. However, he argued that the parties could always go back to the arbitrator for clarification if a dispute subsequently arose. But that precisely is the problem. The award was simply incomplete. Mr Chagonda’s approach would entail the registration application being made and being heard twice. In my view, there was no conceivable basis for overburdening this court like that. The applicant simply had to submit for registration an award that was complete. Therefore, I hold that paragraph (c) of the arbitral award by Retired Justice Smith on 28 June was incapable of registration as an order of this court because it was incomplete, more particularly in that it did not sound in money. However, holding that paragraph (c) of the award by the arbitrator was incapable of registration as an order of this court begs the further question, namely whether it could be 3 At p 334B - C HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 split or severed so that paragraphs (a) and (b) could be registered and (c) rejected. This point did not squarely arise either at the hearing or in the papers. The nearest reference to it was in the respondent’s heads of argument. After arguing that no remedy may be fashioned outside the provisions of the Arbitration Act and that neither can be availed by the court, paragraph 2.3 of the respondent’s heads of argument went on to declare that the request to register paragraph (c) of the award had to be refused. The submission seems to imply severability of the award. In context, the respondent was objecting to the registration of the arbitral award as a whole, and not just paragraph (c) thereof. However, with regards to paragraphs (a) and (b), the objection was that no PAYE tax had been provided for. Thus, the argument that the award did not sound in money was peculiar to paragraph (c) only. So the argument did not address the question of severability. Article 36 of the Arbitration Act provides the grounds upon which the recognition or enforcement of arbitral awards may be refused by this court. One of them, in sub-article (1) (a)(iii), is that if the award deals with a dispute not contemplated by, or not falling within the terms of the submission to arbitration, or if the award contains decisions on matters beyond the scope of the submission to arbitration, then recognition or enforcement may be refused. It is the proviso to sub-paragraph (iii) of paragraph (a) of sub-article (1) of art 36 that permits the severability of an award. It says: “[P]rovided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced …”: In Confederation of Zimbabwe Industries v Mbatha4 MATHONSI J said that the article allows the severance of an offending part of the award where appropriate. However, other than art 36(1)(a)(iii) aforesaid (and art 34(2)(a)(iii), which says the same thing on the same subject matter, but in the context of an application to set aside an arbitral award) I have found no other provision dealing with the severability of an arbitral award for the purpose of registration with this court. The situation dealt with by art 36 (and art 34) and the judgment in Mbatha is different from the one in the present matter. In the 4 HH125-15 HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 present matter, the award by Retired Justice Smith did not deal with a dispute not contemplated by, or falling within the terms of the submission to arbitration. It did not contain decisions on matters beyond the scope of the submission to arbitration. It was simply incomplete in part. So, did this render the whole award incapable of registration? The question is not a moot point. The award sought to be registered was not made by this court. It was made in another forum. The governing legislation does not provide for divisibility of awards made elsewhere when they are submitted for registration with this court. If only paragraphs (a) and (b) of the award are registered they become an order of this court. But to split the award in that manner would amount to transforming the arbitral award of the arbitrator. I do not think the court can do that. In my view, it does not matter that each of the paragraphs in the award seems to be stand-alone orders that deal with different heads of emoluments due to the applicant, and thus seem complete by themselves. But if only paragraphs (a) and (b) are registered at this stage, then the applicant may have to come back again sometime for the registration of paragraph (c) if he eventually gets it quantified. This then goes back to the point about the registration application having to be determined by this court piece meal. It serves to emphasize the incompleteness of the award. The applicant brought this application prematurely. The respondent argued that having seen that paragraph (c) of the award did not specify the amount, the applicant should have proceeded in terms of art 33 of the Arbitration Act. This article provides for the correction and interpretation of an award within thirty days of the receipt of the award, or within a longer period as may be agreed upon by the parties. In paragraph (a) of sub-article (1) a party may, on notice to the other, request the arbitrator to, inter alia, “… give an interpretation of a specific point or part of the award.” If the arbitrator considers the request to be justified it shall make the correction or give the interpretation within thirty days of the receipt of the request. It was not explained why the applicant did not avail himself of this provision. Now, with the view that I have taken in respect of the respondent’s objection No. 1, it is no longer necessary to deal with the rest of the other objections, namely whether or not the award should have specified the amount of PAYE tax payable and whether or not set-off should apply. HH 707-15 HC 11614/12 HH 707-15 HC 11614/12 DISPOSITION In this matter, paragraph (c) of the arbitral award by Retired Justice Smith dated 28 June 2012 relating to the payment of cash-in-lieu of leave is not capable of registration as an order of this court as it is incomplete, more particularly in that it does not sound in money, the amount due not having been specified. Not being an order of this court, and there being no provision in law for the severability or separation of this type of award so as to register it in part for the purpose of enforcement, the arbitral award as a whole is therefore not capable of registration. In the circumstances, the application is dismissed with costs. 19 August 2015 Atherstone & Cook, applicant’s legal practitioners Dube, Manikai & Hwacha, respondent’s legal practitioners