Olcraft (Pvt) Ltd v F.C. Platinum & Anor (HC 6553 of 2012) [2015] ZWHHC 529 (23 June 2015)

1 HH 529-15 HC 6553/12 OLCRAFT (PRIVATE LIMITED t/a FLORA UNLIMITED versus F C PLATINUM and MIMOSA MINING COMPANY (PRIVATE) LIMITED HIGH COURT OF ZIMBABWE TAKUVA J HARARE, 5 November 2013 and 15 October 2014 & 24 June 2015 Opposed Application A. M. Mvuu, for the applicant F. Chimwamurombe, for the respondents TAKUVA J: The plaintiff and the first defendant entered into a contract in which the plaintiff was to carry out general maintenance of first defendants soccer pitch at Mandava Stadium in Zvishavane. In terms of the agreement between the parties any dispute arising from their agreement would be solved through arbitration. The second defendant was not party to the agreement between the plaintiff and the first defendant. The defendants filed a special plea based on two points of law namely: (a) Lack of locus standi on the part of the second defendant, and (b) Lack of jurisdiction, on the part of this court to entertain the dispute between the plaintiff and the first defendant. At the hearing of the matter, Mr Mvuu for the plaintiff conceded in respect of the misjoinder that indeed the second defendant had been improperly joined. He indicated that the plaintiff had withdrawn its case against the second defendant. Mr Chimwamurombe for the defendants confirmed that position. The only issue left for consideration was the question of lack of jurisdiction. In this regard, it was contended as follows: (a) Clause 13 of the agreement between the plaintiff and the first defendant provides for a dispute resolution mechanism. It states: “If after fifteen (15) working days from the commencement of such internal negotiations, the parties have been unable to resolve the dispute amicably; either of the parties may refer the dispute for arbitration by written notice to the other party”. HH 529-15 HC 6553/12 (b) It is trite law that the courts will always uphold the principle of the sanctity of contracts unless there are special circumstances justifying a departure. See Edgars Stores Managers’ Association v Edgars Stores Ltd SC 103/04, See also PTA Bank v Elanne (Pvt) Ltd 2000 (1) ZLR 156. (c) The parties should respect and follow that dispute resolution mechanism which they chose for themselves – see Cargill Zimbabwe v Culveham Trading (Pvt) Ltd HH 42/06. (d) The court should dismiss the plaintiff’s claim with an order of punitive costs as the plaintiff is not only abusing court process but also put the defendants to unnecessary legal expense in defending themselves against an unwarranted action. The plaintiff’s counsel submitted that this court has inherent jurisdiction which cannot be ousted by an arbitration clause. Reliance was placed on the following cases: Chunguete v Minister of Home Affairs and Ors 1990 (2) SA 836, Chawora v The Reserve Bank of Zimbabwe HH 59-06. Cargill v Culvenham Trading (Pvt) Ltd HH 42/2006 and Thornton v McKrezie and Ors HH 84/06. The issue here is whether or not clause 13.1.2 of the agreement is an arbitration agreement in terms of article 7 of the First Schedule of the Arbitration Act [Chapter 7:15]. The article states; “DEFINITION AND FORM OF ARBITRATION AGREEMENT (1) “ARBITRATION AGREEMENT” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (2) The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract.” (my emphasis). Article 8 of the same Act states: “ARBITRATION AGREEMENT AND SUBSTANTIVE CLAIM BEFORE COURT (1) A court before which proceedings are brought in a matter which is the subject of an arbitration agreement, shall, if a party so requests not later than when submitting his statement on the substance of the dispute, stay those proceedings and refer the parties to HH 529-15 HC 6553/12 arbitration, unless it finds that the agreement is null and void, in operative or incapable of being performed” (my emphasis). In casu, clause 13.1.2 of the agreement states: “If after fifteen (15) working days from the commencement of such informal negotiation, the parties have been unable to resolve the dispute amicably, either party may refer the dispute for arbitration by written notice to the other party”. (my emphasis). In Edgars Stores Managers Association v Edgars Stores Ltd SC 103/04 Chidyausiku CJ held that; “Whether a dispute falls within the ambit of an arbitration clause is primarily a question of interpretation. If a clause does fall within the ambit of the arbitration clause then the court must stay the proceedings and refer the matter to arbitration”. The Learned Chief Justice while interpreting a clause couched in the following terms: “In the event that the representatives of the Edgars Group and the Managerial Employees Committee are unable to reach agreement on any subject of debate then, the matter shall be referred to external voluntary arbitration. The determination of the arbitrator shall be binding on both parties”, held that such a clause was an arbitration agreement in terms of article 7. He stayed the proceedings and referred them to arbitration. See also Independence Mining (Pvt) Ltd v Fawcett Security Operations (Pvt) Ltd 1991(1) ZLR 268, Zimbabwe Broadcasting Corp. v Flame Lily Broadcasting (Pvt) Ltd 1999(2) ZLR 448 and PTA Bank v Elanne (Pvt) Ltd 2000 (1) ZLR 156. Applying these principles to the current case, I am of the view that the special plea regarding absence of jurisdiction cannot succeed for two reasons; 1. Clause 13.1.2 of the agreement does not amount to an arbitration clause properly so called as it uses the word “may” instead of “shall”. It therefore does not oust the court’s inherent jurisdiction to entertain the matter. 2. In any event the purported agreement is not valid for want of signatures. On this basis, I am satisfied that there is no merit in the special plea and it is hereby dismissed with costs. Gunje and Chasakara Law Firm, plaintiff’s legal practitioners Danziger & Partners (Gweru), 1st & 2nd defendants’ legal practitioners