ZIMASCO v PORTNEX International (Proprietary) Limited (208 of 2024) [2024] ZWHHC 208 (28 May 2024)

1 HH 208 - 24 HC 2455/22 ZIMASCO (PRIVATE) LIMITED versus PORTNEX INTERNATIONAL (PROPRIETARY) LIMITED and C. H. LUCAS N. O. HIGH COURT OF ZIMBABWE CHINAMORA J HARARE, 28 May 2024 Opposed court application Adv D Tvadar, for the applicant Adv T Mpofu with Adv M Ndlovu, for the first respondent CHINAMORA J: This is an application for registration of an arbitral award made in terms of Article 35 of the Arbitration Act [Chapter 7:15]. The award the applicant seeks to have registered was handed down by Honourable Arbitrator Lucas on the 29th of March 2022. The applicant wants to register the said award and the bill of costs for enforcement purposes. The facts giving rise to this application are as follows: Sometime in 2015, the applicant and the respondent executed a lease agreement in terms of which the applicant leased to the respondent its West Plant Furnaces and associated infrastructure. The lease was replaced by a similar lease in 2017. The respondent failed to pay the lease fees, various operating costs and services rendered to it by the applicant in terms of the agreement. In addition, upon the expiry of the lease the respondent was obliged to return the Plant and Equipment in a ‘similar state of operability and maintenance’ but subject to ‘fair wear and tear’. In breach of its obligations under the lease agreement, the respondent failed to discharged the obligations nor did it rectify the breach. Consequently, the matter was referred to Arbitration before Honourable Arbitration Luca and the referral was in terms of the lease agreement. The arbitration proceedings culminated in an arbitral award, which is attached to the application as Annexure C. Consequently, the applicant seeks the following order: HH 208 - 24 HC 2455/22 (a) the application for the recusal of the arbitrator was dismissed with costs. (b) the respondent’s counterclaim for the payment of the sums of US$1 215 014.50 and ZAR 121 833.57 and ZWL$ 176 881.30 was dismissed with costs. (c) the respondent was ordered to pay the Claimant the sum of US$ 1 914 177.00 together with interest thereon calculated at 12% per annum as from 31 December 2020 to date of payment in full. (d) further the respondent was ordered to pay the Claimant’s costs of suit. (e) the respondent was also ordered to pay the arbitrator’s costs, including the arbitrator’s cost awarded against the respondent as specified in the Award for its Objection in limine amounting to US$ 2 250 00. The said bill of costs amounts to US$ 13 000.00. (f) the Claimant is entitled to recover from the respondent the above arbitrator’s costs which were covered by the deposits paid to the arbitrator by the Claimant, less US$ 1 250.00 deposited by the Respondent. The respondent opposed the application, and started by giving a historical background to the following effect. The respondent is a company with limited liability incorporated in South Africa with a branch registered as a foreign company in Zimbabwe and is currently under business rescue proceedings. The respondent contends that the arbitral proceedings from their inception were fraught with procedural irregularities. As a consequence, the award was invalid and a nullity, therefore, could not stand. The respondent argues that it raised an objection in limine which was dismissed by the arbitrator. Furthermore, the respondent denied being in breach of the lease agreement. It submits that upon vacating the premises, the plant and equipment were returned as agreed. In the result, the respondent prayed that the application be dismissed with costs. It is settled law that Article 35 of the Arbitration Act [Chapter 7:15], inter alia, provides as follows: “(1) An arbitral award, irrespective of the country in which it was made, shall be recognized as binding and, upon application in writing to the High Court, shall be enforced subject to the provisions of this article and of article 36.” (2) The party relying on an award or applying for its enforcement shall supply the duly authenticated original award or a duly certified copy thereof and the original arbitration HH 208 - 24 HC 2455/22 agreement referred to in article 7 or a duly certified copy thereof. If the award or agreement is not made in the English language, the party shall supply a duly certified translation into the English language.” From the papers before me, it is evident that the applicant satisfied the procedural requirements set out in Article 35 (2) of the Arbitration Act hence the respondent did not raise objections with regard to the said point. It follows, the award should be registered. The respondent in its opposing affidavit failed to raise any recognizable legal basis on which registration may be resisted. In essence, the respondent failed to plead facts which invoke Article 36 of the Arbitration Act, consequently, registration of the award in question becomes mandatory. In Gwanda Rural District Council vs. Lourens Marthinus Botha SC 174-20, the Supreme Court held that: “Before delving into the merits or otherwise of the grounds of appeal, I pause to observe that when presiding over the registration of an arbitral award, the court a quo had very limited jurisdiction. This is mainly because its function was merely to register the arbitral award for purposes of enforcement…Thus in terms of applicable law an application for the registration of an arbitral award is granted upon its mere presentation, authentication and production of the original arbitration agreement subject to the provisions of article 36…”. It is on the strength of the above decision that I am satisfied that that the award ought to be registered. Let me add in elaboration that, the applicant presented before me an authenticated arbitral award, and this was not disputed by the respondent. Furthermore, the respondent did not plead facts relevant to invoke the provisions of Article 36 of the Arbitration Act. In the result, I see no reason for not affording the relief sought. Accordingly, it is therefore ordered that the award by Mr. Lucas be and is hereby registered for enforcement with the first respondent paying costs on an ordinary scale. CHINAMORA J:…………………………………. Gill, Godlonton & Gerrans, applicant’s legal practitioners Madzima, Chidyausiku, Museta, respondent’s legal practitioners