Bekimpilo Gumbo v The Gas Boys (Private) Limited and The Honourable Mr. David Whatman N.O.

In May 2019, the applicant (Bekimpilo Gumbo) and the first respondent (The Gas Boys (Private) Limited) entered into a commercial agreement whereby the first respondent leased haulage trucks to the applicant at a rental fee of ZAR 100,000 per month. The agreement contained an arbitration clause (clause 26). The applicant failed to make the required payments, leading the first respondent to cancel the agreement and recall the trucks. After an initial court action (HC 9692/19) was withdrawn, the parties attempted out-of-court settlement which failed. The first respondent then pursued arbitration as per their agreement. The parties could not agree on an arbitrator, so the Commercial Arbitration Centre appointed the second respondent (Mr. David Whatman). In the arbitral proceedings, the applicant raised preliminary objections challenging the arbitrator's jurisdiction on the basis that the agreement was unlawful because it was denominated in foreign currency (South African Rand), allegedly contrary to Zimbabwean law. The arbitrator ruled against the preliminary objection, finding he had jurisdiction. The applicant then approached the High Court seeking to set aside the arbitrator's ruling, arguing it violated public policy.

• Whether the arbitrator's ruling on jurisdiction constituted an 'arbitral award' subject to review under Article 34 of the Model Law (Arbitration Act)
• Whether an arbitrator's decision on his own jurisdiction can be challenged before the High Court as a preliminary question or only after an award on the merits
• Whether the arbitrator's decision to assume jurisdiction was contrary to the public policy of Zimbabwe
• Whether a contract denominated in foreign currency rendered the arbitration agreement unlawful and deprived the arbitrator of jurisdiction
• Whether the doctrine of separability applied to preserve the arbitration agreement even if the main contract was allegedly illegal

The application to set aside the arbitral award was dismissed with costs. The parties were directed to return to arbitration to enable the second respondent (arbitrator) to continue with the proceedings.

An arbitrator's ruling on jurisdiction constitutes an arbitral award capable of review under Article 34 of the Model Law where it is a formal decision that resolves a dispute (including a dispute about jurisdiction) wholly or in part. The doctrine of separability means that an arbitration clause is autonomous from the main contract and confers jurisdiction on the arbitrator even where the main contract is alleged to be illegal or void. An arbitral award will only be set aside on public policy grounds where it violates a fundamental principle of law, morality, or justice and is palpably inequitable; mere incorrectness in law or fact is insufficient. Courts must apply a restrictive approach to setting aside arbitral awards to preserve the finality and autonomy of arbitration. The principle of kompetenz kompetenz gives arbitrators jurisdiction to rule on their own jurisdiction, and courts should be reluctant to interfere with such determinations unless they violate public policy in the strict sense.

The court noted that Article 16(3) of the Model Law is worded in a confusing manner as it suggests an arbitrator can rule on jurisdiction either as a preliminary question or in an award on the merits, but these options are mutually exclusive. The court expressed the view that logically, jurisdictional challenges must be resolved before proceeding to the merits, as it would be illogical for an arbitrator to hear a case on the merits only to later rule he had no jurisdiction. The court observed that the alleged illegality of the contract (being denominated in foreign currency) would be very difficult to prove, particularly since the contract was signed in May 2019 during the multi-currency regime, before SI 142/2019 made the Zimbabwean dollar sole legal tender in June 2019. However, the court emphasized it was not deciding the case on this basis. The court also commented that while the arbitrator's ruling was 'inelegantly written,' this was the only blemish and did not affect its validity or rationality. The court noted the congestion in Zimbabwean courts and emphasized that arbitration exists to complement the formal court system by providing expeditious dispute resolution, and courts should not wantonly interfere with arbitration proceedings.

This case is significant in Zimbabwean arbitration law as it: (1) Provides judicial clarification on what constitutes an 'arbitral award' under the Arbitration Act and Model Law, establishing that interlocutory rulings on jurisdiction are reviewable awards; (2) Affirms the restrictive approach to setting aside arbitral awards on public policy grounds, requiring palpable inequity rather than mere legal incorrectness; (3) Endorses and applies the doctrine of separability, confirming that arbitration clauses are autonomous from the main contract and survive even if the main contract is void or illegal; (4) Recognizes the principle of kompetenz kompetenz, affirming that arbitrators have jurisdiction to rule on their own jurisdiction; (5) Reinforces the sanctity of arbitration agreements and the court's reluctance to interfere with the arbitration process; (6) Provides guidance on the courts' supportive role in upholding arbitration as an alternative dispute resolution mechanism. The judgment strengthens the pro-arbitration approach in Zimbabwe and limits grounds for court interference in arbitral proceedings.