Bitumat Limited and Venus Independent Petroleum Services (Private) Limited v Paramount Motors (Private) Limited t/a Belleview Service Station and Stephen Tshuma

The applicants (Bitumat Limited and its subsidiary Venus Independent Petroleum Services) entered into an agreement dated 23 May 2008 with the first respondent (Paramount Motors) for the supply of fuel for retail at the first respondent's fuel outlets. The second respondent was cited as surety and guarantor. A dispute arose regarding whether the first respondent was obliged to remit monies to the applicants from fuel sales proceeds. The applicants sought to refer the matter to arbitration under clause 14.2 of the agreement, which provided for disputes to be referred to "the Arbitration Forum of Zimbabwe". The Chairperson of the Commercial Arbitration Centre in Harare declined to appoint an arbitrator, stating that the Commercial Arbitration Centre was not the entity named in the agreement. The applicants alleged outstanding amounts of US$5,051.50 for petrol and US$6,311.00 for diesel. The respondents challenged the contract's legality on the basis that the authority to sell fuel in foreign currency had not extended to them.

• Whether the contract between the parties was illegal for lack of authority to sell fuel in foreign currency
• Whether clause 14.2 of the agreement referring to the 'Arbitration Forum of Zimbabwe' (a non-existent body) rendered the arbitration clause void for vagueness
• Whether the court could rectify the arbitration clause to substitute the correct name of the arbitration body
• Whether the court should determine the issue of illegality at this stage or leave it to the arbitrator
• Whether an order could be granted against the Chairperson of the arbitration centre who was not a party to the proceedings

The application for rectification of clause 14.2 of the agreement succeeded. The "Arbitration Forum of Zimbabwe" referred to in clause 14.2 was substituted with the "Commercial Arbitration Centre in Harare". The first respondent was ordered to pay the costs of the application. The prayer for an order directing the Chairperson to appoint an arbitrator was refused.

A court has the power to rectify a written contract where it fails to express accurately the true mutual intention of the parties, even where the parties have used an incorrect name or omitted words, provided the court is giving effect to the parties' intention and not writing a new contract for them. When interpreting contractual clauses, words must be construed in the context of the whole agreement to ascertain the parties' mutual intention at the time of contracting. A misnomer or technical error in naming a body responsible for arbitration does not negate the parties' clear intention to resolve disputes through arbitration, and the court may substitute the correct entity to give effect to that intention. Where only one arbitration centre exists in the jurisdiction, this must be presumed to be the body the parties intended to reference, even if incorrectly named.

The court made several non-binding observations: (1) The second respondent ought not to have been cited in proceedings concerning only the interpretation of the arbitration clause, as the matter did not inquire into the parties' substantive rights and obligations under the contract. (2) Any remarks by the court on whether the first respondent was duty-bound to remit monies to the applicants would be obiter, as the court was not seized with that issue. (3) The court noted that the contract was apparently not drafted with the assistance of legal practitioners, which explained the error in naming the arbitration body. (4) The court observed that on the face of it, based on the documents presented, the contract appeared legal, but this did not preclude the arbitrator from making a contrary finding after hearing all parties. (5) The court noted that the relief should have been framed as rectification rather than a declaratory order. (6) The court commented on the 'in pari delicto' rule and cited Dube v Khumalo regarding when courts will relax this rule to prevent unjust enrichment, though ultimately found this unnecessary to decide.

This case is significant in Zimbabwean (and by extension South African) contract law for its exposition of the principles governing rectification of contracts. It demonstrates the courts' willingness to reform written contracts where there is a clear mutual intention of the parties that has been inaccurately expressed due to mistake, slip of the pen, or inaccuracy in expression. The judgment affirms that courts will interpret contracts as a whole to give effect to the parties' true intentions, and that a technical error or misnomer (such as naming a non-existent arbitration body) will not defeat the clear intention to arbitrate disputes. It also illustrates the proper approach to allegations of illegality in the context of arbitration clauses - that courts should make a preliminary assessment but leave full determination to the arbitrator where evidence is required.