Buywest Investment (Private) Ltd v Hunyani Forests Limited

The parties entered into an agreement of sale on 21 September 2018 for the sale of machinery and equipment. The plaintiff paid the full purchase price of US$60,000 plus 15% VAT. In terms of clause 4 of the agreement, the plaintiff was required to dismantle and remove the equipment from the defendant's premises within 90 days from receipt of the full purchase price, failing which the defendant reserved the right to repossess the equipment without compensation. The plaintiff collected some equipment but left some on the premises. The defendant later barred the plaintiff from collecting the remaining equipment and repossessed it. Clause 10 of the agreement provided that any dispute arising from the agreement should be referred to arbitration. By July 2021, the matter had been referred to arbitration before Justice Mtshiya (Rtd), with a pre-arbitration hearing set for 21 July 2021. Notwithstanding the pending arbitration, the plaintiff issued summons on 3 September 2021 seeking, inter alia, a declaration that clause 4 was invalid and that the plaintiff was the rightful owner of the equipment.

• Whether the court had jurisdiction to hear the matter in light of the arbitration clause in the agreement
• Whether the doctrine of lis pendens applied given that arbitration proceedings were already pending between the parties on the same subject matter
• Whether clause 4 of the agreement allowing repossession without compensation was contrary to public policy and thus outside the scope of arbitration
• Whether Article 8(1) of the Arbitration Act required the court to stay proceedings and refer the parties to arbitration

The special plea was upheld and the plaintiff's application was struck off with costs on the legal practitioner and client scale.

Where parties have entered into a valid arbitration agreement and arbitration proceedings are already pending before a competent tribunal concerning the same subject matter between the same parties, the court will uphold a special plea of lis pendens and decline jurisdiction. A party cannot circumvent an arbitration agreement by instituting court proceedings after arbitration has already commenced. The doctrine of lis pendens applies where there are two actions between the same parties, concerning the same subject matter, and founded on the same cause of complaint. A challenge to the validity of a substantive clause of an agreement (as opposed to the arbitration clause itself) does not oust the jurisdiction of the arbitrator and should be raised as a preliminary point before the arbitrator. Article 8(1) of the Arbitration Act applies where a party requests referral to arbitration before submitting their first statement on the substance of the dispute, not where arbitration is already underway.

The court observed that while the High Court has jurisdiction under section 14 of the High Court Act to hear applications such as the plaintiff's, this general jurisdiction is subject to the parties' agreement to arbitrate and the principle against duplicative proceedings. The court noted that clauses 4 and 10 of the agreement were clear and unambiguous and needed no interpretation. The court commented that parties are bound by the terms and conditions of their agreement, no matter how onerous they may be. The court also observed that a challenge on jurisdiction on the ground of public policy can only be sustained after a finding has been made to that effect, suggesting that such determinations are fact-intensive and require proper consideration of evidence.

This case illustrates the Zimbabwean courts' approach to enforcing arbitration agreements and upholding party autonomy in contractual dispute resolution. It demonstrates that where parties have agreed to arbitration, the courts will not entertain parallel proceedings on the same subject matter, particularly where arbitration proceedings are already underway. The case reinforces the doctrine of lis pendens in the context of arbitration and clarifies that challenges to the validity of specific clauses (as opposed to the arbitration agreement itself) should be raised before the arbitrator rather than circumventing the arbitration process through court proceedings. The award of costs on a higher scale signals the court's disapproval of parties attempting to bypass agreed arbitration mechanisms.