Grainco (Private) Limited v Gardner Magandi and Jean Maguranyanga N.O.

The applicant and 1st respondent concluded a maize financing agreement under which the applicant advanced US$40,000 to the 1st respondent. The 1st respondent was to deliver a minimum of 1,800 tonnes of maize for sale to the applicant, with the price to be determined based on prevailing rates. The applicant was entitled to recover the principal amount, management fees calculated at 4% of the minimum tonnage, and applicable interest. The agreement contained an arbitration clause providing that disputes would be referred to a single arbitrator appointed by the Chairperson of the Commercial Arbitration Centre, and that the arbitrator's decision would be "final and binding" on both parties. The 1st respondent failed to deliver the contracted maize and did not repay the funds advanced. On 31 October 2024, the 2nd respondent (arbitrator) issued an arbitral award in favour of the applicant ordering payment of the principal, management fees, and interest. The 1st respondent initiated review proceedings on 13 December 2024 under Rule 62 of the High Court Rules, 2021, alleging breaches of natural justice and procedural irregularities by the arbitrator.

• Whether the application for review of an arbitral award is competent in circumstances where the parties agreed that the arbitrator's decision would be final and binding
• Whether the High Court has review jurisdiction over arbitration proceedings conducted under the Arbitration Act [Chapter 7:15]
• Whether the proper remedy against an arbitral award is limited to an application to set it aside under Article 34 of the Model Law rather than review proceedings under Rule 62
• Whether the arbitral award should be registered and enforced under Article 35 of the Model Law

1. The application for review (HCH5693/24) was struck off the roll. 2. The arbitral award issued by the 2nd respondent on 31 October 2024 (annexure JC6) was registered as an order of court. 3. The arbitral award issued by the 2nd respondent on 20 February 2025 (annexure JC8) was registered as an order of court. 4. The 1st Respondent was ordered to: (i) pay USD40,000.00 or the equivalent in local currency at the prevailing inter-bank rate; (ii) pay USD24,120.00 as management fees; (iii) pay interest on both amounts at 16% per annum, compounded monthly and calculated daily from 15 May 2023 to date of final payment; (iv) pay the applicant's costs of the arbitration proceedings. 5. The 1st respondent was ordered to bear the costs of suit on the punitive scale.

1. An arbitration clause in a contract providing that the arbitrator's decision shall be final and binding is binding on the parties, and a party is not at liberty to resile from that clause at will. 2. Where parties have agreed to arbitration with finality provisions, an application for review under the High Court Rules is not a competent remedy against an arbitral award. 3. Under the Arbitration Act [Chapter 7:15] and the Model Law, the only recourse against an arbitral award is an application to set it aside in accordance with Article 34 of the Model Law. 4. The High Court's jurisdiction in relation to arbitral awards is limited to recognizing and registering such awards under Article 35 of the Model Law; the court does not function as a reviewing body or a court of appeal in arbitration matters. 5. Parties cannot unilaterally abandon their contractual commitments, and the principle against "running away from one's signature" applies with particular force in commercial arbitration agreements.

The court made the observation that "running away from one's signature is frowned upon, and rightly so in the corporate world," emphasizing the importance of upholding contractual commitments in commercial dealings. The court also noted that the 1st respondent's argument that he was "free to choose which law to apply when seeking recourse" was misconceived, as the applicable law and procedure for challenging arbitral awards is specifically prescribed by the Arbitration Act and Model Law, not left to the discretion of the dissatisfied party. While the 1st respondent alleged various procedural irregularities and breaches of natural justice by the arbitrator (including dismissing an application for absolution, allowing introduction of additional evidence without notice, and failing to provide reasons), the court did not substantively address these allegations, as the review application was found to be incompetent as a matter of law.

This case is significant in Zimbabwean arbitration law as it reinforces the principle of finality in arbitration agreements and clarifies the limited scope of judicial intervention in arbitration proceedings. The judgment emphasizes that where parties have contractually agreed that an arbitrator's decision shall be final and binding, they cannot subsequently seek to review that decision through ordinary court processes. The case confirms that the only competent remedy against an arbitral award under the Arbitration Act [Chapter 7:15] and the Model Law is an application to set aside under Article 34, not a review application under the High Court Rules. This promotes certainty in commercial arbitration and upholds the principle of pacta sunt servanda (agreements must be kept) in the context of alternative dispute resolution. The case also demonstrates the court's role as limited to recognition and registration of arbitral awards, rather than functioning as a reviewing body or court of appeal over arbitration proceedings.