Harare Sports Club v Zimbabwe Cricket

The applicant (Harare Sports Club) and the first respondent (Zimbabwe Cricket) entered into a notarial lease agreement on 16 July 1999 for property known as Harare Sport Club. The agreed monthly rent was initially Z$40,000, which changed to USD$170 per month upon introduction of multiple currency. The parties maintained a cordial relationship for 10 years. Disputes arose after the currency change regarding the quantum of monthly rentals. The applicant claimed USD$170 was a token rental pending negotiations and that rent was increased to USD$3,000 in April 2015. The first respondent maintained that USD$170 was the agreed rental and that rent was deliberately low because it was responsible for making improvements to the property, which would be set off against rentals under clause 5(c) of the lease. The parties failed to mutually agree on appointing an arbitrator to resolve their disputes as contemplated in the lease agreement.

• Whether the court has power to authorize the second respondent (Commercial Arbitration Centre) to appoint an arbitrator where parties have agreed on an appointment procedure but failed to implement it
• Whether the dispute should be referred to the Commercial Rent Board rather than arbitration
• Whether a dispute existed between the parties
• The proper interpretation of Article 11(4) of the Arbitration Act [Chapter 7:15] and the phrase 'necessary measure'
• Whether the court can delegate its appointment power to the Commercial Arbitration Centre

The application was granted as prayed. The court authorized the second respondent (Commercial Arbitration Centre) to appoint an arbitrator to determine the disputes between the parties.

Where parties have contractually agreed on a procedure for appointing an arbitrator but one party fails to act as required under that procedure, and the agreement provides no other means for securing the appointment, the High Court has power under Article 11(4) of the Model Law Schedule (Arbitration Act Chapter 7:15) to take 'necessary measures' which includes authorizing an arbitration institution to appoint the arbitrator. The phrase 'necessary measure' must be interpreted broadly in light of the court's inherent jurisdiction to avoid absurd results and ensure that disputes subject to agreed arbitration procedures can be resolved. The principle of sanctity of contract requires that parties adhere to their contractually agreed dispute resolution mechanisms, and courts will enforce such agreements where freely and voluntarily entered into.

The court observed that the lease agreement was a well thought out document but contained a shortcoming in that it failed to provide for all possible eventualities, particularly what would happen where parties failed to mutually agree on appointing an arbitrator. The court noted that parties who commenced discussing rent in 2009 cannot genuinely claim to still be negotiating the same matter six years later. The court also observed that the legislature, in its wisdom, could not have inserted into the Act a clause (Article 11(4)) which served no purpose, and that it remained alive to the inherent jurisdiction of the court in allowing it wide discretion to deal with such matters. The court commented that the law is not crafted to produce absurd results.

This case is significant in Zimbabwean arbitration law as it clarifies the scope of the High Court's powers under Article 11(4) of the Model Law Schedule of the Arbitration Act [Chapter 7:15]. It establishes that the court's power to take 'necessary measures' extends beyond merely appointing an arbitrator directly, and includes authorizing an arbitration institution to make such appointment where parties have agreed on a procedure but failed to implement it. The case reinforces the principle of sanctity of contract in the context of contractual arbitration clauses and demonstrates judicial willingness to facilitate arbitration where parties have contractually agreed to that dispute resolution mechanism. It also clarifies that disputes involving interpretation of lease terms, breach, and parties' rights and obligations fall within arbitration jurisdiction rather than the Commercial Rent Board, even where rent is an issue.