Helensville Construction (Pvt) Ltd v Kadoma City Council

The parties entered into a contract worth $102,584 wherein the plaintiff was required to rehabilitate Cameroun Square over a two-month period. On 21 June 2017, the defendant terminated the contract based on alleged breach by the plaintiff. The defendant undertook to pay for works done up to termination, less amounts due to defendant. The plaintiff presented an invoice for $34,378.06 which remained unpaid. The plaintiff then issued summons claiming payment of $34,378.06 for services rendered and $50,441.49 in damages for breach of contract. The contract contained clauses 24 and 25 in Annexure 3 providing for dispute resolution through adjudication and potential arbitration, but only for disputes relating to decisions made by the project manager. Clause 14 of the contract provided for remedies in case of default by either party, including the right to sue for specific performance or breach of contract.

• Whether the dispute resolution mechanism in clauses 24 and 25 of Annexure 3 to the contract ousted the court's jurisdiction
• Whether there was a clear and unequivocal arbitration clause that required the matter to be referred to arbitration before approaching the court
• Whether a dispute existed that triggered the adjudication/arbitration process under the contract
• Whether the plaintiff was required to file a replication to the special plea
• Whether the special plea was prematurely raised

The special plea was dismissed with costs on the ordinary scale in favor of the plaintiff.

For an arbitration clause to oust the court's jurisdiction: (1) the clause must be clear and unequivocal, worded in imperative rather than permissive terms; (2) an actual dispute must exist and be identifiable from the pleadings - it cannot be presumed from entering appearance to defend or raised in heads of argument; (3) the dispute must fall squarely within the scope of matters covered by the arbitration clause; (4) where a contract clause grants a project manager decision-making authority on behalf of one party, and the arbitration mechanism only applies to disputes about those specific decisions, a claim for non-payment or breach of contract does not automatically trigger that arbitration mechanism; (5) where a contract contains separate provisions dealing with breach and default that provide for the right to sue, such provisions may operate independently from dispute resolution clauses relating to contract administration and supervision.

The court made observations that: (1) while it is incumbent upon a plaintiff to file a replication to a special plea to inform the court of grounds of challenge, it is within the court's discretion to order such filing if deemed necessary, particularly where the rules do not provide for filing of a replication; (2) where heads of argument sufficiently traverse the grounds of opposition, the court may decline to exercise discretion to order a replication; (3) the jurisdiction of the court is inherent and will not be lightly interfered with; (4) whether the plaintiff's substantive claim for payment and damages will succeed is not an issue to be decided on a special plea challenging jurisdiction. The court also noted that the alleged dispute raised at paragraph 15 of the defendant's heads of argument was "inappropriate and unacceptable" as it had not been raised in the pleadings.

This case is significant in Zimbabwean contract and civil procedure law for clarifying the requirements for a valid arbitration clause that ousts the court's jurisdiction. It establishes that: (1) arbitration clauses must be clear and unequivocal to oust the court's inherent jurisdiction; (2) a dispute must actually exist and be apparent from the pleadings to trigger arbitration provisions; (3) disputes cannot be assumed or raised for the first time in heads of argument; (4) the scope of arbitration clauses must be carefully interpreted to determine what types of disputes they cover; and (5) contract clauses dealing with breach and default may operate independently from dispute resolution mechanisms concerning contract administration. The judgment reinforces the principle that courts will not lightly interfere with their inherent jurisdiction unless clearly required by unambiguous contractual provisions.