Housing Corporation of Zimbabwe (Pvt) Ltd v National Social Security Authority

The applicant (Housing Corporation of Zimbabwe) and the first respondent (National Social Security Authority) entered into a Housing Offtake Agreement on 14 July 2017 for the construction and delivery of 8000 housing units. The first respondent paid a deposit of US$16 million. The applicant constructed only 53 housing units before a dispute arose in 2018, leading the applicant to cancel the Agreement on 29 May 2018. The parties blamed each other for breach and referred the matter to arbitration. The arbitrator awarded the applicant US$30 million in damages for loss of profit (later corrected to US$22 million) and dismissed the first respondent's counterclaim for refund of the US$16 million deposit. The High Court registered the arbitral award. On appeal, the Supreme Court set aside the award, finding it contrary to public policy as it awarded consequential damages expressly excluded by clause 22.1 of the Agreement. The applicant then sought direct access to the Constitutional Court to challenge the Supreme Court's decision, alleging violations of its constitutional rights under sections 56(1) and 69(2).

• Whether it is in the interests of justice to grant direct access to the Constitutional Court to challenge a Supreme Court judgment on a non-constitutional matter
• Whether the Supreme Court acted as a court of first instance in dealing with the public policy issue
• Whether the Supreme Court violated the principle of finality of arbitral awards
• Whether the Supreme Court failed to act in accordance with governing legal principles
• Whether the applicant's rights to equal protection of the law (s 56(1)) and a fair hearing (s 69(2)) were violated
• Whether an arbitral award granting remedies contrary to the express terms of the contract violates public policy

Application for direct access dismissed with no order as to costs.

An arbitral award that grants remedies expressly excluded by the contract between the parties violates the sanctity of contract and may be set aside as contrary to public policy under Article 34(2)(b)(ii) of the Model Law. For constitutional review of a Supreme Court decision on a non-constitutional matter, an applicant must satisfy a three-tiered test: (1) demonstrating a failure by the Supreme Court to act in accordance with applicable substantive and/or procedural law; (2) showing that this failure resulted in an arbitrary or irrational decision; and (3) establishing that a protected fundamental right was consequently violated. Mere substantive incorrectness or error of law does not justify constitutional review of a final Supreme Court judgment. The Supreme Court may, in exceptional circumstances, deal with matters as a court of first and last instance where all relevant material and submissions are properly before it.

The Court observed that while the Supreme Court is not bound by its own precedents under section 26(2) of the Supreme Court Act, it should be cognizant of established principles when departing from them. The Court noted that the Constitutional Court's jurisdiction as ultimate guardian of the Constitution is narrow and specialized, limited to constitutional matters only. It commented that what constitutes "fundamental substantive incorrectness or procedural irregularity" is not always self-evident and requires objective and careful scrutiny of the facts and circumstances of each case. The Court emphasized that the law does not protect litigants against wrong decisions but rather protects the fairness of the proceedings. It is the propriety of the process leading to the decision rather than the correctness of the decision itself that may entitle a litigant to approach the Constitutional Court. The Court also observed that the sanctity of contract is one of the most important tenets of public policy.

This judgment clarifies and reaffirms the stringent test for constitutional review of Supreme Court judgments on non-constitutional matters in Zimbabwean law. It reinforces the principle that the Constitutional Court will not interfere with Supreme Court decisions merely because they may be substantively incorrect, but only where there is a demonstrable failure to act in accordance with governing law resulting in an arbitrary decision that violates fundamental rights. The case also reinforces the doctrine of sanctity of contract in arbitration, confirming that arbitral awards granting remedies expressly excluded by contract terms may be set aside as contrary to public policy. It establishes that the Supreme Court may, in exceptional circumstances, act as a court of first and last instance where all relevant material is before it. The judgment provides important guidance on the limited scope for challenging final Supreme Court decisions and the high threshold required for direct access applications to the Constitutional Court.