Jasper Chimedza v City of Harare and Others

On 19 June 2018, the applicant (Chimedza) entered into a lease agreement with the first respondent (City of Harare) for stand number 24787 Budiriro Township, Harare. On 20 July 2018, the third respondent wrote to the applicant cancelling the lease agreement on the basis that the stand had previously been allocated to the Government of Zimbabwe for a joint hospital project with the Kuwait Government. The applicant challenged this cancellation, asserting he had fully complied with the lease requirements and had not breached the agreement. The respondent claimed it made the lease in good faith but only discovered afterward that the land had been set aside for a government hospital project funded by Kuwait. The respondent argued the matter should be referred to arbitration in terms of clause 10.18 of the lease agreement. The applicant conceded to the striking off of the second and third respondents for misjoinder.

• Whether the arbitration clause in the lease agreement ousted the jurisdiction of the High Court
• Whether arbitration was the expressed or implied first choice dispute resolution mechanism between the parties
• Whether the High Court could entertain a declaratur application despite an arbitration clause
• Whether the respondent's mistake in allocating the land absolved it from its contractual obligations
• Whether the respondent had discharged the onus of proving a justifiable mistake warranting release from the contract

1. The application for declaratur was granted. 2. The decision by the 1st respondent dated 20 July 2018 cancelling the applicant's memorandum of lease dated 1 July 2018 was set aside. 3. The applicant's memorandum of lease agreement was declared valid and the first respondent was ordered to take note, endorse and record the same in their records and systems. 4. The first respondent was ordered to pay costs of suit on an attorney-client scale.

1. An arbitration clause only ousts the jurisdiction of the court where arbitration is the expressed or implied first choice dispute resolution mechanism chosen by the parties. Where the clause provides for other processes before arbitration (such as a period for negotiation or mediation), arbitration is not the exclusive forum and courts retain jurisdiction. 2. A party seeking to escape contractual obligations on grounds of mistake bears the onus of proving: (a) that a mistake occurred; (b) that the mistake was not due to his own fault, carelessness or failure to conduct necessary investigations; and (c) that the other party knew of the mistake, caused it, or as a reasonable person ought to have known of it. 3. An offeror cannot escape liability from a contract by establishing he made a wrong offer which was accepted, particularly where the mistake was due to his own carelessness or inattention. 4. Men of full age and competent understanding who enter into contracts freely and voluntarily must honor those contracts, and courts will not rewrite contracts or excuse performance merely because the contract has become onerous or inconvenient. 5. The maxim caveat subscriptor applies: parties are bound by contracts they sign and must bear the consequences of their own ineptitude in failing to conduct proper due diligence before contracting.

The court made obiter observations that: (1) The fact that a party seeks a remedy (such as a declaratur) that only the High Court can grant is of no consequence when determining whether an arbitration clause ousts jurisdiction - what is paramount is what the parties agreed regarding the forum for dispute resolution, not what remedy one party elects to pursue; (2) The court noted that the matter involved national importance with potential for diplomatic fallout between Zimbabwe and Kuwait, but held that such considerations, no matter how material, do not absolve a party from contractual obligations where the mistake is of its own making; (3) The court observed that the respondent failed to provide any documentary evidence (paper trail) showing the previous allocation of the stand to the government hospital project, relying merely on assertions and a letter from the Ministry of Health, which itself was not evidence of allocation to a joint Zimbabwe-Kuwait project.

This case is significant in Zimbabwean contract law and arbitration jurisprudence for several reasons: (1) It clarifies when arbitration clauses oust court jurisdiction, establishing that arbitration must be the expressed or implied first choice dispute resolution mechanism; (2) It reinforces the principle that where arbitration clauses provide for intermediate dispute resolution steps (such as mediation or negotiation periods), arbitration is not exclusive and courts retain jurisdiction; (3) It strengthens the doctrine of sanctity of contract and the principle that parties who contract freely and voluntarily must honor their obligations; (4) It sets a high threshold for parties seeking to escape contractual obligations on grounds of mistake, confirming that mistakes arising from one's own carelessness or failure to conduct proper investigations will not justify release from contractual bonds; (5) It demonstrates that public interest considerations (such as diplomatic relations or public health infrastructure) do not override validly concluded contractual obligations where the contracting party is at fault. The case applies the maxim caveat subscriptor (let the signer beware) and reinforces that local authorities must exercise due diligence before entering into lease agreements.