Joylen Investments (Pvt) Ltd v Snappy Sports Bar and Innocent Winston Babbage

The plaintiff (Joylen Investments) was the landlord and owner of shops 3, 5 and 6 Norvaal House, at corner Fife Street and 6th Avenue. The first defendant (Snappy Sports Bar) leased the property from the plaintiff, and the second defendant (Innocent Winston Babbage) bound himself as surety and co-principal debtor. The lease agreement was signed on 11 May 2005 but was to run from 01 March 2005 to 28 February 2006. The monthly rental was $5400 with provision for increases by agreement. The first defendant failed to honour rental payments and as of the date summons were issued, was in arrears of $7938.76, plus holding over charges of $600 per month and $22.56 of total expenses per month from 23 September 2010. The plaintiff sought eviction and payment of arrears. The defendants filed a special plea and exception challenging the forum and procedure.

• Whether the lease agreement's arbitration clause (clause 35:1) precluded the plaintiff from instituting court proceedings for non-payment of rent
• Whether the correct interpretation of clause 35:1 required all disputes to be referred to arbitration before approaching the courts
• Whether the plaintiff used the correct procedure by seeking an order for eviction before the agreement was formally cancelled
• Whether non-payment of rent entitled the landlord to cancel the lease agreement and seek eviction

The first and second defendants' special plea and exception were dismissed with costs.

The binding legal principles established are: (1) Where a lease agreement contains an arbitration clause with "and/or" language allowing the landlord to refer disputes to arbitration and/or institute legal proceedings, the landlord has a genuine option to choose either forum or both, and is not obliged to pursue arbitration before approaching the courts; (2) Non-payment of rent by a tenant constitutes a breach of the lease agreement that entitles the landlord to cancel the agreement and seek eviction in the same proceedings without first obtaining a separate order of cancellation; (3) The landlord's right to institute legal proceedings for breach of lease is not limited to interim relief pending arbitration where the agreement provides alternative remedies.

The court observed that the plaintiff's claim related to a clear factual breach (failure to pay rent) rather than a dispute involving legal issues requiring interpretation of the agreement. The court also noted that the defendants had, "not in so many words" but effectively, admitted that they were in rent arrears. While not strictly necessary for the decision, the court indicated that arbitration clauses are more appropriately invoked for disputes about interpretation or application of agreements rather than for clear breaches such as non-payment. The court's citation of Venter v Venter suggests that the principle allowing cancellation for non-payment of rent is well-established in South African law, which Zimbabwean courts continue to reference.

This case is significant in Zimbabwean commercial law for clarifying the interpretation of arbitration clauses in lease agreements. It establishes that an "and/or" clause giving parties the option to refer disputes to arbitration or institute legal proceedings allows the landlord to choose their preferred forum without being compelled to first pursue arbitration. The case also affirms the landlord's right to seek both cancellation of a lease agreement and eviction based on non-payment of rent as part of the same legal action, without needing to first formally cancel the agreement before seeking eviction. It reinforces the principle that breach through non-payment of rent entitles a landlord to immediate relief through the courts.