Mutual Construction (Private) Limited v Old Mutual Construction Zimbabwe (Private) Limited

In 2013, the Plaintiff entered into a building contract for the construction of 613 houses in Budiriro. The works were completed in November 2019. The Plaintiff claimed that the Defendant owed USD$617,815.29 for retention, accrued interest, security costs, and client snag list claims. On 2 November 2023, the Defendant paid US$36,289.66 as primary retention but excluded the other claims. The contract was actually signed between the Plaintiff and Central Africa Building Society (CABS), not the Defendant. The Defendant acted as Project Manager for CABS. The contract contained an arbitration clause (Clause 25) requiring disputes to be referred to arbitration. The Plaintiff sued the Defendant directly in court, arguing that the Defendant had acknowledged the debt through part payment and active participation in the project.

• Whether the Plaintiff's Declaration disclosed a valid cause of action against the Defendant
• Whether the court had jurisdiction to hear the matter in light of the arbitration clause
• Whether the claims for retention interest, security costs, and client snag list were legally cognisable

The Defendant's exception was upheld. The Plaintiff's claim against the Defendant was dismissed in its entirety. Costs were awarded to the Defendant.

A cause of action requires the entire set of facts giving rise to an enforceable claim, including every material fact to be proved. Where a contract is concluded with one party (CABS), another party (Defendant) acting as project manager/agent cannot be held liable absent proof of assumption of personal liability. An arbitration clause in a contract binds parties to arbitrate disputes and ousts the court's jurisdiction unless the party seeking to avoid arbitration proves the clause is invalid, inoperative, or the matter falls outside its scope. Mere allegations of acknowledgement of debt, without documentary proof, cannot displace a binding arbitration clause. Claims for interest upon interest or damages arising from interest are not legally cognisable as they violate the in duplum rule.

The court observed that once a dispositive issue has been determined, it is not always necessary to deal with every other issue raised, citing Gwaradzimba N.O. v CJ Petron & Co. (Pty) Ltd SC 12/2026. The court noted that the excipient must persuade the court that upon every interpretation the pleading could bear no cause of action, and that the excipient is prejudiced by being called upon to answer claims that are not legally sustainable. The court also made reference to the principle that parties cannot 'blow hot and cold' by pursuing alternative remedies inconsistently.

This case reinforces several important principles in Zimbabwean law: (1) the strict requirement for establishing a cause of action based on a complete contractual relationship between the parties; (2) the courts' respect for party autonomy and arbitration clauses, giving effect to agreements to arbitrate disputes; (3) the distinction between principal and agent in contractual liability; (4) the application of the in duplum rule prohibiting interest upon interest and damages arising from interest; and (5) the requirement that acknowledgement of debt must be properly substantiated with documentary evidence to establish liability or waive contractual dispute resolution mechanisms.