Muvuti Investments (Private) Limited v Old Mutual Property Investments (Private) Limited and The Honourable Arbitrator, Amos Masarire

The first respondent (Old Mutual) took the applicant (Muvuti Investments) to arbitration over alleged non-payment of rentals. On 8 November 2011, the arbitrator (second respondent) made an award prescribing a formula for converting rentals paid by the applicant in Zimbabwe dollars (for the period 1 September 2004 to 31 January 2009) to US dollars using Reserve Bank of Zimbabwe exchange rates at each payment date. The court remitted the matter to the arbitrator for quantification. When the applicant applied the prescribed formula, it arrived at a figure of US$10,542,159.26. On 5 May 2015, the arbitrator issued a quantification award but refused to endorse the calculation, finding the resultant conversion "unreasonable and unrealistic." Instead of quantifying according to his original formula, the arbitrator deemed the applicant to have fully paid all rentals for the period, effectively changing his original award. The applicant challenged this quantification award as contrary to public policy.

• Whether an arbitrator becomes functus officio after making an award and is prohibited from changing the award without parties' consent
• Whether the arbitrator exceeded his jurisdiction by changing his award instead of merely quantifying it
• Whether Article 34 of the Arbitration Act permits the setting aside of only part of an award or requires setting aside the entire award
• Whether the quantification award was contrary to public policy
• Whether the court has power under Article 34 to substitute its own findings for those of an arbitrator or remit the matter to another arbitrator

The quantification award dated 5 May 2015 was set aside in its entirety. The first respondent (Old Mutual) was ordered to pay the applicant's costs.

An arbitrator becomes functus officio once an award is rendered and has no jurisdiction to change his mind or modify the award without parties' consent, except to correct patent mistakes (mathematical or grammatical errors) under Article 33 of the Arbitration Act. An arbitrator who purports to quantify an award but instead refuses to apply the prescribed formula and makes a substantive new determination has exceeded his jurisdiction and issued a new award. An arbitral award will be set aside as contrary to public policy under Article 34(2)(b)(ii) where it goes beyond mere faultiness or incorrectness and constitutes a palpable inequity that is far-reaching and outrageous in its defiance of logic or accepted standards such that a fair-minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt. Article 34 empowers the court only to set aside awards, not to substitute its own findings or remit matters to other arbitrators.

The court observed that the problem emanated from the first award itself, where the arbitrator did not realize the effect his prescribed formula would have when applied years later to the Zimbabwe dollar hyperinflation context. The court noted that the approach of converting Zimbabwe dollar payments to US dollars was "noble" but the arbitrator failed to anticipate the absurd outcome. The court commented that while individual parties may have their own desires, public policy is more important than individual preferences. The court also noted that once an award is set aside, it is permissible for parties to commence fresh arbitration proceedings, though the court cannot order this. The court expressed concern that allowing such awards to stand would bring the integrity of Zimbabwe's arbitration process into disrepute and cause litigants to lose faith in arbitration, emphasizing the need for certainty in arbitration proceedings.

This case is significant in Zimbabwean arbitration law as it clarifies the doctrine of functus officio in arbitration proceedings and the limited scope for arbitrators to modify or change awards after they have been made. It establishes that arbitrators may only correct patent errors under Article 33 and cannot change substantive decisions even when they later believe the original award produces unrealistic results. The judgment reinforces the principle that arbitrators must remain within their terms of reference and cannot exceed their mandate. It also provides important guidance on the public policy ground for setting aside arbitral awards under Article 34, emphasizing that awards that defy logic and constitute palpable inequity will be struck down to preserve the integrity of the arbitration process. The case underscores the finality of arbitral awards and the limited grounds for judicial intervention, while protecting against awards that would bring the arbitration system into disrepute.