Nu.Com (Private) Limited and Chakanyuka Karase and Matipedza Karase v Nu Aero (Private) Limited and Fly Africa Limited and Low Cost Enterprises (Private) Limited

The first applicant (Nu.Com) and second respondent (Fly Africa) entered into a shareholders' agreement regarding the first respondent (Nu Aero), a joint venture providing low-cost air travel. The first applicant held 51% shares and the second respondent 49%, reflecting Zimbabwe's indigenisation laws. Disputes arose after months of operation concerning finances and operational capacity. The first applicant sought to sell its 51% shareholding for US$1,400,000 and notified the second respondent. The second respondent responded that the shares had already been sold to the third respondent pursuant to clause 21 (Default Call Option) of the shareholders' agreement. On 26 October 2015, the first applicant received a "Default Call Option Notice" dated 23 October 2015, and responded the next day requesting particulars, but received no response. The first applicant then approached the court seeking an order declaring it still held 51% of shares and that the purported sale was null and void.

• Whether the court has jurisdiction to determine the dispute in light of the arbitration clause (clause 39) in the shareholders' agreement
• Whether the dispute falls within the scope of the arbitration clause requiring mediation and arbitration in the United Kingdom under the London Court of International Arbitration (LCIA)
• Whether the procedures for invoking the Default Call Option under clause 21 were properly followed
• Whether clause 21 could be interpreted as a basis for compulsory acquisition of property

The application was dismissed with costs. The court declined jurisdiction in favor of the arbitration forum agreed upon by the parties in the shareholders' agreement.

Where parties have entered into an agreement containing an arbitration clause that clearly confers exclusive jurisdiction on an arbitral forum, the court is under an obligation to give effect to that clause and must decline jurisdiction over disputes falling within the scope of the arbitration agreement. An arbitration clause is binding on the parties, and courts should not be astute in trying to reduce the ambit of widely cast arbitration clauses. A dispute concerning the construction, validity, or termination of an agreement containing an arbitration clause falls within the purview of that clause and must be referred to the agreed arbitration forum.

The court made observations regarding the substantive merits of the dispute, noting that: (1) the first applicant argued that clause 21 procedures were not followed, including that no valuation at 80% of fair market value was conducted and no purchase price was deposited in trust; (2) the first applicant contended that interpreting clause 21 as a basis for compulsory acquisition would render it void under the Companies Act; and (3) there were prior disputes between the parties that had spilled into court under HC 10476/15 where a provisional order restraining unilateral decisions had been issued but not yet confirmed. However, the court did not need to determine these substantive issues given the finding on jurisdiction.

This case is significant in Zimbabwean jurisprudence for reinforcing the principle that courts must give effect to arbitration clauses in commercial agreements and should not be astute in trying to reduce their ambit. It demonstrates the court's willingness to uphold party autonomy in choosing international arbitration forums, even where this ousts domestic court jurisdiction. The judgment emphasizes that where parties have agreed to a widely cast arbitration clause, particularly one conferring exclusive jurisdiction on foreign arbitral institutions, Zimbabwean courts will respect that choice and decline jurisdiction except for enforcement of arbitral awards. This promotes certainty in commercial agreements and international arbitration in Zimbabwe.