Onel Electrical Engineers (Pvt) Ltd v Unki Mines (Pvt) Ltd and David A Whatman N.O

The applicant and first respondent concluded a contract where the applicant was to supply, install and commission an electrical plant for the first respondent's housing project in Shurugwi. The applicant could not fully perform because critical path-works were not made ready by the first respondent as required. The applicant issued various compensation events, and the first respondent initially agreed to pay and requested an invoice, but later changed its position after allegedly receiving legal advice. The matter went to adjudication where the adjudicator upheld the applicant's claim. The first respondent issued a notice of dissatisfaction and the matter proceeded to arbitration. The second respondent (arbitrator) held he had procedural jurisdiction but concluded that the adjudicator had no jurisdiction to hear the matter and dismissed the award made in favor of the applicant. The first respondent had also filed a counter-claim before both the adjudicator and arbitrator.

• Whether the application was filed within the 30-day period prescribed by Article 16(3) of the Arbitration Act
• Whether the arbitrator erred in dismissing the applicant's claim after finding lack of jurisdiction
• Whether the arbitrator correctly found that the adjudicator lacked jurisdiction to hear the matter
• Whether the first respondent's filing of a counter-claim and pleading to the merits conferred jurisdiction on the adjudicator and arbitrator
• Whether the first respondent was estopped from questioning jurisdiction after agreeing to pay
• Whether the arbitrator properly distinguished between a claim and a dispute
• Whether notice of the ruling commenced on the date of email or receipt of a signed award

The court set aside paragraphs 2, 3, 5 and 6 of the second respondent's preliminary award of 5 March 2018. The hearing of the substantive matter was ordered to proceed before a different arbitrator to be chosen by the parties in terms of the arbitration agreement. The first respondent was ordered to pay the costs of the application.

The binding legal principles established are: (1) An arbitrator who finds lack of jurisdiction must simply decline jurisdiction and cannot dismiss the matter, as dismissal creates res judicata; (2) Once an arbitrator finds procedural jurisdiction to hear a jurisdictional challenge, this necessarily implies subject matter jurisdiction over the underlying dispute; (3) A party who files a counter-claim and pleads to the merits before an adjudicator or arbitrator willingly consents to jurisdiction, which cannot subsequently be withdrawn; (4) A party who agrees to pay a claim is estopped from later challenging jurisdiction or alleging belated claims; (5) Pleading to a matter on the merits confers jurisdiction; (6) For time computation under Article 16(3) of the Arbitration Act, the onus is on the party alleging non-compliance to prove when a duly signed award was served; (7) A calendar month for statutory time computation purposes runs from the beginning of a month to the end of that month.

The court observed that there is a distinction between a claim and a dispute, and that the fact a claim may have inured to the benefit of a party does not mean a dispute existed. The court noted that the operational need for rapid resolution of disputes in construction contracts could easily resolve exclusion of contractual obligations. The court also commented that the issue of notification from the project manager was central to deciding whether the applicant participated in any delays, and this aspect required a full hearing to be properly resolved.

This case establishes important principles regarding arbitration procedure in Zimbabwe, particularly concerning: (1) the computation of time limits under Article 16(3) of the Arbitration Act and when notice of a ruling is deemed to be received; (2) the proper approach when an arbitrator finds lack of jurisdiction (declining jurisdiction rather than dismissing to avoid res judicata); (3) the relationship between procedural and subject matter jurisdiction in arbitration; (4) how conduct such as filing counter-claims and pleading to the merits can confer jurisdiction that cannot later be withdrawn; and (5) the effect of estoppel where a party agrees to pay but later seeks to challenge jurisdiction. The case reinforces principles of consent to jurisdiction in arbitration and the limited circumstances in which jurisdictional challenges can succeed where a party has participated in proceedings.