The first respondent (Chawara Syndicate) owned agricultural land and constructed a dam (Chawara dam) in the 1990s at a cost of USD$2,600,000. On 17 July 2005, the applicant (Pickwerl Mining) entered into a contract with the respondent granting the applicant a twenty-year water right on the dam, with the applicant agreeing to pay USD$3,000 per month as compensation for the dam's construction. From May 2011, the applicant stopped making payments, accruing arrears of USD$111,000. The land on which the dam was situated was acquired by the State under the Land Acquisition Act and the land reform programme in 2001. Two members of the syndicate vacated their farms in compliance with the law, but Mark Hook continued to occupy the land. The respondent obtained an arbitral award on 5 December 2015 ordering payment. The applicant sought to set aside the arbitral award under Article 34(2) of the Model Law in the Arbitration Act, while the respondent counter-applied for registration of the award.
1. The arbitral award dated 5 December 2015 rendered by the second respondent in the matter between Chawara Syndicate and Pickwerl Mining (Private) Limited is set aside. 2. The counter application for registration of the arbitral award in HC 5936/16 is dismissed. 3. Costs of this application shall be borne by the first respondent.
An arbitral award will be set aside as contrary to public policy where it endorses or rewards criminal conduct. A contract concluded in relation to land acquired by the State under the land reform programme is illegal and void where the former owner has no lawful authority to occupy or use the land. Former owners of acquired land lose all rights to such land upon expiration of the prescribed period under the Gazetted Lands (Consequential Provisions) Act and cannot enforce contracts that would allow them to continue benefiting from the use of such land. Continued occupation of acquired land without lawful authority constitutes a criminal offence under s 3 of the Gazetted Lands (Consequential Provisions) Act. The principle ex turpi causa non oritur actio applies - no cause of action can be founded on an illegal contract. Where land has been acquired under the land reform programme, liability for compensation for improvements rests with the State under the Land Acquisition Act, not with third parties who may have contracted with the former owner.
The court observed that the fact that parties entered into an agreement is neither here nor there when the agreement was and remains illegal. The arbitrator, in upholding the illegal agreement, was giving effect to the first respondent's use of acquired land, thereby according him the rights of an owner, which he could not do. The court noted that people who continue to occupy and/or use acquired land without lawful authority are criminals and do not deserve the protection of law. The court commented that if a former owner continues in occupation in open defiance of the law, no court has jurisdiction to authorize the continued use or possession of the acquired land.
This case is significant for establishing the irreversibility of Zimbabwe's land reform programme and its consequences for contractual relationships. It confirms that once land is acquired by the State under the land reform programme, former owners are completely divested of all rights to the land and cannot derive any benefit from it or enter into enforceable contracts relating to it. The case reinforces that continued occupation of acquired land without lawful authority is a criminal offence, and courts will not enforce contracts that effectively reward such criminal conduct. It demonstrates the limits of arbitration - even valid arbitral awards will be set aside if they are contrary to public policy or give effect to illegal agreements. The judgment clarifies that the State, not third parties, bears responsibility for compensating former landowners for improvements on acquired land, and that this is a constitutional matter rooted in Zimbabwe's history of colonial dispossession.