On 1 January 2003, Pioneer Transport (applicant) and Delta Corporation (first respondent) executed an agreement for the supply of primary beverage transport services. Pioneer was to supply 12 mechanical horses to draw 34 trailers supplied by Delta for distribution of Delta's products. The parties had a dispute which was referred to arbitration in accordance with clause 18 of their agreement. David Leslie Crutteden (second respondent) was appointed as arbitrator and issued an award on 16 January 2010. The central dispute concerned clause 9(f) of the agreement, which required Pioneer to return Delta's trailers in "good working condition" upon termination of the agreement, fair wear and tear excepted. Pioneer brought an application to the High Court to set aside the arbitral award under Article 34 of the First Schedule to the Arbitration Act [Cap 7:15].
Application dismissed with costs on an ordinary scale
The binding legal principles established are: (1) An applicant seeking to set aside an arbitral award under Article 34 of the Arbitration Act is not required to comply with the award before bringing the application - requiring prior compliance would defeat the statutory right of recourse; (2) Parties cannot contractually exclude the court's jurisdiction to set aside arbitral awards under Article 34, even if they agree the arbitrator's decision is "final and binding"; (3) An arbitral award is only contrary to public policy and subject to being set aside if it constitutes a palpable inequity so far-reaching in its defiance of logic or accepted moral standards that a sensible and fair-minded person would consider the conception of justice would be intolerably hurt by the award; (4) Courts do not exercise appellate jurisdiction over arbitral awards - an award will not be set aside merely because the arbitrator's reasoning or conclusions are wrong in fact or law; (5) Arbitrators have "the right to be wrong" on the merits without the award being subject to court interference.
The court made observations that: (1) The arbitration process is completely separate from the court system and it is the responsibility of parties (not the arbitrator or court) to secure and file the record of arbitration proceedings when challenging an award; (2) The mere fact that a party seeks to review a decision does not make the application frivolous - there must be evidence of mala fides or abuse of process to warrant a punitive costs order; (3) A finding that a prescribed debt is not prescribed does not in itself breach public policy as the Prescription Act does not create criminal liability for such errors; (4) The court noted its approval of the principle from Telcordia Technologies Inc v Telcom SA that a wrong interpretation by an arbitrator does not constitute a misconception of the nature of the inquiry - the arbitrator fulfills their function precisely by interpreting the agreement, even if incorrectly.
This case is significant for establishing key principles regarding judicial review of arbitral awards in Zimbabwe (and by extension South Africa, given the similar adoption of the UNCITRAL Model Law). It confirms: (1) parties seeking to set aside arbitral awards under Article 34 are not required to first comply with the award (no "dirty hands" bar applies); (2) the statutory right to challenge arbitral awards cannot be contractually excluded; (3) the very high threshold for setting aside awards on public policy grounds - courts do not sit as appellate tribunals over arbitrators and will only intervene where awards defy logic or moral standards to an intolerable degree; (4) arbitrators have "the right to be wrong" on facts and law without their awards being set aside. The judgment reinforces the pro-arbitration, minimal intervention approach that characterizes modern arbitration legislation based on the UNCITRAL Model Law.