Pomelo Mining (Pvt) Ltd v Annandale Trust and Addington Bexley Chikomborero Chinake N.O

Pomelo Mining (the applicant) and Annandale Trust (the first respondent) entered into a joint venture agreement to explore, prospect, extract and beneficiate minerals. The first respondent owned all shares in Beatrice Mine (Pvt) Ltd. Under the agreement, the applicant was to advance $500,000 as an initial loan to the company, which would result in it acquiring 74% of the shares. After completion of phase one, the applicant was required to advance a further $4,000,000 for phase two. The applicant paid the initial $500,000 and received the 74% shares. However, the first respondent alleged the applicant failed to provide the $4,000,000 for phase two and cancelled the agreement. The dispute was referred to arbitration in terms of the agreement. The applicant challenged the arbitrator's appointment and raised preliminary objections which were dismissed. The arbitrator (second respondent) confirmed the cancellation and granted consequential relief. The applicant filed three applications: HC 4914/18 challenging the arbitrator under Article 13 of the Arbitration Act, HC 9967/18 seeking to set aside the arbitral award under Article 34, and the first respondent filed HC 7290/18 for registration of the arbitral award under Article 35.

• Whether the first respondent was properly represented before the court by a trustee
• Whether adequate notice was given for referral to arbitration under clause 14 of the agreement
• Whether the arbitrator possessed the qualifications agreed by the parties
• Whether there was a real likelihood of bias on the part of the arbitrator
• Whether the applicant was unable to present its case before the arbitrator under Article 34(2)(a)(ii)
• Whether the arbitral procedure was conducted in accordance with the parties' agreement and the Model Law
• Whether the arbitral award violated public policy of Zimbabwe by not ordering restitution
• Whether the arbitral award should be registered as an order of court

1. Application HC 9967/18 (to set aside arbitral award) dismissed with costs. 2. Application HC 4914/18 (challenging arbitrator) dismissed with costs. 3. The arbitral award dated 1 August 2018 registered as an order of court. 4. Cancellation of the Joint Venture Agreement confirmed as lawful. 5. Applicant ordered to return the 74% shares to the first respondent within 7 days, failing which the Deputy Sheriff may sign documents. 6. Applicant ordered to remove its directors from the Board within 7 days, failing which their appointments are set aside. 7. First respondent to pay costs of arbitration on High Court scale. 8. Respondent (presumably applicant in the registration application) to pay costs.

1. A trustee of a trust has inherent authority to represent the trust by virtue of their position as trustee, even in the absence of a specific resolution authorizing such representation. 2. Under Article 13 of the Arbitration Act, challenges to an arbitrator are limited to the grounds specified in Article 12(2): lack of impartiality, independence, or agreed qualifications. Procedural objections such as inadequate notice fall outside this provision. 3. The test for bias in arbitration proceedings is objective: whether there is a real likelihood of bias assessed from the perspective of a reasonable, right-thinking person. Remote, speculative or unsubstantiated allegations of bias are insufficient. 4. Under Article 34(2)(a)(ii), a party cannot claim it was unable to present its case where it willfully absented itself from proceedings without seeking a postponement or showing good cause for non-attendance. The right to legal representation does not entitle a party to disregard arbitral proceedings. 5. Under Article 34(2)(b)(ii) read with Article 34(5), an arbitral award violates public policy only where it breaches fundamental principles of law, morality or justice. Courts will not interfere with awards merely because the arbitrator's reasoning or conclusions may be wrong in fact or law. The public policy ground applies only in glaring instances of illogicality, injustice or moral turpitude. 6. Courts do not exercise appellate jurisdiction over arbitral awards but have a limited supervisory function.

1. The court noted in passing that the Trust Deed provides that where one trustee remains, that trustee is competent to appoint additional trustees under clause 7.2. 2. The court observed that while some elaboration by the arbitrator on the reasons for proceeding in the applicant's absence would have been helpful, the brief statement provided was sufficient for arbitration purposes. 3. The court commented that the facts regarding whether the money paid was a loan or meant to purchase shares remained in dispute but were not before the court for determination. Prima facie, the court observed that the money appeared to be a loan to the company rather than payment for shares, as the shares were issued pursuant to the agreement itself. 4. The court noted that in all cases on restitution it had reviewed, there was no authority for the proposition that where an innocent party does not tender restitution, the claim cannot succeed - it is for the aggrieved party to counterclaim for restitution. 5. The court remarked that the applicant's conduct before the arbitrator 'left a lot to be desired' but this could not be said of its conduct before the court, thus not warranting costs on a higher scale.

This case is significant for clarifying the limited grounds upon which Zimbabwean courts will interfere with arbitral awards under the Arbitration Act (Chapter 7:15). It reinforces that: (1) challenges to arbitrators under Article 13 must be based on the grounds specified in Article 12(2) (impartiality, independence, or qualifications); (2) bias must be real and objectively demonstrable, not based on speculation or remote connections; (3) parties who fail to appear at arbitral proceedings without good cause cannot later claim they were denied the opportunity to present their case; (4) courts will not set aside awards on public policy grounds merely because they disagree with the arbitrator's reasoning or conclusions; and (5) the public policy exception requires a fundamental breach of justice, morality or legal principle. The judgment emphasizes the pro-arbitration policy and limited scope of judicial review of arbitral awards, consistent with international arbitration principles embodied in the UNCITRAL Model Law.