Portnex International (Proprietary) Limited v Zimasco (Private) Limited

The appellant (Portnex), a South African company with a branch in Zimbabwe, and the first respondent (Zimasco), a Zimbabwean company, executed a lease agreement in 2015 which was renewed in 2017. The appellant leased the first respondent's west plant furnaces and infrastructure. The appellant breached the lease agreement by failing to pay lease fees and operating costs. The dispute was referred to arbitration in terms of the lease agreement. During arbitration, the appellant raised a point in limine that was dismissed, then applied for the arbitrator's recusal alleging bias, which was also dismissed. The arbitrator proceeded to determine the merits and issued an award in favor of the first respondent. The first respondent then applied to the High Court for registration and enforcement of the arbitral award in terms of Article 35 of the Arbitration Act. The appellant opposed registration on the basis that the arbitral proceedings were fraught with procedural irregularities, particularly the arbitrator's failure to properly determine the recusal application before proceeding with the merits.

• Whether the High Court was correct to register the arbitral award in circumstances where the appellant alleged procedural irregularities in the arbitration proceedings
• Whether the appellant had invoked the provisions of Article 36 of the Arbitration Act (Model Law) which provides grounds for refusing recognition or enforcement of an arbitral award
• Whether dissatisfaction with an arbitrator's procedural decisions alone constitutes a valid basis for refusing registration of an arbitral award
• What procedural requirements must be met for registration of an arbitral award under Article 35(2) of the Arbitration Act

The appeal was dismissed with costs. The judgment of the High Court dated 28 May 2024 registering the arbitral award in favor of the first respondent was upheld.

Once a party seeking to register an arbitral award satisfies the procedural requirements set out in Article 35(2) of the Arbitration Act [Chapter 7:15] (presenting the authenticated original award or certified copy, the original arbitration agreement, and translations if necessary), registration becomes mandatory unless the opposing party pleads specific facts invoking Article 36 which sets out grounds for refusing recognition or enforcement. Mere dissatisfaction with an arbitrator's procedural decisions or general allegations of irregularity in arbitral proceedings do not constitute valid grounds for refusing registration of an arbitral award. The proper remedy for a party wishing to challenge an arbitral award is to bring an application for setting aside the award under Article 34 of the Act. A party cannot defeat an application for registration by simply filing a notice of opposition venting frustration with the arbitrator's decisions without invoking the statutory grounds for refusing recognition.

The Court observed that when parties freely and voluntarily clothe an arbitrator with final binding jurisdiction through their arbitration agreement, the arbitrator becomes a tribunal of final jurisdiction that can ordinarily do no wrong, as its determination is generally not subject to any other authority. The only window of opportunity for challenging such determination is through the High Court's review powers under Article 34 of the Model Law. The Court also noted that the appellant made an application at the commencement of the appeal hearing to stay proceedings pending another appeal involving the same parties, but this application was withdrawn after the Court indicated that the two matters dealt with different issues (one relating to an interim award and the current matter relating to the final award) and that the other matter still required leave to appeal.

This case reinforces the pro-arbitration policy in Zimbabwean law and clarifies the limited role of courts in the registration of arbitral awards. It emphasizes that: (1) registration of arbitral awards is almost automatic once procedural requirements under Article 35(2) are met; (2) parties opposing registration must specifically plead grounds under Article 36 of the Arbitration Act; (3) dissatisfaction with arbitral procedures or outcomes does not constitute a valid ground for refusing registration; (4) the proper remedy for challenging an arbitral award is an application for setting aside under Article 34, not mere opposition to a registration application; and (5) courts exercising registration functions have very limited jurisdiction and cannot review the merits of arbitral awards. The case demonstrates the finality of arbitration and the difficulty of challenging arbitral awards, consistent with the Model Law's approach to enforcement of arbitral awards.