Portnex International (Pty) Limited v Zimasco (Private) Limited & Kevin Terry N.O.

The applicant (Portnex), a South African company registered in Zimbabwe and under business rescue, entered into a Furnace Leasing Agreement with the first respondent (Zimasco) on 29 June 2017. Lease fees were denominated in US dollars at US$45 per metric tonne of ferrochrome produced. Following the promulgation of SI 33/19 (22 February 2019) and SI 142/19 (24 June 2019), which introduced the RTGS dollar and changed Zimbabwe's monetary landscape, disputes arose concerning payment obligations. Portnex paid US$281,059.09 in May 2019 for March 2019 rental fees and subsequently defaulted on further payments. Zimasco appropriated 4,507.55 tonnes of ferrochrome alloy in lieu of unpaid fees. The parties submitted the dispute to arbitration. The arbitrator rendered a partial award finding the lease obligations were affected by SI 33/19 and became payable in RTGS dollars. Portnex then claimed refund of the US dollars paid and return of the appropriated ferrochrome under condictio indebiti. The arbitrator rendered a final award dismissing these claims, finding Portnex failed to establish the essential elements of condictio indebiti. Portnex sought to set aside the arbitral award in the High Court on public policy grounds under Article 34(2)(b)(ii) of the Arbitration Act. The High Court dismissed the application. Portnex appealed (SC 448/24) but failed to pay security for costs timeously, resulting in the appeal being deemed abandoned. Portnex then applied for reinstatement of the appeal.

• Whether the applicant showed good cause for reinstatement of an appeal deemed abandoned for failure to pay security for costs
• Whether the applicant provided a reasonable explanation for the delay in paying security for costs
• Whether the applicant has reasonable prospects of success on the intended appeal
• Whether the arbitral award was contrary to public policy
• Whether the court a quo erred in upholding the arbitrator's dismissal of the condictio indebiti claim
• Whether the application before the High Court was a disguised appeal rather than a genuine Article 34 application
• Whether invoices denominated in US dollars issued between 22 February 2019 and 24 June 2019 were lawful

The application for reinstatement of the appeal in case number SC 448/24 was dismissed with costs on a legal practitioner and client scale.

For reinstatement of an appeal deemed abandoned, an applicant must show: (1) a reasonable explanation for the delay, and (2) good prospects of success on appeal. An application to set aside an arbitral award under Article 34 is not an appeal - the court does not substitute its own view for that of the arbitrator. An award is only contrary to public policy where "the reasoning or conclusion in an award goes beyond mere faultiness or incorrectness and constitutes a palpable inequity that is so far reaching and outrageous in its defiance of logic or accepted moral standards that a sensible and fair-minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award" - it must make "justice and one's sense of justice spin on its head." Between 22 February 2019 (SI 33/19) and 24 June 2019 (SI 142/19), charging and payment of obligations in US dollars was not illegal as US dollars remained legal tender alongside RTGS dollars during that period. For condictio indebiti to succeed, the payer must establish payment was made under a reasonable but mistaken belief that payment was due. Courts will not entertain frivolous applications seeking to undermine arbitral awards in the hope of obtaining a different outcome from that reached by the arbitrator.

The Court observed that SI 33/19 declared that every enactment stating amounts in US dollars should be construed as stating amounts in RTGS dollars at parity, but a lease agreement is not an enactment as defined in the Interpretation Act. The Court emphasized the importance of finality in arbitration, noting that parties who voluntarily submit to arbitration as a speedy and cost-effective dispute resolution mechanism should not be permitted to disrespect their agreement by undermining the arbitral process. The Court expressed concern that the applicant, despite owing over US$3 million to the respondent, was dragging the respondent through multiple court applications with little prospect of success. KUDYA JA remarked on the importance of proper file management by legal practitioners, noting that correspondence relating to a particular case should be directed to the appropriate file to avoid administrative errors.

This case is significant for: (1) Reaffirming the restrictive approach to public policy challenges to arbitral awards in Zimbabwe - awards will not be set aside merely because the arbitrator's reasoning or conclusions are wrong in fact or law; (2) Clarifying that payment in US dollars between 22 February 2019 (SI 33/19) and 24 June 2019 (SI 142/19) was lawful as US dollars remained legal tender during that period; (3) Emphasizing the principle of finality in arbitration and the courts' reluctance to entertain disguised appeals masquerading as Article 34 applications; (4) Establishing high standards for reasonable explanations in applications for condonation and reinstatement; (5) Illustrating when punitive costs on a legal practitioner-client scale are appropriate for abuse of process. The judgment reinforces that courts will protect the integrity of arbitration as an alternative dispute resolution mechanism by refusing to allow parties to undermine arbitral awards through baseless court applications.