Ronald Tonderayi Muchaka v Donald Dereck Zhanje and The Honourable Judge George Smith (Retired) N.O.

The applicant and 1st respondent operated a real estate business in partnership for approximately 2 to 3 years until a dispute arose between them. The applicant instituted proceedings in HC 2521/05 seeking dissolution of the partnership and appointment of a liquidator. To expedite resolution, the dispute was referred to the 2nd respondent (an arbitrator) for determination. The arbitrator delivered his award in January 2007. Finding that the applicant had not brought any assets into the partnership but taking into account the 1st respondent's material contribution, the arbitrator awarded the remaining partnership assets in a manner more favorable to the 1st respondent and issued specific directions to the liquidator regarding partnership accounts. Each party was ordered to bear its own costs and pay half the arbitration fee. The applicant challenged the award under Article 34(2)(a)(iii) and 34(2)(b)(ii) of the First Schedule to the Arbitration Act [Chapter 7:15] (the Model Law).

• Whether the arbitrator went beyond the issues referred to him for determination by apportioning partnership assets
• Whether the arbitrator's award was contrary to public policy by acting without valuation of partnership assets or accounts and disregarding partnership law
• The proper interpretation and application of Article 34(2)(a)(iii) and 34(2)(b)(ii) of the Model Law regarding setting aside arbitral awards

The application to set aside the arbitral award was dismissed with costs.

An arbitral award may only be set aside under Article 34(2) of the Model Law in limited circumstances. The public policy ground under Article 34(2)(b)(ii) must be restrictively construed to preserve the basic objective of finality in arbitration. An award is not contrary to public policy merely because the arbitrator's reasoning or conclusions are wrong in fact or in law. An award will only be set aside on public policy grounds where the reasoning or conclusions violate some fundamental principle of law, morality or justice, or constitute a palpable inequity 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 would be intolerably hurt by the award. Where parties refer a dispute to arbitration without formally specifying particular issues, the arbitrator has broad discretion to resolve all aspects of the dispute that fall within the general subject matter of the submission.

The court observed that the apportionment of partnership assets upon dissolution cannot logically be contrary to the law of partnership when the partnership was not intended to continue but was to be dissolved. The court also noted that the essential purpose of the arbitration reference was to resolve the dispute regarding the partnership assets and the respective rights and interests of the parties in those assets upon dissolution. These observations suggest a pragmatic approach to partnership dissolution disputes referred to arbitration.

This case illustrates the Zimbabwean High Court's approach to reviewing arbitral awards under the Model Law, emphasizing judicial restraint and the restrictive interpretation of grounds for setting aside awards. It reinforces the principle of finality in arbitration and establishes that courts will not interfere with arbitral awards merely because they may contain errors of fact or law, but only where fundamental principles of justice are violated. The case provides practical guidance on the interpretation of Article 34(2) of the Model Law and the high threshold required to successfully challenge an arbitral award on public policy grounds.