Samuel Jakata v Source Properties (Pvt) Ltd

The applicant leased a butchery shop from the respondent at Arcadia Shopping Centre, Harare. The lease was initially for six months, extended for two years, and then further extended from 1 September 2018 to 31 January 2020. On 12 February 2019, the applicant was given notice to vacate before the lease expired. A dispute arose when the respondent sought to eject the applicant, referring to a lease agreement that described the premises as "Shop number 16, Stand 216 Groombridge, Harare" instead of the Arcadia property. The applicant claimed this was a forged document and that his signature was forged. The matter was referred to arbitration before Retired Justice L.G. Smith, who found the lease agreement was not forged, that there was merely a clerical typing error, that the parties' minds were ad idem regarding the Arcadia property, that the lease had expired, and ordered the applicant to vacate. The applicant applied to the High Court to set aside the arbitral award on grounds that it was contrary to the public policy of Zimbabwe.

• Whether the arbitral award was contrary to the public policy of Zimbabwe in terms of Article 34(2)(b)(ii) of the Arbitration Act [Chapter 7:15]
• Whether the arbitrator had jurisdiction to determine the matter
• Whether the appointment of the arbitrator was proper
• Whether the arbitral proceedings complied with principles of natural justice
• Whether the court could interfere with the factual findings of the arbitrator regarding forgery and validity of the lease agreement
• What constitutes public policy for purposes of setting aside an arbitral award

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

An arbitral award may only be set aside on public policy grounds under Article 34(2)(b)(ii) of the Arbitration Act where the 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 concept of justice in Zimbabwe would be intolerably hurt by the award. Courts do not exercise appellate power over arbitral awards and may not substitute their own findings for those of the arbitrator simply because the arbitrator may have erred on fact or law. The concept of public policy must be construed narrowly to preserve the autonomy and finality of arbitral proceedings. A party who receives full benefit under a contract cannot, after the contract has expired and when facing enforcement consequences, challenge the validity of that contract on grounds of alleged illegality or unenforceability without offending principles of justice.

The court observed that public policy has both procedural and substantive aspects and parties may challenge arbitral awards on either basis. The court noted that arbitral proceedings are of an informal nature and must be conducted in accordance with the parties' agreement under Article 34(2)(a)(iv). The court also observed that arbitrators have power to rule on aspects related to their own authority and jurisdiction. The court listed instances when an award may be set aside on public policy grounds: (a) if it disregards fundamental values, interests and policies which are the basis of legal order in Zimbabwe; (b) if it shocks the conscience and violates the most basic notions of morality and justice and social order of the country; (c) there must be substantial injustice shocking to the court's conscience rendering enforcement repugnant; (d) it must be patently illegal. The court emphasized that public policy takes into account notions of justice and the need to do simple justice between man and man.

This case is significant in Zimbabwean arbitration law as it reinforces the principle of finality and autonomy of arbitral awards. It confirms that courts will adopt a narrow construction of "public policy" when considering applications to set aside arbitral awards under Article 34 of the Arbitration Act. The judgment emphasizes that courts exercise supervisory rather than appellate jurisdiction over arbitral awards and will only interfere where awards are "incurably bad" and display glaring instances of illogicality, injustice and moral turpitude that shock the conscience. The case clarifies that mere errors of fact or law by an arbitrator, even if substantial, do not constitute grounds for setting aside an award on public policy grounds. It also addresses procedural aspects such as appointment of arbitrators and conduct of proceedings by written submissions.