Surface Wilmar Private Limited v Windmill Private Limited

The applicant and respondent are companies registered in Zimbabwe that entered into a supply agreement on 20 March 2024, wherein the applicant would supply soya bean meal to the respondent. The applicant supplied the goods but the respondent failed to pay the full amount owed, making only partial payment. The respondent breached the agreement on 4 May 2024, with an initial balance of USD 139,533.00 owed. After a letter of demand on 10 June 2024 and further partial payments, the debt reduced to USD 118,533.00 by 16 July 2024. The respondent proposed a payment plan from 12 July to 2 August 2024 but failed to honour it. A balance of USD 79,500.20 remained outstanding, plus interest of USD 6,140.57 at 1% per month from 26 March 2024. The applicant brought a court application for recovery of the debt. The parties' contract contained a dispute resolution clause (Clause 2) requiring arbitration under the Commercial Arbitration Centre, Harare rules for any disputes arising from the agreement.

• Whether the court has jurisdiction to hear the matter in light of the arbitration clause in the parties' contract
• Whether the relief sought by the applicant was competent in relation to the currency denomination
• Whether parties can be compelled to honour an arbitration agreement contained in their contract
• What principles govern the court's power to rewrite or vary contractual terms agreed between parties

The application was dismissed. The parties were directed to proceed in terms of clause 2 of the arbitration agreement. No order as to costs was made.

Where parties have contractually agreed to an arbitration clause for resolution of disputes arising from their agreement, the court will not assume jurisdiction over such disputes unless it is shown that the arbitration clause is void, inoperative, or incapable of being performed. Once it is established that a dispute falls within the ambit of an arbitration clause, the onus falls on the party challenging the reference to arbitration to show why court proceedings should not be stayed. Courts will not rewrite contracts entered into between parties or excuse them from the consequences of contracts they have freely and voluntarily accepted. An arbitration clause in a contract is binding on the parties and a party is not at liberty to revoke it at will simply because they prefer court proceedings.

The court observed that the respondent did not actually dispute owing the applicant a debt, though there might be disagreement about the exact amount. The court noted that issues regarding the total amount owed and the currency of payment would be matters for determination by the arbitrator. The court made an observation about the applicant's relief seeking payment in USD without alternative for payment in local currency, but did not make a final determination on this point as the jurisdictional issue was dispositive. The judge expressed that there was nothing presented that could persuade the court to override the binding force of the arbitration agreement.

This case reinforces the sanctity of arbitration agreements in Zimbabwean commercial law and the principle that courts will not assume jurisdiction where parties have contractually agreed to resolve disputes through arbitration. It emphasizes the court's duty to uphold freedom of contract and respect the parties' autonomy in choosing their dispute resolution mechanism. The case serves as authority for the proposition that parties seeking to avoid arbitration bear the onus of demonstrating why an arbitration clause is void, inoperative, or incapable of being performed. It also reaffirms that courts will not rewrite or vary terms agreed upon by parties, even if one party subsequently finds litigation more convenient than the agreed arbitration process.