Townsend Enterprises (Private) Limited v Sinohydro Zimbabwe (Private) Limited

The applicant (Townsend Enterprises) and respondent (Sinohydro Zimbabwe) entered into a Memorandum of Agreement on 18 June 2015 whereby Townsend was to supply 60,000 cubic metres of sand to Sinohydro. Townsend was to extract and wash sand from the Gache Gache river feeding into Lake Kariba and deliver it to a stockpile site in Kariba at $46.96 per cubic metre before VAT. Various longstanding disputes arose between the parties culminating in a declaration of dispute by Townsend in April 2017 and disputed cancellation of the balance of the contract by Sinohydro in May 2017. The main dispute concerned Townsend's claim for an adjustment of the contract price which was rejected by Sinohydro. The matter was referred to arbitration and Arbitrator D.A. Whatman handed down an award on 15 January 2018. Townsend applied for registration of the arbitral award (HC 1186/18) while Sinohydro applied for setting aside of the award (HC 1775/18). The parties agreed the court should deal with both applications concurrently.

• Whether the arbitral award should be registered as an order of court
• Whether the arbitral award was contrary to public policy
• Whether the arbitral award was secured by fraud
• Whether the deponent to the opposing affidavit (in HC 1186/18) and founding affidavit (in HC 1775/18) complied with Rule 227 of the High Court Rules 1971
• Whether Wu Yi Feng, who was not a witness at the arbitral hearing and not party to negotiations, was competent to depose to the affidavits

1. The arbitral award handed down by Arbitrator Mr D.A. Whatman on 15 January 2018 was registered as an order of the court. 2. The application in case number HC 1775/18 for setting aside of the arbitral award was dismissed with costs. 3. In HC 1186/18, each party was to pay its own costs (though there is an apparent discrepancy in the judgment as the initial order stated the respondent should pay costs on a legal practitioner and client scale).

An affidavit filed in court proceedings must comply with Rule 227 of the High Court Rules 1971, which requires that it be made by a person who can swear to the facts or averments therein. A deponent must have personal knowledge of the facts and must be able to demonstrate how they obtained such knowledge. A useful test is whether the deponent would be a competent viva voce witness to the facts if called to testify. Non-compliance with Rule 227 is a peremptory requirement and constitutes a gross irregularity that renders the papers defective and such defect cannot be condoned. Where opposing papers or founding papers are struck out for non-compliance with Rule 227, the application must succeed or fail accordingly.

The court noted that the respondent in HC 1186/18 had opposed registration of the arbitral award on grounds that it was contrary to public policy and secured by fraud, and the applicant in HC 1775/18 alleged the award violated basic principles of contract law and was contrary to public policy. However, the court did not need to address these substantive grounds as the matter was determined on the preliminary procedural point. The court also noted Wu Yi Feng initially contended in founding papers that he had 'personal knowledge' but resiled from that position in the answering papers, suggesting inconsistency in the party's position.

This case is significant in Zimbabwean arbitration law for reinforcing the strict procedural requirements for affidavits filed in court proceedings, particularly in applications relating to arbitral awards. It demonstrates that non-compliance with Rule 227 of the High Court Rules 1971 regarding the competency of deponents is a fatal defect that will result in papers being struck out. The case emphasizes that parties seeking to oppose registration of arbitral awards or to set aside such awards must ensure their affidavits are deposed by persons with direct personal knowledge of the relevant facts. It also illustrates the court's reluctance to interfere with arbitral awards where proper procedural requirements are not met by the challenging party.