Vicemast Services (Pvt) Ltd v Pickglow Trading (Pvt) Ltd t/a Glow Petroleum

The applicant and respondent entered into a lease agreement whereby the respondent would lease the applicant's service station in Rusape for selling fuel and petroleum products. The written lease agreement was dated to commence on 1 May 2018 and terminate on 30 April 2021 for a period of three years. A dispute arose regarding when the lease was set to expire after the applicant sought to repossess the premises. The respondent contended that the lease should have commenced on 1 December 2018 because it spent time from May to November 2018 making necessary improvements to comply with regulatory requirements. The parties submitted the dispute to arbitration as per their arbitration agreement. The arbitrator ruled in favour of the applicant, finding the lease commenced on 1 May 2018 and terminated on 30 April 2021, and declined jurisdiction over the respondent's counter-claim for compensation for improvements made to the premises. The applicant then sought recognition and registration of the arbitral award. The respondent opposed registration on grounds that the award was against public policy.

• Whether the arbitrator erred in finding that the lease agreement commenced on 1 May 2018 and terminated on 30 April 2021
• Whether the arbitrator correctly declined to exercise jurisdiction over the respondent's counter-claim for compensation for improvements
• Whether the arbitral award was contrary to the public policy of Zimbabwe and should not be registered
• What constitutes an award contrary to public policy sufficient to refuse registration of an arbitral award

The arbitral award dated 3 August 2021 made by Honourable ABC Chinake was registered as an order of the High Court. The respondent was ordered to pay costs on the ordinary scale.

An arbitral award will only be set aside or refused registration on public policy grounds where the reasoning or conclusions constitute a palpable inequity that is so 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. Mere errors of law or fact by an arbitrator do not constitute grounds for refusing to register an award on public policy grounds. Courts must construe the public policy defense restrictively to preserve the basic objective of finality in arbitration. An arbitrator does not foist terms on parties or violate public policy by applying the parole evidence rule and interpreting a written contract with an entirety clause according to its express terms, notwithstanding alleged prior discussions. The failure to rule on jurisdiction is distinguishable from ruling that jurisdiction does not extend to a particular claim; only the former violates public policy through breach of audi alteram partem.

The court made important observations about the award of costs on the higher (attorney-client) scale, cautioning that such awards should only be made in exceptional circumstances. The court noted it has become fashionable for lawyers to seek higher costs merely because a party opposed an application, but emphasized that this could inappropriately curtail constitutional rights of access to courts and the right to be heard. The court stated: 'I am of the view that the values espoused in those rights override the granting of attorney and client costs and care must be taken to avoid passively curtailing these rights through inappropriate orders for costs on that scale.' The court also observed that courts adopt a less interventionist approach to arbitral awards to ensure disputes are not unnecessarily prolonged by fresh litigation, and noted that an arbitrator's role is to interpret existing contracts, not to negotiate or foist contracts on litigating parties where they have failed to negotiate terms.

This case reinforces the restrictive approach Zimbabwe courts take to setting aside or refusing to register arbitral awards on public policy grounds, emphasizing the finality of arbitration as an alternative dispute resolution mechanism. It reaffirms the high threshold established in ZESA v Maphosa for finding an award contrary to public policy - requiring palpable inequity that is outrageous in its defiance of logic or moral standards, not mere errors of law or fact. The judgment emphasizes the sanctity of written contracts and the parole evidence rule in commercial arbitration. It also provides guidance on the distinction between an arbitrator failing to rule on jurisdiction (which violates audi alteram partem) versus ruling that jurisdiction does not extend to certain claims. The case further contributes to jurisprudence on costs by cautioning against routine awards of attorney-client costs that could chill the exercise of constitutional rights of access to courts.