Zimasco (Private) Limited v Portnex International (Proprietary) Limited and Kevin Terry (N.O.)

Zimasco (the Applicant) and Portnex International (the First Respondent) entered into a Lease Agreement on 29 June 2017 for the lease of furnaces at Zimasco's Ferrochrome production facility in Kwekwe. Disputes arose between the parties, particularly regarding the currency in which rent was payable under the lease agreement. The parties agreed to appoint Mr. Kevin Terry (the Second Respondent) as Arbitrator to determine their disputes. They agreed that the currency issue be dealt with by way of Partial Award. On 2 March 2020, Mr. Terry rendered his Partial Award in favour of Portnex and made a punitive cost award on the legal practitioner and client scale without inviting submissions or explaining the basis for such punitive costs. Zimasco filed an application to set aside the Partial Award (HC 2446/20), which was dismissed by MANGOTA J in HH 34/21. Zimasco then brought this application under Article 13 of Schedule 1 of the Arbitration Act seeking the recusal of Mr. Terry as Arbitrator, alleging partiality and bias. The Arbitrator had refused to recuse himself when requested.

• Whether issue estoppel applied to prevent the recusal application from proceeding
• Whether the doctrine of issue estoppel requires that the same relief must be demanded
• Whether an arbitrator can be recused before completing the arbitration process when a Partial Award has been issued
• Whether a point in limine on issue estoppel can be raised at the hearing even if not pleaded in papers

1. The point in limine is upheld. 2. The application is struck off the roll. 3. No order as to costs.

The binding legal principle is that issue estoppel applies to prevent parties from fragmenting arbitration proceedings through successive court applications seeking to interrupt the arbitration process before the arbitrator has completed determination of all issues placed before him. Where a court has given a final decision directing parties to complete the arbitration process, issue estoppel prevents subsequent applications that would achieve the same result of stalling the arbitration, even if the specific relief sought is different. The doctrine of issue estoppel does not require that the same relief be demanded; it requires only that (1) the same question be decided; (2) the judicial decision be final; and (3) the parties be the same. A piecemeal approach to arbitration proceedings is contrary to logic, consistency, and decided case authorities.

The court made observations supporting MANGOTA J's reasoning that where an arbitral award is set aside, a trial de novo would be required, which is more time-consuming and costly than continuation of proceedings. The court also observed that parties cannot wish away the issues which they agreed to take to arbitration in the first place, and these issues will continue to face them until resolved in some way. The court noted that it would not deal with the merits of the recusal application given the disposal on the point in limine, leaving open what the outcome might have been on the substantive allegations of bias and partiality had the matter proceeded to the merits.

This case is significant in Zimbabwean arbitration law for reinforcing the principle that parties cannot adopt a piecemeal approach to challenging arbitration proceedings. It establishes that once parties have agreed to arbitration and issues are being determined, they cannot interrupt the process by seeking recusal of the arbitrator before all issues are finalized, particularly where a prior court has directed that the arbitration should continue to completion. The case demonstrates the application of issue estoppel in the arbitration context and confirms that issue estoppel does not require identical relief to be demanded, only that the same question be decided by the same parties in a final decision. It also confirms procedural flexibility allowing points of law to be raised at hearing even if not pleaded.