Zimbabwe Cricket v (1) Harare Sports Club (2) Advocate Daniel Tivadar (Arbitrator)

The first respondent (Harare Sports Club) was the registered owner of a sporting complex which it leased to the appellant (Zimbabwe Cricket) through a Notarial Agreement of Lease signed on 16 July 1999. The rental was initially fixed in Zimbabwe dollars at $40,000 per month. Clause 3(c) of the lease provided for annual escalation at a rate to be agreed between the parties. Clause 20 provided that if the parties failed to agree on rent, an independent arbitrator appointed by mutual agreement would determine it. When the multi-currency system was introduced in 2009, the parties failed to agree on the rent chargeable in foreign currency. They could not agree on the appointment of an arbitrator. The first respondent applied to the High Court seeking an order authorizing the Commercial Arbitration Centre to appoint the second respondent as arbitrator. The appellant opposed this application, arguing that the High Court could not delegate the power to appoint an arbitrator and that the dispute should be determined by the Commercial Rent Board under the Rent Regulations. The High Court granted the application and the second respondent was appointed. After the arbitral award was issued, the appellant sought to set it aside while the first respondent sought to register it. The High Court dismissed the application to set aside the award and granted registration.

• Whether the High Court has authority to delegate the power to appoint an arbitrator to the Commercial Arbitration Centre under Article 11(4) of the UNCITRAL Model Law
• Whether the dispute was governed by the Commercial Premises (Rent) Regulations and should be determined by the Commercial Rent Board
• Whether clause 3(c) of the lease was invalid by virtue of section 29 of the Rent Regulations
• Whether the arbitral award met the requirements for setting aside under Article 34 of the UNCITRAL Model Law
• Whether the arbitral award was in conflict with public policy of Zimbabwe
• Whether the arbitrator exceeded his jurisdiction by determining fair rental rather than escalation of rental
• Whether the arbitrator's admission of expert evidence was procedurally improper

The appeal was dismissed with reasons to follow, which were subsequently provided in the judgment dated 23 [month not specified] 2022.

The binding legal principles established are: (1) Under Article 34 of the UNCITRAL Model Law, courts do not exercise appellate power over arbitral awards and will only set aside awards where the reasoning or conclusion 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 conception of justice would be intolerably hurt by the award; (2) A party to arbitration cannot approach the court merely because the arbitrator made an incorrect decision; (3) Where an arbitrator makes a preliminary ruling on jurisdiction under Article 16 of the UNCITRAL Model Law, a party must seek High Court review within the prescribed time period or be bound by that ruling; (4) An arbitrator has discretion under the UNCITRAL Model Law to adopt procedural measures, including admission of expert evidence, that will produce just and equitable results, provided both parties are given equal opportunity to present their case; (5) Parties are bound by the arbitration procedure they have contractually agreed upon.

The Court made non-binding observations regarding the factual circumstances of the currency transition from Zimbabwe dollars to the multi-currency regime in 2009, noting that the lease required written amendments but oral agreements for rental amounts were made as temporary measures. The Court observed that there was evidence of the appellant paying US$3000 per month despite denying the existence of the second oral agreement. The Court also commented that the first respondent was losing value on its property due to the informal rental arrangements following the currency change. These observations provided context for understanding why the arbitrator needed to determine a fair rental rather than merely escalate an existing one, but were not essential to the legal principles being established.

This case is significant in South African and Zimbabwean arbitration law as it clarifies the limited grounds on which courts will interfere with arbitral awards under the UNCITRAL Model Law. It establishes that courts will not review arbitral awards on the merits and will only set aside awards in exceptional circumstances where there is palpable inequity that defies logic or accepted moral standards. The case also confirms the procedural requirements for challenging an arbitrator's jurisdiction and the consequences of failing to seek timely High Court review of preliminary jurisdictional rulings. It reinforces the principle of party autonomy in arbitration and the arbitrator's discretion in conducting proceedings to achieve just and equitable outcomes. The judgment provides important guidance on the interaction between statutory rent control regimes and contractual arbitration clauses, and the treatment of currency substitution in long-term lease agreements.