Zimbabwe Manpower Development Fund v MCR Vengesai and Agnes Vengesai

The appellant (ZIMDEF), a statutory body, and the respondents (Vengesayi Architects), beneficial owners of an architectural firm, entered into an agreement in 1998 for architectural services regarding construction of a building. The project was suspended in 2005 at the instance of the main contractor demanding additional payment to cushion against inflation. Vengesayi Architects had been paid in full for all work up to that point. The project resumed in 2011 with an instruction from ZIMDEF to "resume supervision services". Upon resumption, the project was revalued in US Dollars due to Zimbabwe's adoption of a multicurrency regime. In 2014, Vengesayi Architects sent a fee note claiming 6% of the revalued project cost, less amounts already paid. ZIMDEF contended it had paid 4.5% of fees and that only supervision (1.5%) remained payable. A dispute arose regarding calculation of fees under the Architects (Conditions of Engagement and Scale of Fees) By-Laws S.I. 829/1980. The matter was referred to arbitration, which found in favor of Vengesayi Architects and awarded USD 476,093.92 plus interest at 5% from 7 August 2014. ZIMDEF also counterclaimed for damages alleging negligence, which the arbitrator dismissed as prescribed.

• Whether the High Court erred in refusing to set aside the arbitral award on grounds that it violated public policy of Zimbabwe
• Whether the arbitrator correctly interpreted and applied the provisions of S.I. 829/1980 regarding calculation of architectural fees
• Whether the arbitrator erred in calculating fees based on rates not specified in the statutory instrument
• Whether the arbitrator awarded payment for work already completed and paid for
• Whether the arbitrator correctly applied the law of prescription in dismissing the counterclaim for damages

The appeal was dismissed with costs. The High Court's order registering the arbitral award was upheld, and the dismissal of ZIMDEF's counter-application to set aside the award was confirmed.

An arbitral award may only be set aside on public policy grounds where it 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 in Zimbabwe would be intolerably hurt by the award. Mere errors of law or fact by an arbitrator, even if glaring, do not constitute violations of public policy sufficient to warrant setting aside an award. The party alleging that an award violates public policy bears the onus of proving facts establishing such violation and must do more than make bald, unsubstantiated averments. An arbitrator cannot be faulted for not applying legal provisions that were not raised by the parties before him in an adversarial proceeding. Courts will not substitute their findings for those of an arbitrator or conduct a rehearing on an application to set aside an award under Article 34 of the Model Law.

The Court observed that neither party presented their case well before the arbitrator, particularly regarding the currency conversion issues when the project was revalued from Zimbabwe Dollars to US Dollars. The Court noted that a proper approach would have required Vengesayi Architects to establish what it received in Zimbabwe Dollars, convert that sum to US Dollars, obtain an independent valuation of the total project cost, and undertake a mathematical exercise to confirm compliance with the fee structure in S.I. 829/1980. The Court also commented that civil litigation in Zimbabwe is adversarial and a court, tribunal or adjudicator is not empowered to prosecute a dispute on behalf of any party, as doing so would constitute a gross irregularity and be perceived as bias. The Court clarified that the High Court judge's remarks about appeals should not be misconstrued as suggesting that ZIMDEF should have appealed the arbitral award, but rather that the High Court does not sit as an appeal court when determining applications under Article 34.

This case is significant in Zimbabwean arbitration law as it reinforces the high threshold required for setting aside arbitral awards on public policy grounds. It confirms that courts will not interfere with arbitral awards merely because of errors of law or fact, and will not substitute their own findings for those of an arbitrator. The judgment emphasizes the principle of finality in arbitration and the limited grounds for judicial intervention. It clarifies that parties choosing arbitration must accept the consequences of that choice, including living with awards that may contain errors, unless those errors rise to the level of violating public policy in the strict sense defined in ZESA v Maposa. The case also establishes important principles regarding the burden of proof on parties seeking to set aside awards and the requirement that legal arguments must be properly raised before the arbitrator to be considered on review.