Zimbabwe Schools Examination Council v Moses H Chinhengo (Former Judge) N.O and Tarch Print Zimbabwe (Pvt) Ltd

The second respondent won a tender in 2011 for binding of applicant's 'O' Level and 'A' Level result slips for 2004-2010. A contract was entered into with a fixed price of $71,620.50 for binding work to be completed in 21 days. Applicant only provided all batches in 2014. Applicant paid $69,255.00, leaving a balance of $2,365.85. However, second respondent raised invoices claiming a balance of $43,708.35 from a revised total of $112,963.35. Applicant refused to pay the revised amount and offered only the original balance. The dispute was referred to arbitration. The arbitrator awarded: (a) $18,129.80 for additional costs occasioned by extension of the agreement from March 2012 to August 2014; and (b) $2,365.85 being the outstanding balance. Applicant sought to set aside part (a) of the award as contrary to public policy under Article 34 of the Arbitration Act.

• Whether the notice of opposition complied with Rule 227(2)(d) of the High Court Rules requiring an index for documents exceeding 5 pages
• Whether the arbitral award dealt with matters beyond the scope of submission to arbitration in terms of Article 34(2)(a)(iii) of the Arbitration Act
• Whether the arbitral award was contrary to public policy of Zimbabwe in terms of Article 34(2)(b)(ii) of the Arbitration Act
• Whether the arbitrator exceeded his mandate by interpreting a contractual clause that parties had already agreed upon
• Whether the arbitrator created a new contract for parties instead of interpreting the existing contract

The application succeeded. Paragraph (a) of the operative part of the arbitral award handed down by the first respondent on 21 March 2017 was set aside. The second respondent was ordered to pay costs of suit.

An arbitral award may be set aside under Article 34 of the Arbitration Act where: (1) the arbitrator exceeds the scope of matters referred for determination, including by interpreting contractual provisions that parties have already agreed upon in their statement of agreed facts; and (2) where the award is contrary to public policy because the reasoning constitutes a palpable inequity that is outrageous in its defiance of logic, such as awarding damages after finding that the claim was not proven, was waived, and the breach was condoned. Arbitrators, like courts, have a duty to interpret contracts and not to create new contractual terms for parties. The principle of freedom of contract and sanctity of contracts must be respected.

The court made important observations about procedural compliance, stating that rules of court are made for the convenience of the court and while compliance is imperative, non-compliance should not automatically result in dismissal of a litigant's case where other remedies are available in the interest of justice. The court should consider the degree of non-compliance, prejudice suffered, and whether such prejudice can be remedied by an order of costs. The court endorsed the principle from Zimbabwe Open University v Mozambique 2009 (1) ZLR 101 (H) that not every infraction of the rules is fatal to proceedings. The court also noted that damages that are by their nature difficult to assess with certainty fall into a special category, but extra costs of hiring equipment, labour, and inflation adjustments are easily quantifiable and do not fall into that category.

This case is significant in Zimbabwean arbitration law as it clarifies the narrow grounds upon which courts will interfere with arbitral awards under Article 34 of the Arbitration Act [Chapter 7:15]. It establishes that: (1) arbitrators are confined to their terms of reference and cannot determine matters not submitted to them, even interpretative issues already agreed upon by parties; (2) the "public policy" ground for setting aside awards applies where an award goes beyond mere incorrectness to constitute a palpable inequity that is outrageous in its defiance of logic; (3) arbitrators cannot award damages where they have found that the claim was not proven or was waived; and (4) judicial officers must interpret contracts, not create new contractual terms for parties. The case also demonstrates judicial pragmatism in applying procedural rules, holding that non-compliance should not automatically result in dismissal where justice can be served through other remedies.