MODULE 2:

ARBITRATION CASES IN ZAMBIA

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ARBITRATION CASES IN ZAMBIA

CHAPTER 1:

1. CONSTITUTING THE ARBITRAL TRIBUNAL

1.1Whether it is competent to refer a dispute that is tainted with

illegality to arbitration.

ODY’S OIL COMPANY LIMITED V THE ATTORNEY GENERAL,

CONSTANTINOS JAMES PAPOUTIS1

This was an appeal against the judgement of the High Court in which the
learned judge stayed the proceedings before him and referred the dispute to
arbitration for settlement. The facts of the case were that Mr. Odysseus and his
son by the same name, held 50% of the shares in the appellant company while
the remaining 50% shares were held by the 2nd respondent, Mr. Constantinos
James Papoutis. A dispute arose over certain transactions of the appellant
company as well as the 2nd respondent’s shareholding. The 2nd respondent was
alleged to have applied stolen money from the Zamtrop account to invest in the
appellant company. The Government of the Republic of Zambia, through its
agencies, the Anti-Corruption Commission and the Task Force on Corruption
placed a restriction on the 2nd respondent’s shares in the company. The
restriction was however revoked.

1
ODY’S OIL COMPANY LIMITED V THE ATTORNEY GENERAL, CONSTANTINOS JAMES PAPOUTIS SCZ NO. 4 2012

2
In this case it was held that:

It is trite that the Courts will not enforce a contract which is tainted with
illegality as it is contrary to public policy. Further it was stated in this case
that although the arbitration clauses was valid, it was inoperative and
incapable of being performed as issues of illegality and public policy cannot
be resolved at arbitration.

1.2Can a party appeal against a decision made by the Court in respect of

the appointment of an arbitrator?

NUBIAN RESOURCES LIMITED V METALCO INDUSTRIES2

The appellant appealed against a ruling of the learned trial Judge in which she
ordered that an arbitrator be appointed by an independent lawyer within 14
days. The trial judge further ordered that in the event of default, the court would
appoint the arbitrator to arbitrate on the dispute under the contract between the
parties. This order was made following the application of the respondent. The
appellant logged an appeal challenging that decision. The respondent then filed
an application before a single judge seeking to have the appeal dismissed for
irregularity or incompetence on the ground that no appeal lies against a decision
on the appointment of an arbitrator. The single judge ruled that the application
should be made before a full bench in open court.

It was held:

2
NUBIAN RESOURCES LIMITED V METALCO INDUSTRIES SCZ/8/069/2013.

3
Under section 12 (5) of the Arbitration Act, the decision of the Court on the
appointment of an arbitrator is not subject to appeal.

1.3
 The power of the Courts to stay proceedings (section 10),
 Power of the Courts to utilize a viable interpretation over one that
impugns an arbitration clause,
 And the survival of arbitration clauses upon termination of
contract.

BOMAR MINING COMPANY (Z) LIMITED V MOPANI COPPER MINES

PLC3

The parties entered into a NEC Term Service Contract ( the contract) on 30 th
November 2015 which was subsequently terminated by the Defendant on 9th
September 2016. The contract provided for a dispute resolution mechanism by
way of adjudication and arbitration on appeal. On 16 th February 2017, the
Plaintiff commenced an action against the defendant by way of a writ of
summons accompanied by a statement of claim.

On 9th March 2017, the Defendant applied to the Court to stay the proceedings
and refer the matter to arbitration pursuant to section 10 of the Arbitration Act.
This application was supported by an affidavit deposed to by Johan du Toit

3
BOMAR MINING COMPANY (Z) LIMITED V MOPANI COPPER MINES PLC 2017/HKC/0002

4
( the “Deponent”), wherein the Deponent averred that the dispute resolution
mechanism under the contract provided the forum as arbitration under the
International Chamber of Commerce, International Court of Arbitration Rules.
The Deponent thus prayed that the matter be referred to arbitration and an
arbitrator be appointed in accordance with the arbitration clause.

The Plaintiff opposed this application and averred that in terms of the provisions
of the Contract, adjudication was the first step of dispute resolution and where
that failed, the parties could then resort to arbitration. The Plaintiff further
averred that the adjudicators nominating body- the Zambia Centre for Dispute
Resolution ceased to exist in Zambia and therefore, the parties could not rely on
a non-existent adjudicating body. The Plaintiff thus stated that the arbitration
clause in its current state was invalid, ineffective and unenforceable against the
parties.

In the aforementioned case, the following were held:

i. The process of adjudication and arbitration both survived the

termination of the contract.
ii. When interpreting an arbitration clause, preference is given to a
viable interpretation over one that impugns it.
iii. A stay of proceedings is granted in accordance with section 10 of the
Arbitration Act.

5
CHAPTER 2

2. THE POWERS AND JURISDICTION OF TRIBUNAL/ INTERIM

MEASURES

2.1
 Section 11 of the Arbitration Act provides the requirement to specify the
relief sort.
 Partnership property is subject to arbitration.

ELIAS CHILESHE CHIPIMO AND CHARLES MKOKWEZA V

BRADFORD MACHILA4

The Claimants alleged that the Respondent threatened to levy distress on the
partnership of Corpus Globe due to the Respondent’s perceived interest in stand
number 2386 (the “ Property”), Lusaka from which the partnership operated.
The Claimants claimed that the Respondent had traded his interest in the
Property for monthly drawings, following his failure to meet his budgetary
obligations to the partnership of Corpus Globe. The Respondent averred that the
dispute for rentals on the Property did not arise from the partnership deed (the
“Deed”) of Corpus Globe because the Property was owned by Brentwood
Investments Limited, of which the Respondent was a shareholder along with
Karish Investments Limited and Nova Holdings.

The Respondent as such stated that the issue of rentals due to Brentwood was
not subject to resolution by arbitration in terms of the Deed. The first Claimant

4
ELIAS CHILESHE CHIPIMO AND CHARLES MKOKWEZA V BRADFORD MACHILA 2009/HPC/0554

6
therefore applied to the Court for an interim measure of protection pursuant to
Rule 9 of the Arbitration (Court Proceedings) Rules 2001.

In the above cited case, the following were held:

i. The application was not properly presented before the Court as no

specific endorsement was made to aid the Court in determining what
specific measures of protection were being sort, or the asset that was
sort to be preserved or indeed the wrongful act that was sort by the
Claimants to restrain the Respondent from committing.
ii. As the property in dispute was not an asset of the partnership, the
claimants did not have a good arguable claim to the right sort to be
protected.

2.2Whether awarding of damages would suffice in place of an interim

injunction.

RORAIMA DATA SERVICES LIMITED V ZAMBIA POSTAL SERVICES

CORPORATION5

The Plaintiff applied for an interim protection measure pending arbitration

pursuant to Rule 9 of Statutory Instrument No. 75 of 2001. The order sought to
restrain the Defendant from conducting any commercial transactions on any
platform other than “Cash 4 Africa Technology” in the Defendant’s electronic
cash transfer portfolio.

5
RORAIMA DATA SERVICES LIMITED V ZAMBIA POSTAL SERVICES CORPORATION 2011/HN/ARB/01.

7
In this case it was held:

i. It is trite law that where damages would suffice and the Defendant is
able to pay them, then no injunction should be granted.
ii. If the Plaintiff succeeded and an injunction was refused, then the
usual damages for breach of contract would be granted.
iii. If the Defendant succeeds and it is found that the injunction should
not have been granted, the Defendant will be compensated in
damages.

In the case of ZIMBABWE MINING DEVELOPMENT CORPORATION V

AMAPLAT MAURITIUS LIMITED, AMARI NICKEL HOLDINGS
ZIMBABWE LIMITED AND OTHERS6

The following were held:

1. The action by the Applicant was misconceived in law as the

arbitrators had immunity under the Arbitration Act.
2. To restrain the arbitrators from acting and continuing the
arbitration proceedings would have been contrary to the spirit of the
provisions of the Arbitration Act.

CHAPTER 3

6
ZIMBABWE MINING DEVELOPMENT CORPORATION V AMAPLAT MAURITIUS LIMITED, AMARI NICKEL
HOLDINGS ZIMBABWE LIMITED AND OTHERS 2012/HP/1213.

8
 3. STAYING OF PROCEEDINGS COMMENCED IN
CONTRAVENTION OF ARBITRATION AGREEMENT

3.1 Can a party at any stage of the proceedings, refer a matter to

arbitration?

KENNETH VAN DER WESTHERZEN V ROTA RABELS LIMITED, YING

DUAN LI LING7

This was an application made by the Defendants to stay the proceedings in this
matter. The application was made pursuant to section 10 of the Arbitration Act
No. 19 of 2000.

In this case it was held:

i. A party may under the Arbitration Act make an application at any

stage of the proceedings and request the Court to refer the matter to
arbitration.
ii. Section 10 of the Arbitration Act does not constrain any party that
has taken steps in the proceedings.

3.2
1. The underlying philosophy of the Arbitration Act of 2000
2. The circumstances in which a Court may interfere with arbitration
as a mode of dispute resolution.

7
KENNETH VAN DER WESTHERZEN V ROTA RABELS LIMITED, YING DUAN LI LING 2010/HP/387.

9
 3.3 What may or may not form the subject matter of arbitration,
whether this is to be determined by the Court or an Arbitrator.

POUWELS CONSTRUCTION ZAMBIA LIMITED AND POUWELS

HOTELS AND RESORTS LIMITED V INYATSI CONSTRUCTION
LIMITED8

This was an appeal against a ruling of the High Court dismissing the
Appellant’s application to set aside originating process for irregularity. On 16 th
July 2009 Platinum Gold Equity Limited and the 1st Appellant executed a
contract by which the latter was to construct a shopping centre at plot number
7732 Parklands Kitwe, for the former. At the same time the 1 st Appellant
executed a subcontract agreement with the Respondent for earthworks, layers,
external works and service reticulation in respect of the said shopping centre.
Alleging breach and failure or neglect by the 1st Appellant to pay the
Respondent the outstanding amount on the subcontract, the Respondent
commenced an action against the Appellants. On 14th January 2014 the
Appellants filed separate summons to set aside originating process. The basis of
the Appellant’s applications was amongst others that clause 29 of the
Agreement and Schedule of Conditions of Building contract between Platinum
Gold Equity Limited and Pouwels Construction Zambia Limited and Inyatsi
Construction Limited provide for Alternative Dispute Resolution (ADR) which
includes Arbitration.

Held:

i. The philosophy underlying the Arbitration Act of 2000 is

underpinned by its preamble as being “to redefine the supervisory

8
POUWELS CONSTRUCTION ZAMBIA LIMITED AND POUWELS HOTELS AND RESORTS LIMITED V INYATSI
CONSTRUCTION LIMITED, APPEAL NO. 023 OF 2016.

10
 role of the Courts in the arbitral process.” The Act is intended to
restrict the Court’s involvement in arbitration to the extent only of
providing a complementary role to the arbitral process. Unlike the
repealed Arbitration Act of No. 3 of 1933 (chapter 40) which gave the
Courts unfettered power to interfere in and control the arbitral
process, the Arbitration Act of 2000 was intended by the legislature
to foster commerce by giving parties to a commercial transaction
freedom to choose arbitration as their preferred dispute resolution
forum.
ii. The Courts will only interfere with the parties’ choice of forum if the
arbitration agreement is null and void, inoperative or incapable of
being performed.
iii. Regarding the contention by Counsel for the Respondent that some
issues are not arbitrable, we must emphasise that this is a question to
be determined by the arbitral tribunal once it is constituted and not
the Courts.

3.4 Whether matters not covered by an arbitration clause can be

referred to arbitration.

MECHANISED MINING SOLUTION (Z) LIMITED V KONKOLA

COPPER MINES PLC.9

9
MECHANISED MINING SOLUTION (Z) LIMITED V KONKOLA COPPER MINES PLC 2012/HK/435.

11
The Defendant applied for a stay of proceedings and for the matter to be
referred to arbitration. The gist of the Defendant’s supporting affidavit was that
in these proceedings, the Plaintiff claims K 1 087 299 352.22 being the amount
outstanding for goods supplied to the Defendant at the Defendant’s own request
and a refund of interest and processing fees charged by Indo Zambia Bank Ltd
on the Plaintiff’s account at that bank. At all material times the Plaintiff was
engaged by the Defendant pursuant to a U.O.B. Contract which contains an
arbitration clause. That the inventory of the equipment claimed to have been
supplied shows that the same were for the execution of works on the same
contract or ancillary to the performance thereof. The Plaintiff filed an affidavit
in opposition to the effect that the Plaintiff’s claim was threefold as follows:

i. The claim for the price of support material.

ii. The claim for the value of goods collected by the 1st Defendant following
a flood at their mine; and
iii. Interest which the defendant undertook to pay to the bank on a facility
given to them.

The Plaintiff Argued that the U.O.B. contract exhibited by the Defendant was
for a limited period of four months, which means that it expired by October
2011 but the transactions in respect of this case occurred between February and
March 2012.

In this case it was held:

The U.O.B contract relied upon by the defendant expired before the
transactions in question were entered into. The claims by the plaintiff in
this case relate to the things done outside the said U.O.B contract.
Therefore, the arbitration clauses relied upon by the Defendant did not
apply in the current case.

12
 3.5Effect of an agreement being null and void.

ABDUL AZZIZ TICKLAY AND KHATIJA T/A KITTYKAT PROPERTIES V

ESPARANZA DESIGNS INVESTMENTS LIMITED10

This was an application by the Defendant for an Order to refer the matter to
Arbitration made pursuant to section 10 of the Arbitration Act number 19 of
2000 of the Laws of Zambia. The application was supported by an affidavit and
skeleton arguments dated 17th March 2014. It was deposed that on 12th February
2014, the Plaintiff issued a Writ of Summons and Statement of Claim against
the Defendant to recover outstanding rentals and an order for restoration of the
leased shop premises, amongst other reliefs. The matters in dispute arose out of
a lease agreement and within the scope of the said agreement the differences
were fit and proper to be referred to arbitration. The Defendant deposed that
there was no sufficient reason why the said matters should not be referred and
decided by arbitration as the Defendant had not taken any further steps beyond
giving notice to raise a preliminary issue dated 28 th February 2018 and that the
Court should therefore in its inherent jurisdiction grant an order referring the
matter to arbitration. The Plaintiff opposed the application and filed an affidavit
and skeleton arguments on 26 March 2014. The Plaintiff argued that the
application to refer the matter to arbitration was ploy to prevent the Plaintiff
from applying for a Judgment on admission. It was submitted further that the
lease agreement was for a period longer than one year and not registered at the
Lands and Deeds Registry therefore it was null and void.

In this particular case it was held that:

10
ABDUL AZZIZ TICKLAY AND KHATIJA T/A KITTYKAT PROPERTIES V ESPARANZA DESIGNS INVESTMENTS
LIMITED 2014/HPC/0071.

13
Section 10 of the Arbitration Act provides for the reference to arbitration
of matters brought to Court based on agreements subject of an arbitration
clause. This section excludes reference of matters to arbitration where the
Court finds the agreement subject of an arbitration clause null and void.
The lease agreement was null and void by virtue of non-registration, the
matter could not be referred to arbitration.

3.6The import of section 11 (1), (2) and (4) of the Arbitration Act.

HOTTLIER LIMITED V EASTERN AND SOUTHERN TRADE AND

DEVELOPMENT BANK11

On 17th October 2016 the applicant filed Originating Summons and n affidavit
in support for an interim measure of protection pending the commencement and
conclusion of arbitration proceedings pursuant to section 11 (1) and (2) of the
Arbitration Act No. 19 2000 as read together with Rule 9 of the Arbitration
(Court Proceedings) Rules, Statutory Instrument No. 75 of 2001.

The gist of the application was that a dispute had arisen between the parties
regarding a Loan Agreement. The Loan Agreement provided for arbitration as a
mode of dispute resolution. The Applicant was apprehensive that the
Respondent may place the Applicant in receivership before the matter goes to
arbitration and sought to invoke sections 11 (1) and (2) of the Arbitration Act.

It was held:

11
HOTTLIER LIMITED V EASTERN AND SOUTHERN TRADE AND DEVELOPMENT BANK 2016/HP/RB/0009.

14
 i. Section 11 is clear on the powers of the Courts to grant interim
measures of protection to any party, before or during arbitral
proceedings. Sub section (2) of the same section sets out the relief the
Court can grant upon request in terms of subsection (1) thereof.
ii. Section 11 (4) outlines that the Court will invoke its powers under
section 11 only where a tribunal has not yet been appointed and the
matter is urgent, or that the tribunal so appointed is not one that is
competent to grant the order or injunction.

CHAPTER 4

4. THE EFFECT OF A COURT ORDER STAYIG PROCEEDINGS

PENDING REFERRAL TO ARBITRATION.

4.1 A respondent’s application to stay proceedings pending referral to

arbitration

INTERMARKET BANKING CORPORATION ZAMBIA V NONDE

MUNKANTA12

In this case the Respondent applied to stay proceedings pending referral to

arbitration. The application was made by way of summons, and was supported
by an affidavit and skeleton arguments.

12
INTERMARKET BANKING CORPORATION ZAMBIA V NONDE MUNKANTA 2012/HPC/0268.

15
Held:

i. By virtue of section 10 of the Arbitration Act, where the parties have

agreed to refer their disputes to arbitration, the Court is obliged
upon application by one of the parties to stay proceedings and refer
the parties to arbitration.
ii. An arbitration clause is an agreement between the parties to the
exclusion of the Court, whilst a consent order is an agreement of the
parties which is endorsed and sealed by the Court.

4.2 Urgency is required when granting an injunction

FRIDAY MWAMBA V DERRICK CHEKWE13

On 18th February, 2010 the Judge granted the applicant an ex parte injunction
pursuant to section 11 of the Arbitration Act No. 19 of 2000, that the
Respondent, whether by himself, his proxies, servants or his agents howsoever
be restrained, and an injunction granted to restrain the respondent from
attending any meeting or meetings of or concerning Necor Zambia Limited and
Application Solutions Limited or either of them or from attending the office or
business premises of the said companies or either of them or otherwise doing or
causing to be done any act or thing having a bearing upon the companies in
question pending the resolution, by arbitration, of the dispute and differences
that have risen between the applicant and the Respondent unit/ unless it were
ordered otherwise. The matter was heard inter parties on 25 th February, 2010.
13
FRIDAY MWAMBA V DERRICK CHEKWE 2010/HPC/0107.

16
The injunction being sought by the applicant is in the applicant is in aid of
intended arbitration proceedings. The applicant held 48.5% shares in the capital
of Necor Zambia Limited while the respondent holds 1.5% shares therein.
Necor Zambia Limited, in turn held 51% shares in the capital of Application
Solutions Zambia Limited, a private company limited by shares wherein the
respondent and applicant held 0.18% and 17.82% shares respectively.

The following was held:

The Courts only grant an injunction if the arbitral tribunal has not yet
been appointed and the matter is urgent. Granting the injunction in the
absence of any urgency would only serve to place the applicant in an
unassailable position.

CHAPTER 5

5. THE EFFECT OF AND CHALLENGES OF AN AWARD

5.1
 The rationale for setting aside arbitral award.
 An award is final and binding.
 The requirements for one to succeed on an application to set aside an
arbitral award.

JOHN KUNDA V KEREN MOTORS (Z) LIMITED14

The Plaintiff issued an originating summons seeking an order to set aside the
arbitral award of the sole arbitrator in the arbitral proceedings involving Keren

14
JOHN KUNDA V KEREN MOTORS (Z) LIMITED 2008/HPC/550.

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Motors (Z) Limited as Claimant and Adventist Development and Relief Agency
(ADRA) as Respondent rendered on 6th August 2008 on the ground that the said
award affected by fraud and/ or misrepresentation within the terms
contemplated by section 17 (2) (b) (iii) of the Arbitration Act No. 19 of 2000.
The Plaintiff’s affidavit in support disclosed that the award is tainted with fraud
and/or misrepresentation because the Defendant based its original fees or
charges against the Plaintiff upon the carriage contract by falsifying the tonnage
of the potato vines or the goods transported on the Plaintiff’s behalf on the
various routes as a result of which it fraudulently charged the Plaintiff a sum of
K2 625 085 059.20 (unrebased). When the Plaintiff objected against the said
price and accused the Defendant with fraud or misrepresentation, the bill was
waived and reduced by over K1 300 000 000.00, in circumstances where the
Plaintiff had already paid K834 649 714.40. The fraud having been detected, the
Plaintiff refused to pay any more of the bill as a result of which the Defendant
slashed the balance to the sum of K360 471 260.80. The Plaintiff initially began
to off-set the balance by paying K50 000 000.00 at once, but having confirmed
the said fraud the Plaintiff refused to be bound by the contract any longer,
prompting arbitration proceedings. At the arbitration proceedings the Plaintiff’s
evidence as to the said fraud was rejected and the plaintiff was found to be
bound by estoppels to pay the balance of K310 471 260.80, notwithstanding the
fraud. The Plaintiff appealed to have the award entirely set side.

Held:

i. The purpose of an action to set aside an award is to preserve the

integrity of the arbitral process. The point should be noted that
setting aside proceedings do not serve as a means to achieve a review
of the tribunal’s decision on the merits.
ii. Arbitral rules, such as those of UNCITRAL provide unequivocally
that an arbitration award is final and binding. These are not

18
 intended to be mere empty words. One of the advantages of
arbitration is that it is meant to result in the final determination of
the dispute between the parties. If the parties want a compromise
solution to be proposed, they should opt for mediation. If they are
prepared to fight the cause to the highest Court in the land, they
should opt for litigation. By choosing arbitration, the parties choose a
system of dispute resolution that results in a decision that is, in
principle, final and binding. It is not intended to be a proposal as to
how the dispute might be resolved; nor is it intended to be the first
step on a ladder of appeals through national Courts.
iii. For an application under section 17 (2) (b) (iii) to succeed, the
applicant must satisfy the Court that the arbitral award was obtained
by fraudulent means, corruption or misrepresentation.

Does the Court have jurisdiction to settle matters of taxation costs arising
out of the arbitration process?

YOUGO LIMITED V PEGASUS ENERGY (ZAMBIA) LIMITED15

In the above cited case, the Defendant appealed against the ruling of the learned
Deputy Registrar dated 6th June, 2011 in which the Deputy Registrar held that
the High Court was the Taxing Master in respect of a bill of costs originating
from arbitration proceedings.

Held:
15
YOUGO LIMITED V PEGASUS ENERGY (ZAMBIA) LIMITED 2008/HPC/0299.

19
“Costs awarded in arbitration proceedings can be taxed either by an
arbitral tribunal or the taxing master. They are taxed by an arbitral
tribunal if there is prior agreement between the parties to that effect or if
an application in that regard has been made to the arbitral tribunal.
Absence of such agreement or application, the Taxing Master, which is the
Court, has the jurisdiction and power to tax costs arising from arbitration
proceedings once an application for taxation is made before it.”

Section 16 (5) only applies in circumstances where the arbitral tribunal has
been requested to tax the cost of an award.

Whether application to set aside the award on grounds of public policy

would be competent

MARTIN MISHECK SIMPEMBA ROSE DOMINGO KAKOMPE V

NONDE MUNKANTA16

In the aforementioned case, action was commenced by writ of summons on 29 th

November 2005 and the Plaintiffs claims were:

a. Damages for breach of contract, and an order rescinding the transfer of

mining rights of plot number 923/M, entered between the 1 st and 2nd
plaintiffs and the Defendant by the contracted dated 9th May 2003;
b. Damages for breach of contract dated 9 th May, appointing the Plaintiff as
main contractors on the mine;
c. An order for an injunction to restrain further mining;

16
MARTIN MISHECK SIMPEMBA ROSE DOMINGO KAKOMPE V NONDE MUNKANTA 2008/HP/268.

20
 d. An order of attachment of the property on the mine to be held as security
for monies owed;
e. Any other equitable relief as the Court may deem fit;
f. Interest; and
g. Legal costs

Although the Plaintiffs launched this action in the High Court, on 24 November,
2005, the agreement between the parties provided for an arbitration clause as
follows; “Any dispute between the parties shall be referred to the arbitration
under the Arbitration Act of Zambia, and the Chairman of the Law Association
of Zambia or his nominee will be the sole arbitrator.”

Thus the matter was referred to arbitration sometime in 2007. After the
arbitration was conducted, an award was rendered in favour of the Plaintiff on
31st December, 2007. On 17th March, 2008, the Defendants filed originating
summons in the High Court to set aside the arbitral award pursuant to section 17
(2) (b) (ii) of the Arbitration act No 19 of 2000. The gravamen of the
application was that the award rendered on 31 st December, 2007, ought to be set
aside on the ground that the award in question was in conflict with public
policy, and offensive to the relevant provisions of the Mines and Mineral Act.

In this case it was held that:

i. Although the term public policy is not defined in the Arbitration Act,
the defence of public policy should only be invoked where the
upholding of an arbitral award would; shock the conscience; is
clearly injurious to the public good; wholly offensive to an ordinary
member of society; where it violates the forum’s most basic notion of
morality or justice; or it is outrageous in its defiance of logic or
accepted moral standards that any sensible and fair minded person
would be intolerably hurt by such an award.

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 ii. The defence of public policy is narrowly construed in the bid to
preserve, and recognize the goal of finality in all arbitrations. Thus
an arbitral award is not liable to be struck down on allegations that it
is premised on incorrect ground whether of fact or law.
iii. An award will not be contrary to public policy, merely because the
reasoning or conclusions of the arbitrator are wrong in fact of law.
This is so because an application to set aside an award is not an
appeal on the merit.

5.2.
 Whether an incomplete award can be filed, registered and enforced
 Incomplete resolution of dispute (section 11 (2))

MOBIL OIL (Z) LTD V MALAWI PETROLEUM, CONTROL

COMMISSION.17

This was n appeal against the High Court decision in which the award made by
an arbitrator was confirmed. The High Court became seized of the matter by
originating summons in which the Court was asked to determine the following:

1. That an arbitrator’s findings of fact in an award cannot be altered

by either party by way of Notice of Motion.
2. That an award once delivered and registered in the judgment book
of the High Court is of binding force upon the parties in
accordance with section 16 (1) of the Arbitration Act.
17
MOBIL OIL (Z) LTD V MALAWI PETROLEUM, CONTROL COMMISSION (2004) Z.R. 227 (S.C.) .

22
 3. That the Respondent (now the Appellant) not having appealed
against the award dated 13th September, 1999, the Claimant (now
the Respondent), was entitled to enforce and enjoy the fruits of the
award without further hindrance.
4. That the award having provided for either replacement of the
products or payment in United States Dollars.

Held:

i. The parties having agreed that the arbitrator had not completely
resolved their dispute, it cannot be said that the award was complete.
If an ward is not complete, it cannot be registered.
ii. Under the Arbitration Act, it is the arbitrator that files the award
and gives notice to the parties and not the parties filing the award.
The registration of filing of the award was therefore null and void.

5.3 Conditions to be fulfilled on the application to set aside an award.

KONKOLA COPPER MINES PLC V COPPERFIELDS MINING

SERVICES LIMITED18

In this case, action was commenced by way of originating summons, and

supporting affidavit. The summons were issued pursuant to section 17 0f the
18
KONKOLA COPPER MINES PLC V COPPERFIELDS MINING SERVICES LIMITED 2010/HP/ARB/ NO. 002.

23
Arbitration (Court Proceedings) Rules. The reliefs sought were stated as
follows: that the Tribunal erred in law when it purported to shift the evidential
proof from the Defendant to the Plaintiff.

i. That the award is grossly excessive and misrepresentative of the facts and
effected by fraud;
ii. That the award was improperly procured and is perverse in that it ignored
the facts of the case;
iii. That the award is not a reasoned award as agreed by the parties; and
iv. That there were ex parte communications on the part of some members of
the Arbitral Tribunal, and the defendant during the arbitral proceedings
which prejudiced the Plaintiff’s case and tainted the award.

It was held:

i. Section 17 of the Arbitration Act makes it abundantly clear that the

grounds to be proved before an award can be set aside are those set
out in the section.
ii. An application to set aside an award is not intended for the Court to
review the award of a Tribunal, or conduct a hearing akin to an
appeal.
iii. The provisions of Order XLV, Rule 13 of the High Court Act are in
conflict with the provisions of section 17 of the Arbitration Act
because the order prescribes the sole ground for setting aside an
award as being perverseness, or misconduct of the arbitrator umpire.
iv. There was also another conflict in terms of the time limited
prescribed for setting aside an award. The High Court Order
prescribes fifteen days, whilst the Act under section 7 (3) prescribes a
period of not more than three months from receipt of the award.

24
 v. In view of the conflict in the two pieces of legislation, the prior statute
would be repealed by implication because its provisions were wholly
incompatible with a subsequent one.
vi. The Plaintiff should have not waited for the award to be rendered
because in any event, it is not a ground for setting aside an award.

5.4 Whether the Court has jurisdiction to stay execution of an award

after refusing to set aside an award.

On September 2010, a judgement was handed down dismissing the Plaintiff’s

application to set aside an arbitral award. The plaintiff being dissatisfied with
the judgement, filed notice of appeal, and also applied for a stay execution of
judgment and stay of sale pending determination of the appeal.

It was held:

i. The fact that an award had become enforceable in the same manner
as an order of the Court did not in and of itself render it open to a
stay of execution.
ii. The attempt by the Plaintiff to stay sale pending appeal had the effect
of attempting to stay execution. The award was rendered by an
Arbitral Tribunal, and not the Court. The Court has no jurisdiction
to stay that which it did not render.
iii. It is neither the function nor role of the Court in the arbitral process,
to stay execution of an award.
iv. The forum for contesting an award is the Registry where it is filed.

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 5.5 THE FINALITY AND BINDING NATURE OF ARBITRAL
AWARDS

 Whether the principle extends to the date and manner of payment of

the sum awarded by an Arbitral Tribunal.
 Distinction between an Arbitral award being enforceable like a Court
Order and a Court dealing with an arbitral award like a Court
Order.


SAVENDA MANAGEMENT SERVICES LIMITED V STNBIC BNK

ZAMBIA LIMITED19

In this case the Respondent gave the Appellant banking facilities which were
secured by, among other things, legal mortgages. Under clause 14 of the facility
letters, the parties agreed to refer to arbitration any dispute that may arise
between them in connection with the banking facilities.

A dispute arose between the parties and on June 2010, they appointed an
arbitrator. The Arbitrator delivered his Final Award on May 23 rd, 2012. On May
24th 2013, the Arbitrator went on to deliver an Additional Award on Assessment.
In sum, the Arbitrator ordered the Appellant to pay the Respondent a total
amount of US $ 1, 363, 850.49 with interest at the rate of 12% per annum from
the date the dispute was declared by the parties, to the date of reconciliation.
The Arbitrator directed that the Appellant should pay the total amount due to
the Respondent within 60 days from the date of assessment and that, in default,
19
SAVENDA MANAGEMENT SERVICES LIMITED V STNBIC BNK ZAMBIA LIMITED Selected Judgment No. 39 of
2017.

26
the Respondent should be art liberty to foreclose on the mortgage properties and
exercise its powers of sale. On 15th August 2013, the Arbitral Award was
registered in the High Court and leave for its enforcement was granted.

Following the registration of the Arbitral award in the High Court, the
Appellant made an application before the Deputy Registrar for an order to pay
the judgement debt in instalments pursuant to Order 36, Rule 9 of the High
Court Rules. The learned Deputy Registrar ordered that the debt be paid in 12
equal monthly instalments. The Respondent appealed against the ruling of the
Deputy Registrar to a Judge in chambers. While the appeal was pending before
the lower Court, the Respondent raised preliminary issues that the proceedings
instituted in the High Court by the Respondent following an Award made by the
Arbitral Tribunal and the reliefs sought and or being sought under the
proceedings were improperly before the High Court for lack or want of
jurisdiction under sections 20 (1), 20 (2) and 17 (2) of the Arbitration Act No.
19 of 2000. After considering the Ruling of the Deputy Registrar and the
submissions of Counsel, the lower Court held that the proceedings before the
Deputy Registrar were irregular as the High Court lacked jurisdiction to grant
reliefs sought by the Appellant. The Court consequently dismissed the appeal
that was pending before it. The Appellant appealed against this decision.

In this appeal, the following were held:

Rule 38 of the Arbitration (Court Proceedings) Rules and Order 36, sub-
rule 9 of the High Court rules do not give the High Court Jurisdiction to
allow a party to arbitration to pay the sum decided in that arbitral award
in instalments. This is so because section 20 of the Arbitration Act clearly
provides that an award made by an arbitral tribunal is ‘final and binding’
on the parties. The issue of the period within which the amount awarded to
the Respondent in the arbitral award was supposed to be settled was

27
decided upon by the Arbitrator. Therefore, in view of the provisions of
section 20 (1) of the Act, the Award of the Arbitrator, on the period within
which the appellant was required to settle the full amount, is final and
binding on the Appellant. Rule 38 of the Arbitration (Court Proceedings)
rues does not give the High Court jurisdiction to order the payment of an
arbitral award in instalments. Rue 38 (1) deals with application of rules of
the High Court and the Subordinate Court where Arbitration Rules do not
provide for a particular issue. Rule 38 (2) relates only to ancillary and
incidental applications and does not cloth the High Court with jurisdiction
to entertain an application that would effectively review and alter the
decision of the Arbitrator.

It is very clear that section 20 (1) that the finality and binding effect of an
arbitration award is only subject to subsection (2) and (3) of that section.
Subsection (2) preserves the right of a person to challenge an arbitral
award under the avenues provided in the act. As for subsection (3),
although it provides for enforcement of an arbitration award in the same
manner as an order of the Court, it does not give the Court Jurisdiction to
alter the arbitral award in any way. Subsection (3) does not say that the
arbitration award will become a court order; but that it will be deemed to
be an order of the Court for the purposes of enforcement, so that it can be
enforced using the court enforcement mechanisms available for the
enforcement of court orders. Therefore subsection (3) purely relates to
procedural aspects of enforcement of an arbitration award. Allowing the
application to pay in instalments does not fall under the umbrella of
enforcement of the arbitration award. Allowing the said application would
amount to changing the decision of the Arbitrator with regard to the period
within which the payment should have been made.

28
The Courts do not have jurisdiction to sit as appellate Courts to review and
alter arbitral decisions. The jurisdiction to decide on how the amount
should be paid lies with the Arbitral Tribunal. If the amount to be paid and
the time at which payment is to be made are not specified, the award runs
the risk of being challenged on the basis of uncertainty. It follows from this
rule that there is a presumption that arbitrators have the power to direct
when and how payment is to be made.

29