Housing Corporation of Zimbabwe (Pvt) Ltd v National Social Security Authority & Anor

### Preamble
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Judgment No. CCZ 10-25
Const. Application No. CCZ 8/25
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REPORTABLE (8)

HOUSING CORPORATION OF ZIMBABWE (PVT) LTD

v

NATIONAL SOCIAL SECURITY AUTHORITY

PETER CARNEGIE LLYOD

CONSTITUTIONAL COURT OF ZIMBABWE

GARWE JCC, HLATSHWAYO JCC & PATEL JCC

HARARE, 6 MAY & 24 JULY 2025

L Madhuku with L Uriri and D Tivadar, for the applicant

T Mpofu with T L Mapuranga, for the first respondent

No appearance for the second respondent

PATEL JCC:		This is an application for direct access in terms of s 167(5) of the Constitution as read with r 21 of the Constitutional Court Rules, 2016. Should direct access be granted, the applicant intends to file a substantive application in terms of s 85 of the Constitution, seeking to set aside the judgment of the Supreme Court in Case No. SC 334-23. The basis of the intended application is that, in adjudicating a matter that was not of a constitutional nature, the Supreme Court infringed the applicant’s right to equal protection and benefit of the law as enshrined in s 56(1) of the Constitution as well as the right to a fair hearing protected under s 69(2) of the Constitution.

After hearing counsel, we were not persuaded that it would be in the interests of justice for direct access to be granted. More specifically, we did not think that any basis had been established to show that the Supreme Court had failed to act in accordance with the principles governing the proceedings before it. In the circumstances, we held that the application should fail and proceeded to dismiss it with no order as to costs. We further indicated that the reasons for our decision would follow in due course. I now set out those reasons.

The Background

The applicant is a company registered in terms of the laws of Zimbabwe. The first respondent is a statutory body established under the National Social Security Act [Chapter 17:04].  The second respondent is an arbitrator appointed by the Commercial Arbitration Centre.

On 14 July 2017, the applicant and the first respondent entered into a Housing Offtake Agreement. The Agreement provided for the construction by the applicant and delivery to the first respondent of 8000 housing units at an agreed price per housing unit. The houses were to be delivered in batches of 250 houses over an agreed timeframe. In terms of the Agreement, the first respondent was to pay a deposit of US$ 16 million to the applicant. The first respondent duly paid the deposit on 4 August 2017.

The applicant constructed and completed a total of 53 housing units with other housing units being in various stages of completion.  In 2018, a dispute arose between the parties relating to the operation and implementation of the Agreement. The dispute resulted in numerous meetings being held and correspondence being exchanged between the parties. In these meetings and correspondence, the applicant complained of the first respondent’s lack of action regarding several issues that affected the performance of the Agreement. Eventually, the applicant proceeded to write a letter to the first respondent, on 29 May 2018, cancelling the Agreement.  This resulted in the parties blaming each other for breaching the contract.

Thereafter, the parties referred the dispute to arbitration before the second respondent. At this arbitration, the applicant was the claimant and the first respondent was the respondent. The applicant claimed that the first respondent had committed certain material breaches of the Agreement which amounted to repudiation of the Agreement.  As a consequence of the alleged violations of the provisions of the Agreement, the applicant claimed damages in the sum of US$ 2,316,000.00 and US$ 56,542,364.00, together with interest a tempore morae and costs of the arbitration.

On the other hand, the first respondent denied having repudiated or breached the Agreement. It denied that the applicant was entitled to lawfully terminate the Agreement as it had purported to do.  The first respondent claimed that it was entitled to cancel the Agreement on account of alleged breaches perpetrated by the applicant.  In consequence, the first respondent filed a counterclaim in which it claimed cancellation of the Agreement, refund of the offtake deposit of US$ 16 million which it paid to the applicant and damages in the sum of US$ 5,000.00 per day from 4 February 2018 to the date of payment of the US$ 16 million and costs.

On 25 March 2019, the arbitrator issued a final award wherein he found in favour of the applicant and awarded it damages for breach of the Agreement.  The arbitrator awarded the applicant damages for loss of profit in the sum of US$ 30 million and dismissed the first respondent’s counterclaim for refund of the US$ 16 million deposit that it had paid.  The reasoning of the arbitrator was that the sum of US$ 30 million was the profit that the applicant would have made had the Agreement not been terminated.

Armed with the arbitral award, the applicant filed an application for its registration under Case No. HC 2554/19. The applicant also opposed the application for the setting aside of the award which had been made by the first respondent. In seeking the registration of the arbitral award, the applicant prayed for payment in the sum of US $30 million together with interest thereon at the prescribed rate of 5% per annum from 22 February 2019 to the date of payment in full.

In turn, the first respondent opposed the application for the registration of the award and filed an application under Case No. HC 2835/19 for the setting aside of the arbitral award. It further sought an order that the matter be referred to a different arbitrator to determine equitable terms for the termination of the Agreement between the parties. The first respondent’s application was made on the basis that the arbitral award was contrary to public policy and that it induced a sense of shock to any reasonable Zimbabwean.  It was further contended that the arbitrator had confused himself by dealing with the Agreement as a construction contract as opposed to an offtake agreement, under which the applicant was obligated to construct houses while the first respondent was obligated to purchase the completed housing units, if they met all the requirements set out in the Agreement.  In the first respondent’s view, damages could only have arisen where the applicant had produced completed housing units and failed to find an offtaker or, if it found one, the purchase price offered was lower than what the parties had agreed in the Agreement.

A chamber application for the consolidation of the two applications was filed under Case No. HC 5556/19 and granted 15 July 2019. The two consolidated applications were set down for hearing and determined under No. HH 481/20 on 22 July 2020.  In the said judgment, the application under HC 2938/19 for the setting aside of the award was dismissed and the relief sought under HC  2554/19 for the registration of the award was granted.

The first respondent was dissatisfied with the judgment and appealed to the Supreme Court under Case No. SC 338/20. The appeal was heard on 13 September 2021. At the hearing of the appeal, the first respondent sought leave to amend its grounds of appeal by adding a new ground of appeal. This new ground attacked the validity of the proceedings before the High Court on the basis that the applicant, in its application for registration of the arbitral award, did not attach an authenticated copy of the award.

The Supreme Court upheld this procedural point and allowed the appeal with costs under judgment No. SC 20-22. It further set aside the judgment of the High Court and remitted the matter to that court for determination de novo before a different judge. The court found that the failure by the applicant to comply with the provisions of Article 35(2) of the Model Law was fatal to the application for the registration of the arbitral award. The court further noted that the judgment of the High Court did not show that a determination was made on the application for the setting aside of the arbitral award under Case No. HC 2938-19. It consequently held that the failure on the part of the lower court to determine all the issues before it constituted a gross irregularity and that the decision therefore had to be set aside.

Prior to the fresh hearing of the matter, on 23 November 2021, the applicant filed three documents authored by the second respondent, the arbitrator. The documents were titled: Original signed and authenticated Partial Award, Original signed and authenticated Final Award and Original signed and authenticated Corrected Award. The corrected award reflected that the original awarded amount of US$ 30 million was substituted by the amount of US$ 22 million. The second respondent had, without reference to the parties, corrected the arbitral award and substituted the initial amount after realising that the High Court had found that he had made an arithmetical error in his computation of the damages.

A trial de novo was conducted before the High Court. The court dealt with the application for setting aside of the arbitral award first. In relation to the complaint by the first respondent that it is a public institution with a duty to manage public funds for the benefit of old pensioners and as such an order that it pay RTG$ 46 million to the second respondent was outrageous and violated the public policy of Zimbabwe, the court found that the complaint was an issue speaking to sympathy and not the law. The court held that as the first respondent is a body corporate with power to sue and be sued and to enter into contracts, then it equally had to be bound by the transactions which it concluded. The court thus found that the complaint was without merit.

Similarly, the second complaint that the order to pay such a huge amount in damages to the applicant was contrary to public policy was held to be without merit. The court reasoned that the first respondent did not probe the second respondent for a reduced award to be made. The court also referred to human error on the part of the first respondent’s personnel in failing to perform the terms of the Agreement. Thus, the first respondent could not argue that a huge payment to the applicant would be contrary to public policy.

The third complaint raised by the first respondent before the High Court was that the expert, a Mr. Stuart, who gave evidence during the arbitration proceedings, did not produce primary documents which he relied on to reach his conclusions. The High Court dismissed the complaint on the basis that the first respondent had not questioned the expert’s report during the arbitral proceedings and, as such, it could not seek to belatedly question that report. The court thus found that the complaint was without merit.

Accordingly, the court found that the first respondent had failed to satisfy the recognised grounds for setting aside the award. In the event, the court dismissed the application for the setting aside of the arbitral award. The High Court went on to deal with the application for registration of the arbitral award made by the applicant. The court found that, in making the application, the applicant had complied with the provisions of Article 35(2) of the Model Law by filing certified copies of the partial award and final award as well as a certified copy of the Housing Take Off Agreement incorporating the arbitration agreement.

In the result, the court disposed of the two applications by dismissing the application in Case No. HC 2938/19 for setting aside the arbitral award and allowing the application in Case No. HC 2554/19 for the registration of the award. The court proceeded to register the award in favour of the applicant, as subsequently amended by the reduction of the amount of US$ 30 million to US$ 22 million, as an order of that court. Consequently, the first respondent was ordered to pay to the applicant the sum of US$ 22 million, together with interest thereon at the prescribed rate of 5% per annum from 22 February 2019 to the date of full payment, and the costs of the application.

Aggrieved by the decision of the High Court, the first respondent appealed to the Supreme Court under Case No. SC 334-23. The court found that the claim made by the first respondent before the arbitrator was based on profit which it would only have made when the contract was eventually concluded. The court determined that the arbitrator had failed to consider the fact that the Agreement between the parties did not stipulate the bill of quantities to build the 8000 houses. It also did not take into account essential features such as overhead expenses which would flow from the project in the form of rentals, consumables and salaries, which expenses would be borne by the applicant. The court concluded that the loss of profit claimed by the applicant was unsubstantiated as it did not take into consideration certain essential elements.

The court further noted that the arbitrator failed to consider that the applicant would not have been able to transfer the property to the first respondent as it had no rights of ownership over the property. The court thus found that the damages claimed could not have arisen from any breach by the first respondent and that they could not be special damages. Again, the court noted that the Agreement, in terms of clause 5 as read with clause 6, stipulated the nature of the Agreement between the parties, the effect of which was that any profit which the applicant was to make could only arise after it had completed the housing units and sold them to the first respondent.

The court proceeded to consider the first respondent’s ground of appeal relating to the issue of whether the arbitral award was contrary to public policy. The court observed that the decision of the arbitrator could only be interfered with if the decision was so glaringly wrong that it resulted in palpable injustice. The court found that the Agreement between the parties did not provide for consequential damages. On this basis, the court held that the finding by the arbitrator that the damages claimed were special damages, in circumstances where they were not, allowed it to interfere with that finding. Thus, the error by the arbitrator had the effect of furnishing an award which was patently contrary to clause 22.1 of the Agreement. In the result, the court found that the arbitral award was contrary to public policy and that the High Court had erred in allowing the registration of the award. The court accordingly allowed the appeal with costs.

The Present and Intended Applications

In the instant application, the applicant avers that the Supreme Court failed to act in accordance with the law governing arbitral proceedings in three respects. The first is that the court a quo acted as a court of first instance in arbitral matters as prescribed under Article 34(2)(b)(ii) of the Model Law. In making this point the applicant contends that the Supreme Court could not make a finding on whether the arbitral award was contrary to public policy as only the High Court has jurisdiction to make such a finding. Secondly, the applicant avers that the court a quo failed to follow the rigid test set out in Zimbabwe Electricity Supply Authority v Maposa 1992 (2) ZLR 452 (S). Lastly, it is contended that the Supreme Court, as an appellate court, was bound to preserve the finality of arbitral awards.  Based on these three supposed errors on the part of the court a quo, the applicant avers that its right to a fair trial as enshrined in s 69(2) and its right to equal protection of the law as guaranteed by s 56(1) of the Constitution were infringed, particularly as the court failed to apply the high standard established in ZESA v Maposa (supra). The applicant therefore prays for an order that it be granted direct access to this Court to file its application under s 85(1)(a) of the Constitution, as particularised in the draft substantive application attached to this application.

The application is opposed by the first respondent. In its notice of opposition and heads of argument, the first respondent avers that the applicant has no right to a judgment of its choice. Furthermore, the applicant acknowledged that it had received US$ 16 million to provide 8000 housing units but delivered only 53 housing units. The first respondent argues that the arbitrator erred in awarding the applicant US$ 22 million for doing nothing.  Additionally, the court a quo did not act as a court of first instance in dealing with the challenge against the arbitral award. The Supreme Court was correct in finding that an award which contradicts the contract it is based on is at law contrary to public policy. Lastly, the first respondent avers that the arbitral award was not final as it was inconsistent with public policy and that the award could therefore be set aside.  The first respondent thus prays for the dismissal of the application.

The relief sought by the applicant in the intended substantive application is threefold. Firstly, it seeks a declaration that the applicant`s right to a fair hearing enshrined in s 69(2) of the Constitution and its right to the protection of the law enshrined in s 56(1) of the Constitution were infringed by the Supreme Court. Secondly, the applicant seeks an order that the judgment of the Supreme Court be declared null and void and of no force or effect and be set aside. Thirdly, it seeks an order that, as just and equitable relief under s 85(1) and s 175(6) of the Constitution, the first respondent’s appeal before the Supreme Court be dismissed with costs.

Submissions by Counsel

Mr Madhuku, for the applicant, submits that the court a quo failed to act as an appeal court and turned itself into a court of first instance. In particular, the court erred in considering whether the arbitral award was contrary to public policy when this issue had not been raised before the High Court or determined by it. Given that the High Court did not make any finding in this regard, the court a quo could not determine this issue as a court of first instance in the exercise of its appellate jurisdiction.

Mr Madhuku further argues that the decision of the court a quo was procedurally wrong in that it failed to follow its own precedent, as stated in ZESA v Maposa (supra), setting out the requirements to be satisfied where an arbitral award is alleged to be contrary to public policy. Counsel maintains that the court a quo was obligated to use the two-prong approach established in ZESA v Maposa and that its failure to employ this approach amounted to a procedural irregularity. Even though it is not bound by its own precedents, the court could not simply disregard established principle.

Mr Mpofu, for the first respondent, did not motivate the preliminary issues raised in the notice of opposition and heads of argument. The preliminary points were consequently regarded as having been abandoned. On the merits of the matter, counsel submits that the court a quo dealt with the matter before it on the correct principles of the law in arriving at its determination. The question of public policy was a live issue before the court as it had been explicitly raised in the grounds of appeal. In any case, the issue was in fact considered and determined by the High Court in dismissing the application for the setting aside of the arbitral award. Furthermore, the issue had also been specifically raised in the founding affidavit to that application. Thus, the question of public policy was properly before the court a quo and it could therefore not be faulted for dealing with that question.

Mr Mpofu contends that there is no constitutional issue before the Court as the applicant is simply arguing that the court a quo erred in its decision. Additionally, inasmuch as the Supreme Court is not bound by its own decisions, it was not bound to follow the principles established in ZESA v Maposa (supra). In any event, the court a quo did follow those principles by relying on particular judgments which had applied the principles. Counsel submits that the court correctly applied the principle that an arbitral award would be contrary to public policy where the award falls outside the founding clauses of the contract between the parties. Thus, the court a quo correctly exercised its appellate jurisdiction in finding that the arbitral award was contrary to public policy. This finding did not amount to any infringement of the constitutional rights of the applicant under s 56(1) or s 69(2) of the Constitution.

Issues for Determination

The principal issue arising for determination in this matter is whether it is in the interests of justice to grant the application for direct access. This enquiry entails interrogating whether the intended substantive application carries prospects of success and whether the decision of the Supreme Court infringed any of the applicant’s fundamental human rights. I shall address these issues ad seriatim.

The Interests of Justice and Prospects of Success

Applications for direct access are governed by the Rules of the Constitutional Court. An applicant must therefore first meet the criteria set out in r 21(3) of the Rules. Principally, an applicant must show that it is in the interests of justice for the matter to be brought directly before this Court. In assessing whether it is in the “interests of justice” for a matter to be brought before the Court, regard should be had to r 21 (8) which stipulates the considerations to be taken into account, to wit, the prospects of success if direct access is granted, whether the applicant has any other remedy available to him or her, and whether there are any disputes of fact in the matter. The considerations delineated are not exhaustive.

The concept of what constitutes ‘interests of justice’ has been elaborated in several cases and texts. See, for instance, Rita Mbatha v Confederation of Zimbabwe Industries CCZ 5-21, at p 6, citing I. Currie and J. de Waal: The Bill of Rights Handbook, 6th ed, at p 128. In essence, the Constitutional Court is a specialised court, specifically constituted with the narrow jurisdiction of hearing and determining constitutional matters only. The Court serves as the ultimate guardian of the Constitution, using the text of the Constitution as the standard or yardstick by which it ensures the integrity and authenticity of its intended meaning. Section 167(1)(c) of the Constitution reinforces this position and provides that a decision by the Court on whether a matter is a constitutional matter, or whether an issue relates to a decision connected with a constitutional matter, is final.

Thus, it is well established that the Court's jurisdiction is only activated when a constitutional issue arises for determination. According to s 332 of the Constitution, a constitutional matter is defined as “a matter in which there is an issue involving the interpretation, protection or enforcement of this Constitution.” The scope and purpose of this definition is succinctly articulated in Lytton Investments (Pvt) Ltd v Standard Chartered Bank Zimbabwe Ltd & Anor 2018 (2) ZLR 743 (CC). In particular, the obligation to interpret, protect or enforce the Constitution is designed and invoked in order to secure the foundational values and principles embedded in the Constitution.

The prospects of success in the intended substantive application constitute a crucial factor to be assessed by the Court in deciding whether or not the applicant should be granted leave to approach the Court to set aside the decision of the Supreme Court. The test for reasonable prospects of success postulates an objective and dispassionate decision as to whether or not the applicant has an arguable case in the intended application. The prospects of success must not be remote but must have a realistic chance of succeeding. The applicant must demonstrate an arguable prima facie case and a mere possibility of success will not suffice. See Essop v S 2016 [ZASCA] 114; S v Dinha CCZ 11-20; Zimbabwe Consolidated Diamond Company (Pvt) Ltd v Adelcraft Investments (Pvt) Ltd CCZ 2-24. Additionally, the prospects of success must resonate with the constitutional infringements raised by the applicant. It must show that the court a quo, in its determination of the matter before it, breached one or more of its constitutionally protected rights.

Review Limitations on the Finality of Supreme Court Judgments

It is a settled position that the Supreme Court is the final court of appeal in all non-constitutional issues. Section 169 (1) of the Constitution states that the Supreme Court is the final court of appeal except for matters where the Constitutional Court has jurisdiction. Therefore, by constitutional command, its decisions are final and non-appealable. The finality of its judgments or orders is confirmed by s 26 of the Supreme Court Act [Chapter 7:13] which provides that there shall be no appeal from any judgment of the court. The Constitutional Court is in turn bound by the dictates of law not to stray from its mandate under the Constitution to determine only matters concerned with constitutional issues. Therefore, generally speaking, the Court does not have, nor can it assume, appellate or any other jurisdiction over decisions emanating from the Supreme Court that are devoid of any constitutional issue.

The decision of the Supreme Court in a non-constitutional matter is final and its correctness cannot be challenged simply on the basis that it might be wrong. See Williams & Anor v Msipa N.O. & Ors 2010 (2) ZLR 552 (S), at 567B-C. Nevertheless, a decision of the Supreme Court may be deemed to have violated fundamental rights or freedoms where the court deviates from the objective standards set by the procedural and substantive laws governing the proceedings before it. This position has been adopted and reaffirmed in a number of decisions of this Court. The leading case in this regard is Lytton Investments (Pvt) Ltd v Standard Chartered Bank & Anor (supra), at 755B-C, where the Court held that:

“The facts must show that there is a real likelihood of the Court finding that the Supreme Court infringed the applicant’s right to judicial protection. The Supreme Court must have failed to act in accordance with the requirements of the law governing the proceedings or prescribing the rights and obligations subject to determination. The failure to act lawfully would have to be shown to have disabled the court from making a decision on the non-constitutional issue.

The theory of constitutional review of a decision of the Supreme Court in a case involving a non-constitutional matter is based on the principle of loss of rights in such proceedings because of the court’s failure to act in terms of the law, thereby producing an irrational decision. There must, therefore, be proof of the failure to comply with the law. The failure must be shown to have produced an arbitrary decision. Arbitrariness and inconsistencies threaten the claim to judicial authority.”

The aforestated principle of constitutional review was subsequently crisply summarised in S v Mukondo CCZ 8-20, at p 5, as follows:

“Where the jurisdiction of the Court is sought to be invoked on the allegation that the decision of a subordinate court on a non-constitutional matter violated a fundamental human right, the applicant must show that the violation was a result of failure by the subordinate court to act in accordance with the law governing the proceedings concerned leading to an arbitrary decision.”

`	Again, in Machine v Sheriff for Zimbabwe & Ors CCZ 8-23, at p 8, it was reiterated that:

“The authorities hold that the decision of the Supreme Court must be arbitrary or irrational so as to threaten the claim of the court to judicial authority. The arbitrariness or irrationality of the decision must arise from a demonstrable failure by the Supreme Court ‘to act in accordance with the requirements of the law governing the proceedings or prescribing the rights and obligations subject to determination’.”

Similarly, in Zimbabwe Consolidated Diamond Company (Pvt) Ltd v Adelcraft Investments (Pvt) Ltd CCZ 2-24, at p 21, it was stated that:

“It is necessary for the complainant to demonstrate that the Supreme Court, in adjudicating the non-constitutional matter before it, failed to act in accordance with the requirements of the law governing the proceedings or prescribing the rights and obligations subject to determination. Additionally, the failure to act lawfully must be shown to have disabled the court from making a decision on the non-constitutional issue before it, thereby entailing an irrational or arbitrary decision. In the present matter, it seems to me that the impugned judgment falls squarely within the parameters of constitutional review justifying interference with that judgment.”

The test to be applied for the constitutional review of a Supreme Court decision on a non-constitutional matter was reprised in Unifreight Africa Limited v Mashinya CCZ 13-24, at pp 16-17, in the following terms:

“In other words, it must be shown that the subordinate court has failed to act in accordance with the applicable substantive and/or procedural law and thereby rendered an arbitrary or irrational decision entailing the violation of a fundamental right. ……… Lastly, it must be re-emphasised that the decision of the Supreme Court in a non-constitutional matter is final and binding in the absence of any fundamental substantive incorrectness or procedural irregularity.” (my emphasis)

Lastly, there is the case of Fairclot Investments (Private) Limited v Augur Investments OA   & Ors CCZ 16-24, at pp 17 and 19-24, where the test was further elaborated:

“Even an apparently incorrect determination of facts or erroneous application of a legal test to those facts does not amount to a constitutional issue- General Council of the Bar of South Africa v Jiba and Two Others CCT 192/18 and Feathers Mukondo v the State CCZ 2/19. A misinterpretation of the law by the Court does not give rise to a constitutional issue justifying direct access – Vongai Chiwaridzo v TM Supermarkets (Private) Limited & Four Others CCZ 19/20.  The decision of the Supreme Court would be correct because it is final and not final because it is correct.  The law does not protect litigants against wrong decisions but rather the fairness of the proceedings. ……………

That failure to act in accordance with law must be shown to have disabled the Supreme Court from making a decision on a non-constitutional issue.  There must, therefore, be proof of the failure to comply with the law and the failure must be shown to have produced an arbitrary decision.  That is the test that an aggrieved party must satisfy.  The test is not whether substantively or procedurally the decision of the Supreme Court was correct.

But what does this test mean exactly?  Is it every aberration, perceived or otherwise, that entitles a litigant to institute a s 85 (1) application? ……… It seems to me, therefore, that it is the propriety of the process leading to the decision rather than the correctness of the decision itself which would entitle a litigant to approach this court in terms of s 85 (1) of the Constitution. ……… Substantive or procedural incorrectness of final judgments by the Supreme Court is not what the test envisions.  There ought to have been some other conduct on the part of the Court that would have resulted in the violation of a litigant’s fundamental rights. That conduct must have preceded the decision sought to be impugned.  In other words that conduct must have tainted the ultimate decision of the Court.”

The principle that emerges from the above-cited cases, is that there is a three-tiered test for the constitutional review of decisions of the Supreme Court. What must be demonstrated, firstly, is a failure by the court to act in accordance with the applicable substantive and/or procedural law, secondly, a resultant arbitrary or irrational decision and, thirdly, the consequential violation of a protected fundamental right. While all three tiers are relatively clear when considered on their own, it is the requirement to establish a fundamental substantive incorrectness or procedural irregularity that appears to be particularly problematic. What constitutes a fundamental error or irregularity is not always self-evident. It seems to me that the precise parameters of such error or irregularity will invariably depend upon an objective and careful scrutiny of the facts and circumstances of the case at hand. That is after all the essence of judicial analysis in its broadest sense.

Validity of the Impugned Supreme Court Judgment

Having regard to the averments and submissions of the parties, the questions that arise for determination in casu are as follows:

Whether the Supreme Court acted as a court of first instance in respect of the question of public policy.

Whether the court violated the principle of finality of arbitral awards by setting aside the arbitral award.

Whether the court acted contrary to the principles governing the proceedings.

Whether there was a violation of the applicant’s rights under s 56(1) and s 69(2) of the Constitution.

Court of First Instance and Finality of Arbitral Award

As regards the first and second questions posed above, the applicant’s challenge before this Court is based on the contention that the court a quo acted as court of first instance by dealing with the error allegedly made by the arbitrator regarding public policy, contrary to its established precedent, and thereafter setting aside the arbitral award. Having found that the High Court was wrong in upholding the arbitrator’s decision, the court should have remitted the matter to the High Court to determine the supposed violation of public policy. It is further argued that the court failed to adhere to the standards and the two-stage approach set out in ZESA v Maposa (supra) in order to determine the alleged violation of public policy. It then proceeded to set aside and interfere with a final arbitral award, thereby contravening the principle of finality of arbitral awards.

Per contra, the first respondent’s position is that the question of public policy was squarely before the High Court as well as the Supreme Court and was therefore properly addressed by the court a quo. Furthermore, the court dealt with the matter according to applicable legal principles. An award which grants a remedy that the parties have contracted out of is contrary to public policy. In any event, so it is argued, the Supreme Court is not bound by its own precedents, including the decision in ZESA v Maposa, and is obliged to apply the provisions of the Model Law. It is also entitled to deal with a matter as a court of first and last instance in exceptional cases, as in casu, where all the relevant material was before the court a quo to enable it to decide the alleged violation of public policy.

A close scrutiny of the record demonstrates that the question of whether or not the arbitral award was contrary to public policy was a live issue before the High Court as well as the Supreme Court. This issue was fully ventilated before the High Court and was directly adverted to when the court dismissed the application to set aside the arbitral award. Subsequently, before the Supreme Court, the question of public policy was expressly raised by the first respondent in three of its grounds of appeal, which specific grounds were consequently upheld by the court a quo. Accordingly, the Supreme Court acted entirely within its mandate and authority in determining whether the award contravened public policy inasmuch as that issue was properly and squarely before it for consideration. It follows that it clearly did not act as a court of first instance in this respect as is contended by the applicant.

At any rate, it is not correct that the Supreme Court cannot deal with matters as a court of first and last instance in exceptional circumstances, particularly where all the relevant averments and submissions on the issue in contention have been placed before it. The correct position was set out in Madza & Ors v The Reformed Church in Zimbabwe Daisyfield Trust & Ors SC-71-14, at p 10, as follows:

“This Court is always reluctant to decide matters at first and last instance although it is quite possible that it may do so in exceptional circumstances.  This is because it is preferable to have the benefit of the reasoning of the lower court and that way an appellant is not deprived of his right to appeal and, in the exercise of this right, to place before this Court for consideration, a different view from that of the court a quo.”

As regards the contention that the Supreme Court failed to apply the approach established in ZESA v Maposa, the applicant’s argument is flawed for three reasons. Firstly, it is settled that the Supreme Court is not bound by its previous decisions. See, inter alia, s 26(2) of the Supreme Court Act [Chapter 7:13] which explicitly stipulates that “The Supreme Court shall not be bound by any of its own judgments, rulings or opinions nor by those of any of its predecessors.” Thus, the court a quo was not bound by the test set out in the ZESA v Maposa case. Secondly, the court noted that for it to exercise its appellate jurisdiction in scrutinising the arbitral award it had to be cognisant of the fact that it is not every wrong finding made by an arbitrator that warrants interference by a court of law. The court therefore recognised the principle that the authority of an arbitrator must ordinarily be deferred to, but it also acknowledged that it is obliged to interfere where it finds a sound basis for so doing. Thirdly and more significantly, the Supreme Court specifically related to and applied the test expounded in ZESA v Maposa, as well as in subsequent case authorities, in defining what a violation of public policy means and what such violation entails.

What emerges from the record is relatively clear. The court a quo analysed the nature of the damages which had been claimed by the applicant and those which had been awarded by the arbitrator and then upheld by the High Court. It found that they were “consequential damages” and contrary to the express provisions of the Agreement between the parties. The applicant and the first respondent were bound by the Agreement that they had concluded in which what was to happen in the event of any breach of the Agreement was clearly spelt out. What the first respondent sought before both courts was the setting aside of the arbitral award on the basis that it was contrary to the public policy of Zimbabwe as provided for under Article 34 (2)(b)(ii) of the Model Law scheduled to the Arbitration Act [Chapter 7:15].

In ZESA v Maposa (supra), at 466E-G, GUBBAY CJ elaborated the significance of Articles 34 and 36 of the Model Law as follows:

“An arbitral award will not be contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in fact or in law. In such a situation the court would not be justified in setting the award aside. Under article 34 or 36, the court does not exercise an appeal power and either uphold or set aside or decline to recognise and enforce an award by having regard to what it considers should have been the correct decision … Where, however, the reasoning or conclusion in an award goes beyond mere faultiness or correctness and constitutes a palpable inequity that is so far reaching and outrageous in its defiance of logic or acceptable 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, then it would be contrary to public policy to uphold it. The same applies where the arbitrator has not applied his mind to the question or has totally misunderstood the issue, and the resultant injustice reaches the point mentioned above.”

See also Ropa v Rosemart Investments (Pvt) Ltd & Anor 2006 (2) ZLR 283 (S), at 286B-D; Delta Operations (Pvt) Ltd v Origen Corporation (Pvt) Ltd 2007 (2) ZLR 81 (S), at 85B-E; Peruke Investments (Pvt) Ltd v Willoughby’s Investments (Pvt) Ltd & Anor 2015 (1) ZLR 491 (S); OK Zimbabwe Ltd v ArdMbare Properties (Pvt) Ltd SC 55-17, at pp 12-13.

An award that violates the sanctity of a contract between the parties thereto may be regarded as being contrary to public policy. This proposition finds strong authority in the Delta Operations case (supra) at 85E-F, 86E-G and 88B-C:

“…. I am satisfied that the learned judge in the court a quo correctly found that the award was in conflict with the public policy of Zimbabwe. I say so for four main reasons. The first reason is that the arbitrator granted remedies which were not available to Natbrew in terms of the contract………

…. by granting the remedy of specific performance and, alternatively, a measure of damages falling totally outside the ambit of the contract, the arbitrator completely disregarded the contractual terms agreed upon by the parties, thereby in effect creating a new contract for them. By doing so, he violated one of the most important tenets of public policy, i.e. the sanctity of contracts.

…. the arbitrator went on a frolic of his own, created an issue which did not arise from the submissions made by the parties, and awarded a measure of damages which went so far outside the contract as to create a new contract for the parties. The public policy of Zimbabwe does not permit an arbitrator to do that.” (My emphasis)

A similar position is echoed in Legacy Hospitality Management Services Limited v African Sun Limited & Anor SC 43-22, at pp 10-11, where it was held that:

“In order to determine whether the arbitral award offends public policy as contended by the appellant and vehemently disputed by the first respondent, due consideration to the agreement entered by the parties ought to be made. …..

…. In compliance with guidelines outlined in Article 34(2)(ii) on what constitutes an award that conflicts with public policy, …. the courts have been cognisant of

the need to protect the principle of sanctity of contract.” (My emphasis)

The significance of the sanctity of contract doctrine was succinctly explained in Magodora & Ors v Care International Zimbabwe 2014 (1) ZLR 397 (S), at 403C-D, as follows:

“In principle, it is not open to the courts to re-write a contract entered into between the parties or to excuse any of them from the consequences of the contract that they have freely and voluntarily accepted.” (My emphasis)

In the present case, clause 22.1 of the Agreement between the parties provides as follows:

“In the event of either Party committing a breach of this Agreement and failing to remedy such breach within the notice period specified in this Agreement for such particular breach, or in the absence of a specified notice period, within 14 (fourteen) days of written notice, then the aggrieved party may terminate this Agreement with immediate effect and pursue any remedies available to it at law provided that neither party shall be liable to the other for any consequential damages or indirect loss.” (My emphasis).

The foregoing provision of the Agreement clearly stipulates that the damages which either party can claim for breach of contract are general damages and not consequential damages. The Supreme Court correctly found that the applicant, having itself failed to deliver the contractually agreed number of housing units, could not succeed in its claim for consequential or special damages as this was expressly excluded by the terms of the Agreement. The arbitral award was therefore founded on damages which were not contemplated by the Agreement. By virtue of the sanctity of contract between the parties, the award could not be upheld and was accordingly vacated by the Supreme Court as constituting a palpable inequity that was contrary to public policy. The critical error committed by the arbitrator went to the root of the contract between the parties and consequently the court a quo could legitimately interfere with the arbitral award.

Failure to Comply with Governing Principles and Violation of Fundamental Rights

It is trite that the decision of the court a quo on the non-constitutional questions adverted to above was final and not appealable. The crucial question that then arises is whether the decision of the court is susceptible to constitutional review on the basis of the three-tiered test that I have delineated earlier. In other words, was there a failure by the court to act in accordance with the applicable substantive and/or procedural law, resulting in an arbitrary or irrational decision and entailing the violation of a protected fundamental right?

First and foremost, the applicant has failed to demonstrate and I am unable to perceive any fundamental substantive incorrectness or procedural irregularity in the proceedings or judgment of the court a quo. As I have already opined, the court correctly considered and applied the test for setting aside the palpably faulty arbitral award on the relevant facts before it. Secondly, it acted properly within its jurisdictional and procedural mandate to interfere with and vacate that award. In these circumstances, it cannot conceivably be said that the judgment of the Supreme Court was so arbitrary, irrational or erroneous as to justify its reversal.

The third and final inquiry is whether the applicant’s rights were violated in any fashion by the manner in which the Supreme Court arrived at its decision. Although I have already concluded that there is no basis for impugning the substantive or procedural correctness of the judgment a quo, it seems necessary, for the sake of completeness, to briefly consider and answer this question.

The applicant seeks direct access on the averments that the decision infringed its right to the protection of the law as enshrined in s 56(1) and the right to a fair hearing as guaranteed by s 69 (2) of the Constitution. In particular, it contends that the court a quo infringed its fundamental rights by not allowing the matter to be heard first by the High Court as to the alleged violation of public policy.

This contention, in my view, is totally devoid of any merit. The applicant has not proffered any evidence of comparable differentiation as regards other litigants who might be similarly positioned and favourably treated so as to justify its assertion founded on the alleged infringement of s 56(1). Moreover, as I have already concluded, the High Court did in fact consider and reject the first respondent’s argument revolving around the alleged violation of public policy by the arbitrator. On this basis, the Supreme Court was perfectly entitled to entertain and uphold that argument on appeal as warranting interference with the arbitral award. In short, I am satisfied that the applicant has entirely failed to sustain any infringement of its right to the equal protection of the law and its right to a fair hearing.

Disposition

The applicant has failed to establish any basis upon which this Court should grant direct access to challenge and overturn the decision of the Supreme Court. We were unable to glean any prospects of success in the substantive application that the applicant intended to mount before the full bench of the Court. It would therefore not have been in the interests of justice to grant the instant application for direct access. It was for these reasons that we dismissed the application with no order as to costs.

GARWE JCC:			I agree.

HLATSHWAYO JCC:		I agree.

Clairwood Chambers, applicant’s legal practitioners

Mawere Sibanda, first respondent’s legal practitioners