Archipelago (Private) Limited v Local Authorities Pension Fund and Addington B.C. Chinake

### Preamble
1
HH 147/2012
HC 5575/11
HC 4137/11
ARCHIPELAGO ( PRIVATE ) LIMITED
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ARCHIPELAGO (PRIVATE) LIMITED
versus
LOCAL AUTHORITIES PENSION FUND
and
ADDINGTON B.C. CHINAKE

HIGH COURT OF ZIMBABWE
MTSHIYA J
HARARE 30 NOVEMBER 2011 AND 04 APRIL 2012

Mr Mutasa, for the applicant
Advocate Uriri, for the respondent

MTSHIYA J: Articles 34 and 35 of the Arbitration Act ( Cap 7:15 ) ( the Act ) provide as follows;
ARTICLE 34
Application for setting aside as exclusive recourse against arbitral award

(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this article.
(2) An arbitral award may be set aside by the High Court only if-
(a) the party making the application furnishes proof that-
(i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication on that question, under the law of Zimbabwe; or
(ii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iii) the award deals with a dispute not contemplated by or not failing within the terms of the submission or arbitration, or contains decision on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated or from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or

[ Subparagraph amended by Act 14/2002]


(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Model Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Model Law;

[ Subparagraph amended by Act 14/2002 ]

(b) the High Court finds that:
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of Zimbabwe; or
(ii) the award is in conflict with the public policy of Zimbabwe.

(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application the award or, if a request had been made under article 33, from the date on which that request had been disposed of by the arbitral tribunal.

(4) The High Court, when asked to set aside an award, may where appropriate and so requested by a party, suspend the setting aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity the resume the arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion will eliminate the grounds for setting aside.

(5) For the avoidance of doubt, or without limiting the generality of paragraph (2)
(b) (ii) of this article, it is declared that an award is in conflict with the public policy of Zimbabwe if-
(a) the making of the award was induced or effected by fraud or corruption; or
(b) a breach of the rules of natural justice occurred in connection with the making of the award.

ARTICLE 35
Recognition and enforcement

(1) An arbitral award, irrespective of the country in which it was made, shall be recognized as binding and upon application in writing to the High Court, shall be enforced subject to the provisions of this article and of article 36.

(2) The party relying on an award or applying for its enforcement shall supply the duly authenticated original award or a duly certified copy thereof and the original arbitration agreement referred to in article 7 or a duly certified copy thereof. If the award or agreement is not made in the English Language, the party shall supply a duly certified translation into the English Language


I have before me two applications, namely HC 5575/11 and HC 4137/11. The two applications were consolidated by consent and are based on the above quoted articles of the Act.

The application in HC 5575/11 is premised on Article 34 of the Act. The application seeks to have the arbitral award set aside.

The application in HC 4137 is for the registration of the award in terms of Article 35 of the Act.

Both applications are opposed.

The background to both applications can briefly be given as follows:-

In October 1997 the parties entered into a lease agreement wherein the Local Authorities Pension Fund was the Lessor and the applicant (Archipelago (Private) Limited) was the Lessee. A dispute arose over non-payment of rent.

The dispute was, in terms of Clauses 31 of the Lease agreement, referred to arbitration. Clause 31 of the Lease agreement provides as follows:

“RESOLUTION OF DISPUTES”

31.a) Where a dispute arises between the parties hereto in regard to the interpretation or application of this Agreement or any matter relating to or arising from this Agreement, either party shall be entitled (if the dispute has not been resolved within seven days of it having arisen) to refer the dispute for arbitration by a single independent arbitrator (hereinafter referred to as “the Arbitrator”).

b) The arbitrator shall be appointed by one of the following appointing authorities:

(i) by the President for the time being of the Architects’ Institute of Zimbabwe, where the dispute predominantly relates to the question of repair or maintenance of the Building or the Leased Premises;

(ii) by the President for time being of the Zimbabwe Institute of Quality Surveyors, where the dispute predominantly relates to the question of the cost of the repair or maintenance of the Building or the Leased Premises;

(iii) by either the Chairmen of the time being the Royal Institution of Chartered Surveyors (Zimbabwe Group) or the Chairman for the time being of The Real Estate Institution of Zimbabwe (Mashonaland Province), whichever the party first raising the dispute shall choose, where the dispute predominantly relates to the question of the rental value of the Leased Premises.


(iv) By the President for the time being of the Law Society of Zimbabwe, where the dispute predominantly relates to:

(1) legal issues including the proper interpretation of this Agreement;
(2) the Tenant’s failure to pay rent
(3) the Tenant’s failure to pay any other amount owed I terms of this Agreement;
(4) the Tenant’s failure to observe any other obligation owed in terms of this Agreement (other than a regard to repair or maintenance);
(5) the question of whether the Landlord is entitled to terminate the Agreement and/or evict the tenant; and/or
(6) any other matters not specifically covered in (i), (ii) or (iii) above.

b) The appointing authority shall nominate as the Arbitrator an independent person who is familiar with the type of issues to be decided in arbitrating the dispute.

c) The reasonable fees and disbursements incurred by the appointing authority shall be met by the Landlord, who shall be entitled, subject to any award made by the Arbitrator to the contrary, to recover one-half thereof from the Tenant.

d) The arbitrator shall call upon each party hereto to serve on the other party and on the Arbitrator within thirty of request written submissions of fact and/or law regarding the dispute and the relief which should be granted. The parties may attach to such submissions documents in support thereof, together with written statements of fact by any witness.

e) The Arbitrator shall be entitled, in his sole and absolute discretion:

(i) to decide whether any part or any other person who might be of assistance to the Arbitrator shall be invited or permitted to give oral evidence or make oral submissions;
(ii) to decide the extent to which or the topics on which such person shall give such evidence or make such submissions;
(iii) to make his own enquiries into any aspect of the dispute and to rely upon the results thereof; and
(iv) to rely upon his own expertise and judgment in reaching his decision.

f) The Arbitrator shall otherwise act in terms of the Arbitration Act [Cap 12] of Zimbabwe (the Schedule to which is hereby excluded), as amended, or any enactment which replaces the Arbitration Act of Zimbabwe.

g) The Arbitrator’s decision shall be recorded by him in a written document, which he shall sent by registered mail to the parties hereto at the addresses for service selected in this Agreement.

h) The decision of the Arbitrator shall be final and binding upon the parties hereto and either party shall be entitled to have the decision registered with the High
 Court of Zimbabwe as an Order of this Court.

i) The Arbitrator shall (unless the parties hereto agree in writing to the contrary direct that the costs incurred by the substantially unsuccessful party, unless for any reason, which he shall record in writing, he considers some other order as to costs should be made.

j) The Arbitrator’s award of costs shall include the payment of the reasonable fees and disbursements incurred by himself and any professional adviser or witness consulted by any party to the dispute.

k) In the event that the Arbitrator or any such professional adviser is a legal practitioner, his fees shall be determined in accordance with the tariff recommended by the Law Society of Zimbabwe.

l) In the event that Arbitrator or any such professional adviser is not a legal practitioner, his fees shall be those which he reasonably and customarily charges and in the event of any dispute the decision of the appointing authority on the amount of such fees shall be final and binding upon the parties.”

In September 2012 Mr A.B.C. Chinake (Chinake) was appointed arbitrator in terms of the Clause 31 (b) (iv) of the lease agreement quoted above. The record before me shows that on 15 March 2011 both parties agreed that the issues for determination by Chinake would be the following:

“a) Whether the lease agreement was lawfully cancelled;

b) What mount, if any, is due to the Claimant as arrear rent/holding over damages?;

c) Whether the Claimant is entitled to an eviction order;

d) Whether Respondent was only obliged to pay 50% of the market rent; and

e) An order as to costs.”

On 30 March 2011 Chinake made the following award; in favour of Local Authorities Pension Fund:-

a. “That Archipelago (Private) Limited is found to be in breach of the Lease Agreement between it and Local Authorities Pension Fund by dint of failure to pay rentals and operating costs.

b. That Archipelago (Private) Limited shall pay to Local Authorities Pension Fund, as at the date of this Award, the outstanding arrear rentals [less the payment of USD 46,000-00 made on 14 March 2011], in the sum of USD117,009-00 (One Hundred and Seventeen Thousand and Nine United States Dollars).
 c. That Archipelago (Private) Limited is ordered to pay operating costs in the sum of USD41,446-52 (forty One Thousand Four Hundred and Forty Six United States Dollars and Fifty Two United State Cents) as at the date of this Award.

d. That Archipelago (Private) Limited is ordered to pay holding over damages in the sum of USD60,480-00 (Sixty Thousand Four Hundred and Eighty United States Dollars) for the period 1 September 2010 to 1 March 2011 and, in respect of the subsequent period, holding over damages at the rate of USD 8,640-00 (Eight Thousand Six Hundred and Forty United States Dollars per month or a *pro rata* portion thereof from April 2011 to the date on which vacant possession is given to Local Authorities Pension Fund.

e. That Archipelago (Private) Limited be and is hereby ordered to;

5.1 give vacant possession of the section of the basement, Linquenda House, 58 Nelson Mandela Avenue, Harare [leased premises] within 1 (one) month from the date of this Order and, in any event, by no later than 30 April 2011.

5.2 If Archipelago (Private) Limited, or any person occupying the property through it, remains on the property after that date, subject to registration of the Award as an Order of the High Court, the Deputy Sheriff is authorized to remove Archipelago (Private) Limited and all its possessions, including the possessions of any person occupying the property through them, from the leased premises.

f. That Archipelago (Private) Limited shall pay Local Authorities Pension Fund’s costs on A Legal Practitioner and Client scale including any disbursements, including fees paid to the Arbitrator and such other disbursements.

g. That this Award shall be registered as Order of the High Court, in terms of the Agreement between the parties and be duly enforceable in accordance with the High Court Rules.”


On 4 May 2011 Messrs Archipelago (Private) Limited (applicant)filed an application with this Court for a review of Chinake’s award. That application was, however, only withdrawn on 8 March 2012 when, on 7 March 2012 I had asked my clerk to enquire on same. However, on 13 June 2011, before the withdrawal of that application, Messrs Arhipelago (Private) Limited (the applicant) filed this application (HC 5575/11) seeking the following relief;

“It is hereby Ordered that;

1. The arbitration award handed down by the second respondent at Harare on 30 March 2011 in the arbitration proceedings between the applicant and the first respondent is contrary to the public policy of Zimbabwe. Consequently, it is ordered that the said arbitration award aforesaid be and is hereby set aside in terms of article 34 (2) (b) (ii) of the Unictral Model Law, first schedule to the Arbitration Act [ Cap 7 : 15 ]

2. The first respondent shall pay the costs of this application only if the application is opposed.”

The filing of the above application appears to have been prompted by the application filed on 29 April by Local Authorities Pension Fund in terms of Article 35 of the Act seeking the registration of Chinake’s award (ie HC 4137/11).

I have already indicated the two applications were consolidated by consent. Given the circumstances of this case, I believe it is logical to start by determining the application (HC 5575/11) which seeks to have Chinake’s award set aside. I believe a decision on that application may assist in the subsequent determination of the other application, namely HC 4137/11.

As can be seen from the draft order, the main reason put forward for the application to set aside the award is that; “ it is contrary to the public policy of Zimbabwe.” That averment is based on Article 34 (2) (b) (ii) already quoted herein.


In its founding affidavit and particularly in paragraphs 11 and 12 thereof the applicant states:

“I seek to have set aside as contrary to the public policy of Zimbabwe the whole of the award. I submit that the award is contrary to public policy in that;

(a) The agreement between the parties which led to the arbitration proceedings is the Consumer Contracts Act [Cap 8:03] and is therefore no capable of resolution by arbitration in the absence of a separate consent to arbitration signed by the applicant in terms of section 4 of the Arbitration Act.

(b) In any event, at the time the matter was referred for arbitration, no dispute had arisen within the contemplation of the agreement between the parties as the applicant was not in breach of the agreement of lease in question.

(c) Critically, thought the first respondent was cited as the claimant, the claim was essentially an unauthorized act of CR Richard Ellis.

(d) The parties were not treated equally and fairly in that the proceedings went on regardless of the fact that the applicant had requested further particulars, which were not furnished. Additionally, the second respondent was clearly biased against the applicant.

(e) The applicant, having been in occupation since 1978, was ordered to vacate the premises in one month, a grossly unreasonable period in the circumstances.

(f) In any event, the second respondent went on to decide matters that were not before him such as holding over damages.

(g) The second respondent further misconducted the proceedings by deciding certain disputed facts without the leading of evidence, including but not limited to the nature of the operating costs and the existence of an oral agreement in term whereof the applicant would pay fifty percent of the agreed fair rental by reason of having made improvements to the building in question.


(h) The material background facts appear from the pleadings before the second respondent. I attach hereto as **Annexure “B”** the statement of Claim, **Annexure “C”** the statement of defence, **Annexure “D”** the statement of reply, **Annexure “E”** the claimant’s submissions and **Annexure “F”** the applicant’s submission. I incorporate the above herein by reference as if specifically transversed herein seriatim.

(i) The facts can be summed up in the affidavit I disposed to in HC 4222/11 attached hereto as Annexure “G”. I incorporate herein the contents of the said affidavit which also sets out the factual basis of the grounds I have set out above justifying the setting aside of the award.

12. I contend that the arbitration award is contrary to the public policy of Zimbabwe in that it is contrary to the law of Zimbabwe for the reasons set out in paragraph 11 above.”

In response to the above, the respondent through paragraphs 3 and 4 of its opposing affidavit states:-

“3.3.1 Ad Paragraph 11 (a)

I am advised that the averments herein made are misleading and further that the referral of the Parties’ dispute to arbitration was perfectly legal. In particular, I deny the allegation that the nature of the contract that was existing between the applicant and the first respondent is one in respect of which a separate arbitration agreement would be required.

3.2 Ad Paragraph 11 (b)

I vehemently deny the allegations herein made. It seems to me clear that:-

(i) On 3 August 2010, the respondent demanded arrear rentals and operating costs in the total sum of US$186 140.48 (although in the letter of demand the amount had been erroneously stated as US$186 000 140.48). See **Annexure “H”**.
 (ii) For a period of at least eight (8) months immediately before the said demand, the applicant had paid not even a single cent towards its rentals and operating costs as appears on Annexures “11” and “12”.

(iii) At the time that the matter was referred to Arbitration as per Annexure “J”, the applicant was still in rent and operating costs arrears, having again paid no cent towards same.

From the above, it is mischievously misleading for one Stouyannides to allege as he has done in this paragraph.

3.3 Ad Paragraph 11 (c)

I respectfully aver that there is absolutely no substance in the allegations herein made. For completeness, I mention that the Arbitration in question had been sanctioned by the first respondent and therefore its Agents were lawfully executing their mandate. The applicant’s dismal failure to substantiate its allegation to the contrary demonstrates the lack of substance and bona fides in its claim,

3.4 Ad Paragraph 11(d)

(i) Denied. I am advised that the applicant was not entitled to request for further particulars as it had purported to do. I attaché hereto marked Annexure “K” the arbitration directions in respect of which the applicant raised no objections. It is needless to over-emphasise the fact that nowhere is it stated that the applicant would be entitled to request for further particulars. In any event, the applicant never raised the issue of its Request for Further Particulars at anytime during the proceedings and therefore cannot properly do so at this stage.

3.5 Ad Paragraph 11 (e)

The averment made herein takes the applicant’s case nowhere because it does not constitute an acceptable ground for the setting aside of the Arbitral Award in casu.


3.6 Ad Paragraph 11 (f)

Denied. At a meeting held between the Parties and the Arbitrator on 15 March 2011, it was agreed that the Arbitrator would also deal, among other things, with the issue of holding over damages. I attach hereto marked Annexure “L” copy of an e-mail that was sent to the applicant’s lawyers after the said meeting wherein that position was unambiguously stated. No objections were received in respect of same from the applicant’s lawyers.

3.7 Ad Paragraph 11 (g)

I am advised that there is no substance in the allegations herein made. In particular, the allegations made do not constitute an acceptable grounds for the setting aside of an Arbitral Award in terms of the Arbitration Act.

I also hasten to point out that this matter was decided on the papers because the applicant’s lawyer had failed to turn up for the oral hearing. In any case, the factual dispute mentioned herein was immaterial to the resolution of the issues that were before the Arbitrator particularly in view of the contents of a copy of the lease agreement which the applicant admitted was the one which was regulating the affairs of the applicant and the first respondent as Landlord and Tenant.

3.8 Ad Paragraph 11 (h)

No issues arise herein. However, I wish to attach hereto marked Annexure “M” copy of the opposing affidavit which I deposed to in Case Number 4222/11. I beg leave to incorporate herein copy of its contents as if same are specifically repeated.

3.8 Ad Paragraph 11

I vehemently deny the allegation that the facts that are set out in Annexure “G” form a basis for the setting aside of the Arbitral Award in question. For completeness, I incorporate herein contents of Annexure “H” which I verily believe quite sufficiently deal with the allegations contained in Annexure “G”.


4. **Ad Paragraph 12**

I vehemently deny the allegation herein made and further point out that the applicant has dismally failed to prove that there exists any basis in law and in fact for the allegation that the Award in question is contrary to the Public Policy of Zimbabwe.”

In his submissions, Advocate Uriri for the applicant, stated that notwithstanding the contents of paragraph 1-17 of the applicant’s Heads of Argument filed on 7 October 2011, the dispute between the parties was anchored on paragraph 18 of the said Heads of argument where the applicant argued that there was no dispute when the matter was referred to arbitration.

That stance saw the abandonment of the other issues initially raised by the applicant.

The thrust of the applicant’s argument was that Nyandoro’s evaluation of a fair rental had never been agreed upon. That being the case, it was argued, there was never any fair rental to be paid by the applicant. That point, it was argued, had been missed by the arbitrator. The parties had differed on the method of evaluation and it was argued that there was no rental upon which the arbitrator could base his determination.

The applicant submitted that Nyandoro was not an arbitrator but an ‘expert’. It was also argued that Mr Chinake had accepted Nyandoro as a “valuer” and not as an arbitrator. That, it was submitted, was the reason why the applicant had not challenged Nyandoro’s evaluation in Court.

Advocate Uriri went further to argue that “ascertaining that there was a valid rent determination was a condition precedent for Chinake to determine whether or not there had been a breach of contract”. He said that in terms of Clauses 31 (b) (iii) of the lease agreement the rental value of the leased premises in the event of a dispute, was to be determined by an arbitrator. The applicant submitted that any rental not so determined was of no effect and could therefore not be used to ascertain or prove rental arrears.


It was also Advocate Uriri’s submission that, in the absence of a properly determined rental, Chinake could not decide the matter. He said Chinake had no authority to proceed with the arbitration and accordingly “it would be contrary to public policy to enforce an award made by an arbitrator who, in fact, had no authority to make such an award.” The award, it was submitted, merited being set aside.

In response to the applicant’s submissions. Mr Mutasa, for the first respondent, submitted that it was not correct to argue that Nyandoro’s rental determination was not binding on the applicant, who in any case had even failed to pay what it believed was fair rent. He said it was worth noting that for the period 17 November 2009 to 14 January 2011 no single amount of rent had ever been paid by the applicant. He went on to say that, prior to Nyandoro’s determination, the applicant was already in arrears and thus indicating that a dispute had already arisen between the parties.

Mr Mutasa said Mr Nyandoro was appointed arbitrator in terms of Clauses 31 (b) (iv) of the lease agreement and his report clearly showed that the applicant had participated in the process. He said Nyandoro had conducted the arbitration proceedings properly and his determination on rent was final. There had been no reversal of Nyandoro’s determination and the rental demanded by the respondent was based on that determination, a determination Nyandoro had made in the capacity of an arbitrator.

Mr Mutasa went further to submit that the applicant had accepted the issues that Chinake would determine. There was therefore, in his view, no basis for setting aside Chinake’s award.

In determining this matter I agree with Advocate Uriri that the starting point is paragraph 18 of the Applicant’s Heads of Argument filed on 7, October 2011 as read together with paragraphs 11 and 12 of the applicant’s founding affidavit. I shall therefore start by looking at the issue of Nyandoro’s appointment and his determination of rent payable.


“RE: LEASED PREMISES: BASEMENT LINGUENDA HOUSE, 58 NELSON MANDELA AVENUE, HARARE

We refer to the above matter and advise that we act for Local Authorities Pension Fund. Please take note of our interest in this matter. Our instructions are that:-

You lease from our client premises located at Stand Number 6535, Harare Township being a portion of the basement of Linguenda House measuring approximately 1 440m².

In breach of the terms and conditions of your lease agreement, you have failed and/or neglected to pay rent and operating costs incurring arrears thereby in the total sum of US$186 000 140.48 as at 30 July 2010.

Following your said breach, we have been instructed to cancel the lease agreement existing between yourselves and our client. Take notice that the lease agreement is hereby cancelled.

We demand that you vacate our client’s premises and pay the arrears within three (3) days of receiving this letter, failing which legal proceedings will be instituted against yourselves without giving you further notice.

We therefore await hearing from you in near course. [sic]”

The Respondent later pointed out that the correct figure of arrears as at 30 July 2010 was US$186 140-48 and not US$186 000 140-48 as reflected in above letter. It said there was typographical error.

On 10 August 2010 the applicant wrote a lengthy letter to the respondent. The relevant parts of the letter read as follows:-

“RE: OUR LEASE WITH LOCAL AUTHORITIES PENSION FUND

Your letter of 3rd August refers.

In view of arrangements in place, we are totally surprised by its contents and ask you to please note as follows:
 During the said meeting, the undersigned, explained at length that last years determination, by an arbitrator appointed by Richard Ellis was totally unfair since his ruling was based on rental payable at the time by Steers, on Mandela Avenue, which is an extremely busy street, as compared to our premises which are in the basement of Linguenda House. It was the undersigned’s belief, as advanced in said meeting that said arbitrator, a Mr Nyandoro, issued a very high determination so as to get the financial benefit, as his fees are based on a percentage of determination.

It was furthermore advanced by the undersigned, that back in 1978, when we made the original arrangement with the management of LAPF, it was agreed that no rental would be levied against us for a period that needed for us to transform the premises at Linguenda House, which were in a terrible state and furthermore, that when the Nite Club and Restaurant was opened the rentals would have been based at no more than 50% of the current rentals applicable in the area. This agreement was reached in order for us to invest the bulk of the ZW$750,000.00 was a huge amount of investment during Rhodesia (pre Independence of Zimbabwe)

This agreement was kept by LAPF as we moved to the premises in September 1978 and the first rental was paid in December 1979, since Archipelago opened to the public on the 15th November 1979.

The first rental paid to LAPF was ZW$2,100.00.

The undersigned furthermore advised in the meeting, that the demanded operating costs are abnormal and irregular when taking into consideration, that we are paying our own electricity bills directly to ZESA (in fact we three different accounts) and that we could not participate in additional charges, such as, the up-keep of lifts, air conditioning and the like. He furthermore advised, in particular to the Manager of LAPF, to give instructions to its property agents, on said issue and also, to note that we will never accept to pay a cent on operating costs, without proof of actual paid invoices and exact calculations of the proportion I relation to Archipelago Nite Club and Restaurant.

After much deliberation on all of the above, the undersigned proposed a rental from January to December 2010 of US$2,100.00, since it was felt that the correct rental for our premises at the market going prices was +/- US$4,200.00 per month.

On said proposal we were advised most categorically “TO WAIT”, for the property agents further advice of an acceptable rent, which if it wouldn’t have been accepted by us, would have caused the calling of further meeting with all concerned, so as to come to finality on this matter.

Since the meeting in question, no written communication has been received by this office from either LAPF, or its agent. The only information we have received, is that soon after the meeting of 27th January 2010, the Property Manager of Richard Ellis Ms Progress Kamonera, left from her employment.


On the strength of the above, we wish to accordingly advise you, that should you decide to issue a Summons of the High Court, same will be defended on the above-mentioned merits with full costs.

Furthermore and as we have not heard in any of our agreement or obligations, we do not accept the cancellation of our 32 year old lease agreement.

In conclusion, it is felt that due to the excellent past relationship with the landlord, which equally prevailed during the meeting in January this year, that rather than a long and expensive litigation in Court, that a further meeting is arranged at the landlord’s premises where all pending issues could be worked through.”

The above letter was written by John Stouyanides under the title “ Chairman.”

On 19 August 2010, the respondent’s legal practitioners, prompted by the lengthy letter, wrote to the applicant in the following terms:

“RE: LEASED PREMISES: BASEMENT LINGUENDA HOUSE, 58 NELSON MANDELA AVENUE, HARARE

We refer to your letter of 10 August 2010 which we received at our offices on 12 August 2010..

The demand of US$186 000 140.48 as contained in our previous correspondence is obviously erroneous because the outstanding amount in respect of rent and operating costs as at 1 August 2012 is US$186.140.48.

That notwithstanding, it seems quite clear that you are disputing our client’s right to cancel the lease agreement. Our instructions are to invoke Clause 31 of the lease agreement.

We have therefore requested the President of the Law Society of Zimbabwe to appoint an Arbitrator in accordance with Clause 31 (b) (iv) of the lease agreement. Our letter I regard is attached hereto for your information and agreement. Our letter in regard is attached hereto for your information and records.

Kindly please let us know should there be any issues that you may want us to address particularly on the arbitration procedure. We will be grateful to hear from you in due course”.

On 24 August 2010 the applicant, through Mellisa Omar, wrote to the respondent’s in the following terms:


“RE: Lease Premises: Basement Linguenda House, 58 Nelson Mandela Avenue, Harare

Reference is made to your letter of 19th August 2010 (which only received by this office yesterday 23rd August 2010) as well as telephonic communications exchanged with the undersigned yesterday morning and in confirmation of our telecom, I would ask you to please note as follows:

Mr John Stouyanndies is currently out of the country and will be returning to office on Monday next week, at which time he would read the letter and respond to your office accordingly.

In the meantime, could you kindly please furnish us with a copy of the lease that was attached to the letter sent to the President of the Law Society of Zimbabwe in order that the may be au fait with all relevant matters upon his return to the office.

We look forward to receiving the abovementioned document and thank you for understanding.”

On 31 August 2010, John Stouyanndies (Chairman) of applicant addressed the following letter to the respondent’s legal practitioners:-

“RE: Leased Premises: Basement Linguenda House, 58 Nelson Mandela Avenue, Harare

Reference is made to your letter of 19th August 2010 followed by ours of 24th August 2010 and yours of 30th August 2010, contents on which noted.

Initially, the undersigned would like to express his gratitude in your professionalism in accepting to wait for his physical return to Harare, so that your letter of 19th of August could be responded in detail.

Whilst we appreciate your having forwarded us the current Lease Agreement per your letter of yesterday’s date, it would be greatly appreciated if through your office we could equally obtain a copy of the original Lease Agreement signed between both parties in 1979.

In response to your letter dated 19th August 2010 we would like to advise as follows:
1. We are still astonished, to say the least, by the amount demanded for rent and operating costs as at the 1st of August 2010 and wish to categorically advise that it is impossible that such an amount could be outstanding. It will accordingly be appreciated if you would be kind enough to advise in detail how the amount in question has been arrived at.
2. Based on our previous advices, we want to categorically inform you that we have not refused to effect any payment for rental and are still waiting for written confirmation from the landlord or its agent of the monthly amount in question. It is obviously not disputed that a meeting was held LAPF’s offices on the 27th of January 2010 and it will be accordingly be appreciated if some kind of proof could be forwarded to us indicating response from landlord’s agents Richard Ellis as a follow up to said meeting with particular reference to the monthly rental from 1st January this year, this being in strict accordance of arrangements during said meeting.

3. Based on 2 above, we have never refused to pay an acceptable monthly rental and as a result, kit is believed that the landlord has no right whatsoever to cancel a Lease over Leased premises for 32 years or so

4. As a result of 3 above, it is believed that the involvement of the Law Society of Zimbabwe for the appointment of an Arbitrator is irregular and if it is followed through, will force us to get the determination of the High of Zimbabwe on a case which we will introduce immediately upon such appointment.

5. We have proven before beyond reasonable doubt that the appointment of such Arbitrators defies the normal course of justice as has been the case with the appointment of Mr Nyandoro by Richard Ellis so as to determine the correct rental applicable in the first place.

6. In order to save valuable time and in line with our request per1 above we would like to assure you that on each and every occasion when we had the opportunity to investigate with at least the last 3 of the landlord’s agents, operating costs in respect of said building as levied against us, we had always found these as being totally irregular and in the majority of cases of no concern to the Basement Premises we are occupying.

7. We equally note with concern that your response under review remained silent on the question of damages due to total negligence by the landlord or its agent in fixtures in our members bar having been totally destroyed as a result of severe flooding for an extended period of time during the last rain season.

8. We would like to reiterate our willingness to sit around a conference table as a follow up to our last reported meeting and solve our disputes, rather than having to resolve to have this matter heard at the High Court of Zimbabwe.

9. The undersigned is yet to embark of a further trip overseas from lunchtime tomorrow, his itinerary and ticket having been issued since the end of July. It will accordingly be appreciated if relevant matters under dispute as referred to above could remain in abeyance until his return to Harare on the 30th of September 2010.

We look forward to hearing from you and we thank you in anticipation.”

On 1 September 2010 the applicant through John Stouyannides again wrote to the respondent’s legal practitioners in the following terms:-

“RE: Leased Premises, Basement Lignuenda House, 58 Nelson Mandela Avenue, Harare

Your letter of 1st September 2010 refers.
 Although it is accepted that delays in the conclusion of this matter are not in your client’s interest, at the same time it must be appreciated that one can not just throw a figure on a table and expect to be paid for it, without the necessary proof etcetera.

Furthermore, it must be appreciated beyond any doubt that the reason for the meeting at your client’s premises was due to the fact that the Award was in dispute, since what would have been the reason for the meeting in the first place?

Equally, during said meeting, IT WAS AGREED that the Awarded rental was abnormal and that records should have been searched so as to get confirmation any market related rental would have been halved, this being in strict accordance with the original arrangements prior to our investment on the premises during the years 1978 and 1979.

As a result of the above, we feel that we are entitled to a fair approach by the landlord and wish to make it categorically clear that any action that your client intends to institute will be defended in Court with all its merits.

It is still believed that a suitable meeting at the beginning of next month will solve this dispute in an amicable way.

Please be guided accordingly.”

It appears thereafter the respondent decided to proceed to arbitration and hence the appointment of Chinake by the Law Society of Zimbabwe through its letter of 14 September 2010 which read as follows;

“Messrs Gill, Godlonton & Gerrans
Legal Practitioners
Beverley Court
HARARE

Dear Sirs

RE: APPOINTMENT OF ARBITRATOR: LOCAL AUTHORITIES PENSION FUND vs ARCHIPELAGO (PVT) LTD

Reference is made to your letter of the 3rd of September 2010 regarding the above matter.

I am pleased to advise you that I have appointed Mr ABC Chinake of Kantor & Immerman Legal Practitioners.


Kindly confirm by return post if the appointment is acceptable to you?

Yours faithfully

J. TSHUMA
President ( Law Society of Zimbabwe )”

It remains clear from the applicant’s correspondence that it was never satisfied with Nyandoro’s determination of the rental payable. The correspondence, however, does not indicate any formal attempt to have Nyandoro’s determination set aside. Nyandoro’s determination shows that the applicant participated in the proceedings that were initiated through the invocation of Clause 31 of the lease agreement, quoted in full at pp 3-4 of this judgment. Furthermore in its letter of 10 August 2010 the applicant referred to Nyandoro as an arbitrator. The fight was against his determination which was never set-aside.

In his report, filed by the applicant (undated), Nyandoro gives the Chronology of events as follows:-

“CHRONOLOGY:
1709/2009

A G. M Nyandoro of INRE ( Iwe-Neni Real Estate) received appointment letter dated 17th September 2009 from the Chairman of the Royal Institution of Chartered Surveyors, Harare group appointing him to act as an expert in the settlement of the dispute between Archipelago ( Pvt) Ltd ( Tenant) and C B Richard Ellis for ( Landlord) regarding basic rentals payable for Stand 6535 Salisbury Township at 58 Nelson Mandela Avenue Harare..
20/10/09
I receive letter dated 20/09/09 from the tenant Archipelago advising that the previously agreed rent with the previous managers was $1 400.00 USD per month and that whatever market rent established was to be charged to Archipelago at 50% for the investment done on the property by the tenant at the commencement of the lease.
30/10/09
I receive from CBRE their submission dated 29/10/09 with a schedule of comparables ranging from $5.00 to $7.00 per square metre. Attached to this was a copy of a trigger notice dated 3rd February, 2009 to the tenant proposing a rent of $8 640.00 USD ($6.00) per square metre per month for the period 01/12/09 to 28/02/09. Also attached to it was a counter notice dated 5th March 2009 from the tenant for the amount stated above and suggesting that if not agreed the matter be referred to arbitration.

12/11/09

I receive from the tenant acknowledgement and submission that they cannot comment on landlord’s comparables and neither could they provide comparables as they are not in the property industry. They urged me to go ahead and make a determination that is feasible. and acceptable to them.

13/11/09

I request to meet the tenant and we meet at his premises to highlight how to open market system operates in the property.”

The above clearly proves the active participation or inclusion of the applicant in the arbitration exercise. The report also indicates that Nyandoro’s fees were to be shared equally between the parties.

In view of the foregoing, I regard purported unilateral introduction by the applicant of the valuation Report by Crusader Real Estate Consultancy ( Pvt) Ltd, as mischevious.

Clause 31 of the Lease Agreement under which Nyandoro was appointed defines who he was. The clause deals with the appointment of an Arbitrator. The appointed Arbitrator may be an expert in some aspect of the dispute between the parties. Clause 31 (c) confirms that point.

The said clause states that:-

“The appointing authority shall nominate as the arbitrator an independent person who is familiar with the type of issues to be decided in arbitrating the dispute”.

Nyandoro was familiar with issues of rent and hence his appointment.

To me, the fact that Nyandoro was a valuer, makes it more reasonable for him to have been appointed an Arbitrator. If in the award and in his report he is described as an expert, all it means is that Arbitrator Nyandoro was an expert in the area of rent valuation. The Arbitration Act [ Cap 7:15] does nor prohibit experts in their fields of operation from being appointed as Arbitrators in dispute matters. Clause 31 (i) of the lease agreement states that;

“The decision of the arbitrator shall be final and binding upon the parties hereto and either party shall be entitled to have the decision registered with the High Court of Zimbabwe as an Order of that Court.”.


The rental determination by Nyandoro was final and the applicant never took any steps to have it set aside for whatever reason. The applicant was fully aware of the appointment of Nyandoro in terms of the lease agreement. It participated fully in the arbitration exercise. It is therefore bound by Nyandoro’s determination. This means that when the parties appeared before Chinake the level of the rent payable had already been determined.

Accordingly the argument that the determination of the fair rent was a pre-condition for Chinake to embark on the arbitration exercise is misplaced. Having found that Nyandoro’s determination was binding on the applicant, I shall now proceed to consider whether or not Chinake’s award was against public policy.

In making a determination on any aspect of Chinake’s award, it is important to know what exactly was before him for determination. This he clearly set out on 15 March 2011 as follows:-

“4. The issues that the Arbitrator shall deal with are these:-

a) Whether the lease agreement was lawfully cancelled;
b) What mount if nay, is due to the Claimant as arrear rent/holding over damages
c) Whether the Claimant is entitled to an eviction order
d) Whether the respondent was only obliged to pay 50% of the market rent; and
e) An order as to costs.”

The above issues for the Arbitrator’s determination were accepted by both parties. The applicant never disputed that position. Due to problems relating to the non-appearance of the applicant’s legal practitioner, on 17 March 2011, Chinake made the following ruling:-

1. That this matter shall be determined on the papers, in light of the circumstances to date.
2. That the Claimant shall file its Submissions by 4:00p.m, Monday 28 March 2011 and serve the same on the respondent.
3. That the respondent shall file its Submissions by 4:00p.m., Wednesday 30 March 2011 and serve the same on the Claimant;
4. That the ruling of the Arbitrator will be issued by 4:00p.m., Wednesday, 6 April 2011 and served on both parties.
5. That the question of the wasted costs of 17 March 2011 was reserved.”

With respect to the above ruling Chinake goes on to state:-


“ Subsequent to my making this Ruling, Mr Samukange telephoned me around 1.20p.m. and indicated that he was on his way to my offices.

I indicated that the matter had already been resolved and read to him my Ruling.

He indicated that he understood the reason why this Ruling had been made and that it was fair, in the circumstances, and he undertook to file his Submissions as directed.

I subsequently received both Counsel’s Submissions timeously.”

The above clearly indicates that procedurally the issues for determination were properly before Chinake

In noting that a rental level had already been determined Chinake said;

‘I agree that the provisions of the Lease, in particular Clause 5 (a), as read with Clause 35 (b), place the matter beyond doubt and the Rent Determination made by Mr AGM Nyandoro is binding on the parties.

I also point out that, in terms of Clause 31 (i) of the Lease Agreement the decision of any Arbitrator appointed in terms of Clause 31, is final and binding,”

In view of the foregoing I think it would be improper to allow the applicant to argue that there was no rental upon which Chinake would make a determination on the issues before him. The applicant should be estopped from doing so. Accordingly the applicant should be denied the relief it seeks.

There is no basis upon which the award should be set aside. It does not offend any public policy. The application to have it set aside should fail.

What then is the impact of this decision on the relief sought by the respondent as applicant in HC 4137/11.

As already indicated, the application in HC 5575/11 appears to have been triggered by the relief sought in HC 4137/11. The reasons for the rejection of the registration of the award as prayed for in HC 4137/11 are the same as those put forward in HC 5575/11 for the setting aside of Chinake’s award. In refusing to grant the relief sought in HC 5575/11, I have dealt with and dismissed the arguments put forward for the setting aside of the award. I have already stated that, in my view, the award does not offend public policy in any way. I am unable to find any reason to have Chinake’s award set aside. I agree with GOWORA J, as she then was, when, in Isdore Husaihwevhu & others vs UZ – UCSF Collaborative Research Programme (HH 237/10), she said

“It seems to me that the import of the defence under Article 34 and 36 is not to imbue the Court before whom the award is to be registered or set aside with powers of Appeal to determine the correctness of the decision by the Arbitrator … I am persuaded that an award by an Arbitrator is not contrary to public policy merely because the Arbitrator was wrong in law or in fact in reaching the conclusion that he arrived at”.

I am unable to fault Chinake’s determination either in law or fact.

Given the above I find that nothing militates against the registration of the award as an order of this Court.

I therefore order as follows:-

1. The application in HC 5575/11 be and is hereby dismissed with costs.
2. The arbitral award granted by A.B.C. Chinake on 30 March 2011 be and is hereby registered as an order of this court.
3. The respondent in HC 4137/11 be and is hereby ordered to pay costs of suit.

Messrs Venturas & Samukange, applicants/ respondents legal practitioners
Messrs Gill Godlonton & Gerrans respondents/applicant’s legal practitioners

/am


HH 147/2012
HC 5575/11
HC 4137/11
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