Pomelo Mining (Pvt) Ltd v Beatrice Mine (Pvt) Ltd & Anor & Anor

### Preamble
1
HH 470-23
HC 804/20
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POMELO MINING (PVT) LTD

Versus

BEATRICE MINE (PVT) LTD

And

ANNADALE TRUST

And

REGISTRAR OF COMPANIES N.O

HIGH COURT OF ZIMBABWE

CHILIMBE J

HARARE, 1 February and 31 July 2023

Trial cause

R. R. Nyapadi, with K. Moyo for plaintiff

T. Zhuwarara for the defendants

CHILIMBE J

BACKGROUND

[1] Two points arose at the commencement of trial predicated on r 49 (14) and r 52 (7) of the High Court Rules 2021.In essence, the parties addressed me on preliminary case management considerations in the spirit of the two rules in particular, and Part VI of the rules in general.

[2] Part VI deals with preliminary matters before trial. What I am required to do therefore is to give my reasons for the case management directions which I will issue, after hearing the parties’ submissions in that regard.

[ 3] The issues in question commenced with; -

An invitation to the court by Mr. Zhuwarara, to direct the parties to file written submissions on the legal issues involved in terms of r 52 (7) of the High Court Rules 2021; -

A request by the court for the parties to accentuate the issues for trial and comment on the controversy between the parties,

[4] The second matter was raised in view of (a) the manner in which the issues had been framed, (b) the admissions made and most importantly, (c) the matters in respect of which findings of fact and law relevant to the issues had been made during previous proceedings being; -

Arbitral award issued by Mr.A.B.C Chinake on 1August 2018. This award withstood subsequent attempts to have it set aside in both the High Court and Supreme Court.

The High Court`s decision per MUZOFA J in Pomelo Mining (Pvt) Ltd v Annadale Trust and Addington Bexley Chikomborero Chinake HH 33-19 which dismissed an application to set the above award aside and instead registered it as an order of this court.

The Supreme Court`s decision per MATHONSI JA in Pomelo Mining (Pvt) Ltd v Annadale Trust and Addington Bexley Chikomborero Chinake SC 90-19 which upheld MUZOFA J`s decision.

The High Court`s decision per ZHOU J in Pomelo Mining (Private) Limited v Beatrice Mine (Pvt) Ltd and Annandale Trust and Registrar of Companies HH 518-20 which resulted in the present trial proceedings.

[5] The parties addressed the court and supported their respective positions through further submissions in writing. The defendants then escalated their position and urged the court to decline jurisdiction. There was no need in fact, it was argued, for the court to revisit the disputation. The claim which plaintiff purported to bring under the present proceedings had been resolved and concluded by the arbitrator.

[6] The plaintiff argued that its claim related to residual matters that remained outstanding. The arbitral award and subsequent proceedings before this court and the Supreme Court had not exhausted all aspects of the parties` dispute. I briefly set out the facts of the dispute before returning to this point.

THE ILL-FATED JOINT VENTURE STRUCTURE

[7] Pomelo (as investor) and Annadale (as asset owner) entered into a mining joint venture (JV) through Beatrice Mine as the JV company. The investor and asset owner respectively held 74% and 26 % shareholding in the JV company.

[8] The asset comprised of several mining claim claims located in the Beatrice area. The joint venture (JV) collapsed. The asset owner alleged failure by the investor to invest in the JV as agreed. It demanded the 74% that had been allotted to the investor. The dispute was referred to arbitration and the investor succeeded.

[9] The investor made spirited efforts to resist this outcome as noted above. Those endeavours were not successful. The investor then trained its guns on a different target. It decided to launch a claim for the return of its investment (sic).

[ 10] In its declaration filed of record, the investor stated thus; -

Parag 12.

It is common cause that the joint venture agreement was cancelled on August 1,2018, through an arbitral award and the award further ordered that the 74% shares in 1st Defendant held by Plaintiff be returned to the 2nd Defendant. However, the award became operational on November 22 after Plaintiff`s appeal in the Supreme Court was dismissed.

Parag 13.

It is upon the basis of this cancellation of the joint venture agreement that Plaintiff seeks an order for restitution of the sums it invested into the 1st Defendant.

Parag14.

On January 7,2020, the 1st Defendant wrote to the Plaintiff a letter in which it tendered the amount of ZWL 2,501,275.15 to Plaintiff as money it owed Plaintiff following the cancellation of the agreement.

[ 11] The issue to determine is whether these matters were conclusively addressed by the various forums in which the dispute saw contestation.

THE ISSUES BEFORE THE VARIOUS TRIBUNALS

[ 12] In the proceedings before the arbitrator, the present Before the arbitrator, Annadale sought three things. Firstly, an order confirming cancellation of the JV agreement. Secondly, return of the shares allocated to Pomelo and thirdly, removal of Pomelo`s nominee directors.

[ 13] This claim received favour and was duly granted. As already noted, the arbitrator`s decision was confirmed by this court as well as the Supreme Court. Mr. Zhuwarara drew attention to the following matters in support of his argument that previous decisions pronounced themselves on specific matters which Pomelo was now (improperly) raising again in the present claim; -

[14] That Pomelo spurned the opportunity to present its own claim before the arbitrator. As such, Pomelo, according to the import of counsel`s argument, stood effectively barred. He added that this court per MUZOFA J had made a specific finding that the amounts which Annadale now sought to recover under the present proceedings.

[15] That finding was to the effect that “the money paid was not to buy shares but a loan to the company.” It therefore precluded this court under the present proceedings to receive evidence and argument to the effect that the amount paid was for a purchase of shares. Counsel fortified his argument by quoting the Supreme Court` observation that; -

“The appellant`s undoing was its failure to take up the opportunity to present its case before the arbitrator resulting in the matter being determined on the basis of only the first respondent`s statement of claim”

[ 16] Mr. Nyapadi for Pomelo insisted that the claim for restitution was properly before the court. It was consequential upon the outcome of the arbitrator`s award which cancelled the contract. He referred to the comment by MUZOFA J to the effect that

“The facts of this case remain in dispute as to whether the money paid to the company was a loan or meant to purchase the shares. The issue was not before the Court for determination”.

[ 17] Mr. Nyapadi` s further contention was that both this court per MUZOFA J and the Supreme Court recognized Pomelo`s option to still pursue a claim in restitution.

ANALAYSIS OF THE ARGUMENTS.

[18] I must say that despite his forceful arguments, Mr. Zhuwarara did not elect to strike the serpent on the head. His arguments were implicit that the matter was res judicata by reason of the principles of issue estoppel and functus officio. He was careful to merely advert to the fact that the court could not revisit its earlier judgments. He referred in that regard to Supreme Court in Zesa Holdings (Pvt) Ltd v Utah SC 32-18 [at page 10] where it was held as follows; -

“Furthermore, in Unitrack (Pvt) Ltd v Telone (Pvt) Ltd 	SC 10/18 MAVANGIRA AJA (as she then was) held as follows: “It is a general principle of our law that once a court or judicial officer renders a decision regarding issues that have been submitted to it or him, it or he lacks any power or 	legal authority to re-examine or revisit that decision. Once a decision is made, the term “functus officio” applies to the court or judicial officer concerned.” (my emphasis)”

[19] I make such observation because res judicata and related concepts are established via well-known tests. See Kawondera v Mandebvu 2006 (1) ZLR 110 (S); Flowerdale Investments (Pvt) Ltd & Anor v Bernard Construction (Pvt) Ltd & Others 2009 (1) ZLR 110 (S); Chawasarira Transport (Pvt) Ltd v Reserve Bank of Zimbabwe 2009 (2) ZLR 112 (H).

[ 20] The requirements being; - (a) the two actions must be between the same parties or their privies, (b) the two actions must concern the same subject matter; and (c)the two actions must be founded upon the same cause of action. Mr. Zhuwarara` s argument was to the effect that a necessary ingredient of a cause of action previously decided upon but was being presented to the court again.

[ 21] Quite clearly, the requirements of res judicata are not fulfilled by the circumstances of this matter. Nor, in my view can it be said that the causa as presented herein (see 8 above) was fully addressed and resolved. The arbitrator was seized with the issue of breach and in particular, cancellation of the contract. He correctly disposed of that aspect. But the award left the residual consequences of the cancelled contract.

[22] This is the point that was noted by MUZOFA J and the Supreme Court. To the effect that if Pomelo could pursue the salvage of its interest via other remedies. What was decided and concluded was that Pomelo was in breach and needed to surrender the shares it held in Beatrice Mines. The argument by Annadale is simple. It says that monies ploughed into the venture were consumed by operations. They were not pocketed as profits accruing to the JV asset owner.

[23] This is the additional dimension that must be addressed by leading of evidence in this matter. This aspect was not specifically pleaded before the arbitrator nor in the two appeals. I say that evidence must be led mindful of Mr. Zhuwarara’ s arguments that (in any event) the calling of evidence to determine this dispute can be obviated. This is because the issues of restitution derive from interpretation of contracts. And that is an exercise in law not fact. I opine as follows in addressing this point.

[24] Firstly, Pomelo`s prayer incorporates other claims beyond the USD $500,000 allegedly paid in exchange for the 74% shareholding in Beatrice Mines. This brings in issue factual matters beyond captured in counsel`s contemplation. Pomelo declares as follows; -

Parag 11

“The total amount invested into the 1st Defendant joint venture company by Plaintiff adds up to in or around USD2,500,00,00. This amount is inclusive of the initial USD 500,000,00 paid for the 74% shares to be issued, the serviced loan of USD 1,200,000,00 and the USD 800,000,00 further injected into the 1st Defendant.”

[25] Secondly, this court per ZHOU J made the following observations which still survive an attempt on their life by Mr. Zhuwarara. Counsel had argued that when the court made the observations in question, it did not enjoy the benefit of Pomelo`s averments in its declaration. For the simple reason that the declaration was drawn and filed subsequent to the court`s decision. I set out the remarks by ZHOU J; -

“There is no doubt that the agreement is inelegant in the manner in which it portrays this payment, particularly its relationship with the transfer of 74% of the shares.  What was within the contemplation of the parties is a matter which will have to be resolved by oral evidence.  The agreement even presents itself as a “memorandum of understanding for a joint venture’, as if it expresses an intention to enter into some further agreement.  Yet it creates obligations on the parties upon the signing of it.”   [ Underlined for emphasis]

[26] The learned judge proceeded further and noted that; -

“The disputes of fact are material because they have a bearing on the currency in which the applicant must be paid the US$2 501 275.15 which it paid pursuant to the joint venture agreement.  This is so because if it was a loan there will be the question of whether or not it was affected, and therefore became RTGS dollars, by the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Real Time Gross Settlement Electronic Dollars) Regulations, 2019, Statutory Instrument 33 of 2019.  On the other hand, if it was a payment for shares or an investment in the joint venture it may not necessarily have been an obligation which was expressed in the United States dollars as at the effective date of Statutory Instrument 33 of 2019, in which case the question will have to be resolved as to the currency in which the applicant must be restituted. Where there is a material dispute of facts which cannot be resolved on the papers this court has a discretion as to the future course of the proceedings.  Both parties were primarily basing their arguments on the wording of the written agreement.”

DISPOSITION

[ 27] I am indebted to both counsel for their submissions. I am sufficiently addressed on the matters that I queried at commencement. I now proceed to issue further directions, noting of course, that there shall be no order as to the costs arising from this engagement. The proposals proffered on behalf of Beatrice Mine and Annadale that the trial proceeds as a stated case do not find favour. Similarly, the objections raised regarding jurisdiction are overruled.

It is ordered that; -

The present proceedings be and are hereby directed to proceed to trial on the issues identified at the pre-trial conference.

Any of the parties to this matter may approach the Registrar, within 7 days from the day of this order, and arrange for the set down of this matter.

Muza and Nyapadi-Plaintiff`s legal practitioners

Wintertons-1st and 2nd defendants` legal practitioners

CHILIMBE J________31/8/23