Powertel Communications (Pvt) LTD Versus Dandemetande Investments (Pvt) LTD

### Preamble
1
HH 454-25
HCH 1806-24
5
---------




POWERTEL COMMUNICATIONS (PVT) LTD

versus

DANDEMETANDE INVESTMENTS (PVT) LTD

HIGH COURT OF ZIMBABWE

TAKUVA J

HARARE 3 March 2025 & … July 2025

CJ Mahara & SMakwarimba for the applicant

S Mpofu for the respondent

TAKUVA J:

This is a court application in terms of article 11(4) of the Arbitration Act [Chapter 7:15] (“the Act”). The applicant requests this Court to appoint an arbitrator who will preside over the parties’ dispute, following their failure to agree on the appointment of one. Both parties are companies, duly incorporated in terms of the laws of Zimbabwe.

BACKGROUND FACTS

In 2010, the parties entered into an Internet Capacity Purchase Agreement. Clause 27 of the agreement provides that in the event of a dispute between the parties relating to the agreement, the parties shall by consent, refer such dispute to arbitration.  Sometime in 2017, a dispute arose between the parties, emanating from the respondent’s decision to terminate the agreement. In 2018, the parties agreed to appoint the Honourable Retired Justice Ziyambi as the arbitrator who would preside over the dispute. The respondent herein was the claimant in those proceedings. However, the arbitration process did not materialize as the respondent did not file its claim. Around late 2019, the arbitrator communicated to the parties, indicating that it had been over a year since documents were to be filed in that matter and that the impression was that the matter had been abandoned. She then expressed her non-availability due to some other new engagements.

In 2023, the applicant sought reappointment of a new arbitrator from the Commercial Arbitration Centre and Mr. Whatman was appointed as one. The respondent objected to this appointment, stating that the applicant had violated clause 27 of their agreement by unilaterally seeking the appointment of that arbitrator. That preliminary objection was upheld by Mr. Whatman and a final award was issued by consent, terminating those proceedings on the basis that the matter was not properly before the arbitrator. The applicant averred that thereafter, the parties failed to reach a consensus regarding the appointment of a new arbitrator and that this therefore necessitated the present application.

RELIEF SOUGHT

The applicant prays that:

The application for appointment of an arbitrator be and is hereby granted.

The Court be and hereby appoints a sole arbitrator on recommendation of Chairman of the Commercial Arbitration Centre in Harare until this dispute is finalized.

The respondent shall pay costs of suit on a legal practitioner and client scale.

PRELIMINARY POINTS

The claim has prescribed

The respondent averred that the applicant’s claim was a debt and that in terms of the Prescription Act [Chapter 8:11] (“the Prescription Act”), that claim had prescribed because more than three years had lapsed from the time the parties failed to agree on an arbitrator in 2018 to the time when this application was filed in 2024. In response, the applicant averred that this preliminary point could only be raised before an arbitrator who will be seized with the main dispute between the parties. It argued that in this Court, it had not filed its claim against the respondent but was only seeking recourse in terms of Article 11(4) of the Arbitration Act, which is the appointment of an arbitrator to deal with the dispute between the parties.

The applicant’s claim against the respondent, which is the basis of the dispute between them, concerns the alleged failure by the respondent to settle a debt due in terms of the agreement. The Court is not seized with that particular claim or the dispute between the parties. The applicant only requested this Court to appoint an arbitrator who will preside over their dispute. A preliminary point of law is one that if properly taken in an application or action, is capable of disposing of a matter without the need for the court to delve into the merits of the matter. (See Dicron Investments (Pvt) Ltd v Kawa and Ors HH 129-17 at page 1). In casu, the respondent argued that the applicant’s claim had prescribed yet that claim had not been filed in this Court. I therefore agree with the applicant’s contention such point could only be raised before the forum dealing with the applicant’s claim. In that regard, the preliminary point on prescription lacks merit.

Incompetent relief sought

The respondent averred that in terms of article 11 of the Model law, recommendations on the arbitrator ought to be made to the Court by the applicant and that the respondent should be afforded a chance to present its opinion regarding the suggested arbitrator. It averred that in casu, the applicant sought appointment of a sole arbitrator by the Court, on recommendation of the Chairman of the Commercial Arbitration Centre in Harare. It contended that such procedure definitely deprives the respondent of an opportunity to challenge the credentials of the arbitrator. It argued that therefore the relief sought is not competent because it arrogates powers to recommend an arbitrator to the Commercial Arbitration Centre, violating the procedure laid down by statute.

In response, the applicant submitted that the mentioning of the Commercial Arbitration Center in the draft order was just a recommendation and not a directive to the Court. Article 11(5) of the Act provides for the criteria to be followed by the High Court in appointing an arbitrator. It states that:

“(5) A decision on a matter entrusted by paragraph (3) or (4) of this article to the High Court shall be subject to no appeal. The High Court in appointing an arbitrator shall have due regard to any qualifications required of the arbitrator by the agreement of the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator and, in the case of a sole or third arbitrator, shall take into account as well the advisability of appointing an arbitrator of a nationality other than those of the parties.”

The above provision means that when the High Court appoints an arbitrator, it must consider:

any specific qualifications or requirements for arbitrators stated in the parties’ arbitration agreement, for instance the agreement might require the arbitrator to have expertise in a particular field.

The independence and impartiality of the arbitrator.

In the case of a sole or third arbitrator, whether appointing an arbitrator of a different nationality from the parties is advisable. (This is more relevant in international arbitrations).

Ideally, the criteria outlined in article 11(5) of the Act ensures that the appointed arbitrator is qualified to handle the dispute fairly. The Act incorporated the United Nations Commission on International Trade Law (“UNCITRAL”) Model Law with the necessary modifications. There are other jurisdictions like Zambia, which incorporated similar UNCITRAL Model Law provisions into their Arbitration Act No. 19 of 2000. Section 12 of the Zambian Arbitration Act as read with article 11 of the Model Law provides for the procedure to be adopted by the High Court in appointing an arbitrator to determine disputes, where parties fail to agree on such. In Orange Financial Services Limited v Mwaba 2024-HPC-0644, which was an application for appointment of an arbitral tribunal, the Court had an occasion to interpret section 12 of the Zambian Arbitration Act as read with article 11 of the UNCITRAL Model law. It stated at pages 6 to 7 that:

“5.7 Article 11(4) of the Model Law provides that a party may request the Court or other authority named in that Country to make the appointment. Further when appointing an arbitrator, Article 11 (5) of the Model Law states that the Court or other authority must consider any qualifications required of the arbitrator.

“5.8 In this case, the Applicant has submitted the name of High Court Judge Kareen Etambuyu Mwenda-Zimba as the proposed sole Arbitrator for consideration. The Respondent has not opposed the proposal.

5.9 I have considered the manner in which the Applicant has presented the application before court. My considered view is that the Applicant as a matter of good practice ought to have availed a list of arbitrators in Zambia from any arbitral institution with their attendant qualifications upon which a decision could be made to appoint an arbitrator. The exhibited "ML5, being a Notice of arbitration is not sufficient to holistically guide the Court in the appointment of an arbitral tribunal…” (Underlining for emphasis)

The above case law authority indicates that when applying to the High Court for the appointment of an arbitrator, the applicant may propose a specific arbitrator or a list of potential arbitrators, or a method for selecting one. It also shows that a respondent should be afforded an opportunity to challenge the eligibility of the proposed arbitrator(s) and if the respondent agrees with a proposed arbitrator, the court may then appoint them.

However, it is not mandatory under article 11 of the Model Law to propose an arbitrator but it is just a matter of good practice since it can help the Court to assess the applicant’s preference, ensuring that such arbitrator is qualified, impartial and independent to deal with the parties’ dispute. If the applicant does not propose any arbitrator, or if the respondent objects to the proposed arbitrator(s), the court may appoint one independently or consult a recognized arbitral institution. Thus, the Court retains the discretion to appoint an arbitrator.

In casu, the applicant prayed for an order in terms of the draft order. Paragraph 2 of the relief sought herein states that:

“2.	The Court be and hereby appoints a sole arbitrator on recommendation of Chairman of the Commercial Arbitration Centre in Harare until this dispute is finalized.”

From the reading of that paragraph, the mentioning of the Commercial Arbitration Center was not a proposal or recommendation to the Court. The applicant prayed that this Court appoints an arbitrator, and that the latter should be recommended by the Chairman of the Commercial Arbitration Centre in Harare. The Commercial Arbitration Centre is a recognized dispute resolution institution in Zimbabwe which offers arbitration and other alternative dispute resolution services. The Court can appoint an arbitrator based on recommendation from the same or through other means. Thus, the relief sought is incompetent because it takes away the discretion of the Court in appointing an arbitrator.

However, this does not prejudice the respondent in any way because the applicant did not propose any specific arbitrator(s) such that the respondent needed to be afforded an opportunity to challenge such specific proposals. In any event, as already indicated, the Court retains the discretion on who to appoint as the arbitrator. It is important to highlight that such discretion is exercised judiciously, paying attention to the qualifications, impartiality and independence of the arbitrator. The Court also considers the non-appealability of its decision in such situations as indicated by article 11(5) of the Act. Hence, there being no prejudice to the respondent, the preliminary point lacks merit

THE PARTIES’ AVERMENTS ON THE MERITS

The applicant averred that since the arbitration proceedings by Dr. Whatman failed, it had made countless efforts to reach a consensus with the respondent on the appointment of a new arbitrator, and that these efforts were futile. It averred that it communicated its proposed list of potential arbitrators to the respondent and even requested it through several correspondences, to furnish its own proposed list of potential arbitrators. It alleged that there was no progressive response from the respondent. In response, the respondent averred that article 11(4) of the Act was inapplicable to the applicant’s cause because the parties’ agreement provided for the appointment of three arbitrators to preside over the dispute. It admitted that it had not responded to the applicant’s correspondences because there was no need to participate in a process where certain rights had prescribed.

In its answering affidavit, the applicant argued that article 11(4) of the Act provides a remedy to the aggrieved party to utilize in circumstances as in this matter. It averred that clause 27 of the agreement allows appointment of a sole arbitrator by the parties upon agreement and that in this case, the parties had failed to agree on appointing one. It stated that the respondent had failed to act as required in accordance with the required procedure for the appointment of an arbitrator in terms of their agreement.

ISSUES FOR DETERMINATION

Whether article 11(4) is applicable to the applicant’s cause.

Whether the applicant has satisfied the requirements of article 11(4) of the Act in bringing the present application.

THE LAW

Article 11 of the Act provides as follows:

“(1) …

(2) …

(3) …

(4) Where, under an appointment procedure agreed upon by the parties—

(a) a party fails to act as required under such procedure; or

(b) the parties, or two arbitrators, are unable to reach an agreement expected of them under such procedure; or

(c) a third party, including an institution, fails to perform any function entrusted to it under such procedure; any party may request the High Court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.

(5) A decision on a matter entrusted by paragraph (3) or (4) of this article to the High Court shall be subject to no appeal. The High Court in appointing an arbitrator shall have due regard to any qualifications required of the arbitrator by the agreement of the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator and, in the case of a sole or third arbitrator, shall take into account as well the advisability of appointing an arbitrator of a nationality other than those of the parties.”

APPLICATION OF THE LAW TO THE FACTS

Whether article 11(4) is applicable to the applicant’s cause.

The respondent contended that article 11(4) of the Act is inapplicable to the applicant’s cause because the parties’ agreement provides that any dispute between the parties shall be presided over by three arbitrators. Clause 27 of the parties’ agreement states that:

“… unless the parties agree to consent to the jurisdiction of the Courts of Zimbabwe, any dispute shall finally be settled by arbitration in accordance with the Zimbabwean arbitration  laws, unless the parties agree to a sole arbitrator, there shall be three (3) arbitrators, with each party appointing one arbitrator, who collectively will select a third, who shall be the Chairman of the arbitration tribunal, failing which, such third arbitrator shall be appointed by the Chairman of the Commercial Arbitration Centre in Harare at the request of either party following such failure by the two arbitrators to agree on a third arbitrator…”

The provision entails that generally, any dispute arising between the parties in relation to their agreement, should be presided over by three arbitrators. Each party appoints one arbitrator, and the two arbitrators appointed by the parties shall then jointly select a third arbitrator. That third arbitrator will be the Chairman of the arbitration tribunal to preside over the dispute. If the two arbitrators appointed by the parties fail to agree on a third arbitrator, such third arbitrator will be appointed by the Chairman of the Commercial Arbitration Centre in Harare.

Therefore, for a three-panel arbitration tribunal to ensue, both parties should have cooperated in appointing the first two arbitrators. Article 11(4) deals with scenarios where the High Court is requested to appoint an arbitrator by a party upon failure to appoint one through a procedure prescribed by their agreement or upon failure by a third party to perform obligations tasked to it under such procedure. The applicant alleged that the respondent failed to act as required under the agreed appointment procedure, that is cooperating in the nomination of an arbitrator. Thus, article 11(4) is applicable to the applicant’s cause.

Whether the applicant has satisfied the requirements of article 11(4) of the Act in bringing the present application.

In order to succeed in the present application, the applicant must demonstrate that:

there is clause in the parties’ agreement, which provides that arbitration shall be the dispute resolution mechanism.

there is a dispute between the parties, which requires resolution.

it unsuccessfully attempted to appoint an arbitrator through the agreed process.

The applicant attached the agreement between itself and the respondent. Clause 27 of that agreement provides that generally, any dispute relating to the agreement shall be referred to arbitration for resolution. Also, the applicant indicated in its founding affidavit that, a dispute arose between the parties when the latter unilaterally terminated their agreement and neglected to pay for the operations, administration and maintenance charges due in terms of the agreement. Attached to the application is a letter dated 13 November 2020 which was written by the applicant to the respondent, wherein it indicated that the respondent had failed and neglected to pay an amount of USD 2, 298, 046.60 due in terms of the agreement. In that letter, the applicant highlighted that it had communicated the issue to the respondent, who instead proceeded to terminate the contract without any justifiable cause. Thus, there is a dispute between the parties which requires resolution.

In addition, the applicant indicated that since the arbitration proceedings by Dr. Whatman failed, it made countless efforts to reach a consensus with the respondent on the appointment of a new arbitrator. It attached a letter dated 26 April 2023, wherein it communicated its proposed list of potential arbitrators to the respondent and even requested the latter to furnish its proposed list of the same. The applicant alleged that the respondent did not cooperate. The respondent in its opposing affidavit admitted that it ignored the applicant’s correspondences for the reason that the applicant’s rights in terms of the agreement had prescribed. In my view, by so doing the respondent was not being fair to the applicant. Whatever its reasons, it should have at least communicated its reasons to the applicant for not pursuing the arbitration process. The applicant still yearns for redress and their agreement provides that unless the parties agree to the jurisdiction of the courts, their dispute shall be resolved through the arbitration process. However, without agreeing on the appointment of the arbitrator, the dispute remains unresolved. Therefore, this Court should intervene by appointing an arbitrator upon the applicant’s request in terms of article 11(4) of the Act.

COSTS

The applicant prayed that the application be granted with costs of suit on a legal practitioner and client scale because the respondent had been frustrating the arbitration proceedings since 2018. It averred that the respondent thus violated its right to a hearing within a reasonable time and that it had been put out of pocket in bringing the present application.

An award for costs on a punitive scale would be justified if the court in exercising its discretionary powers sees that the conduct of a litigant was dishonest or malicious, thereby causing vexatious or frivolous proceedings. (See Dongo v Naik & Ors SC 52-20 at page 11). In casu, the respondent’s non-cooperation in appointing an arbitrator was deliberate and has forced the applicant to institute litigation in order to enforce the arbitration agreement. The issue of costs is however a discretion of the Court. Whilst the Court acknowledges the applicant’s frustration due to the respondent’s conduct, it opines that the applicant also contributed to its predicament by seeking to reinstitute the arbitration proceedings, five years after the initial proceedings failed. Therefore, the prayer for costs on a higher scale is not justified in the circumstances. In my view, an order for costs on the ordinary scale will suffice.

DISPOSITION

The preliminary points taken by the respondent lack merit. In the result, after reading documents filed of record and hearing counsel, it is ordered that:

The application for appointment of an arbitrator be and is hereby granted.

The appnt shall pay the respondent’s costs of suit on the ordinary scale.

………………………………………

Muvingi and Mugadza, Applicant’s Legal Practitioners

Munangati and Associates, Respondent’s Legal Practitioners