Ultra Resources (Pvt) LTD T/a Ultra Construction & CIVIL Engineering V Premier Services Medical Investments (Pvt) LTD T/a PSMI

### Preamble
1
HH 648-25
HCHC861/24
---------


ULTRA RESOURCES (PVT) LTD

t/a ULTRA CONSTRUCTION & CIVIL ENGINEERING

Versus

PREMIER SERVICES MEDICAL INVESTMENTS (PVT) LTD

t/a PSMI

HIGH COURT OF ZIMBABWE

COMMERCIAL DIVISION

CHILIMBE J

14 and 20 October 2025

Special plea

T.N. Nleya for plaintiff

G. Mtisi for defendant

CHILIMBE J

BACKGROUND

[1] Both parties are corporate entities registered in terms of the laws of Zimbabwe. Plaintiff is in the building construction and maintenance services business. Defendant plies its trade in the medical sector.

[2] Plaintiff issued summons seeking against defendant, an order for payment of US$1,517,933.09 plus interest and costs. The claim arose over the alleged non-payment by defendant, of construction and maintenance services rendered under the parties` agreement titled “Service Level Contract” (“SLA”).

[3] Defendant raised a special plea of jurisdiction. It contended that the plaintiff had evaded the arbitraldispute resolution procedure prescribed in clause 8 of the SLA. I set out clause 8 below; -

“8. Settlement of disputes

8.1 The parties shall make every effort to resolve any disputes arising in connection with this contract amicably by direct informal negotiations if the parties are unable to resolve the dispute, either party may require that the dispute be referred for resolution by arbitration.

8.2 The parties shall appoint an arbitrator and, upon failure to agree, the appointment shall be done by the Harare Commercial Arbitration Centre.

8.3 Proceedings shall be in order that the matter be resolved promptly and informally. The Arbitrator`s award as to the dispute and costs of arbitration shall be final and binding upon the parties.

8.4 Notwithstanding the provisions of sub-clause 8.2 either party shall be entitled to apply for any necessary interim court order or interim relief pending the conclusion of the arbitration proceedings referred to in this clause.”

ARGUMENTS BEFORE THE COURT

[4] Sadly, the commendably rational dispute resolution attestations in cluse 8 of the SLA proved insufficient to stave off a legal broil. Summons were issued and defended, with a special plea following shortly thereafter. In moving the special plea, Mr Mtisi (for defendant) took the position that the parties were bound by the dictates of clause 8.

[5] He argued that contrary to the view taken by plaintiff, there was in fact a dispute between the parties. Whilst defendant admitted indebtedness, the question of quantum and currency were in very much in contention. Defendant had, according to counsel, amplified the nature of the dispute by pleading over on the merits.

[6] The parties` contract was, counsel submitted, impacted by the promulgation of (i) the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Real Time Gross Settlement Electronic Dollars (RTGS Dollars)) Regulations, I 33 of 2019 (“SI 33/19”) and (ii) Presidential Powers (Temporary Measures) (Zimbabwe Gold Notes and Coins) Regulations, SI 60 of 2024 (“SI 60-24”).

[7] Mr Mtisi focussed in his submissions, on the nature of arbitral proceedings in general. It was customary in this jurisdiction, he opined, for courts to uphold parties` contractual decisions to refer disputes to arbitration. He cited the remarks of MAKARAU JP (as she then was) in Shell Zimbabwe (Pvt) Ltd v ZIMSA (Pvt) Ltd 2007 (2) ZLR 366 (H) at 370 D, as follows; -

“It is the second jurisprudential basis of arbitration that concerns me most in this matter. This relates to the contractual autonomy of the parties to choose the method of resolving their differences under the agreement. This autonomy has been described as paramount in the arbitration regime in this jurisdiction and explains the respect with which arbitration awards are treated by the courts.”

[8] Mr Mtisi also referred to this court`s discussion on the point in Conplant Technology (Pvt) Ltd v Wentspring Investments (Pvt) Ltd HH 965-15 and Tatenda George Manduna v Alliance Insurance (Pvt) Ltd HH 147-16. Indeed, the decisions cited by counsel addressed the age-old principle of freedom and sanctity of contracts and the courts` overarching duty to defend same.

[9] And as noted by MAKARAU JP in Shell Zimbabwe (Pvt) Ltd v ZIMSA (Pvt) Ltd (supra), this sanctity extended naturally, to arbitration clauses or agreements in parties` contracts. This reasoning is located in a line of case which include), Independence Mining (Private) Limited v Fawcett Security Operations (Private) Limited 1991(1) ZLR 268(H) at 272  Zimbabwe Broadcasting Corporation v Flame Lily Broadcasting (Private) Limited t/a Joy TV 1999(2) ZLR 448(H), PTA Bank v Elanne (Private) Limited & Others 2000(1) ZLR 156(H) and Capital Alliance (Private) Limited v Renaissance Merchant Bank Ltd & Others 2006 (2) ZLR 232 (H).

[10] Mr Nleya (for plaintiff), on the other hand, raised two defences against the special plea. Firstly, that clause 8.1 did not make arbitration mandatory, and secondly, that in any event, there was no dispute to refer to arbitration. submitted that defendant acknowledged indebtedness. Mr Nleya submitted that plaintiff only became acquainted with the basis of defendant`s denial after summons were issued. In that regard, counsel urged the court-in the event of a finding against plaintiff-to recognise this aspect in its order of costs.

[11] Mr Nleya then turned to what he deemed the ambiguity in the operative phraseology in clause 8.1 that “…. either party may require that the dispute be referred for resolution by arbitration.” In that regard, counsel`s position was that a correct interpretation of subclause 8.1 of the SLA showed that arbitration was made optional rather than mandatory.

[12] referring to a number of decisions on the question, Mr Nleya argued that such ambiguity necessitated invoking the contra proferentum rule against defendant as the drafter of the provision. I now turn to analyse the arguments.

ANALYSIS OF THE ARGUMENTS

[13] I will not dwell on the nature and purpose of a special plea, apart from stating that they are well-established concepts in our law. (See Doelcam (Pvt) Ltd v Pichanick & Others 1999 (1) ZLR 390(H), at 396 and Tel-One (Private) Limited v Capitol Insurance     Brokers (Private) Limited HH 60-18.)

[14] What is important however is to sound the reminder that a special plea urging the court to withhold its jurisdiction in deference to arbitration derives from, and is governed by statute. As noted above, arbitration proceedings in Zimbabwe are regulated by the Arbitration Act. Section 8 thereof provides as follows;

Arbitration agreement and substantive claim before court

(1)A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

[15] In Conplant Technology (Pvt) Ltd v Wentspring Investments (Pvt) Ltd this court distilled 5 key requirements which a defendant had to fulfil in order to access the relief provided therein. I restate them as follows; -

There must exist a dispute between the parties.

The referral to arbitration must be made timeously.

The excipient must simultaneously plead over on the merits.

The arbitration agreement must not be null and void, inoperative or incapable of being performed.

The onus to demonstrate why the court proceedings should not be stayed rests on the party challenging the reference to arbitration.

[16] Applying the above considerations, I have no hesitation in ticking off items (i), (ii) and (iii) as herein fulfilled, and (v) as a mere guide. The real issue is on (iv) where the question arises as to whether plaintiff herein proved that clause 8 of the SLA is “null and void, inoperative or incapable of being performed.”

[17] In answering the question, I must take into account the emphasis, in Conplant Technologies v Wentspring Investments and the authorities discussed therein, that courts should show a predilection toward upholding arbitral agreements. In the same vein, I also note that the court in Conplant paid heed to the manner in which the parties had pleaded their cause. MAFUSIRE J observed at page 4 that; -

“Yet another condition in Art 8 of the Arbitration Act for referral to arbitration is that the arbitration agreement must not be null and void, or inoperative or incapable of being performed. It was common cause that this was not the case in this matter. It did not form part of the plaintiff’s grounds for resisting referral.” [ emphasis added]

[18] I further take note that plaintiff did not, in its papers, specifically attack the arbitral agreement clause 8 (a) in its entirety and (b) as being null and void, inoperative or incapable of being performed. In examining clause 8 of the SLA, I turn to the Supreme Court`s guidance in Ashanti Goldfields Zimbabwe Limited v Jafati Mdala SC 60-17 [ pages 4-5] on interpretation of contracts as earlier set out in Kundai Magodora & Ors v Care International Zimbabwe 2014 (1) ZLR 397 (S) that; -

“It is an accepted principle of our law that courts are not at liberty to create contracts on behalf of parties, neither can they purport to extend or create obligations, whether mandatory or prohibitory, from contracts that come before them. The role of the court is to interpret the contracts and uphold the intentions of the parties when they entered into their agreements provided always that the agreement meets all the elements of a valid contract. This principle was set out clearly in the case of Kundai Magodora & Ors v Care International Zimbabwe SC 24/14 by PATEL JA when he stated the following:

“In principle, it is not open to the courts to rewrite 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, even if they are shown to be onerous or oppressive. This is so as a matter of public policy. See Wells v South African Alumenite Company 1927 AD 69 at 73; Christie: The Law of Contract in South Africa (3rd ed.) at pp. 14-15. Nor is it generally permissible to read into the contract some implied or tacit term that is in direct conflict with its express terms. See South African Mutual Aid Society v Cape Town Chamber of Commerce 1962 (1) SA 598 (A) at 615D; First National Bank of SA Ltd v Transvaal Rugby Union & Another 1997 (3) SA 851 (W) at 864E-H.” (My emphasis).”

[19] Clause 8 of the SLA must be read in its totality. The plaintiff-incorrectly in my view-predicated its argument purely on subclause 8.1. This severance drew no justification from the contract. Clause 8 after all, constituted the parties` arbitral agreement. A reading of the entire clause reveals the parties` intention. I am left in no doubt that the parties defined and agreed, by clause 8 (1) to (4), on a procedure to resolve disputes via arbitration.

[20] I briefly examine the subclauses in question. Subclause 8.1 of the SLA created the option for a party to resort to arbitration in the event of a dispute. I accept, that clause 8.1 could have been better framed. But it does not negate the clear intent of the partis which, as stated in the preceding paragraph, shines through once one consider clause 8 in totality.

[21] Subclauses 8.2 and 8.3 underpin the parties` intention by setting out the procedure or arrangements for the said arbitration. Subclause 8.4 thereafter confirms this approach by emphasising that even if parties advert to the court for interim measures, the main dispute resolution procedure remained arbitration.

[22] The crux of the plaintiff`s opposition to the special plea was that subclause 8.1 of the SLA created a choice rather than obligation for the parties to address disputes by arbitration. Additional to my comments about such incorrect severance, I have the following to say. In the first instance, subclause 8.1 expressly mentions arbitration as the dispute resolution facility. Any other interpretation of the approach proposed in that subclause can only be presumptuous.

[23] Secondly, the plaintiff predicated its opposition by reference to an option open to the parties rather than options closed to the parties. It was not suggested in the papers nor argument that by subclause 8.1, (i) arbitration was ousted and (ii) that parties were obligated to revert to litigation. Accordingly, plaintiff`s argument cannot sustain.

[24] Finally, the plaintiff`s argument did not attach itself to the requirement in Article 8.(1) of the Arbitration Act; - namely whether the arbitration agreement could be condemned as “null and void, inoperative or incapable of being performed.” And I do not believe that any such conclusion would be correct. The arbitration clause 8 in the SLA is cogently structured as to form a dependable record of the parties` consent and intention to resort to arbitration. As such, the proceedings herein must defer to that arbitral process.

DISPOSITION AND COSTS

[25] The special plea must therefore succeed. As for costs, Mr Nleya argued that defendant not only had defendant acknowledged indebtedness when approved by plaintiff, it had given no hint of a possible object to the claim.  Had these matters been earlier communicated to plaintiff, then perhaps summons may not have been issued. The defendant`s admission of liability was made in plaintiff`s replication.

[26] Mr Mtisi also accepted the indebtedness, albeit conditionally on the basis that of contestations on quantum and currency. I made 3 quick points. Firstly, whilst parties are enjoined by law to respect arbitral agreements, Mr Nleya was correct that if there was no contest then plaintiff was at liberty to approach the courts for relief.

[27] Secondly, I was however not furnished with sufficient facts to establish the nature of the concession made by defendant-when and how exactly it was framed. Such facts could have swayed matters in plaintiff`s favour on the question of costs. But I hasten to make the third observation; - that the special plea before the court was a procedural right set out in Article 8.1 of the Arbitration Act. The plaintiff should have asked itself as to whether it had a valid defence to resist and offset the special plea. It did not. But in view of the considerations discussed in the authorities cited above and the need to encourage parties to respect arbitral pacts, I will let each party bear its own burden.

It is hereby ordered that; -

The special plea for stay of proceedings in terms of Article 8 (1) of the Arbitration Act [ Chapter 7:16] be and is hereby granted.

The herein proceedings are stayed and dispute referred for resolution in terms of the parties` arbitration agreement.

Each party to bear its own costs.

Mangezi Nleya & Partners-plaintiff`s legal practitioners

Msendekwa-Mtisi- defendant`s legal practitioners

[CHILIMBE J___20/10/25]