Avim Investments (Pvt) Ltd v Livetouch Investments (Pvt) Ltd

### Preamble
1
HMA 48-22
HC 242-21 &
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AVIM INVESTMENTS (PVT) LTD

versus

LIVETOUCH INVESTMENTS (PVT) LTD

HIGH COURT OF ZIMBABWE

ZISENGWE J

MASVINGO, 14 & 25 February & 29 June 2022

Mr T. Tavengwa, for the applicant

Mr G. Nyoni, for the respondent

Court application:	Registration of an Arbitral award

ZISENGWE J:  	The journey travelled by the United States dollar in recent times as legal tender in Zimbabwe and its tumultuous relationship with the Zimbabwe dollar have been the source of much angst and consternation in business and economic circles alike, spawning in their wake a litany of litigation. The present application is yet another example of the latter. This is because although the parties haggled over a number of issues regarding whether or not the arbitral awarded in favour of the applicant against the respondent should be registered, the primary source of their dispute post the granting of that arbitral award can be traced to the currency in which the monetary part of the award is to be denominated.

In this application the parties hold diametrically opposite views regarding the registrability (for purposes of enforcement) of an arbitral award made by the (the arbitrator) in favour of the applicant with the respondent contending that the award is flawed and lends itself to be setting aside, and the applicant arguing to the contrary. The arbitral award was granted by Retired Justice MTSHIYA on the 20th of August 2021 and amended on the 26th of August 2021.

Initially the parties approached different seats of the High Court with each seeking an outcome opposite to that of the other. Whereas the applicant instituted an application in the High Court at Masvingo seeking the registration of the arbitral award in terms of Article 35 of model law attached to the Arbitration Act, [Chapter 7:15], (“the model law”). The respondent on the other hand approached the High Court at Bulawayo seeking the setting aside of the same arbitral award in terms of Article 34 of the Model Law.

Ultimately the parties agreed to a consolidation of the two matters and to a simultaneous hearing of the same given that they both emanate from the same set of facts and that their respective positions constitute essentially opposite sides of the same coin, so to speak.

The background

In April 2017 the parties entered into a written contract in terms of which the applicant undertook to supply and transport at an agreed fee 1000 tonnes of a raw material known as coal fines from Hwange to respondent’s chosen destination. The actual carriage of the resource was however subject to a monthly agreement of the same.

It was envisaged that the contract would subsist for a period of 5 years commencing on 1 May 2012 and terminating on 30 April 2017. It was also a term of the agreement that in the event of a dispute the matter would be referred for arbitration.

It is on that latter basis that the applicant approached the arbitrator alleging a material breach of the contract on the part of the respondent. The breach was firstly that the respondent had failed to pay for three deliveries of coal fines totalling US $55 855.33 and Secondly that the respondent unjustifiably refused to accept a consignment of coal fines it (i.e. applicant) had procured intending to deliver to it respondent in anticipation of the fulfilment of its contractual obligations with the respondent. The cumulative value of this latter consignment was given as US$815 000. The relevant breakdown in arriving at the above figure was duly provided.

In its claim with the arbitrator, therefore, the applicant bought an admixture of remedies comprising the payment of US$55 855.33 for the unpaid sum of money for the coal fines already supplied and delivered (“the first claim”), the payment of US$815 000 for the 56 000 tonnes of coal fines which it claims respondent unjustifiably and in breach of contract refused to accept coupled with an order of specific performance wherein the respondent was compelled to accept the said coal fines(“the second claim”). It also sought interest on the above sums of money and costs of suit on the superior scale.

The respondent resisted the first claim on the basis of prescription contending that that amount having been due for payment in August 2017 and the applicant having only referred the matter for arbitration in 2021, the claim had long since prescribed regard being had to section 15 (d) of the prescription Act, [Chapter 8:11].

With regards to the second claim, the respondent while acknowledging that the contract between it and the applicant was extant and therefore also insisting on specific performance, however raised the question of the currency in which it would be obliged to pay for the supply and delivery of the coal fines. It therefore counter claimed for the due performance of the contract by both parties, subject to its obligation to pay being denominated in Zimbabwe dollars at the rate of 1:1 with the United States dollar. This was ostensibly on the basis of the provisions of section 22 of the Finance Act No. 2 of 2019.

To summarise, therefore, regarding to the second claim, the parties appeared to be in ad idem that the contract between then was extant and that each party was contractually obligated to perform its side thereto. However, they parted ways when it came to the denomination in which the respondent was required to pay applicant for the supply and delivery of   coal fines to the former.

Ultimately, the respondent successfully warded off the first claim i.e. for the payment of US $55 855.33 based on the unpaid sum of money for the coal fines already supplied ad delivered. The arbitrator found that that claim had prescribed and rejected applicants’ contention that the running of prescription had been judicially interrupted.

Regarding the second claim, the arbitrator after reviewing the evidence placed before him made the following findings:

That the respondent acted in bad faith in refusing to accept the coal finds procured by one applicant ostensibly on the basis of having insufficient space for the storage thereof.

That there was ample justification from the evidence to order respondent or pay the amount of US$815 000 against the delivery of the 56 000 tonnes of coal fines

That in light of the relevant finance related Statutory Instruments promulgated in 2019 and 2020, particularly Statutory Instrument 85/19, it was proper and competent for the arbitrator to denominate the award in United States dollars.

That save for the questions of the currency in which the order was to be dominated, the respondent’s counter-claim virtually coincided with the applicant’s second claim hence there was no logical basis for instituting it as a counter claim per se.

Stemming from the above, the arbitrator made the following award:

The claimant’s (i.e. applicant’s) for US $55 855.33 has prescribed

The respondent shall pay the claimants the sum of US$815 000 in respect of the 56 tonnes (this was later amended to correctly read 56 000 tonnes) at the prescribed rate of interest from the date of this award up to the date of final payment in full.

Upon receipt of full payment in terms of above the claimant shall allow the respondent to take delivery of the 56 tonnes (to read 56 000 tonnes) of coal fines

The counter claim is dismissed

Each party shall bear its own costs; and

Parties shall pay arbitration in equal shares

It was in the wake of the granting of this award that the parties, as indicated earlier, launched parallel applications in Masvingo and Bulawayo respectively. That was before they then agreed to a consolidation of the matters.

Each party raised certain points in limine which in its view were independently potentially dispositive of the matter in its favour. It is to these points in limine that I will first turn.

The points in limine

Applicants’ objection to the validity of the respondent’s opposing affidavit

In this regard, the applicant vehemently disputed the authenticity of the signature affixed to the respondent’s opposing affidavit claiming that it was appended by someone else other than the purported deponent thereto, one Dongchuan Wang.

This was an issue the applicant raised in the Masvingo matter but pursued with more vigour in the run up to the hearing of the consolidated application. A brief background will suffice. When the parties agreed to a consolidation of the Bulawayo and Masvingo applications they filed a draft consent paper whose terms are captured in the resultant court order which reads:

It is ordered that:

Applicant to file its supplementary affidavit with 48 hours of upliftment of order.

Respondent shall file further affidavits in case No. HC 242/21 within (5) five days from receipt of applicant’s supplementary affidavit.

The (2) two matters, that is to say case No. HC 242/21 filed as the Masvingo High Court and HC 242/21 filed at the High Court in Bulawayo, shall be consolidated and heard as one.

The (2) matters, on consolidated shall be set down and heard at high court Masvingo.

Each party will bear its own costs.

That order was made on 7 October 2021. No sooner had the above order been made than did the applicant embark on a spirited mission ostensibly to establish the whereabouts of Dongchuan Wang and the circumstances surrounding the commissioning of the opposing affidavit. From the contents of its further affidavit, applicant left no stone unturned, as it were, in this quest. Immigration officials were interviewed, data was extracted from the immigration data base, the police were roped in and asked to assist, interviews were conducted with the commissioner of oath who commissioned the impugned opposing affidavit etcetera. To cap it all the applicant’s representative indicated that being familiar with Dongchuan Wang’s signature he was certain that the signature on the opposing affidavit was not that of Dongchuan Wang. He expressed the belief that the latter was in China at the time the affidavit was supposedly commissioned in Zimbabwe.

According to the applicant, the evidence unearthed indubitably showed that deponent Dongchuan Wang was not in Zimbabwe at the time that his opposing affidavit was purportedly commissioned in Zimbabwe. The consequence therefore, so the argument went, was that the opposing affidavit was nullity for want of compliance with the relevant rules of court. In other words, according to the applicant given the evidence of his absence from the jurisdiction, his opposing affidavit needed to be duly notarised in the country where it was deposed to.

In response the respondent denied both that Dongchuan Wang was in China at the time of the commissioning of his opposing affidavit or that the signature appearing thereon was a forgery. More pertinently it was averred on behalf of the respondent that the window of opportunity to file further or supplementary affidavits in the wake of the consolidation of the Bulawayo and Masvingo matters did not give the applicant an opportunity, carte blanche to embark on an investigative mission in a bid to place before the court new evidence which was otherwise at its disposal at the time of the filing either its founding or answering affidavits.

There is merit in the latter contention, what was contemplated when the court granted an order inter alia for the filing of supplementary or further affidavits were affidavits stemming from consolidation of the Bulawayo and Masvingo matters.  It was certainly not a window of opportunity to supplement issues that remained in abeyance when parties filed their respective original affidavits.

The fact that in the Masvingo matter parties had proceeded to file heads of argument and had had the matter set down for argument meant that the factual issues as between them had since been crystallised. I say this mindful of the fact that in its answering affidavit, (in the Masvingo matter) the applicant indeed questioned the authenticity of the opposing affidavit deposed to by Dongchuan Wang and the fact that it undertook to furnish further proof that the latter was not in Zimbabwe at the time that his affidavit was purportedly commissioned in Zimbabwe. All that is being said that whatever additional affidavits it sought to produce (with leave of court) in that regard should have been so filed before heads of argument were filed and certainly before the matter was set down for hearing. The applicant therefore sought to take advantage of the wrong window of opportunity to smuggle in additional evidence regarding alleged absence of Dongchuan Wang from the jurisdiction at the time of the commissioning of his affidavit within it.

Therefore, the question of whether or not Donchuan Wang was in Zimbabwe at the time of the commissioning of his affidavit will be decided on the basis of the evidence placed in the answering affidavit. What is clear in this regard, however, is that insufficient evidence was availed to conclude that the said deponent was outside Zimbabwe at the time of commissioning his opposing affidavit. The allegation of his absence from the jurisdiction is predicated on mere supposition and conjecture. Perhaps application’s contention would have gained more traction had it, at the stage of the answering affidavit, been backed by supporting affidavits from the officials who were supposedly later interviewed in a bid to getting to the bottom of Dongchuan Wang’s whereabouts at the material time. Accordingly, this particular point in limine is hereby dismissed.

Whether applicant should have filed court application instead of a chamber application for Registration of the Arbitral award

In the Masvingo record, the respondent questioned the propriety of applicant seeking the enforcement of its arbitral award by way of Chamber application instead of   court application. This issue needs not detain anyone, Article 35 (1) of the Model Law provides as follows:

An arbitral award, irrespective of the country in which it was made, shall be recognised as binding and upon application in writing in the High Court shall be enforced subject to the provisions of this article and of article 36. [emphasis added].

Recourse will therefore be head to the High Court rules for guidance. In rule 2, Chamber application, court and court application are defined respectively as follows:

“Chamber application” means an application to a judge other than a judge sitting in open court.

“Court” means the High Court and any other Court which relies on these rules.

“Court application” means an application to the court in terms of these rules.

What is contemplated in Article 35 (1) of the Model Law, therefore is a court application as opposed to a chamber application. However rule 58 (13) of the High Court Rules, 2021 specifically provides that the fact that an applicant has instituted a court application when he or she should have proceeded by way of chamber application (or vice versa) shall not in itself be a ground for dismissing the application unless there is prejudice to the other party and such prejudice cannot be remedied by directions for the service of the application on that party with or without an appropriate order as to costs.

In the present matter the respondent having fully participated in the proceedings which ultimately proceeded by way of court application, no prejudice was occasioned to it by the applicant having initially instituted its application in Masvingo as a chamber application. This point in limine is also dismissed.

The two main contentious points in limine having fallen by the way side, I now turn to the merits.

ON THE MERITS

The respondent impugns the arbitral award on three broad premises, namely:

That the arbitral award of US $815 000 denominated as it is in United States dollars violates the express provisions of Section 22 (1) (d) of the Finance Act No. 2 of 1999 (which provision was interpreted in the famous case of Zambezi Gas Zimbabwe (Pvt) Ltd v NR Barber (Pvt) Ltd & Anor Section 3/2020 in lucid and unambiguous terms), and therefore against public policy.

That the award for damages for breach of contract while compelling the reciprocal performance of the parties’ respective sides of the contract is inherently contradictory and therefore against public policy.

That the arbitral award for US $815 000 against due performance by the respondent disregards salient terms of the very contract in circumstances amounting to a re-writing of the contract for the parties (thus violating the doctrine of sanctity of the contract) and therefore is against public policy.

Articles 34(2)(b)(ii) and 36(1)(b)(ii) of the Model Law have one thing in common, namely public policy considerations form the basis for either setting aside an arbitral award or a refusal by the court to recognise an arbitral award, respectively. This then begs the question of the circumstances which amount to an arbitral award being in conflict with public policy as contemplated in the above articles.

The leading case in this regard is that of Zimbabwe Electricity Supply Authority v Maposa 1999 (2) ZLR 452(S) where GUBBAY CJ had the following to say;

“An award is not contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in fact or in law. In such a situation the court would not be justified in setting the award aside.

Where, however, the reasoning or conclusion in the award goes beyond mere faultiness or incorrectness and constitutes a palpable inequity that is so far reading and outrageous in its defiance of logic or accepted moral standards that a sensible and fair-minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award then it would be contrary to public policy to uphold it.

The same consequence applies where the arbitrator has not applied his mind to the question or had totally misunderstood the issue, and the resultant injustice reaches the point mentioned above.’.

Similarly, in Peruke Investments (Pvt) Ltd v Willoughby’s Investments (Pvt) Ltd & Anor 2015 (2) ZLR 491 (S) at 499 h-500 F PATEL JA (as he then was) said the following:

“As a rule, the courts are generally loath to invoke this ground except in the most glaring instances of illogicality, injustice or moral turpitude. In the words of GUBBAY CJ in the locus classicus on the subject, ZESA v Maposa 1999(2) ZLR 452 (S) at 456 D-E:

“In my opinion, the approach to be adopted is to construe the public policy defence, as applicable to either foreign or domestic award, restrictively in order to preserve and recognise the basic objective of finality in all arbitrations; and hold such defence applicable only if some fundamental principle of the law or morality or justice is violated”

See also Delta Corporations (Pvt) Ltd v Origen Corp 2007 (2) ZLR 81(S); Augur Investments OU v Fairclot Investments (Pvt) Ltd t/a T&C Construction & D.L. Cruttenden SC 170/16

The threshold for the setting aside (or refusal to enforce) an arbitral award therefore is undoubtedly quite high. The rationale for that is not too far to find, the parties having elected to subject their matter to arbitration as a dispute resolution mechanism as an alternative to ordinary litigation impliedly agree to be ordinarily bound by the outcome thereof unless same is tainted by either a gross error or is otherwise offensive to morality.

The position of the respondent in insisting on the recognition and enforcement of the arbitral award is that the errors complained of by the appellant are not only without merit, but also that even if they were founded, same do not attain the requisite threshold to justify a refusal to recognise and enforce that award (or to have it set aside).

The question of the currency

In this regard the position of the applicants is that there was nothing amiss or irregular about the arbitral award being demonstrated in United States dollars as same is legal tender and payment in United States dollars is not proscribed by law. Reliance was placed in the case of Breastplate Service (Pvt) Ltd v Cambria Africa PL SC 66/2020 on what constitutes legal tender wherein the following was stated;

“In its ordinary significance, [legal tender] denotes money or currency in official circulation that must be accepted of offered in payment of a debt. In the realm of contractual relations, what this means is that the debtor is entitled to settle his debt through the medium of legal tender and, conversely the creditor is obliged to accept that tender. The later has no choice or latitude in the matter on the other hand, unless explicitly proscribed by statute there is nothing under the common law to preclude the debtor from discharging his debt in any currency or medium of exchange other than the official designated legal tender, including any foreign currency, as long as the creditor is prepared to accept such payment in settlement of the debt.”

Per contra, the respondent contended that the arbitral award is irredeemably marred by the failure by the arbitrator to appreciate the reach of two related provisions; namely s 22(1) (a) of the Finance Act No. 2 of 2019 which decrees that all financial obligations denominated in United States Dollars which existed before the effective date (22 February, 2019) were payable in RTGs at the rate of 1:1 with the United States dollar. Secondly that SI 142/2019 (whose provisions are now captured in section 23 of the Finance Act (No.2) of 2019) declared that from 24 Jun, 2019 all forms of foreign currencies were no longer legal tender alongside the Zimbabwe dollar for all domestic transactions.

In respect of the former, reliance was placed on the case of Zambezi Gas Zimbabwe (Pvt) Ltd v NR Barber (Pvt) Ltd & Anor SC 3/20. It was further forcefully argued that the decision of the arbitrator was tainted by its failure to follow the decision in the Zambezi Gas case (supra).

In a sustained attack on the arbitral award it was further submitted that because of its failure to comply with section 22(1) (d) of the Finance Act No. 2 of 2019 and its interpretation in the Zambezi Gas Zimbabwe case (supra), the arbitrator’s decision was afflicted by patent irregularity and hence was against the public policy. Cases cited for this position includes Richardson v Melhorn (1824) 2 Bing 229 (BARROUGH J QB); Egerton v Bronlow (1853) 4H.C.C. 1; ONGC v Saw Pipes Ltd Air 2003 SC 2629; ZESA v Maposa (supra) and Matthews v The Hon Mr J.A. Ebrahim and Ors. HH 103-15.

In countering the arbitrator’s reliance on the provision of SI 85/2020 (which the arbitrator erroneously referred to as SI 185/2019), the respondent argued that the said Statutory Instrument as with a related enactment, namely SI 185/2020 could not be construed as having retrospective effect.

Key in the resolution of the dispute on the interpretation of s 22(1) (d) of the Finance Act No. 2 of 2019 and its application to the present facts, is a determination of the date on which the obligation or liability by the respondent to pay for the coal fines in question arose. The question is therefore whether that obligation can be construed from the facts as having arisen on or before the effective date (i.e. 22 February, 2019) or after that date. This is critical because if the obligation or liability to pay arose before the 22nd of February 2019, then the amount stated in United States dollars is ex lege deemed payable payable in RTGS at the rate of 1:1 with the United States dollar. However, if the obligation to pay arose after the 22nd of February 2019, then the amounts payable would by operation of section 22 of the Finance Act (No. 20 of 2019) will be deemed payable in RTGS at the prevailing official rate.

In this regard, what is relevant in my respectful view is not the date on which the breach of the contract took place but rather the date on which the arbitral award was made. Before that date there was dispute as to whether or not the respondent was in breach at all and if so the extent of his liability. Unlike in the Zambezi Gas Zimbabwe case (supra) where the dispute revolved around a labiality which was in the form of a judgment debt, in the present case there was still need for the determination of the actual liability of either party in view of the applicant’s claim and the respondent’s defence to that claim and its own counter claim. The implicit position by the respondent that its obligation or liability to pay arose contemporaneously with the breach of contract is untenable.

The remarks of MALABA CJ in the Zambezi Gas Zimbabwe case (supra) are instructive;

The liabilities referred to in s 4(1) (d) of SI 33/19 can be in the form of judgment debts and such liabilities amount to obligations which should be settled by the judgment debtor. In interpreting s 4(1) (d), regard should be had to assets and liabilities which existed immediately before the first effective date of the promulgation of SI 33/19. The value of the assets and liabilities should have been expressed in United States dollars immediately before 22 February, 2019 for the provision of s 4(1) (d) of SI 33/19 to apply to them.

Section 4(1)(d) would not apply to assets and liabilities, the values of which were expressed in any foreign currency other than the United States dollar immediately before the effective date if for example, the value of the assets and liabilities was, immediately before the effective date, still to be assessed by application of an agreed formula, s 4(1)(d) of SI 33/19 would not apply to such a transaction even if the payment would thereafter be in United States dollars. It is the assessment and expression of the value of assets and liabilities in United States dollars that matters” (emphasis mine).

In any event it is pertinent to note that part of the breach of the contract for the supply and delivery of the coal fines occurred prior to the effective date and the rest post the effective date. The breakdown of the applicant’s claim before the arbitrator in this regard was as follows;

August 2017 – February 2018 @ US$5.00 per tonne = USD$35 000.00

March 2018 – December 2018 @ USD20.00 per tonne = USD$200 000.00

January 2019 – December 2019 @ USD$20.00 per tonne =- UD$240 000.00

January 2020 – December 2020 @ USD $20.00 per tonne = US$240 000.00

January 2021 - May 2021 @ US$20.00 per tonne = US$100 000.00

At the very least therefore the argument by respondent that the liability or obligation for all supplies and deliveries took place before the effective date cannot be sustained.

More fundamentally however, a reading of the contract between the parties reveals that payment for the supply and delivery of the coal fines was only due upon the fulfilment of certain conditions. Clauses 5 and 6 of the contract are relevant. They provide as follows:

5.        INVOICES

It is hereby agreed that AVIM Investments will prepare an invoice for every 300 tonnes of coal fines delivered to Livetouch Investments in Redcliff at Stand No. 2713 Old Street Works Road

The invoice shall be attached together with the relevant delivery notes and corresponding weigh bridge tickets for Livetouch Investments

The final weight for invoicing shall be based on the Livetouch weigh bridge tickets

6.           PAYMENTS

Livetouch Investments shall effect payments to AVIM Investments within 30             days of receipt of the tax invoices and relevant attachments

In all instances, the applicant’s case before the arbitrator was that the respondent refused to accept the consignment of coal fines. The conditions precedent to the payment for the supply and delivery of the coal fines were as of the date of the breach therefore not satisfied having been frustrated by the respondent. It would be ludicrous therefore to suggest, as the respondent impliedly does, that the date of the liability or obligation to pay arose when it (i.e. respondent) refused to accept the coal fines. In terms of the contract therefore payment would only become due upon the supply and delivery of the coal fines and upon the fulfilment of the other conditions itemised above. The supply and delivery of the coal fines not having been done when they ought to have, owing to the intransigence of the respondent, such liability to pay only arose consequent to the granting of the arbitral award. Needless to say, that this obligation therefore arose well after the effective date (22 February 2019), the corollary being that paragraph (c) of section 22(1) of the Finance Act (No. 2) would be applicable. The said paragraph reads:

“that after the first effective date any variance from the opening parity rate shall be determined from time to time by the rate or rates at which authorised dealers exchange the RTGS for the United States Dollar on a willing seller-willing buyer basis”

The question of the award being denominated solely in United States dollars

In this regard the parties haggled over the implications, if any, of section 23 of the Finance Act (No. 20 of the Finance Act, 2019. Having found that the liability or obligation arose at the time the arbitral ward was made, by necessary implication, therefore means that the legislative framework (on currencies) applicable was one which obtained when the arbitral order was made. Suffice it to say, at the time of the making of the order, the United States dollar was, subject to certain limitations, legal tender in Zimbabwe alongside the local currency.

The strict prohibition in the use of foreign currencies for domestic transactions imposed by section 23 of the Finance Act (No.2) of 2019 whose compliance was enforced by SI 212 of 2019 was relaxed in part by SI 85/2020 which came into operation on 29 March 2020 and SI 185/2020 which came into effect on 24 July 2020. SI 85 of 2020 reads in section 2 as follows:

The Exchange Control (Exclusive use of Zimbabwe Dollar for Domestic Transactions) Regulations, 2019 published in Statutory Instrument 212 of 2019, is amended by the insertion of the following section 5.

“Payment for goods and services using free funds

6(1) in this section

“Free funds” bears the meaning to that terms in Statutory Instrument 109 of 1996 and includes funds lawfully held or earned in foreign currency by any person.

Notwithstanding these regulations, any person may pay for goods and services chargeable in Zimbabwe dollars, in foreign currency using his or her free funds at the ruling rate on the date of payment.

The payment envisaged in subsection (3) may be done electronically through a foreign currency account or in cash or through any electronic payment platform”

SI 185/2020 on the other hand compliments SI 85/2020 and provides in 2 as follows:

2. The Exchange Control (Exclusive Use of Zimbabwe Dollar

for Domestic Transactions) Regulations, 2019, published in Statutory

Instrument 212 of 2019 are amended by the insertion of the following

section after section 6—

“Dual pricing and displaying, quoting and offering of prices for

goods and services

7. (1) Any person who provides goods or services in Zimbabwe

shall display, quote or offer the price for such goods or services in

both Zimbabwe dollar and foreign currency at the ruling exchange

rate.

Pertinent to note, however, is the fact that a proper reading of SI 85/2020 in my view reveals that its provisions do not amount to a wholesale lifting of the prohibition in charging in foreign currency for domestic transactions. All it does is to allow anyone with free funds to pay for the same in foreign currency using free funds at his (i.e. payer’s) disposal. The benefit of electing to pay for goods and/or services in foreign currency therefore is one which accrues to the person who is making the payment.

Similarly, in terms of SI 185/2020 it is a requirement that for the pricing of goods and services, to quote the prices in both foreign currency and Zimbabwe dollars.

The corollary being that it was incumbent therefore on the part of the arbitrator to specify the Zimbabwe dollar equivalent of the amount specified in the arbitral award. The question however is whether such failure amounts to an error so gross as to reach the threshold required either set aside or refuse to recognise an arbitral award. I think not. This is not an error that constitutes an affront to the public policy of Zimbabwe as stated in ZESA v Maposa (supra).

The parties having specifically contracted on terms stipulating that payment for the supply and delivery of the coal fines was to be strictly be in United States dollars coupled with the fact that the use of the United States Dollar not being per se unlawful as same is currently legal tender in Zimbabwe, it was always going to be difficult for the respondent to argue (which argument I reject) that denominating the arbitral award solely in that currency constituted a gross irregularity and on that basis against the public policy of Zimbabwe.

Whether an order for specific performance could be coupled with an order for damages

Here the respondent’s contention is that the applicant had a right to elect whether to enforce the agreement and therefore compel it (i.e. respondent) to abide by it or cancel the agreement by reason of the breach and claim damages but not both.

In this regard the arbitrator carefully analysed the remedies available to a claimant upon breach being committed against him and relying on the of Zivanomoyo v Dingani HH 02-19 concluded that a claimant has several options available to him or her upon breach being committed by the respondent. He had this to say;

“It is undisputable that the injured party has the discretion to choose how the breach should remedied. The remedy should place the injured party in apposition it would have been had the breach not occurred. In light of the above position of the law, I am satisfied that the claimant has managed to prove on a balance of probabilities, that as a result of the breach by the respondent it suffered a loss of US$815.000.”

The order corresponding to the above finding reads as follows;

“4(1) (a) 	..........................

(b)	 The respondent shall pay the claimant the sum of US$815 000 in respect of the 56 000 tonnes of coal fins at the prescribed rate of interest from the date of this award up to the date of full payment in full

(c)	Upon receipt of full payment in terms of (b) above the claimant shall allow the respondent to take delivery of the 56 000 tonnes of coal fines.”

It is settled that a party to a contract who is entitled to specific performance (such as the applicant in casu) is not restricted to that remedy as in addition to specific performance he may claim damages, where for example a mora has occurred (see Silverston Estate Co. v Bellevue Syndicate 1904 TS 462).

The arbitrator appears to have ordered specific performance in reverse order if regard is had to the terms of the contract. In this regard the arbitrator erred. What the parties expressly agreed upon, as I have already alluded earlier in this judgment, was that the supply and delivery of the coal fines was to precede and subsequently give rise to the obligation on the part of the respondent to make payment for the same. Related to this is respondent’s well-founded contention that the arbitral order deprives it (i.e. respondent) of the need to have the coal fines first weighed and assessed prior to accepting the same, before an invoice being generated which takes into account tax matters as well as the window period of 30 days post-delivery within which it was then obligated to pay.

However, this error in ordering payment ahead of the delivery of the coal fines, does not appear to me to be of such a magnitude as to amount to a palpable affront to the public policy of Zimbabwe. It amounted to mere faultiness or incorrectness but not one which can be adjudged as justifying a conclusion that the conception of justice in Zimbabwe would be intolerably hurt by the award.

In the final analysis I am of the view that respondent’s objection to the registration of the arbitral award is not merited. The applicant has managed to make a good case for the recognition and enforcement of the arbitral award.

Costs

The general rule is that the successful party is entitled to his or her costs and there appears to be any good reason to depart from this rule. However there appears to be no justification for awarding costs on the superior scale. The ordinary scale suffices.

Accordingly, the following order is hereby made:

ORDER

IT IS HEREBY ORDERED THAT:

The application for the setting aside of the arbitral award issued by Retired Justice MTSHIYA on the 20th of August, 2021 and amended on the 26th of August, 2021 brought under HC1786/21 (Bulawayo) is hereby dismissed.

The application for the registration of the Arbitral award referred to in paragraph 1 above brought under HC 242/21 (Masvingo) succeeds and the said Arbitral award be and is hereby registered as an order of this court.

The respondent to pay costs of suit.

Mutuso, Taruvinga & Mhiribidi, applicant’s legal practitioners

Messrs Moyo & Nyoni, respondent’s legal practitioners