Ald Plant & Fleet Management Limited v The Attorney General (2023/HPC/0515) [2023] ZMHC 78 (18 August 2023)

IN THE HIGH COURT FOR ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) 2023/HPC/0515 IN THE MATTER OF: AN ARBITRATION BETWEEN ALD PLANT & FLEET MANAGEMENT LIMITED AND ~iA~ _THE ATTORNEY GENERAL. IN THE MATT~ :>~~~,: ,~€, IN THE MA t_tER' OF: r 1 I ~--( /:"-1 'J -s'-..;/ ~ ✓.. A ION 12 (4) OF THE ARBITRATION (~;i;- -~ '1>· n'\, ~c o. 19 OF 2000. ~· >'~: A¢ URT ION 10 OF THE ARBITRATION RULES, .1~t)v.,1,~- ,-,,\/~TATUTORY INSTRUMENT NO. 75 OF ~ .__:-- PROCEEDINGS) ----:-::.~ · 2001 , ~}-''~ , ~. { - - - - - \)\.l p ~ I • AND IN THE MATTER OF: BETWEEN AN APPOINTMENT OF AN ARBITRATOR. APPLICATION FOR THE ALD PLANT & FLEET MANAGEMENT LIMITED APPLICANT AND THE ATTORNEY GENERAL RESPONDENT Before Hon. Lady Justice Irene Zeko Mbewe in Chambers For the Applicant : Ms M Mukuka of Messrs Ellis and Co Mr W. Sitali of Messrs KP Martins Legal Practitioners Mr M. Ndalameta and Mr Chomba of Messrs May and Company For the Respondent : NIA Attorney-Generals' Chambers RULING Rl I p ii g l' Legislation referred to: 1. Arbitration Act No. 19 of 2000 2. Arbitration (Court Proceedings) Rules, S I No 75 of 2001 3. High Court Rules, Cap 27 of the laws of Zambia By originating summons, the Applicant seeks an Order appointing an arbitrator to resolve the dispute between the parties in relation to a contract dated 5th and Jlh August, 2015, and an Order for costs to the Applicant. In the supporting affidavit sworn by David Mwale a Director in the Applicant Company, he avers that on 5th August 2015, the Applicant and Ministry of Local Government and Housing entered into a contract for the rehabilitation of selected urban roads (15.32 KM) in Kaoma District, Western Province of Zambia (Exhibit "DM1 "). On 7th August 2015, the parties entered into a contract for the rehabilitation of selected urban roads (10.65 KM) in Senanga District Western Province of Zambia (Exhibit "DM2") . That in terms of clause 25 of the two contracts which are similar, all disputes between the parties ought to be resolved through arbitration. According to the deponent, a dispute has arisen between the parties in relation to the said contracts and largely concerns areas of construction law around delay damages, standing time for idle equipment, costs of demobilisation from the project sites and payment for all works certified as done. That attempts to settle the dispute by mutual consultation we made but the parties failed to resolve the issues. R2 I P 3 g l' Consequently, on 20th March, 2023 the Applicant through its Advocates served on the Respondent its notice of intention to commence arbitration (Exhibit "DM3"). It is deposed that in terms of paragraph 6 of the notice, the Applicant proposed Rtd Judge Charles Kajimanga or Rtd Judge Philip Musonda as a sole arbitrator. On 7th April, 2023 the Applicant through its Advocates wrote to the Respondent to request for an urgent meeting to agree on the appointment of an Arbitrator (Exhibit "DM4"). On 19th April, 2023 the Respondent wrote to the Applicant's Advocates advising it was taking instructions (Exhibit "OM 5"). On 21 st June, 2023 the Applicant served a notice on the Permanent Secretary in the Ministry of Local Government and Rural Development to commence arbitration in an attempt to expedite the matter (Exhibit "DM6"). On 30th June, 2023 a further letter was sent to the Respondent to prompt them (Exhibit "OM?"). It is deposed that pursuant to Special Condition GCC.25.3 of the contracts, the appointed arbitral institution is the Zambia Association of Arbitrators which is defunct and not operational (Exhibit "DM8"). It is deposed that it cannot perform its role in terms of the contract. The Applicant proposes either Rtd Judge Philip Musonda or Rtd Judge Charles Kajimanga That the Respondent has not responded to all correspondence relating to the appointment of an arbitrator. R3 I f' .i g I' The Applicant in support of the originating summons filed skeleton arguments and list of authorities. Hearing When the matter came up for the hearing of the originating summons on 17th August 2023, I proceeded to determine the matter in the absence of the Respondent as I was satisfied as per the affidavit of service on record that the Respondent was aware of today's sitting. I proceeded to hear the matter pursuant to Order 35 rule 3 High Court Rules, Cap 27 of the laws of Zambia. Counsel for the Applicant Ms Mukuka relied on the supporting affidavit together with the accompanying skeleton arguments. Law and analysis The Applicant's originating summons is brought pursuant to section 12 (4) of the Arbitration Act No. 19 of 2000 as read with section 10 of the Arbitration (Court Proceedings) Rules, SI No. 75 of 2001. The former on appointment of arbitrators provides as follows: "(2) The parties are free to agree on a procedure for appointing the arbitrator or arbitrators, subject to the provisions of subsection (4) and (5). (3) Failing such agreement - (a) ..... .. . (b) in an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitration, the arbitrator shall be appointed, upon request of a party, by an arbitral institution. R4 I Page ., ( 4) Where, under an appointment procedure agreed upon by the parties - (a) a party fails to act as required under such procedure; or (b) .... (c) a third party, including an arbitral institution, fails to perform any functions entrusted to it under procedure, any party may request the Court to take the necessary measures, unless the agreement on the appointment procedure provides other means for securing the appointment. (5) A decision on a matter entrusted by subsection (3) or (4) to the court or to an arbitral institution shall not be subject to appeal." Rule 1 O (1) of the Arbitration {Court Proceedings) Rules, S I No 75 of 2001 provides as follows: "10. (1) An application to the Court, under section twelve of the Act for the appointment of an arbitrator shall be made by originating summons before the Registrar of the High Court." It is my understanding that the above provision specifically section 12 ( 4) (c) of the Arbitration Act No 19 of 2000 gives this Court jurisdiction to appoint an arbitrator on behalf of the parties herein. In this vein, I am inclined to agree with Counsel for the Applicant that this Court has jurisdiction to appoint an arbitrator on behalf of the parties in circumstances where the parties and a nominated arbitral institution are unable to appoint. The background to the originating summons is a dispute arising from two contracts entered into on 6th and 7th August, 2015 between the Applicant RS I P .-i g e .. and Respondent for road construction. According to the Applicant, clause 25.2 and 3 of the contracts provide for the settlement of any dispute arising out of the said contracts which cannot be amicably settled between the parties is to be referred to arbitration. The Applicant made reference to clauses 25.2 and 25.3 of the contracts dated 6th and 7th August, 2015 (Exhibit "OM 1 ") . A perusal of the special conditions only show clause 25.3 with similar wording in both contracts and reads as follows: 25.3 Institution whose arbitration procedures shall be used: Zambia Association of Arbitrators. The place of arbitration shall be Lusaka. Zambia, It is evident the parties sought to have their disputes settled by way of arbitration as discerned from special condition GCC clause 25.3 which appointed the Zambia Association of Arbitrators as arbitrators. The Applicant contends the institution does not have a secretariat prompting the Applicant to write to the Respondent seeking for the appointment of an arbitrator (Exhibit "OM 4"). The Respondent requested for time to respond , however, due to its non responsiveness, the Applicant filed the originating summons pursuant to rule 10 (1) of the Arbitration (Court Proceedings) Rules, S I No 75 of 2001, for purposes of having the Court appoint an arbitrator. Applying the law to the present facts and circumstances, and in light of the Zambia Association of Arbitrators having no secretariat which I take judicial notice of, and the lack of responsiveness from the Respondent in appointing an arbitrator despite the Applicant's notice of intention to R6 I rage ., commence arbitration, I invoke section 12 (3) (c) of the Arbitration Act No 19 of 2000 to appoint an arbitrator. In appointing the arbitrator, I have had regard to the names and qualifications of the proposed arbitrators. I hereby appoint Retired Judge Philip Musonda as an arbitrator in this matter. Costs to the Applicant to be taxed in default of agreement. Delivered under my hand this 18th day of August, 2023 HIGH JUDGE R7 I P .i g e