Bimzi Ltd v B & P Commodities and Shipping Ltd (SCZ Appeal 143 of 1998) [2001] ZMSC 132 (1 June 2001)

IN THE SUPREME COURT OF ZAMBIA SCZ APPFAL NO J 43/98 HOLDEN AT LUSAKA (Civil Jurisdiction) ___ __ | republic of zamsja | 1UDIC1AHY „ j B ZAMBIA | BETWEEN: f 1 4 JiftV 2001 ; - .. DUEhN-chARGE’S CHA^ ■ ? ‘ APPELLANT BFMZIIJ51ITED../ ° 3OX 5 6 1 AND B & P COMMODITIES AND SHIPPING LTD. RESPONDENT Coram: Chaila, Chirwa, Muzyamba, JJS 2831’ October 1999 and 1st June 2001 For the Appellant For the Respondent Messrs C. Banda and Associates Mr. A. Wright Messrs A. Shonga and Company Air. L. C. Zulu and Company JUDGMENT Chaila, JS, delivered the judgment of the court. When the appeal was heard, the panel included, the late Hon. Mr. Justice W. M. Muzyamba. ds we are all aware. our brother is no more. This judgment therefore is a majority judgment. The appellants have appealed against the High Court decision (Mambilnna, J) refusing to set aside the registration of the award of the arbitration given in favour of B & P Commodities and Shipping Limited, hereinafter called the respondent. - J2 - The brief facts of the case are that the appellant had applied to the High Court under Order 71 Rule 9 of the rules of the Supreme Court to set aside the Arbitration Award No. 3683 given by the panel of arbitrators to the Grain and Feed Trade Association (GAFTA), a company registered in accordance with the laws of England. The award was given on 31st December 1996. The award was registered in the High Court for Zambia on 19lh November, 1997under Orders 71 and 73 of the Rules of the Supreme Court (RSC). Prior to the registration on 19th November 1997, the High Court for Zambia had registered the same award on 7th February 1997. The appellant filed summons to set aside the registration on the ground that the Order of registration was improperly and irregularly procured because there was no affidavit in support of the summons to register the award. The High Court found that there was no proper affidavit and the document relied upon was a mere certification. In the ruling of 17th September 1997, the High Court set aside the earlier Order and the registration of the award on account of that defect. The appellant re-applied for registration, that time with a proper accompanying affidavit. The award was registered on 19th November 1997. The appellant made an application to set aside under Order No. 71 Rule 9. The learned trial Judge after analyzing the affidavit and documents refused the application to set aside the registration. The appellant has relied upon the following grounds in the appeal. These grounds are: - J3 - 1. That the learned trial Judge below erred in law when she ruled that the provision of setting aside registration of a foreign judgment do not apply to setting aside registration of foreign arbitration awards. 2. That the learned trial Judge below erred in law when she ruled that there are only two grounds under which the court may set aside an award. 3. That the teamed trial Judge below erred in law and in fact when she ruled that the award was not improperly procured by the respondent either by fraud and/or by the deliberate concealment of material evidence. 4. That the learned trial Judge below erred in law and in fact when she ruled that the GAFTA Appeals Board did not misconduct themselves. 5. That the award is contrary to the laws of Zambia and the enforcement thereof would be against public policy. Counsel for the appellant has submitted and filed detailed and very learned heads of argument. They relied on their written heads but highlighted a few­ areas. Counsel for the respondent equally filed detailed and lengthy heads of argument. They have relied on these heads and highlighted a few areas. We are very grateful to the counsel for these submissions, together with the authorities cited by the learned counsel. We have taken these submissions and the authorities into consideration in our judgment. - J4 - Ground 1 deals with the position the learned trial Judge took on Order 71 and Order 73. The appellant’s advocates have complained that the learned trial Judge misdirected herself when she refused to set aside the registration. On the other hand, the learned counsel for the respondent supported the learned trial Judge’s finding and the interpretation of the two Orders. Order 71(9) under which the application to have the award set aside, provides briefly: (1) (2) (3) An application to set aside the registration of a judgment must be made by summons supported by affidavit. The Court hearing such application may order any issue between the judgment creditor and the judgment debtor to be tried in any manner in which an issue in an action may be ordered to be tried. Where the Court hearing an application to set aside the registration of a judgment registered under the Act of 1920 is satisfied that the judgment falls within any of the cases in which a judgment may not be ordered to be registered under s.9 of that Act or that it is not just or convenient that the judgment should be enforced in England or Wales or that there is some other sufficient reason for setting aside the registration, it may order the registration of the judgment to be set aside on such terms as it thinks fit On this Order there are notes in the White Book, which have provided guidelines. From the notice, it is clear that the Order is talking about the foreign judgments. The learned trial Judge in her ruling briefly covered - J5 - what had transpired before. The award had been set aside by the same Judge on the ground that when it was registered, it did not comply with the requirements. Later the same Court registered the same award. In her ruling, the learned trial Judge seriously considered Orders 71 and 73 and she came to the conclusion that the provisions on setting aside the foreign judgments did not apply to the setting aside of registration of foreign arbitration awards. We have considered the Orders referred to and the submissions and reasoning of the learned trial Judge and we have found that she was on a very firm ground when she made that ruling. The appeal would not succeed on this ground. Ground 2 deals with the learned trial Judge’s decision that there were only two grounds upon which the court may set aside an award. The learned counsel for the appellant drew our attention to the Arbitration Act Cap. 40 of the Laws of Zambia, Hailsbuiy Laws of England 3rd Edition Vol. 2 and the case of Landaner vs Asser (1905) 2KB 184. The advocates for the appellants have argued that jurisdiction to set aside the award of an arbitrator for an error of law is available. That jurisdiction exists at common law. They have argued that the error in law would be seen on the face of the award. It can also be found in the award or in a document incorporated with the award. The counsel for the other side has submitted that although there was a common ground on the common law for setting aside an arbitration award, - 6 - that argument in this case was inconsequential and they urged the Court to dismiss that ground. In her judgment, the learned trial Judge referred to the provisions of Section 15 of the Arbitration Act Cap. 40 of the Laws of Zambia and she quoted the provisions of Section 15, which Section provides: “Where an arbitrator or umpire has misconducted himself or an arbitration award has been improperly procured, the Court may set aside the award. ” The learned trial Judge concluded that the lav/ recognises only two grounds under which the Court may set aside an award, i.e. the misconduct of an arbitrator or the award has been improperly procured. Again the learned trial Judge proceeded to deal with what had been pleaded or laid down in the summons. She considered the question of fraud and the question of deceit. She dismissed the allegations of fraud and deceit on the part of the arbitrators. She later dealt with the conduct of the GAFTA Appeals Board. She dealt with that ground in detail and concluded that there was no misdirection on the part of the Appeals Board. We have considered the learned trial Judge’s judgment and her reasons. We have further considered the submissions of the two learned counsel and we find that there is no basis on which we can faulter the learned trial Judge. The learned trial Judge considered the complaint and allegations very carefully and concluded that the Appeals Board had not misconducted itself. The appeal on that ground cannot succeed. - J7 - Ground 3 deals with the learned trial Judge’s decision that the award was not improperly procured by either fraud or any deliberate concealment of material evidence. This ground is tied up with ground 2. We have already expressed our views and we confirm that the learned trial Judge was correct in her finding. The appeal cannot succeed on this ground either. Ground 4 deals with again the learned trial Judge’s decision that GAFTA Appeals Board did not misconduct themselves. This ground again is tied up with grounds 2 and 3. We do not see any basis on which we can ■felter the learned trial Judge’s decision. The appeal cannot succeed on this ground. Ground 5 deals with the award being contrary to the Laws of Zambia and that the enforcement would be against public policy. The learned advocates for the appellant have argued on interest. They have strongly argued that the interest awarded was contrary to the principles applied by Courts in Zambia and that according to the public policy the award cannot be enforced. The counsel for the respondent while agreeing that if an award is against public policy it may not be enforced, has maintained that this was not the position in this particular case. The learned advocates for the appellant have relied on Order 71(9) of the White Book, which states that the enforcement must not be contrary to public policy. The learned counsel has attempted to define what the public policy is. He has summed up the situation as anything that offends the - 8 - society. The appellant’s advocates have argued that the public policy in Zambia demands, inter alia, justice and fairness and that it is against unjust enrichment. We have considered into account the arguments by both counsel on the interest. In Zambia this Court has settled principles on the interest before and after the judgments or awards. It is trite law that interests before judgments are based on average short-term deposits. After judgment, it used to be 6%, but the law has now changed. It may be a rate not exceeding the lending rate. The appellant has got a valid point in complaining against the high interest rates awarded by the Appeals Board. The appeal on this ground will succeed. The interest given by the Appeals Board is set aside and we order the following: Prior to the award, the interest will be the average short-term deposit. After the award, the interest will be at 6%. As regards the costs, we order that each party bears his own cost. M. S. CHAILA SUPREME COURT JUDGE D. K. CHIRWA SUPREME COURTJUDGE