Dawiq Keren Motors Joint Venture Limited v Road Development (2020/HPC/ARB/0737) [2021] ZMHC 105 (20 September 2021)

RB/0737 IN THE MATTER OF: AN APPLICATION FOR AN ORDER TO SET ASIDE AN ARBITRAL AWARD AND IN THE MATTER OF: SECTION 1 7 OF THE ARBITRATION ACT NO. 19 OF 2000 ~ AND IN THE MATTER OF: RULE 23 OF THE ARBITRATION (COURT PROCEEDINGS) RULES 2001 BETWEEN: DAWIQ KEREN MOTORS JOINT VENTURE LIMITED PLAINTIFF AND ROAD DEVELOPMENT AGENCY DEFENDANT CORAM: Hon. Lady Justice Dr. W. Sithole Mwenda in Chambers at Lusaka on the 10th day of September, 2021. For the Plaintiff' For the Defendant: Mr. L. Mwamba of Simeza Sangwa and Associates Ms. C. Banda of Tembo Ngulube and Associates JUDGMENT Cases referred to: 1. Martin Misheclc Simpemba Rose Domingo Kakompe v. Nonde Mukanta and Zambia Industrial Minerals Limited (2012) 1 ZR 72 at page 89. J2 2. Christ for All Nations v. Apollo (2002) EA 366. 3. Zimbabwe Electricity Supply Authority v. Maposa (1992) Vol.2, ZLR 452. 4. Owen (Edward) Engineering v. Barclays International Limited (1978) All E. R. 976. 5. Spancrete Zambia and Others v. Cavmont Bank Zambia, CAZ Appeal 101 /2018. 6. National Pension Scheme Authority v. Sherwood Greene Limited, 2018/ HKC/ 007. 7. Colgate Palmolive (Z) Inc. v. Abel Shemu Chi/ca and 11 0 Others, SCZ Appeal No. 81 of 2005. 8. Kon/cola Copper Mines Plc v. Mitchell Drilling International Limited and Mitchell Drilling {Z) Limited, SCZ Selected Judgment No. 22 of 2015. 9. Zambia Revenue Authority v. Tiger Limited and Zambia Development Agency, SCZ Selected Judgment No. 11 of 2016. 10. Saving Wealth Limited v. Zamastone Limited, 2017/HPC/0183. 11. Westland H elicopters Limited v. Sheikh Sala Al-Hejalian (2004) EWHC 162 5 (Comm). 12. Saving Wealth Limited v. Zamastone Limited, 2017/HPC/0183. 13 . John Kunda (Suing as Country Director and on behalf of the Adventist Development and Relief Agency (ADRA)) v. Keren Motors (Z) Limited, 2008/ HPC/ 550. 14. Fratelli Loci SRI Estrazion Minerarie v. Road Development Agency, CAZ Appeal No. 112 of 2017. 15. Savenda Management Services Limited v. Stanbic Zambia Limited, SCZ Selected Judgment No. 39 of 2017. 16. NHA-MKP Estate Development Limited v. Workers' Compensation Fund Control Board, CAZ Appeal No. 44 of 201 7. Legislation referred to: 1. Section 1 7 of the Arbitration Act, No. 19 of 2000. 2. Rule 23 of the Arbitration (Court Proceedings) Rules 2001 (S. J. No. 75 of 2001. Publications referred to: 1. Bryan A. Gamer (Ed), Black's Law Dictionary, 8 th Edition [Thomson West, 2004}. J3 2. E. A. Martin (Ed) Oxford Dictionary of Law, 5 th Edition (Oxford: Oxford University Press, 2002. 3. Halsbury's Laws of England, 5th Edition, [London: Butterworths LexisNexis, 2008], Volume 2. 1. INTRODUCTION AND BACKGROUND 1.1 This is an application, by way of Originating Summons, ,.1,i:. Ir_~ for an order to set aside an arbitral award. The Application 1s made pursuant to Section 17 of the Arbitration Act, No. 19 of 2000 and Rule 23 of the Arbitration (Court Proceedings) Rules, 2001 and the Plaintiff is seeking that the final arbitral award made on 4 th August, 2020, be set aside on the following grounds: (i) That the award is contrary to public policy because: (a) The reasoning and/ or conclusions go beyond the mere faultiness and/ or accepted moral standards and are contrary to commercial and construction sense; (b)The Tribunal did not apply its mind to the questions and/or totally misunderstood the issues resulting in injustice; J4 (c) The award enables the Defendant take advantage of a position that it deliberately created; and (d)The award consists of mistakes of law, apparent from the face of the award. (ii) That said arbitral award contains decisions on m a tters that go beyond the scope of submission to arbitration. 1. 2 The Originating Summons 1s supported by an affidavit (hereinafter referred to as the "Affidavit in Support"), sworn by one Clem ent Mugala, the Receiver and Manager of Keren Motors Limited, a joint venture partner of the Plaintiff. The Affidavit in Support is augmented by Skeleton Arguments and both documents are of even date with the Originating Summons. 1.3 In opposition, the Defendant filed an affidavit (hereinafter referred to as the "Affidavit in Opposition"), sworn by one Samuel Twasa, the Senior Manager- Local Contractors Development, in the Applicant Company. The Affidavit in JS Opposition is augmented by Skeleton Arguments. Both documents were filed on 22 th October, 2020. 1.4 The Plaintiff, further, replied to the Defendant's arguments in opposition and, to this end, filed Skeleton Arguments in Reply, on 29th March, 2021. 2. PLAINTIFF'S EVIDENCE AND ARGUMENTS IN SUPPORT 2.1 Clement Mugala deposed in the Affidavit in Support that on 31 st Ma rch, 2014, the Plaintiff entered into Contract No. RDA/ CE/35/ 13 ("the Contract") with the Defendant, for th e periodic maintenance works of 131 Kilometers of Road from M001/T002 Junction in Mpika to Chambeshi Bridge to Kasa ma in Muchinga Province of Zambia- Lot 1 for the sum of Kl 18,299,974.80. As proof of this assertion the deponent referred the Court to exhibit "CMl". 2.2 Mr. Mugala further testified that following continued default by the Defendant to discharge its contractual obligations to the Plaintiff, the Contract was terminated and the matter accordingly referred to arbitration. In this J6 regard, the deponent referred the Court to exhibit "CM2", being copies of the letter references exchanged by the Plaintiff and the Defendant, and the pleadings exchanged along with the witness statements exchanged before the Tribunal. 2.3 The deponent deposed, in addition, that an Arbitral Tribunal was accordingly constituted comprising Judge A. M Wood as sole Arbitrator. That, the final award was delivered on 4 t h August, 2020, and as proof of this, the depone nt referred the Court to exhibit "CM3". 2.4 Finally, Mr. Mugala testified that he had been advised by his Advocates that the contents of the Final Award are contrary to public policy and contains decisions on matters that go beyond the scope of the arbitration. As such, the Applicant commenced these proceedings. 2.5 In the Skeleton Arguments augmenting the Originating Summons, Counsel for the Plaintiff gave the backdrop to the application before court, namely, that the Plaintiff and Defendant entered into a contract as per the Affidavit in Support. That, at arbitration the Plaintiff claimed a J7 total sum of K56,049,231.48, being monies due for its plant machinery and personnel which remained idle during the period when the Defendant did not issue drawings · after it had already mobilised. That, the claim was defended by the Defendant who, inter alia, claimed (ft repayment of the advance payment which was advanced to the Plaintiff in the sum of Kl 1,829,997.80, less any recoveries. Further, that the Defendant also claimed payment of additional charges at 15% of the uncompleted works which were pegged at K23,033,544.78, VAT inclusive, as provided under Clause 60.1 of the Contract. 2 .6 It was recounted that the Plaintiff's reaction to the Defendant's claims was that the Defendant was not entitled to payment of the sum of K23,033,544.78 because no final certificate was ever issued in accordance with Clause 60.1 of the Contract. As regards the claim for the sum of Kl 1,829,997.80, the Plaintiff stated that the same arose from a p erformance bond or guarantee and the appropriate party to pay was the Guarantor, Focus General Insurance Limited. J8 2.7 It was further recounted that on 4 th August, 2020, the Arbitrator published his award 1n favour of the Defendant, as follows: (i) Kl 1,829,997.80, less recoveries; (ii) Damages for breach of contract on failure to provide a valid renewed performance bond as provided under Clause 59.2 (f) of the Contract; (iii) Additional charges at 15% of the uncompleted work at K23,033,544.78, VAT inclusive, as provided under Clause 60.1 of the Contract; and (iv) Inte rest at the commercial lending rate. 2.8 It is the position of the Plaintiff herein that the award is contrary to public policy and ought to be set aside. In this regard, Counsel for the Plaintiff referred the Court to Section 17 of the Arbitration Act and submitted that the same is the law on challenging an arbitral award and that the Court can set aside an arbitral award on the grounds listed under said Section 1 7; one such ground being public policy. 2. 9 On the subject of public policy, Counsel for the Plaintiff J9 submitted that while the concept of public policy is broad and is determined on a case-by-case basis, the overriding criterion is that an award must not be contrary to public morality or justice and must not be so outrageous in its defiance of logic. Counsel, in this regard, referred the Court to the cases of Martin Misheclc Simpemba Rose Domingo Kakompe v. Nonde Mukanta and Zambia Industrial Minerals Limited1 and Christ for All Nations v. Apollo Ins urance Co. Ltd2. 2. 10 Further, placing reliance on the case of Zimbabwe Electricity Supply Authority v. Maposa3 , Counsel for the Plaintiff submitted that an award will be set aside on grounds of public policy if: (i) The reasoning and/ or conclusions go beyond mere faultiness and/ or incorrectness, they defy logic and/ or accepted moral standards and are contrary to commercial and construction sense; JlO (ii) The Arbitrator did not apply his mind to the questions and/ or totally misunderstood the issues, resulting in injustice; (iii) The award enables the Defendant take advantage of a position that it deliberately created; and (iv) The award consists of mistakes of the law that are apparent from the face of the award. 2.11 It was, thus, submitted by Counsel for the Plaintiff that an awa rd may be set aside on the grounds of public policy if the Plaintiff demonstrates that any of the circumsta n ces listed exist. 2 .12 Counsel argued that, in casu, two facets of the award meet the criterion listed above in that the reasoning in the award goes beyond mere incorrectness and is so outrageous that it defies logic and has caused injustice to the Plaintiff. That, the Arbitrator awarded the Defendant the sum of Kl 1,157,006.57, being the advance payment on a performance bond or guarantee and this goes beyond mere faultiness or incorrectness and has caused great injustice to the Plaintiff who has been ordered to Jll pay said sum for no reason at all. Further, Counsel contended that no reasons were given by the Arbitrator for this award. 2.13 Counsel stated that it is not in dispute that the Plaintiff maintained an advance payment bond from Focus General Insurance Limited which covered up to the sum of Kl 1,273,006.57, at the time the Contract was termina ted on 14th November, 2017. That, by said a dvan ce p aym ent bond Focus General Insurance Limited irrevocably undertook to pay the Defendant any sum or sums n ot exceeding Kl 1,273,006.57 upon receipt of the first d em and in writing from the Defendant. In this regard, Counsel submitted that where a performance bond exists, the claim for payment is directed at the person or company that undertook to pay. Further, that a performance bond is distinct from a guarantee in that the payment arises merely on demand and the holder of the bond pays once the guarantee is demanded, and that payment cannot be by the person in whose favour the bond was created. To fortify this position, Counsel for the Jl2 Plaintiff cited the case of Owen (Edward} Engineering v. Barclays International Limited4 and Spancrete Zambia and Others v. Cavmont Bank Zambia5 . 2 . 14 Counsel for the Plaintiff, thus, submitted that it is Focus General Insurance Limited to pay, as it made an ((ii unconditional advance payment guarantee, and not the Plaintiff. That, the order for the Plaintiff to pay advance p aym ent on a performance also translates to commercial a bsurdity which is a viable ground for setting aside an award on grounds of public policy. To lend support to this position, Counsel for the Plaintiff cited the case of National Pension Scheme Authority v. Sherwood Greene Limited6 . 2.15 With regard to the Arbitrator's d etermination that the Plaintiff should pay the sum of K15,970,496.00, in respect of the claimable 15% for the incomplete value of the work, together with interest, Counsel for the Plaintiff submitted that this also went beyond mere incorrectness, so as to be contrary to public policy. (ft 2.16 It was further submitted that the award went against Jl3 public policy in that the Arbitrator refused or neglected to enforce the agreement as agreed between the parties, despite the long-established principle of law that agreements entered into by men of full age must be enforced as they are. To support this, Counsel referred the Court to the case of Colgate Palmolive (Z) Inc. v. Abel Shemu Chi/ca and 110 Others7. In this regard, Counsel contended that the claim was based on Clause 60.1 of the Con tract, which required the Project Manager to issu e a certificate for the value of the work done and materials ordered, less advance payments. That, only then could a claim for additional charges arise. That, there was no certificate issued by the Project Manager and the question is why the Plaintiff was made to pay in the absence of a certificate by the Project Manager, revealing how the claim was calculated and quantified. Counsel, thus, submitted. that the failure to enforce Clause 60.1 of the Contract in the manner agreed by the pasties is contrary to public policy. , · I 2.17 Commenting on the award of K30,000.00 as nominal Jl4 damages in favour of the Plaintiff, Counsel compared the same with the sums of Kl 1,273,006.57 and KlS,970,496.00, a war ded to the Defendant, and submitted that the same was a serious defiance of logic and created an inequity. Further, that no proper reason was given as to why the Plaintiff was awarded K3 0 ,000.00 a s damages, notwithstanding the Arbitrator's findin g that th e Defendant breached the Contract and th e Tribunal~s fin ding that the Plaintiffs plant, machinery and personn el rem ain ed idle. 2. 18 Citing, again , the cas e of Zimbabwe Electricity Supply Authority v. Maposa 3, Counsel for the Plaintiff submitted that the Arbitra tor did not apply his mind to the questions and/ or totally misunderstood the issues, resulting in an injustice . That, the Arbitrator completely misunderstood the issue or concept of performance bonds and advance payments and how they work. That, a review of the award shows that no reasons were given J15 by the Arbitrator for ordering the Plaintiff to pay, instead of Focus General Insurance Limited. 2.19 It was also submitted that public policy dictates that a person must not derive a benefit from a wrong he himself created. That, corollary, an award will be set aside if it allows a party in the wrong to derive a benefit from a state of affairs which the party would have created. To support this contention, Counsel referred the Court to the case of Konkola Copper Mines Plc v. Mitchell Drilling International Limited and Mitchell Drilling (Z) Limiteds. It was, thus, submitted that the award has allowed the Defendant to take advantage of a situation it created. That, this is because the Arbitrator made a finding that the Defendant did not issue drawings in breach of the Contract, and the lack of drawings meant that the works were not completed on time, which led to the termination of the Contract. 2.20 It was, further, submitted that the award consists of mistakes of law that are apparent from the face of the award. Citing the case of King v. Duven and Others9 , J16 Counsel for the Plaintiff submitted that it is trite that an award ought to be set aside if it consists of mistakes of law apparent from the award. That, in casu, the first mistake was the misapprehension of how a performance bond works; and the second mistake was the misapprehension of Clause 60.1 of the Contract. 2.21 With the foregoing, Counsel for the Plaintiff prayed that the arbitral award be set aside for being contrary to public policy and further, that an order be made those costs be paid by the Defendant to the Plaintiff. 3. DEFENDANT'S EVIDENCE AND ARGUMENTS IN OPPOSITION 3.1 Mr. Samuel Twasa deposed in the Affidavit in Opposition, that the Defendant and not the Plaintiff, terminated the Contract between the two parties due to the Plaintiffs continued breach of contract. 3.2 That, he had been advised by the Defendant's advocates, after perusal of the award, that said award is not contrary to public policy. 3.3 The gist of the Skeleton Arguments augmenting the J17 Affidavit in Opposition is that the Arbitral Award should not be set aside as it does not, in any way, conflict with public policy, nor does the award contain decisions on matters that go beyond the scope of submission to arbitration. Counsel for the Defendant contended that the Plaintiffs Originating Summons and Affidavit in Support are extremely vague as to the area of the award which is problematic. 3. 4 Citing the cases of Zambia Revenue Authority v. Tiger Limited and Zambia Development Agency9 and Zimbabwe Electricity Supply Authority v. Maposa3 , Counsel for the ct1' Defendant confirmed that where the reasons or conclusion in an award goes beyond mere faultiness or incorrectness and constitutes an inequity that is so far reaching and outrageous in its defiance of logic or accepted standards that a sensible and fair minded person would be intolerably hurt by the award, then it would be contrary to public policy to uphold it. Further, that the award would involve some element of illegality or Jl8 that it would be injurious to the parties' goods or would be wholly offensive to the ordinary reasonable and well informed member of the public, on whose behalf the state's powers are exercised. 3.5 Counsel for the Defendant contended that the award ((8 reasoning and the conclusion are not in any way faulty, incorrect nor do they defy logic or accepted moral standards which are contrary to commercial and construction sense. Counsel further argued that a perusal of the award shows that that the Arbitrator broke down a ll the issues and addressed them by giving an explanation as to why he had reached that conclusion. That, the Plaintiff believes that the award was faulty and incorrect simply because it did not favour their claim, especially because they are the ones who took the matter to arbitration. Counsel for the Defendant submitted, thus, that the Arbitrator exercised his knowledge and skill to the best of his ability, and his reasoning and conclusion were not, in any way, contrary to commercial practice and construction sense. 3.6 With respect to the Plaintiffs ground that the Tribunal J19 did not apply its mind to the questions and/ or totally misunderstood the issues resulting in injustice, Counsel for the Defendant submitted that they were of the firm belief that the Tribunal did understand the issues and did apply its mind to the questions which arose out of the arbitration. That, the Tribunal was called to determine the claims which each party had brought before the Court and throu ghout the award, especially from pages 197 to 2 12, the Arbitrator gave clear and precise reasons why it came to those decisions. That, the Arbitrator utilised a ll the evidence and information that was provided to him and made a clear and just decision. 3.7 Regarding the ground that the award enables the Defendant to take advantage of a position that it deliberately created, Counsel for the Defendant submitted that said ground goes to the merits of the arbitration and the Plaintiff should not use this opportunity to attempt to appeal against the decision of the Tribunal. Further, that the Defendant did not J20 deliberately create the position that both parties found themselves in as it would not make logical or contractual sense to do so. That, from the facts brought before the Tribunal, both parties breached the Contract. 3.8 Counsel submitted that the award shows that the Plaintiff could not be awarded all the claims it had brought before the Tribunal for the reasons advanced by the Arbitrator and further, that the Defendant was aware that the breach of contract attracted repercussions and therefore, would not deliberately put itself in a position that would cause it to pay or compensate the Plaintiff. Counsel, thus, contended that the award was 1n accordance with the Contract and that to say that the award enabled the Defendant to take advantage of a position that it deliberately created would be the same as saying that the Plaintiff had equally taken advantage of a position it deliberately created, as the Plaintiff also breached the Contract. 3.9 As regards the ground that the award consists of mistakes of law, apparent from the face of the award, J21 . Counsel for the Defendant cited the case of Saving Wealth Limited v. Zamastone Limited10 and submitted that an arbitral award is not liable to be struck down on allegations that it is premised on incorrect grounds whether of fact or law because an application to set aside an arbitral award is not an appeal on the merits. 3.10 Further, citing the case of Martin Misheclc Simpemba Rose Domingo Kakompe v. Nonde Mukanta and Zambia Industrial Minerals Limited1, Counsel for the Defendant submitted that on applications to set aside awards, arbitral awards are not approached with a view to discern the legal weaknesses, inconsistencies, or faults in the application of the law. That, the task of the Court is not to upset or frustrate the arbitral process, but to read the award in a reasonable and commercial sense, assuming that there is no fundamental or substantial procedural or substantive error in the making of the award. Counsel, thus, submitted that the Arbitral Award is not vague ~d has no substantial procedural or substantive error. J22 3.11 With respect to the ground that the award contains decisions that go beyond the scope of Arbitration, Counsel for the Defendant recited Clause 24 of the Contract, being the Arbitration Clause, as follows: "24.1 Before resorting to arbitration the parties shall attempt to settle in good faith all disputes or differences which arise between them in good faith, out of or in connection with this Contract, by negotiations between them in good faith, and in the event of failure of such negotiations, by the use of the procedure known as alternative dispute resolution. 24.2 where failure of negotiations in respect of such dispute or difference occurs, the parties shall together ref er s uch dispute or difference to ADR for resolution in accordance with such of the ADR procedures offered by ADR as ADR considers appropriate in all the circumstances." 3.12 Counsel, thus, submitted that by Clause 24 of the Contract, it was not only disputes that affected certain clauses in the Contract that were to be referred to arbitration, but all disputes or differences that were to arise from the Contract. That, this was the scope of arbitration. 3.13 Thus, on the question of whether the award contains decisions on matters that go beyond the scope of J23 submission to arbitration, Counsel for the Defendant contended that the scope was not exceeded as the Arbitrator only dealt with issues that were brought to his attention through the submissions by both parties. Further, that if there was any information that the Defendant had provided that was beyond the scope of submission to arbitration, the Plaintiff ought to have objected to the production of said information while it h a d the opportunity to raise the objection. Counsel, in this regard, relied on the cases of Westland Helicopters Limited v. Sheikh Sala Al-Hejalian11 and Saving Wealth Limited v. Zamastone Limited12 . 3.14 Further, citing the case of John Kunda (Suing as Country Director and on behalf of the Adventist Development and Relief Agency (ADRA)) v. Keren Motors (Z) Limited13, Counsel for the Defendant submitted that the purpose of an action to set aside an arbitral award is to preserve the integrity of the arbitral process, not to serve as a means to achieve a review of the tribunal's decision on the merits. That, an arbitral award is final and binding and if J24 the parties want a compromise solution, they should opt for mediation and if they are prepared to fight the cause to the highest court in the land, they should opt for litigation. With this, Counsel prayed that the Court dismisses the application herein. ~ 3.15 The Defendant filed Further Skeleton Arguments in Opposition, basically arguing that the Plaintiffs Affidavit in Support is in contravention of Rule 23 (3) of the Arbitra tion (Court Proceedings) Rules, S. I. No. 75 of 2001 . Tha t, the Plaintiff failed to furnish all evidence and facts it is relying on in the affidavit. That, the Affidavit in Support merely claims that the award is contrary to public policy, without stating how this is so. Counsel, thus, referred the Court to the case of Fratelli Loci SRI Estrazion Minerarie v. Road Development Agency1 4 _ 3.16 On the issue of how a performance bond ought to operate, Counsel for the D_efendant submitted that the Defendant made a claim with the insurance company for the advance payment. That, despite the Plaintiffs knowledge of the terms of the payment bond and how J25 they required Focus General Insurance Limited to pay the sum claimed by the Defendant upon receipt of the first demand, the Plaintiff still went ahead and instructed the insurance company not to make a pay out to the Defendant. Further, that the insurance company has since undergone liquidation and is incapable of making a payment to the Defendant. Counsel, thus, referred the Court to pages 74 and 75 of the Award, to demonstrate tha t the Tribunal was aware of these facts and addressed its mind to them in its conclusion. 3. 17 In Conclu s ion, Counsel for the Defendant submitted that the grounds raised by the Plaintiff are not sufficient to warrant the Court to make an order to set aside the award. That, parties go into arbitration with the understanding that the award will be final and binding, and will not be able to appeal on incorrect facts or law; that, the Arbitrator, in coming up with the award, placed heavy reliance on the evidence provided to him by the parties; that as far as the advance payment was concerned, the Plaintiff placed itself in a position where it J26 could not escape its contractual obligation as it prevented its shield from performing the task it was required to perform; that, the KlS million was a sum required to be paid by the Defendant, regardless of the procedure under the contract; and that the Arbitrator did not, in any way, re-write the Contract which the parties went into, but rather, enforced said Contract with the aid of the information and documentation provided by both parties. 4. PLAINTIFF'S ARGUMENTS IN REPLY 4.1 Coun sel for the Plaintiff, in reply to the Defendant's contention that the Plaintiff has not furnished evidence as required under the Arbitration Act, submitted that said argument is difficult to comprehend in light of the fact that there is an Affidavit in Support of the Originating Summons on the record. That, the Affidavit in Support, exhibits the Contract that culminated in the arbitra tion, as well a s all the evidence presented before the Arbitra tor, and the Award. J27 4.2 Counsel for the Plaintiff contended that the ground raised as the basis for setting aside the award is that the award is contrary to public policy. That, therefore, what the Court is interrogating is whether the award is contrary to public policy, and to do this, the Court has to look at the Award in light of public policy. That, the Award itself is the evidence required to determine this matter. 4.3 Regarding the Defendant's position that the Plaintiff asked Focu s General Insurance not to pay because they were owed money by the Defendant and therefore, interfering with the payment, Counsel for the Plaintiff responded that there is no evidence before the Court or indeed the Tribunal, to support the Defendc}Ilt'S assertion. That, the Arbitrator did not make any such finding and that is why the Defendant has relied on extracts of the Arbitrator's summary of the issues for determination. 4.4 Further, that the obligation to pay cannot shift merely because the Plain tiff asked Focus General Insurance not to pay as one can sue to enforce a performance bond, and the Defendant should have pursued Focus General J28 Insurance to honour its obligations under the performance bond. 4 .5 With respect to the issue of the payment of the K15 million, Counsel for the Plaintiff maintained that the Arbitrator ignored public policy's demand to enforce agreements and not to re-write agreements between parties. That, it is not up to the Arbitrator to take a wild guess at a figure in the absence of a certificate, as the need for a certificate is that it shows the value of the works and how much was expected. 4.6 Regarding the issu e of whether the Arbitrator applied his f' mind to the questions raised, Counsel for the Plaintiff maintained that the Arbitrator misunderstood Clause 16 which required the issuance of a certificate. 4.7 On the issue whether the award enables the Defendant to take advantage of a position it created, Counsel for the Plaintiff reiterated their position in support of the contention. 4 .8 Regarding the question whether the Award consists of mistakes of law that are apparent from the face of the J29 Award, Counsel for the Plaintiff submitted that the Defendant is forgetting that there is a distinction between setting aside an award because of legal wealmesses/inconsistencies and setting aside an award for mistakes of law that are apparent on the face of the award. Counsel, thus, contended that the position of the law is that the award should be set aside where there are mistakes of law apparent on the face of the award; that is to say, where there are mistakes of law which a reasona ble arbitrator could not have made, especially taking into account the arbitrator's training. ~ 5. COURT'S ANALYSIS AND FINDINGS 5.1 I have carefully perused and considered the affidavits filed on behalf of the parties herein as well as the arguments advanced by both parties. It is not in dispute that on 31st March, 2014, the Plaintiff and Defendant entered into a contract for the periodic maintenance works of 131 J30 Kilometers of Road from MOO 1 /T002 Junction in Mpika to Chambeshi Bridge to Kasama in Muchinga Province of Zambia- Lot 1, for the sum of Kl 18,299,974.80. 5.2 It has also been alleged by both parties, without dispute, that the other breached said Contract, necessitating termination at the instance of the Plaintiff and subsequent reference of the matter to arbitration. An Arbitral Tribunal was, accordingly, constituted and comprising a sole Arbitrator who rendered a Final Award on 4 th August, 2020. 5.3 The Plaintiff has now commenced these proceedings to set aside the Award and has alleged that said Award is contrary to public policy. That, the Award went beyond mere incorrectness, so that it defies logic, and thereby causing injustice to the Plaintiff. In disputing the claim, the Defendant has contended that the Plaintiff has failed to provide this Court with sufficient grounds on which to make an order setting aside the A ward and particularly alleged that the Plaintiffs Affidavit in Support is in contravention of Rule 23 (3) of the Arbitration (Court J31 Proceedings) Rules, S. I. No. 75 of 2001, 1n that the Plaintiff failed to furnish all evidence and facts it is relying on in said affidavit. It is, thus, for this Court to determine whether there is merit in the Plaintiffs claim that the Final Award in question is contrary to public policy and should be set aside, accordingly. 5.4 The proceedings herein, were commenced pursuant to Section 17 the Arbitration Act, No. 19 of 2000 and Rule 23 of the Arbitration (Court Proceedings) Rules , 2001 (S. I. No. 75), which provide as follows: Section 1 7 of the Arbitration Act ( 1) Recourse to a court against an arbitral "1 7. award may be made only by an application for setting aside in accordance with subsections (2) and (3). (2) An arbitral award may be set aside by the Court only if- ( a) the party making the application furnis hes proof that- (i) a party to the arbitration agreement was under some incapacity; or said agreement is not valid unde r the law to which the parties have subjected it or, failing any indication thereon, under the laws of Zambia; J32 (ii} the party making the application was not given proper notice of the appointment of an arbitral tribunal or of the arbitral proceedings or was otherwise unable to present his case; (iii} the award deals with a dispute not contemplated by, or not falling within the terms of. the submission to arbitration, or contains decisions on matters bei1ond the scope of the submission to arbitration, provided that, if the decision on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decision on matters not submitted to arbitration may be set aside; (iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with this Act or the law of the country where the arbitration took place; or the award has not yet become binding on the_ (v) parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made; or (b} if the court finds that - the subject-matter of the dispute is not capable law of (i} of settlement by arbitration under the Zambia; or (ii} the award is in conflict with public policy: or the making of the award was induced or (iii} effected by fraud, corruption or misrepresentation. J33 (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the award or, if a request has been made under articles 33 of the First Schedule, from the date on which that request had been disposed of by the arbitral tribunal. (4) The court, when asked to set aside an award may, where appropriate and if so, requested by a party, suspend the setting aside proceedings for a p eriod of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in th e arbitral tribunal's opinion will eliminate the grou nds f or setting aside." (Emphasis supplied by th e Pla in tifD Rule 23 of S.1. No. 75 of 2001 (]) An application, under section seventeen of "2 3. the Act, to set as ide an award shall be made by originating s ummons to a Judge of the High Court. (2) The application referred to in sub-rule (1) shall be supported by an affidavit- (a} (b) (c) exhibiting the original award or a certified copy thereof; exhibiting the original arbitration agreement or duly certified copy thereof; stating to the best of the knowledge and belief of the deponent, the facts relied upon in support of the application; and stating the J34 date of receipt of the award by the party applying to set aside the award. (3) The affidavit shall be accompanied by such other evidence with respect to the matters referred to in subsection (2) of section seventeen of the Act, as may be necessary to support the application. (4) On an application to set aside an award, the Court may direct that an issue between the parties shall be stated and tried and may give such direction in relation to the trial of such issue as may be necessary, to malce any other order considered necessary in the circumstances." 5.5 Before I delve into the main issue for determination, namely, wh ether there is merit in the Plaintiffs claim that the Final Award in question is contrary to public policy and should be set aside, I wish to address the coµtention ra ised by the Defendant that the Plaintiffs Affidavit in Support is in contravention of Rule 23 (3) of the Arbitration (Court Proceedings) Rules, S.l. No. 75 of 2001. I have perused the Affidavit in Support in its entirety and I am satisfied that it is in compliance with Rule 23 (3) of S. I. 75 of 2001. Therefore, I must dismiss the attempt by Counsel for the Defendant at challenging said Affidavit. Most of the facts anticipated by Rule 23 (3) of S. I. 75 of 2001, in my view, are clearly traceable in the voluminous J35 exhibits attached to the Affidavit in Support. Exhibits are attached to affidavits to augment assertions in the affidavit, and this has been done in this case. Otherwise, the Plaintiff would have had to reproduce most of the contents of the exhibits in the body of the Affidavit. 5.6 Moving on to the main contention that the Final Award is contrary to public policy, in that it goes beyond mere faultiness or incorrectness and that the Arbitrator did not apply his mind to the questions raised, and misunde rstood the issues, Counsel for the Plaintiff 1s essentia lly inviting this Court to look into the merits of the Arbitral proceedings that culminated in the award now being challenged. 5 .7 The learned a uthors of Black's Law Dictionary, 8th Edition, h ave d efined public policy as follows: "Public policy. 1. Broadly) principles and standards regarded by the legislature or by the courts as being of fundamental concern to the s tate and the whole of society. Public policy. 2 . More narrowly) the principle that a p erson should not be allowed to do anything that would tend to injure the public at large.)) J36 5.8 The learned authors of Oxford Dictionary of Law, 5 th edition, on the other hand, define public policy with an example based on contract, as follows: "Public policy is the interests of the community. If a contract is (on common-law principles) contrary to public policy, this will normally make it an illegal contract. In a few cases, however, such a contract is void but not illegal, and is treated slightly more leniently (for example, by severance). Contracts that are illegal because they contravene public policy include any contract to commit a crime or a tort or to defraud the revenue, any contract that prejudices national saf ety or the administration of justice, and any immoral contract. Contracts that are merely void include contracts in restraint of trade and in restraint of marriage and marriage brokage contracts. " 5 . 9 Although one cannot specifically pinpoint what public policy is, it appears, from the definitions of public policy above, tha t the interests of the society or public at large is at the core. 5 . 10 In terms of an arbitral award that is contrary to public policy, the term 'public policy' is not any clearer than the definitions above. There is, however, some guidance given by our Supreme Court, in this regard, in the case of Zambia Revenue Authority v. Tiger Limited and Zambia J37 Development Agency9. The Court adopted the reasoning of Gubbay CJ, in the case of Zimbabwe Electricity Supply Authority v. Maposa3, in considering the test of an award that offends public policy, as follows: goes faultiness "Where, however, the reasons or conclusion in an award or beyond mere incorrectness and constitutes an inequity that is so far reaching and outrageous in its defiance of logic or accepted standards that a sensible and fair minded pe rson would consider that the concept of justice in Zimbabwe would be intolerably hurt by the a ward, then it would be contrary to public policy to uphold it." 5.11 It was a lso held, in the case of Martin Misheclc Simpemba Rose Domingo Kalcompe v. Nonde Mulcanta and Zambia Indus trial Mine rals Limited 1, that the term public policy s hould be understood to cover fundamental principles of law and justice from the procedural and substantive standpoints. That, although public policy is not defined in the Arbitration Act, or the Model Law, the defence of public policy should only be invoked where the upholding of a n award would shock the conscience; clearly injurious to the public good, wholly offensive to an ordinary m ember of the society; where it violates the forum's most J38 basic notion of morality or justice; or it is so outrageous in its defiance of logic or accepted moral standards that any sensible and fair-minded person would be intolerably hurt by such an award. 5.12 The Plaintiff has alleged 1n these proceedings that the Arbitral Award delivered by the Tribunal on 4 th August, 2020 is contrary to public policy in that: (a ) The reasoning and/ or conclusions go beyond the mere faultiness and/ or accepted moral standards and are contrary to commercial and construction sense; (b) The Tribunal did not apply its mind to the questions and/ or totally misunderstood the issues resulting in injustice; (c) The award enables the Defendant take advantage of a position that it deliberately created; and (d) The award consists of mistal{es of law, apparent from the face of the award. 5.13 It has further, been alleged by the Plaintiff that the award contains decisions on matters that go beyond the scope of J39 submission to arbitration. In most of these allegations the Plaintiff is clearly inviting this Court to look into the merits of the arbitration proceedings or review how the substance of the arbitration was handled by interrogating how the Arbitrator applied substantive law and/ or principles. 5 . 14 It is trite that an arbitral award is final and binding by virtue of th e fact that parties that choose arbitration as their preferred means of dispute resolution, do so at the expense of forfeiting the luxury to appeal against the award, as one would in litigation. The learned authors of Ha lsbury's Laws of England, Volume 2, 5 th Edition, put it this way, in paragraph 1201 : "Arbitration is a process used by the agreement of the parties to resolve disputes. In arbitrations, disputes are resolved, with binding effect, by a person or p ersons acting in a judicial manner in private, rather than by a national court of law that would have jurisdiction but for the agreement of the parties to exclude it." 5.15 The Supreme Court categorically held, in the case of Savenda Management Services Limited v. Stanbic Zambia Limited15, that the courts do not have jurisdiction to sit as ,, J40 appellate courts to review and alter arbitral decisions. Further, that arbitration is resorted to where the parties do not want to subject the resolution of their dispute to the court process. 5.16 As regards what is expected of a court entertaining an application to set aside an arbitral award, the Court of Appeal, stated a s follows, in the case of NHA-MKP Estate Development Limited v. Workers' Compensation Fund Control Board16: "It is clear from the judgment of the lower court that the court did not adjudicate on the issue of the arhilral award of damages for non-completion, becau se the law proscribes reviewing arbitral awards. The court relied on the case of Kon/cola Copper Mines v. Copper Fields, where it was held, inte r alia, that: "A n application to set aside an award is not inte nde d for the court to review the award of the tribunal or indeed conduct a he aring akin to an appe al. " The court was on firm ground ... . . . We, the refore, are of the like mind as the lowe r court not to review the Award or take this as an appeal against the Award." , 5.17 It goes without saying, therefore, that it is not the place J41 for the courts to question whether the reasoning or conclusions of an arbitrator were correct, in respect of the law. It was, thus, the position taken in the case of Martin Misheck Simpemba Rose Domingo Kakompe v. Nonde Mukanta and Zambia Industrial Minerals Limited1, where Matibini, J , (as he then was), held as follows: the "On application to set aside, awards are not legal approached with a view to discern the inconsistencies or weaknesses, application of the law. Rather, the objective is to read an award in a reasonable and commercial sense, assuming that there is no fundamental or s ubstantial procedural or substantive error in the making of the award. " faults in 5.18 I have p erused the Arbitral Award in question exhibited as "CM3" in the Affidavit in Support. I am of the view that the Arbitrator, to the best of his ability, applied his mind to the issues that needed determination. As to whether said Arbitrator's reasoning was erroneous in view of the application of the law is something which this Court is precluded from delving into. Clearly, the Plaintiff was discontented with the Arbitrator's decision and reasoning, and sought to dub the same as being contrary to public J42 policy for going beyond mere incorrectness or faultiness. It was further, held in the case of Martin Misheclc Simpemba Rose Domingo Kakompe v. Nonde Mulcanta and Zambia Industrial Minerals Limited1, that the defence of public policy is narrowly construed in a bid to preserve and recognise the goal of finality in all arbitration. Thus, 1 an arbitral award is not liable to be struck down on allegations that it is premised on incorrect ground, whether of fact or law. In casu, this is exactly what the Plaintiff is seeking to do and is proscribed by the essence of a rbitration. Assuming, therefore, that ind_eed there was something wrong with how the Arbitrator applied the law, an award will not be contrary to public policy merely because the reasoning or conclusions of the arbitrator are wrong in fact or law. This is so because an application to set aside an arbitral award is not an appeal on the m erits. 5.19 For a claim that an arbitral award is contrary to public policy to hold water, cogent reasons must be advanced to support the claim. In the case of Fratelli Loci SRI Estrazion Minerarie v. Road Development Agency14, the Court of Appeal, thus, stated that: J43 "The definition of public policy adopted in the Tiger Limited Transport case shows that a very high standard of proof is set for a person applying to set aside an award on an allegation that it is contrary to public policy. Our view is that for an award to be set aside on that ground, there must be proof that the arbitral tribunal has done gross injustice." 5 .20 Therefore, aside from the discernable fact that the Plaintiff was dissatisfied with the outcome of the arbitration and is attempting, by these proceedings, to re-open the a rbitration for something analogous to review or appeal, I find that the Plaintiff has failed to demonstrate to this Court th at th e reasoning or conclusion in the Award goes b eyond m ere faultiness or incorrectness; and constitutes a blatant inequity that is so far reaching and outrageous in its defiance of logic and a ccepted moral standards that a sensible and fair-minded person would consider that the conception of justice in Zambia would be intolerably hurt by the Award. Consequently, I dismiss the Plaintiffs claim that the Arbitral Award of 4 th August, 2020 was contrary to public policy. 5.21 For the same reasons I have given above, I dismiss the Plaintiff's contentions that the Tribunal did not apply its J44 mind to the questions and/ or totally misunderstood the issues resulting in injustice; that, the a:nard enables the Defendant to take advantage of a position that it deliberately created and that the award consists of mistakes of law, apparent from the face of the award. 5.22 The Plaintiff had also alleged that the Arbitral Award contains decisions on matters that go beyond the scope of submission to arbitration. In rebuttal, Counsel for the Defendant referred this Court to Clause 24 of the Contract, being the Arbitration Clause, and submitted that by said Clause 24, it was not only disputes that affected certain clauses in the Contract that were to be referred to arbitration, but all disputes or differences that were to arise from the Contract and this was the scope of arbitration. 5.23 I have perused said Clause 24 of the Contract, which has also been reproduced earlier in this judg1nent under the Defendant's arguments. I must hasten to state that I agree with the contention by Counsel for the Defendant that the scope of disputes contemplated by the Arbitration • J45 Clause in the Contract are not just those stemming directly from the Contract, but those in connection with the Contract. This is clearly stated in Clause 24. However, most important on this issue of scope, is the fact that this Court has already dismissed the Plaintiff's allegation that e the Arbitral Award in question is devoid of logic and contrary to public policy. In light of such finding, it • cannot now be debated whether or not the Arbitral Award exceeded the scope of submission. In any event, as correctly a rgued by Counsel for the Defendant, the Arbitra tor only h a d what the parties brought before him to work with, and nothing more . 6. CONCLUSION AND ORDERS 6.1 The Plaintiff commenced the proceedings herein with the hope of securing an order setting aside the Arbitral Award rendered on 4 th August, 2020. The Plaintiff cited contravention of public policy as the ground on which it was seeking the order. It argued that the award was devoid of logic and offensive to justice; and contained mistakes of law apparent from the face of the award. J46 6.2 It was also alleged that the award went beyond the scope of submission to arbitration. 6.3 In response, the Defendant argued that the award was not contrary to public policy. That, the award was within the scope of submission to arbitration, reasoned and final. 6.4 Upon evaluating the evidence and submissions on behalf of the Pla intiff and the Defendant, this Court has found that the Plaintiff h as failed to demonstrate that the Arbitral Award in question is contrary to public policy, based on the standard that the reasoning or conclusion 1n the Award goes beyond mere faultiness, or incorrectn ess; and constitutes a palpable inequity that is so far reaching and outrageous in its defiance of logic and accepted moral standards that a sensible and fair minded person would consider tha t the con ception of justice would be intolerably hurt by the Award. All that the Plaintiff has done is d emonstrate that it was dissatisfied with the outcome in the Arbitral Award and h as now invited this Court to embark on an exercise J47 analogous to that of reviewing the award or hearing it on appeal. 6 .5 It cannot be overemphasised that an arbitral award is final and binding and should not be vacated for errors of law and fact committed by the arbitrator and the courts should not assume the role of overseers to mould the award to conform to their sense of justice. The Supreme Court has ably guided on this subject. 6.6 In vie\v of the foregoing, the Plaintiffs application herein, wholly fai ls and is accordingly dismissed. 6.7 Costs are awarded to the Defendant to be agreed by the parties or taxed in default thereof. 6 .8 Leave to a ppeal is d enie d. Dated at Lusaka the 10th day of September, 2021. _"---'--A~:1.;~:.1.._, ______ {., __ W. SITHOLE MWENDA (DR.) HIGH COURT JUDGE