U & M Mining Zambia Limited v Konkola Copper Mines (2014/HP/ARB/0001) [2015] ZMHC 547 (16 March 2015)

IN THE HIGH COURT FOR ZAMBIA AT THE PRINCIPAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: 2014/HP / ARB/0001 U & M MINING ZAMBIA LIMI APPLICANT AND KONKOLA COPPER MINES RESPONDENT Before the Hon. Mrs. Justice N. A. Sharpe-Phiri on the 16th March, 2015 For the Applicant Mr. C. Chula, Mr. E. Sampa and Mr. R. Petersen of Chibesakunda and Company and Mr. W Banda of Messrs Wilson Cornhill For the Respondent : Mr. B Malambo and Mr. C. S Sianondo of Malambo and Company RULING Authorities and referred to: 1. The Arbitration Act. No 19 of 2000 of the Laws of Zambia 2. The High Court Rules, Chapter 27 of the Laws of Zambia New York Convention, Article IV 3. Authentication of Documents Act, Chapter 75 of the Laws of Zambia 4. Bryan Gamer, Black's Law Dictionary, 8th Edition, Thomson. 5. Halsburys Laws of England , Volume 9, 4th Edition, Butterworths 6. Lumus Agricultural Services Company Limited v Gwembe Valley Development Company Limited (in receivership) SCZ Judgment No. 1 of 1999 7. Holman v Johnson (1775) 1 Cowp. 341 8. Korea No. 3 Adviso N. V. v Korea Overseas Construction Corp. 1995 9. Aloe Vera of America, Inc v Asianic Food(s) Pte Ltd (2006) SGHC 78 Rl 10. Harbour assurance Co (UK) Limited v Kansa General Insurance Co. Ltd (1993) 3 All ER 897 11. Kleinwort Benson Ltd v Lincoln Council (1998) 4 All ER 513 12. Radio Publicity v Compagnie Luxembourgeoise de Radiodifusion and Wireless Publicity Limited (1936) 2 All ER 721 13. Holman v Johnson (1775) 1 Cowp. 341 14. Anthony Lombard -Knight v Rainstorm Pictures Inc (2014) ECWA Civ 356. 15. Selly Yoat Asset Management Limited v Remotesite Solutions Zambia Limited (201 OJ Z. R 35 Volume 2, 16. Printing and Numerical Registering Company v Simpson (1875) L. R 19 E. Q 462 17. Steak Ranch Limited v Steak Ranches International (2012) ZR 562, Volume 2 18. David Taylor Limited v Barnett (1953) All ER 843 The delay in delivering this Ruling is deeply regretted. This is the Respondent's application to set aside the Order of registration of the award made on 17th January, 2014. By that Order, the Partial Final Arbitration Award rendered by Mr Edwin Glasgow QC, CBE Stuart Isaacs QC and Michael Lee in London on 7 th November, 2013 was registered in Zambia. The brief background to this case is that an application to register a partial Final Award ('the award') rendered by Mr. Edwin Glasgow QC on the 7 th November, 2013 was filed by U & M Mining Zambia Limited against Konkola Copper Mines Plc under Cause number 2014/HP/ARB/0001. Leave to register the Arbitral Award was granted by the Court on 17th January, 2014 ('the Registration Order'). A separate action was subsequently commenced by Konkola Copper Mines Plc, against U & M Mining Zambia Limited under Cause number 2014/HP/ARB/0004 seeking to set aside the registration of the award registered under cause number 2014/HP/ARB/0001. On the 16th April, 2014, I ordered the consolidation of the two matters and further directed that the application to set aside be determined under the earlier action. R2 In this Ruling, U&M Mining Zambia Limited is referred to as the Applicant and Konkola Copper Mines Plc as the Respondent. Any contrary reference to Applicant and Respondent in the affidavits and respective arguments has been adjusted accordingly throughout this Ruling for ease of reference. This is the Ruling on the application to set aside the Registration Order. It is made pursuant to Section 19 (1) of the Arbitration Act No. 19 of 2000, Rule 23 (1) of the Arbitration (Court Proceedings) Rules of 2001 and Order 30 Rule 11 of the High Court Rules. By this application, the Respondent seeks to set aside the Order for registration of the award granted on 17th January, 2014 on the grounds that: 1. That the arbitration agreement in paragraph 4.12 of the Settlement Agreement made between the Judgment Debtor and the Judgment Creditor dated 26 th October, 2012 and which is the subject of the Award ("the October Settlement Agreement") is not valid under the Laws of Zambia by reason of it being non-compliant with the Authentication of Documents Act. The recognition and enforcement of the Partial Final Award ought to be refused in terms of Section 19(1) (a) (i) of the Arbitration Act ("the Act") and the registration Order consequently set aside. 2. That the October Settlement Agreement being not valid for use in Zambia, it will be offensive to public policy to recognize and enforce the Partial Final Award as that would result in the Judgment Creditor drawing benefit under the October Settlement Agreement pursuant to the said Partial Final Award contrary to the clear provisions of the law prohibiting the recognition and use of the unauthenticated documents in Zambia. The recognition and enforcement ought to be refused in terms of Section 19(1) (b) (ii) of the Act and the Registration Order set side. R3 3. That the recognition and enforcement ought to be refused in terms of Section 19( 1) (b) (ii) of the Act on the grounds that the proceedings giving rise to the Partial Final Award did not meet the substantial justice test as the Arbitral Tribunal awarded financial compensation on claims where the Adjudicator did not find the Respondent liable or culpable. Recognition and enforcement of an award made in the circumstances in which the Partial Final A ward was made would be in breach of public policy and the Registration Order ought consequently to be set aside. 4. That recognition and enforcement ought to be refused in terms of Section 19 (1) (b) (ii) of the Act as enforcement of the Partial Final award will result in unjust enrichment of the Judgment Creditor given that the Partial Final Award awards the Judgment Creditor the sums set out therein without there being any corresponding liability on the part of the Applicant; such unjust enrichment is likely to shock the conscience of the general public in Zambia on whose behalf the Government of the Republic of Zambia holds a 20% stake in the Judgment Debtor and is therefore contrary to public policy. 5. That the Arbitral Tribunal exceeded its jurisdiction when it awarded the Judgment Creditor the sums set out in the Partial Final Award following a finding on the preliminary issue by the Arbitral Tribunal that the October Settlement Agreement is valid and enforceable but without affording the parties an opportunity to be heard on the question of liability thereby effectively rendering a decision on a matter that was not before the Arbitral Tribunal for determination at the time of hearing the said preliminary issue. Therefore, that recognition and enforcement ought to be refused pursuant to Section 19 (1) (a) (iii) of the Act. R4 6. That the composition of the Arbitral Tribunal was not in accordance with the agreement of the Parties and as such that recognition and enforcement ought to be refused pursuant to Section 19 (1) (a) (iv) of the Act. The Registration Order ought, consequently, to be set aside. In support of the application, the Respondent filed an affidavit in support dated 6 th March, 2014 in which one Matyola Ndulo states that the Applicant and the Respondent entered into a contract dated 25 th April, 2007 for Waste Operations at Chingola Open Pits D and F (COPs D & F) (hereinafter called the "the Main Contract"). He stated that the contract was amended by the parties on five separate occasions being amendment No. 1 dated 30th April, 2008; amendment No. 2 dated 2 nd December, 2008, amendment No. 3 dated 15th June, 2009, amendment No. 4 dated 1st April, 2011 and amendment No. 5 dated 23 rd April, 2012. He stated further that the signing of amendment No. 5 was due to the fact that in April, 2012 the Applicant had raised certain claims against the Respondent in respect of the execution of the Contract and threatened to cease all mining work if its demands were not met. He stated that the Applicant and Respondent then entered into discussions culminating in an agreement to amend the Main Contract for the fifth time through contract amendment no. 5 dated 23 rd April, 2012 ("the April Settlement Agreement"). He stated that by virtue of this agreement the parties resolved to refer some of the claims made by the Respondent, including the alleged breaches of contract, to adjudication to a neutral Adjudicator mutually identified by the parties. He stated that the remaining claims raised by the Applicant relating to the execution of the contract were finally settled under the terms of the April Settlement Agreement. He went on to state that pursuant to the settlement agreement, the Respondent agreed to pay US$10,000,000 (Ten Million Dollars) to the Applicant in respect of any sums that would become due pursuant to the adjudication and that this payment would not constitute an admission of RS liability on the part of the Respondent. He stated that the outstanding claims were then referred to Arbitration in August 2012. He went on to state that m the course of these negotiations another extension was negotiated without waiting for the outcome of the adjudication process on account of impending financial loss because attempts, to identify an alternative viable Contractor to perform the substantial scope of the work, failed. He stated further that the Respondent was desirous of ensuring continued operations and was therefore constrained to approach the Applicant with intention to extend the contract to 30 th November, 2012. He stated that in addition, the Applicant indicated to the Respondent that it would not enter into negotiations for extension of the Contract unless the parties simultaneously entered into a Settlement Agreement. This agreement provided for the payment of amounts to the Applicant in case of an adverse order made by the Adjudicator against the Respondent in the adjudication process. He stated that representatives of the parties met in Johannesburg in the Republic of South Africa to discuss the extension of the Contract and possible settlement terms relating to the ongoing adjudication proceedings. The parties subsequently entered into a Memorandum of Understanding and another settlement agreement on 26 th October, 2012 ("the October Settlement Agreement"). This agreement was based on the premise that the Adjudicator would find the Respondent liable for the alleged breaches of contract and would award the Applicant monetary compensation. He stated further however that, on 30th October, 2012 the Adjudicator rendered his decision in which he found that there was no breach of Contract on the part of the Respondent. The Adjudicator further stated that the sum of $10,000,000 paid by the Respondent to the Applicant pursuant to the April Settlement Agreement was sufficient to cover any claims. R6 He stated that the Applicant then commenced arbitration proceedings in the London Court of International Arbitration to recover amounts included in the October Settlement Agreement and at the same time, also referred three other disputes to the LCIA arbitration, namely the disputes relating to the termination of the contract, the failure to pay monies under the Contract and monies due under the Haul road Contract. He stated that the Respondent counterclaimed on the basis that the October Settlement Agreement was entered into under misrepresentation and economic duress and it was therefore invalid and unenforceable in law and that the issue of validity or otherwise of the October Settlement Agreement was the only issue for determination as a preliminary issue. He stated further that the Respondent received the award on 8 th November, 2013 which ordered that the Respondent was liable to pay the Applicant the sums set out therein, in excess of $24million. He stated that the Arbitral Tribunal made the award in spite of there being no underlying breach of the Contract to justify such payment. He states that the Respondent objects to the quantum of this claim and alleges that that the operations of the Respondent and the country as a whole will suffer detrimental consequences if the Registration Order is not set aside. The Applicant filed an affidavit in opposition on 8 th April, 2014 sworn by one Marcelo Rodrigues Furtado de Mendonca in which he stated that the Applicant entered into four contracts with the Respondent bet.ween April 2007 and 15 December, 2011 and that a number of disputes have arisen between the parties, resulting in the signing of a settlement agreement on 23 rd April, 2012 ('the April 2012 Settlement Agreement'). He stated that this agreement specifically set out four items to be adjudicated following the Applicant's complaint that the Respondent had repeatedly breached its contractual obligations. R7 He stated that the Applicant's claim for US$57million was referred to adjudication and that, on an interim basis, the Respondent paid the Applicant the sum US $10 million on account of sums that might be found to be due following the Adjudication. He went on to state that negotiations between the parties led to a resolution of past differences between them and that this was reduced to a further Settlement Agreement on 26 th October, 2012, which agreement contained an arbitration agreement at clause 4.1.2. He stated that the terms of the Settlement Agreement covered a number of issues, including the payment of outstanding invoices which had not been paid by the Respondent and the payment of monies in respect of the matters referred to the Adjudicator. Instead of agreeing a specific sum to compromise the dispute referred to the Adjudicator, the parties agreed a specific formula which would vary the amount payable depending on what the Adjudicator decided. They agreed on a baseline of $21 million as the minimum payment to be paid to the Applicant in the event that the Adjudicator found that the Applicant was entitled to less than that sum, and a cap of $27 million in the event that the Adjudicator found that the Applicant was entitled to more than that sum. He stated that following the settlement agreement, the Adjudicator delivered his decision on 30th October, 2012 and found in favour of the Respondent on most of the issues in dispute except in relation to the Haul Road Maintenance Contract. He said the outcome of the Adjudicator's decision, was that the adjudicated amount was less than $21 million which meant that after deducting the $10 million paid to the Applicant, the Respondent was to pay an additional sum of $11 million by the 5 th January, 2013. He stated, however that the Respondent did not pay the agreed amounts and has been unwilling to perform its obligations and on 28 th January, 2013 the Applicant received two letters from the Respondent's lawyers, terminating the mining agreements and rescinding the October Settlement Agreement. RS He stated that following this the Applicant commenced arbitral proceedings against the Respondent under the LCIA Rules in accordance with Clause 4.1.2 and also referred three other disputes to the LCIA, whose contracts had provisions for a three person panel to hear the disputes. He stated that whilst the Settlement Agreement Arbitration provided for the appointment of a sole arbitrator, the parties expressly agreed to the appointment of the same panel to resolve the dispute in relation to the Settlement Agreement. He went on to state further that on 15th July, 2013 the Arbitral Tribunal ordered that the issue whether the settlement agreement was valid or enforceable should be determined as a preliminary issue. He stated further that the parties subsequently filed witness statements, expert reports and skeleton arguments and the matter was heard. The Arbitral Tribunal delivered an Award on 7 th November, 2013 to the effect that the October Settlement Agreement was valid and binding and that there was no misrepresentation by the Applicant. He stated that the Arbitral Tribunal ordered the payment of monies due under the October Settlement Agreement but that the Respondent has not paid any of the sums ordered under the award. This prompted the Applicant to apply for registration of the Award in Zambia, which Registration Order was granted on 17th January, 2014. The matter was heard before me on the 30 th June, 2014. Counsel for the Applicant Mr. C. Chuula, Mr. Sampa, Mr. Petersen and Mr. Banda and Counsel for the Respondent, Mr. B. Malambo and Mr. C. S Sianondo were both in attendance. The parties relied on their submissions. In support of the application, Counsel for the Respondent relied on the Skeleton Arguments of 6 th March, 2014 in which he argued in ground one that the Arbitral Award of 7 th November, 2013 was issued following the hearing of a preliminary issue raised by the Respondent in relation to the R9 validity of the October Settlement Agreement. He argued that the October Settlement Agreement clearly subjected the agreement to Zambian Law and that it was incumbent upon the Arbitral Tribunal to apply Zambian law in their assessment. He argued that the Arbitral Tribunal deciding the validity of the October Settlement Agreement without reference to Section 3 (d) of the Authentication of Documents Act ("The Authentication Act") was a fatal legal error as there was undisputed evidence that the October Settlement Agreement was signed in Johannesburg, South Africa, which is a foreign place within the meaning of Section 3(d) of the Act. He referred to the case of Lumus Agricultural Services Company Limited v Gwembe Valley Development Company Limited (in receivership) where the Supreme Court held that if a document is executed outside Zambia, it must be properly authenticated for it to be used in Zambia. On this basis, Counsel argued that the October Settlement Agreement not having been authenticated in accordance with Section 3(d) of the Authentication Act was invalid and in terms of the provisions of Section 19 (1) (a) (i) of the Act, the Arbitration Agreement is not valid under the law to which the parties have subjected it. Counsel therefore submitted that the recognition or enforcement of the Award must be refused and the registration Order set aside. In relation to ground two, Counsel for the Respondent submitted that allowing the recognition and enforcement of the Award would tend to injure the public at large particularly given the value at stake in this matter and the strategic importance of the Respondent to the Zambian economy. Counsel cited the case of Holman v Johnson on public policy considerations, where Lord Mansfield stated that, 'No Court will lend its aid to a man who founds his cause of action, upon an immoral or illegal act'. RlO In concluding grounds 1 and 2, he stated that if this Court allowed the continued subsistence of the Registration Order, it would be lending its aid to the Applicant to transgress the provisions of the Authentication Act. On grounds 3 and 4, Counsel argued that the financial compensation awarded by the Arbitral Tribunal of US$24 million is not commensurate with the findings of the Adjudicator. He contended that the Arbitral Tribunal reached its decision summarily upon consideration of a preliminary issue without interrogating the veracity of the Adjudicator's decision and therefore did not do substantial justice to the case. On the basis of the same, he argued that there is no basis in fact or law to allow the enforcement of the Award which will result in the Respondent being unjustly enriched and that this would be contrary to public policy. Under ground 5, Counsel stated that the mandate of the Arbitral Tribunal was to decide whether the October Settlement Agreement was valid and enforceable and that evidence led by both parties was restricted to this question alone. However, Counsel stated that after finding the October Settlement Agreement valid, the Tribunal proceeded to award monetary compensation on the claims of the Applicant without hearing any evidence in support or rebuttal. Counsel referred to Section 19 (1) (a) (iii) of the Arbitration Act, and argued that by awarding a monetary quantum, the Tribunal went beyond the scope of the issues that the parties submitted as a preliminary issue. Finally, on ground 6, Counsel contended that clause 4.1.2 of the October settlement Agreement provided for a sole Arbitrator to hear the matter. However, the Arbitral Tribunal constituted itself as a three member panel in breach of the agreement of the parties. Counsel relied on Section 19 (1) (a) Rll (iv) of the Arbitration Act as authority for the Court to set aside the Registration Order on this ground. In conclusion, Counsel argued that the Respondent had established sufficient grounds upon which to set aside the Registration Order and prayed that the application be granted and that the Applicant be condemned to the costs herein. In opposing the application, Counsel for the Applicant relied on the Skeleton Arguments filed on 15th April, 2014, 2 nd May, 2014 and 25 th June, 2014 respectively. Counsel argued that the application was misconceived as the Applicant had complied with all requirements under Zambian law seeking the recognition and enforcement of the Award. He stated that there were no grounds upon which the Respondent could validly challenge the registration of the Award and that the Respondent was merely attempting to avoid paying amounts which had been found due and owing to the Applicant. In relation to ground one, Counsel for the Applicant argued that the Respondent's attempt to rely on the Authentication of Documents Act is misguided as the Authentication Act does not apply to the current situation as Section 18(2) of the Arbitration Act makes no requirement for the authentication of a document in the underlying arbitration. He stated that there was no requirement to produce a duly authenticated version of the Arbitration Agreement or the Settlement Agreement in this case. Counsel argued that the purpose of the Arbitration Act as shown in its preamble is 'to provide for the recognition and enforcement of foreign arbitral awards under the new York Convention.' He states therefore that this Act exists to give effect to Zambia's obligation as a signatory to the New York Convention. He argued that by Zambia's signature to the New York Convention, any requirements under the general regime of the R12 Authentication of Documents Act 1914 have been superseded by the Arbitration Act 2000 with its own special regime. Counsel argued that an agreement executed outside Zambia and not authenticated is still valid as between the parties but ineffective as against other persons. Counsel argued that, the Supreme Court in the Lumus case held that even an instrument which is not authenticated under the Authentication of Documents Act 1914 remains valid between the parties and is therefore not open to the Respondent to seek to claim otherwise. Counsel referred to the case of Steak Ranch Limited v Steak Ranches International in which my brother Mutuna, N. J considered the effect of non authentication of a document in terms of its use before the Courts in Zambia and stated as follows: " ... Further, in my considered view, where the party challenging a document executed outside Zambia is a party to the document and he does not, as is the case in this matter, dispute that he executed the document or the validity of the signatures thereon, there is no need for such a document to be authenticated in accordance with the [Authentication of Documents] Act to make it valid for use in Zambia ... In making the foregoing finding, I have also revisited the other holding by the Court in the Lumus case which stated that: "We agree with the decision that an instrument which is not attested or registered is valid between the parties but ineffective against other persons ... " This holding confirms my finding that the agreement is valid between the two parties." R13 Counsel submitted that the above decision disposes of the Respondent's argument based on the Authentication Act. Counsel then moved on to the arguments under Section 19 (l)(a)(i) and argued that arbitration agreement is distinct from the Settlement agreement which flows from the separability of the Arbitration Agreement as recognized in Articles 7 and 16 of the UNCITRAL Model Law. He stated that for these reasons the Arbitration Agreement is a valid agreement and the Applicant has no grounds for claiming otherwise. With regard to ground 2 on the Respondent's argument on public policy, Counsel for the Applicant argued that a narrower concept of public policy should apply to recognition of foreign awards than is applied to domestic awards. Counsel argued that the United Nations implemented the New York Convention as a legal tool to foment international commerce and investment by assuring a reliable and efficient dispute resolution mechanism between parties from different jurisdictions. He stated that numerous jurisdictions have established a harmonized body of case law in respect to Article V (2)(b) of the New York Convention and that this case law demonstrates that the public policy should be construed narrowly, and taken into consideration by a Court only in exceptional circumstances. Counsel also cited the Korean Supreme Court where it was held that even if the matter had exceeded the time Limit under the Limitation Act, it could still be recognized and enforced because its enforcement does not amount to a breach of public policy in the narrow interpretation favoured by the New York Convention. R14 Counsel argued that the best view is that a Court may refuse enforcement only if the award is against international public policy. He cited the Luxembourg Court which decided as follows: ' ... The New York Convention does not provide for any control on the manner in which the arbitrators decide on the merits, with as the only reservations, the respect of international public policy. Even if blatant, a mistake of fact or law, if made by the arbitral tribunal, is not a ground for refusal of enforcement of the tribunal award.' Counsel went on to cite more authorities from Portugal, Spain, Colombia, Austria which all state that principles of domestic public policy should not obstruct the enforcement of a foreign arbitral award under the auspices of the Convention. Counsel argued that the Zambia Arbitration Act 2000 supports the interpretation given by the decisions above. He stated that it is important to note that Article 19 of the Act is nearly a copy and paste of both Article V of the Convention and Article 36 (b) (ii) of the UNCITRAL Model Law on International Commercial Arbitration. He stated that the Act differs from both statutes on a particular point: the Convention, in Article V (2) (b) provides: ' ... the recognition or enforcement of the award would be contrary to the public policy of the country'. On the other hand, the UNCITRAL Model Law, Article 36(b)(ii) provides: 'the recognition or enforcement of the award would be contrary to the public policy of this state.' Under the Arbitration Act 2000, Article 19(b) (ii) provides: "the recognition or enforcement of the award would be contrary to the public policy'' he stated that the drafters of the Act did not use the terminologies: public policy of this state or public policy of Zambia". He argued that this is RlS a strong indication that Zambian Courts must apply the principle of international public policy in enforcement proceedings, instead of relying on any purely domestic provision to deny effect to a supranational legal treaty i.e. the Convention. He went on to state that the Convention expressly provides that, if the national law is more beneficial to enforcement of foreign awards than the Convention itself, the Court of enforcement should displace the application of the Convention and rely on the more beneficial provisions. Counsel went on to cite more authorities from Switzerland and Germany to the effect that even if a finding is manifestly incorrect according to the law of a particular country, this does not suffice for setting aside an arbitral judgment. Counsel argued that no court should rely on a specific provision of its domestic law to refuse enforcement of a foreign arbitral award. He stated that although, the Respondent alleges non-compliance with a provision of the Zambian Authentication Act, such formalistic and purely domestic requirement does not fall within the definition of international public policy. Counsel argues in this regard that this Court therefore has the discretion to enforce the foreign award in the Applicant's favour. With regard to ground 3, where the Respondent argued that the Award did not meet the substantial justice test as the Arbitral Tribunal awarded financial compensation on claims where the Adjudicator did not find the Respondent liable, Counsel argued that the parties had, prior to the Adjudicator rendering a decision, agreed terms of settlement of their disputes involving a monetary formula dependent on the decision of the Adjudicator. He argued that the Tribunal had found no basis for the Respondent seeking to resile from a freely negotiated settlement agreement. He stated that based on the finding that the Settlement Agreement was valid and the specific monetary compensation formula approved by the parties in R16 the Settlement Agreement, the Tribunal did not need to determine the underlying merits of the original dispute between the parties. In relation to ground 4, Counsel argued that for the reasons stated above, the Respondent's claim for unjust enrichment against the Applicant are unfounded. Counsel argued in relation to ground 5 that the suggestion that the Tribunal exceeded its jurisdiction by awarding monetary compensation in the Award without affording the Respondent the opportunity to be heard on such matters is entirely wrong. Counsel stated that both parties served witness statements dealing with the circumstances relating to the Settlement Agreement and that following the same, the trial of the preliminary issue on whether the Settlement Agreement was binding or not took place lasting 5 days. He indicated that at the trial both parties submitted written opening arguments and tendered their witnesses including expert evidence. With regard to ground 6 in which the Respondent argued that the composition of the tribunal was not in accordance with the agreement of the parties, Counsel for the Applicant argued that although the parties had in the Settlement Agreement agreed to refer disputes to a sole arbitrator, the parties subsequently consented to refer this dispute to the three-person tribunal, they had appointed to determine other disputes. Counsel restated that the Respondent consented to and participated in the arbitral process at every step of the way and raised no objections to jurisdiction or subject matter. Counsel argued further on the issue of the composition of the Arbitral Tribunal that according to English law, particularly Section 31(1) of the English Arbitration Act 1996, any objection to an Arbitral Tribunal lacking substantive jurisdiction must be raised not later than the first step in the proceedings contesting merits. He submitted that The LCIA Rules also state that a plea that the Tribunal does not have jurisdiction shall be treated R17 as having been irrevocably waived unless it is raised not later than the statement of Defence. In this regard, he argued that the Applicant waived the right to challenge the appointment of arbitrators and the arbitral process and should thus be estopped from contending the contrary. In addition to the above, Counsel for the Applicant went on to argue that no appeal or challenge was made by the Respondent to the validity of the First Award in the English Courts under the English Arbitration Act 1996. He stated that the failure of the Respondent to challenge enforcement in the English Commercial Court means that the Award is now binding as judgment. In reply, the Respondent argued in relation to ground one on the Authentication of Documents Act that it is incorrect to insinuate that Zambia's signing of the New York Convention overrides and or supersedes the Authentication of Documents Act. Counsel cited Halsbury's Laws of England on the rule of implied repeal as follows: 'that one provision repeals another by implication if, but only if, it is so inconsistent with or repugnant to that other that the two are incapable of standing together. If it is reasonably possible so to construe the provision as to give effect to both that must be done' He stated that a Statute repeals another by implication if it is so inconsistent with and repugnant to the other incapable of the two standing together and that there is absolutely no inconsistency between the Arbitration Act and the Authentication of Documents Act and the Applicant's argument has no basis in law. R18 Counsel pointed out that as the parties had expressly chosen the lex loci contractus as Zambian law, the Tribunal ought to have satisfied itself on the legal validity of the Settlement Agreement under Zambian law or been aware the terms of Article 36(1)9a)(i) of the UNCITRAL Model Law on International Commercial Arbitration. He restated that the Settlement Agreement was not valid and that this Court ought to refuse to recognize or enforce the Arbitral Award in issue. With regard to the issue of the legality and severability or separability of the Arbitration clause in a contract that may itself be invalid, Counsel submitted that it is trite law that an Arbitration agreement is a separate agreement in itself and is capable of separation from the contract it is part of. He cited the case of Harbour Assurance Company (UK) Limited v Kansa general Insurance Company Limited which holds that: (i) The arbitration clause may be valid whilst the underlying contract may be invalid, void or illegal. (ii) The Arbitrator has the right to decide the legality or other wise of the underlying contract. He argued that in that case, the Court held also that: 'As to illegality, the question whether the particular form of illegality will if proved, render void both the contract and the arbitration clause must depend upon the nature of the illegality and as Hofman LJ pointed out in the course of argument, when it is said to consist of acts prohibited by statute, upon construction of the relevant provisions of the statute.' He submitted that although severability is possible, it depends on the nature of illegality faced by the underlying contract. He stated that in this case the R19 agreement is faced with a statute based prohibition and therefore severance of the Arbitration Agreement is not possible. He argued that the agreement suffers the same consequence as the underlying agreement itself for lack of authentication. He cited the case of David Taylor Limited v Barnett in which Lord Denning stated: 'There is not one law for arbitrators and another for the courts, but one law for all. If a contract is illegal, arbitrators must decline to award on it just as the court would do.' In concluding Counsel stated that overall the tenor of the Applicant's argument seeks to elevate the Arbitration Act above all other laws. He states that this notion that the Arbitration Act is a mode of resolving disputes and has overriding characteristics over other pieces of legislation is a misconception. He argued that the Arbitration Act itself recognizes the validity and applicability of such Acts as the Authentication of Documents Act, when it provides for illegality as a ground upon which Zambian Courts may refuse to recognize and enforce foreign Arbitral awards. He urged the Court to grant the relief the Respondent have prayed for. I have considered the affidavit evidence and arguments by Counsel. I am grateful to the parties for their submissions which have assisted the Court in arriving at this decision. As a start before addressing the issues before me, I wish to comment on the manner the Respondent brought this application before this Court. The background of this case has already been outlined in the earlier part of my judgment. The Respondent being desirous to set aside the Order for R20 registration of the award granted under this action proceeded to file a fresh action by way of Originating Summons under cause number 2014/HP/ARB/0004 instead of bringing the application by regular Summons under the earlier action. This procedure was irregular as it resulted in duplication of the actions in the Court over the same matter. I thus ordered a consolidation of the two actions to avoid multiplicity of actions over the same subject matter. Another observation is that the Respondent brought this application in accordance with the provisions of Section 19 (1) of the Arbitration Act, Rule 23 (1) of the Arbitration (Court Proceedings) Rules of 2001 and Order 30 rule 11 of the High Court Rules. Section 19 ( 1) of the Arbitration Act refers to the grounds for refusing recognition and enforcement of awards, where as Rule 23 ( 1) of the Arbitration (Court Proceedings) Rules of 2001 refers to the procedure for applying to set aside an award. Order 30 Rule 11 of the High Court Rules on the other hand refers to the business that may be disposed of before a Judge in chambers. It also authorizes a Court to dispose of such other matters in chambers as the Judge may deem fit. None of the above arbitral provisions relate to the setting aside of registration of an award, nor do they permit a party to submit an application to set aside the order for registration of an award. The applicable regulations under which an application to set aside registration of an award may be brought are Rules 17 (2) and 19 (2) (e) of the Arbitration (Court Proceedings) Rules which authorizes a judgment debtor to apply, within a period of ninety days from the date of receipt of the award, to set aside registration of the award on the grounds specified in Section 17 of the Arbitration Act. R21 In addition, throughout the application, the Respondent has relied on the provisions of Section 19 of the Arbitration Act as the ground upon which it relies to set aside registration of the award. The provisions of Rule 19 (2) (e) of the Arbitration (Court Proceedings) Rules of 2001 are unambiguous and authorize an application to set aside registration of an award only on the grounds specified in Section 17 of the Arbitration Act. From the foregoing, it is clear that an application to set aside registration of an award can only be brought on the grounds specified in Section 17 of the Arbitration Act and by relying on the provisions of Section 19 of the said Act the Respondent's application is irregular. That notwithstanding, I will consider the application on the issues raised. The Respondent contends that the arbitration agreement comprised in paragraph 4.1.2 of the Settlement Agreement dated 26 th October, which is the subject of the Award is not valid under the Laws of Zambia by reason of it being non-compliant with the Authentication of Documents Act. The Respondent argues therefore that the Order for registration of the partial award made on the 17th January, 2014 should be set aside in accordance with Section 19 (1) (a) (i) of the Arbitration Act. Arising from the above, the first issue for consideration is that of the validity of the Settlement Agreement of 26 th October, 2012. As earlier stated the evidence is that the parties entered into a Settlement Agreement in Johannesburg, South Africa on the 26 th October, 2012 in order to compromise certain disputes. Although executed in South Africa, it was not notarized. The terms of the agreement were that it would be governed and construed m accordance with the Laws of Zambia (Clause 4.11) and that in the event of a dispute arising out of this agreement the parties would resort to arbitration. Clause 4.12 provides thus: R22 'Any dispute, controversy or claim arising out of or in connection with this Agreement, including any question regarding its existence, validity, performance, breach, termination, shall be referred to and finally resolved by arbitration, by a sole arbitrator under the Arbitration Rules of the LCIA ("the Rules") which are incorporated by reference into this clause. The seat or legal place of arbitration shall be London, England. The language to be used in the arbitral proceedings shall be English. Judgment or any award may be entered in any court having jurisdiction. ' A dispute having arisen, the parties referred the same to Arbitration and an award was rendered, which is the subject of this application as the Respondent argues that the Settlement Agreement is invalid as it contravenes the provisions of Section 3 (d) (i) of the Authentication of Documents Act and that therefore the recognition or enforcement of the Award must be refused in accordance with Section 19 {1) (a) (i) of the Act. The Respondent seeks to set aside the Order for registration of the award. The pertinent issue for consideration is whether the Settlement Agreement is invalid on account of it not being executed in accordance with Section 3(d) (i) of the Authentication of Documents Act. Section 3 (d) (i) of the Act provides that: '3. Any document executed outside Zambia shall be deemed to be sufficiently authenticated for the purpose of use in Zambia if- (d) In the case of a document executed in any place outside R23 her Brittan c majesty's dominions (hereinafter referred to as a ''foreign place") it be duly authenticated by the signature and seal of office. (i) If a British Consul-General, Consul or Vice- Consul in such foreign place; or (ii) If any Secretary of State, Under-Secretary of State, Governor, Colonial Secretary, or of any other person in such foreign place who shall be shown by the certificate of a consul or vice-consul of such foreign places in Zambia to be duly authorized under the law of such foreign place to authenticate such document.' The effect of the foregoing prov1s10n 1s that a document executed outside Zambia needs to be notarized for it to be valid for use in Zambia. This was also the holding in the Lumus case referred to earlier. However, for a Court to invalidate an agreement, a party must provide satisfactory grounds to justify this. It is not sufficient to contend that an agreement is invalid purely on account of it not being authenticated in accordance with the Authentication of Documents Act as the Supreme Court has held in the Lumus case that, 'An instrument which is not authenticated is valid between the parties but ineffective against third parties. ' From this holding, it is clear that the Supreme Court of Zambia has recognized the fact that contracts made between two parties cannot be invalidated by reason only of the fact that the agreement has not been authenticated in accordance with Section 3 of the Act. This shows that the Court will uphold the sanctity of a contract as binding as between the parties and will .not allow a party to a contract to resile from its obligations R24 on the basis of a technicality with regard to the form for as long as the substance of the contract remains unchanged. The Respondent being unable to demonstrate that the said Settlement Agreement is invalid, I am of the considered view that the Settlement Agreement of 26 th October, 2012 is valid as between the Applicant and the Respondent and I so order. I wish to mention that this issue of the validity of the Settlement Agreement was not previously raised by the Respondent when the matter was heard before the Arbitral Tribunal in the United Kingdom and hence appears to be an afterthought on the part of the Respondent as a way to evade its contractual obligations under the Settlement Agreement. The learned authors of Halsbury's Laws of England in Volume 9 at page 151 have echoed the opinion that commercial agreements between parties must be upheld when they stated that, 'Although the Courts will not make a contract for the parties where none exists, they will seek to uphold bargains made between businessmen wherever possible ... If satisfied that there was an ascertainable and determinate intention to contract, the Courts will strive to give effect to that intention, looking at the substance and not at the mere form .. ' Also Sir George Jessel stated in the case of Printing and Numerical Registering Company v Simpson, cited at page 43 in the Selly Yoat Asset Management Limited v Remotesite Solutions Zambia Limited case: 'If there is one thing more than another which public policy requires it is that men of full age and competent understanding shall have the utmost liberty in contracting and that their R25 contract when entered into freely and voluntarily shall be enforced by the Courts of justice. ' The foregoing authorities and the holding in the Lumus case, support my finding that the Settlement agreement of 26 th October 2013 is binding on the parties and should be enforced. These authorities also emphasize the need for the Courts to give effect to the intention of the parties and uphold agreements made by businessmen when entered into freely and voluntarily. The parties herein both being participants of the Settlement Agreement, and not having disputed executing the Settlement Agreement of 26 th October, 2013, are therefore bound by the terms of the agreement. The Respondent's argument under this ground therefore fails. The second ground of contention by the Respondent is that in accordance with Section 19(1) (b)(ii) of the Arbitration Act, it would be contrary to public policy to recognize and enforce the award as the Settlement Agreement, the subject of the award, is not valid in Zambia. The provisions of the said Act state that an award cannot be recognised if it conflicts with public policy. Black's Law Dictionary defines public policy as: 'Broadly, principles and standards regarded by legislature or by the Courts as being of fundamental concern to the state and the whole society. More narrowly, the principle that a person should not be allowed to do anything that would tend to injure the public at large.' The learned authors of Halsbury's Laws of England state in Volume 9 at page 266 at paragraph 392 on public policy that any agreement which tends to be injurious to the public or against the public good is invalidated on the R26 ground of public policy The questio~ whether a particular agreement is contrary to public policy is a question of law to be determined. It has been indicated that new heads of public policy will not be invented by the Courts for the following reasons: (1) judges are more to be trusted as interpreters of the law than as expounders of public policy; and (2) it is important that the doctrine should only be invoked in clear cases in which the harm to the public is substantially incontestable. The authors go on to state at paragraph 393 that some principle classes of agreements which offend public policy as such are agreements which tend to corruptly influence any public officer or causing such officer to neglect his duty, or where a person exercises his position and influence to procure a benefit from the government. The agreements that have been considered to be contrary to public policy are generally illegal agreements and not merely void contracts. The question for my consideration therefore is whether the Settlement Agreement of 26th October 2013 and the award offend public policy in Zambia. Public Policy has been defined as a set of principles and standards of fundamental concern to a State. The Respondent states that the Settlement Agreement is in conflict with public policy because it is was not properly executed in accordance with the Authentication of Documents Act. Can the use of an unauthenticated contract made between two parties be said to offend public policy merely on account of non-authentication or on account of its value? I cannot comprehend how the use of the agreement entered into between two contracting parties herein can injure the public at large merely on account of it not being properly authenticated. It has been said that the Courts should only invoke the doctrine in clear cases in which the harm to the public is substantially irrefutable. To equate the use of an unauthenticated document with that of an illegal or immoral contract, and to assert that the use thereof would tend to injure the public at large seems to me somewhat as an exaggeration. In addition, suggesting that an agreement offends public policy on account of its value is to me implausible. R27 In any event, even where an award seems to conflict with the domestic law, the New York Convention on the recognition and enforcement of foreign awards, which was adopted by the United Nations Conference on International Commercial Arbitration m 1958, favours a narrower interpretation of the public policy. This is in order to foment international commerce and investment by assuring the recognition of foreign awards amongst member states. In this light, the Supreme Court of Korea held in the case of Korea No. 3 Adviso N. V. v Korea Overseas Construction Corp. that the fact that the Statute of Limitations had been exceeded under the mandatory provisions of Korean Law did not necessarily render the enforcement of this award in violation of the public order of Korea. From the foregoing, I am satisfied that the Respondent has failed to demonstrate that the Settlement Agreement and/ or the award or recognition and enforcement thereof will offend public policy. I find therefore that there is nothing in the Settlement Agreement or subsequent award that conflicts with public policy. In fact, public policy compels the Court to give effect to a contract that has been entered into freely and willingly by the parties. In the Selly Yoat case, it was held that, 'if there is one thing more than another which public policy requires is that men of full age and of competent understanding shall have the utmost liberty in contracting and that there contract when entered into freely and voluntarily shall be enforced by the Courts of justice.' This ground therefore fails. I now turn to address the third ground. The Respondent argued that the recognition and enforcement ought to be refused in terms of Section 19(1) (b) (ii) of the Arbitration Act on the grounds that the proceedings giving rise to the Award did not meet the R28 substantial justice test as the Arbitral Tribunal awarded financial compensation on claims where the Adjudicator did not find the Applicant liable or culpable. The Respondent argued that the compensation of the Arbitrator was not commensurate with the findings of the Adjudicator or indeed consistent with the duty of the Arbitral Tribunal to do substantial justice. The Respondent argued that the Arbitral Tribunal reached its decision summarily upon consideration of a preliminary issue without interrogating the veracity or otherwise of the Adjudicator's decision. In order to address this ground, I will briefly restate the background leading up to this matter. Following a number of disputes that arose between the parties, the Applicant referred the disputes to Adjudication before Mr. Allen Joseph Turner, whose decision the parties agreed would not be final and binding and that there were entitled to refer the dispute to LCIA Arbitration after the Adjudicator had made his decision. However, before the Adjudicator rendered his decision, the parties met over a two day period to seek to resolve their differences. The parties then entered into a Settlement Agreement which made provision for the payment of monies in respect of the matters referred to the Adjudicator. At that time, the parties were unable to agree to a specific sum to compromise the dispute and instead agreed to a specific formula which would vary the amount payable depending on what the Adjudicator decided. This formula provided for a base line of $21 million as the minimum amount payable by the Respondent to the Applicant in the event that the Adjudicator found that the Applicant was entitled to less than that sum and a maximum of $27 million in the event that the Adjudicator found that the Applicant was entitled to more than that sum. The settlement amount was to be paid on the sixtieth day after the Adjudicators decision. The Adjudicator delivered his decision on the 30th October, 2012 and found against the Applicant on most of the issues in dispute. The Respondent did not pay the settlement amount but instead sought to rescind the Settlement R29 Agreement. By virtue of the Settlement Agreement, the parties had agreed to refer all disputes arising out of the agreement to arbitration in accordance with the LCIA Arbitration Rules. The Applicant then commenced arbitral proceedings against the Respondent in accordance with Clause 4.12 thereof seeking to enforce the terms of the Agreement. The parties consented to refer this dispute to a panel of three arbitrators that was already constituted to arbitrate other disputes between them. The Arbitral Tribunal ordered that the issue of whether the Settlement Agreement was valid and enforceable should be determined as a preliminary issue before it. The tribunal fixed a date for hearing for five days and two further days were held in reserve. The tribunal also gave directions for the disclosure of documents and the service of witness statements. The parties filed witness statements and expert reports. A hearing was conducted between 30 September 2013 and 4 th October 2014 at the International Dispute Resolution Centre in London. All the witness who provided witness statements gave evidence and Counsel for both parties gave opening statements and closing arguments. During the closing submissions the Respondent accepted that if the Settlement Agreement was found to be valid and binding by the tribunal then it would have no defence to a claim for payment of the amounts due from it to the Applicant under the Settlement Agreement. At the end of the hearing, the tribunal rendered an Award which was delivered on the 18th December, 2013. The Award dealt with amongst other things a counterclaim by the Respondent for rescission of the Settlement Agreement on the ground of misrepresentation. The tribunal dismissed the Respondent's claim that the Settlement Agreement should be rescinded for misrepresentation and found that the Settlement Agreement was valid and binding. The tribunal then ordered the Respondent to pay sums due to the Applicant under the Settlement Agreement. R30 I now turn to specifically address the Respondent's contentions in ground 3. The first point is that the Arbitral Tribunal awarded financial compensation on claims where the Adjudicator did not find the Respondent liable or culpable and the compensation was not commensurate with the finding of the Adjudicator. The assertion is that the Tribunal awarded financial compensation on claims that the Adjudicator had previously exonerated ·the Respondent. The further assertion is that the award of the Tribunal is not commensurate with the findings of the Adjudicator. The evidence shows that the issue before the Arbitral Tribunal related to the validity and enforceability of the Settlement Agreement by which agreement the parties had compromised terms of settlement based on the Adjudicators findings. The Tribunal was not mandated to review the decision of the Adjudicator. Accordingly, in spite of the fact that the Adjudicator had not found the Respondent liable in many claims, the parties had prior to the decision of the Adjudicator entered into a Settlement Agreement compromising the disputes before the Adjudicator. The only effect that the Adjudicator's decision had on the Settlement Agreement is that the Applicant would be entitled to the minimum amount agreed to under the Settlement Agreement. Therefore, the Respondent's argument that the Arbitral Tribunal awarded financial compensation where the Adjudicator had not found the Respondent liable is wholly misleading as the Respondent is fully aware of the Tribunal's mandate. The second issue contended by the Respondent is that the Arbitral Tribunal reached its decision summarily upon consideration of a preliminary issue without interrogating the veracity or otherwise of the Adjudicators decision. The evidence shows that the parties had agreed that the Arbitral Tribunal could consider the issue of whether the Settlement Agreement was valid and enforceable as a preliminary issue and that the Respondent accepted that if the Settlement Agreement was found to be valid and binding then it would have no defence to a claim for payment of the amounts due from it to the R31 Applicant under the Agreement. From this evidence, it is clear that the Tribunal dealt with the substantive issues in the arbitration specifically in relation to the validity of the Settlement Agreement. It is also clear that the Respondent took part in the arbitration process to the extent that it provided witnesses and so forth. The Respondent's arguments therefore that the Arbitral Tribunal dealt with the matter summarily as a preliminary issue and did not examine the Adjudication decision is mistaken and I dismiss this ground accordingly. The Respondent's fourth ground is that recognition and enforcement of the award will result in unjust enrichment of the Applicant as the Award grants the Applicant the sums set out in the Settlement Agreement without there being any corresponding liability on the part of the Respondent. Unjust enrichment is defined in Black's Law Dictionary at page 1573 as, 'A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense.' Further, in the case of Kleinwort Benson Ltd v Lincoln City Council, unjust enrichment was also defined as: 'the essence of the principle is that it is unjust for a person to retain a benefit which he has received at the expense of another, without any legal ground to justify its retention, which that other person did not intend him to receive ... the approach of the common law is to look for an unjust factor, something which makes it unjust to allow the payee to retain the benefit. The common law accepts that the payee is enriched where the sum R32 was not due to be paid to him but it requires the payer to show that this was unjust.' The foregoing authorities indicate that unjust enrichment is a benefit that one obtains from another which is not legally justifiable. The evidence in this case before me shows that the parties entered into a legally binding contract and which agreement was upheld as valid by an Arbitral Tribunal referred to by the parties. The upholding of contractual obligations of parties in this case cannot be said to amount to unjust enrichment as the evidence clearly shows that the Respondent agreed to pay the sums of money would due and owing. The Respondent has therefore failed to satisfy me that there is any unjust enrichment and this ground therefore fails. I now turn to address the fifth ground. The Respondent contended that the Arbitral Tribunal exceeded its jurisdiction when it awarded the Respondent the sums set out in the Award without affording the parties an opportunity to be heard on the question of liability. The Respondent further contended that the Arbitral Tribunal rendered a decision on a matter that was not before it for determination at the time of hearing the said preliminary issue. The evidence before me is that the Respondent fully participated in the week long hearing of the matter on the merits and prior to that they were given the opportunity to present all their witness statements and expert reports. There is no indication that the Respondent intended to present more evidence to the Arbitral Tribunal for which it was not afforded an opportunity. The record shows that the Arbitral Tribunal did give the parties an opportunity to present their cases and that it rendered a decision on the validity of the Settlement Agreement of October 2012 as the question of amounts due and owing under the Settlement Agreement was undeniable. R33 From the foregoing, I find that the Respondent has not demonstrated that the Arbitral Tribunal exceeded its jurisdiction when it awarded the sums set out in the Award. This claim therefore fails. On the sixth claim, the Respondent argued that the number of arbitrators at the Arbitral Tribunal was in breach of clause 4.12 of the Settlement Agreement as the parties agreed that any dispute would be referred to a sole arbitrator. Clause 4.12 of the Settlement Agreement is reproduced in the earlier part of this judgment. It is clear from the arbitration clause in the Settlement Agreement that the parties did agree to refer any disputes arismg out of that Agreement to the decision of a sole arbitrator and that after the dispute arose between the parties, the Applicant did refer the dispute to arbitration before a panel of three arbitrators, which panel where already constituted to determine other disputes between them. There is no evidence before me to suggest that the Respondent objected to the referral of the matter to a panel of three arbitrators. Article 4 of the UNCITRAL Model Law provides that: 'A party who knows that any provision of Law from which the parties may derogate or any requirement under the arbitration agreement has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time-limit is provided therefore, within such period of time, shall be deemed to have waived his right to object' R34 In the case of Radio Publicity v Compagnie Luxembourgeoise, it was held, 'any non-compliance with terms stated in the agreement had been waived by the parties coming together and being at one as to the constitution of the arbitration tribunal. ' It is clear from the foregoing that where a party proceeds with the arbitration without stating his objection to any non-compliance thereof is deemed to have waived his right to object. In this case, the Arbitral Tribunal went ahead to render an award on the basis that the parties accepted the composition of the Arbitral Tribunal. I find that the Respondent not having objected to the composition of the Arbitral Tribunal at the time of the hearing of the matter before the tribunal did waive his right to object and cannot now claim that the composition of the tribunal was in breach of the arbitration clause. This ground therefore fails. From the foregoing, I find that the Respondent's application is unsuccessful, I dismiss it forthwith. I accordingly uphold the ORDER for registration of the award of 17th January, 2014. The costs of this application a.re to be borne by the Respondent, to be taxed in default of agreement. Leave to appeal is granted. Delivered at Lusaka this 16th day of March, 2015 R35