The High Court has ended a protracted deadlock between Powertel Communications (Pvt) Ltd and Dandemutande Investments (Pvt) Ltd by ordering the appointment of a sole arbitrator to preside over their long-running contractual dispute, after nearly seven years of failed arbitration efforts.
In a ruling delivered by Justice Maxwell Takuva, the court criticised Dandemutande for obstructing the arbitration process and held that Powertel had met the legal requirements to invoke the High Court's intervention under Article 11(4) of the Arbitration Act [Chapter 7:15].
"The applicant still yearns for redress and their agreement provides that unless the parties agree to the jurisdiction of the courts, their dispute shall be resolved through the arbitration process. However, without agreeing on the appointment of the arbitrator, the dispute remains unresolved," noted the judge.
The dispute arose from a 2010 Internet Capacity Purchase Agreement between the two telecoms companies.
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Clause 27 of the agreement required that all disputes be referred to arbitration, unless the parties consented to the jurisdiction of Zimbabwean courts.
A rift emerged in 2017 after Dandemutande terminated the agreement and allegedly failed to pay a debt of over US$2.29 million claimed by Powertel.
The parties initially agreed to appoint retired Justice Vernanda Ziyambi as arbitrator in 2018, but the arbitration never materialised because Dandemutande, the claimant at the time, failed to file its claim.
Justice Ziyambi later withdrew from the process due to unavailability.
In 2023, Powertel approached the Commercial Arbitration Centre seeking a new arbitrator, leading to the appointment of Dr. Whatman.
However, Dandemutande objected, and the arbitrator ruled that the matter was improperly before him and terminated proceedings by consent.
Powertel then turned to the High Court for relief.
Dandemutande opposed the application, raising two preliminary points -- that the claim had prescribed and that the relief sought was incompetent.
On prescription, the court found that no actual claim had been filed before it, only an application for appointment of an arbitrator.
"The preliminary point on prescription lacks merit," Takuva held.
"Such a point could only be raised before the forum dealing with the applicant's claim."
The court also dismissed the second objection, ruling that while Powertel had proposed the Chairman of the Commercial Arbitration Centre to recommend an arbitrator, that proposal did not usurp the court's discretion.
"The relief sought is incompetent because it takes away the discretion of the Court in appointing an arbitrator," said the judge.
"However, this does not prejudice the respondent in any way... The Court retains the discretion on who to appoint."
The court was further scathing of Dandemutande's silence in the face of multiple attempts by Powertel to restart arbitration.
"In my view, by so doing the respondent was not being fair to the applicant," said Justice Takuva. "Whatever its reasons, it should have at least communicated its reasons... The respondent's non-cooperation in appointing an arbitrator was deliberate and has forced the applicant to institute litigation."
He then ruled in favour of Powertel and authorised the Chairman of the Commercial Arbitration Centre to appoint a sole arbitrator on behalf of the court.
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However, it declined Powertel's request for punitive costs, finding that although Dandemutande had delayed the process, Powertel had also contributed to the delay by waiting five years to revive arbitration after the first attempt failed.
"An order for costs on the ordinary scale will suffice," Justice Takuva concluded.
Takuva ruled that the application for appointment of an arbitrator is granted.
He said the Chairman of the Commercial Arbitration Centre in Harare is authorised to appoint a suitable arbitrator on behalf of the court.
Dandemutande shall pay Powertel's costs on the ordinary scale.
The ruling is expected to restart formal proceedings between the two parties and finally bring closure to one of the telecommunications industry's longest-running contractual disputes.
