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Commercial Arbitration in Zimbabwe

Adjudication, arbitration, conciliation and mediation are some of the alternative dispute resolution mechanisms in use in Zimbabwe. Of these, arbitration is the most prominent one. On the 13th of September 1996, Zimbabwe repealed its outdated Arbitration Act (Chapter 7:02) and replaced it with the Arbitration Act (Chapter 7:15). Through section 2 of the said Act, the country adopted with minor modifications, the United Nations Commission on International Trade Law (UNCITRAL) Model Law. The said Act applies to every arbitration agreement, whether made before, on or after the 13th of September 1996. It covers both domestic and international arbitration.

Matters that are not capable of determination by arbitration in Zimbabwe

In Zimbabwe, the following matters are not capable of determination by arbitration:

      (a) An agreement that is contrary to the public policy.
      (b) A dispute which in terms of any law, may not be determined by arbitration.
      (c) A criminal case.
      (d) A matrimonial cause or a matter relating to status, unless the High Court gives leave for it to be determined by arbitration.
      (e) A matter affecting the interests of a minor or an individual under a legal disability, unless the High Court gives leave for it to be determined by arbitration.
      (f) A matter concerning a consumer contract as defined in the Consumer Contracts Act (Chapter 8:03), unless the consumer has by separate agreement agreed thereto.

Arbitration in Zimbabwe

Since the introduction of the Arbitration Act (Chapter 7:15) the use of arbitration as an alternative dispute resolution mechanism has gained momentum. Most commercial contracts contain an arbitration clause that enables the parties to choose arbitration as their preferred method of resolving any existing or future dispute between them arising out of or in connection with the contract, including any question regarding its existence, validity or termination.

Most contracts nominate the Commercial Arbitration Centre (CAC) in Harare as the appointing authority in the event that the parties are unable to agree on an arbitrator. The CAC was founded in 1995 by Muchadeyi Masunda and Ian Donovan, the godfathers of arbitration in Zimbabwe. It was the first arbitration centre to be established in Zimbabwe. The second centre, Africa Institute of Mediation and Arbitration (AIMA) is relatively new. It was established by Justice Moses Chinhengo (retired) in 2013. Most of AIMA’s panellists are retired judges. The CAC’s panellists are mostly senior lawyers, retired judges and professionals within fields such as Construction, Engineering, Accounting and Banking.

Advantages of Arbitration

More and more businesses are resorting to arbitration as a dispute resolution mechanism. This is because arbitration offers them the following advantages:

      (a) It helps them resolve their disputes in a less antagonistic manner, thereby enabling them to preserve their business relationships.
      (b) They are able to keep the dispute and its resolution away from the public, and are thus able to protect their secrets.
      (c) They are able to appoint or contribute towards the appointment of the arbitrator.
      (d) The flexible nature of the arbitral process makes it possible for them to structure the arbitral process the way they want.
      (e) It tends to be quicker and more cost effective than litigation.
      (f) The arbitral award is final.

Challenges of arbitration in Zimbabwe

Whilst the use of arbitration as a dispute resolution mechanism in Zimbabwe continues to grow, the field faces various challenges. For example, there are hardly any resources on commercial arbitration in Zimbabwe. Moreover, there is virtually no training for arbitrators taking place in Zimbabwe. Although there are several Fellows or Members of the Chartered Institute of Arbitrators in Zimbabwe, most of these received their training outside the country or by correspondence.

Finally, apart from a few articles, there are no publications on commercial arbitration in Zimbabwe. The one book written many years ago by Muchadeyi Masunda and Ian Donovan has been out of print for over a decade.

The Book Commercial Arbitration in Zimbabwe

In my forthcoming book entitled Commercial Arbitration ln Zimbabwe, I highlight the undesirability of the state of affairs described above, underscore the importance of having trained arbitrators, and call for the training of arbitrators.

The book will be of interest and benefit to arbitrators, lawyers, students of arbitration, judges, and t hose who deal with local and international contracts which include arbitration clauses.

Anyone wanting to know about commercial arbitration in Zimbabwe, the relationship between the Zimbabwean judiciary and the arbitral process, the attitude of the Zimbabwean Courts towards arbitration agreements, how arbitral awards are enforced in Zimbabwe and the circumstances under which arbitral awards might be set aside by the Courts should struggle no more as through the book they will have easy access to that information.

The formation of the African Arbitration Association in 2018 should encourage each African country to have readily available resources on the conduct of arbitration in their jurisdiction. This way, arbitration practitioners from different jurisdictions can share information and draw from each other’s experience with arbitration. The book Commercial Arbitration in Zimbabwe is aimed at doing exactly that for Zimbabwe.

Topics Covered by the book Commercial Arbitration in Zimbabwe

The book covers a wide range of topics, including:

  • The historical background of commercial arbitration in Zimbabwe,
  • Characteristics of arbitration,
  • A comparison of arbitration with litigation,
  • The advantages of arbitration,
  • The appointment of arbitrators,
  • The qualities and qualifications of arbitrators,
  • Types of arbitrators,
  • The difference between the seat of arbitration and the venue,
  • Principles of natural justice,
  • The arbitrator’s powers,
  • Interim measures,
  • Security for costs,
  • Termination of an arbitrator`s mandate,
  • Liability of arbitrators,
  • Preliminary meeting,
  • The hearing,
  • How to deal with a dilatory disputant,
  • The Zimbabwean judicial system,
  • The courts and arbitration,
  • The structure and types of arbitral awards,
  • The registration of awards,
  • The functus officio doctrine,
  • When an arbitral award may be set aside and the effect of setting aside an award,

It is hoped that this book will promote the use of arbitration as a dispute resolution mechanism and shine a spotlight on commercial arbitration in Zimbabwe.

Davison Kanokanga (http://www.kanokangalawfirm.net/)

Bill releases companies from hiring 2/3 of Brazilian Seafarers

The Committee on Economic Development, Industry, Commerce and Service of the House of Representatives approved Bill No. 2.456/19, which puts an end to the compulsory reserve provided for by law, that requires companies operating in Brazil to hire 2/3 (two thirds) of Brazilian employees.

The approved Bill also establishes differentiated treatment to companies established in the country that hire Brazilian workers. It also revokes part of the Consolidation of Labor Laws (CLT), putting an end to the obligation to fire foreigners before Brazilians.

The Congressman supporting the Bill justifies that the Brazilian Constitution privileges free enterprise and free trade. For this reason, the national legislation must guarantee equal treatment between Brazilians and foreigners. The Congressman also argues that the proposed project is in line with the most dynamic and globalised economies, stimulating competitiveness, freedom of choice and establishing favorable treatment for those who willingly establish reserve policies for national workers.

Our partner, Mariana Félix, especialised in Labour Law explains that if this bill is approved by the National Congress and sanctioned by the President, it will bring direct consequences for local and foreing shipowners operating in Brazil. Because, according to the terms of the Bill approved by the Committee of the Chamber of Deputies, it will no longer be necessary for shipowners to hire Brazilians to compose 2/3 (two thirds) of the crew in order to operate in Brazilian waters.

CARF disapproves binding precedent that would harm ship agents

The Firm was represented today by our partner Jeová Costa Lima Neto, who accompanied the extraordinary session of the Administrative Council of Tax Appeals (CARF), in Brasília, which deliberated on fifty draft proposals. Among the proposals, we highlight the 49th Proposal for Binding Precedents, whereby “the cargo agent and the maritime agent, as local representatives for the international carrier, are liable for infringements committed in the carriage of goods by sea”.

The Binding Precedent was not approved! This closed another chapter in the long battle fought by the Tax Authority against ship agents – who suffer from the fact that The Brazilian Federal Revenue Office (RFB) imposes on them fines that should be destined to the international carrier. The binding precent proposed by CARF intended to give a final outline to the imbroglio, but in a completely unfavorable outcome to ship agents – essential figure for international maritime transport.

As agents of foreign shipowners who carry out international transport, ship agents perform important task of dealing directly with the complex intricacies of Brazilian bureaucracy.

Our office mission is to promote foreign trade, shipping mentality and Legal Certainty in and outside the courts, we are happy with the outcome of the non-approval of CARF’s proposed binding precedent!

Incentive Program for Cabotage Navigation and Foreign Vessels

Published in the Union Official Diary of this Friday, August 30, the approval of a the resolution of the Investment Partnership Council of the the Presidency of the Brazilian Republic with the directives for police making regarding an Incetive/Stimulation Program to cabotage transportation to be named “BR do MAR”.

The policy aims to:

  • Increase the supply and quality of cabotage transport;- Encourage competition and competitiveness in the provision of cabotage services;
  • Increase the availability of fleet in the national territory; encourage the training, training and qualification of national seafarers;
  • Stimulate the development of the national shipbuilding industry for the construction, jumborisation, conversion, modernisation, docking and repair of vessels used for cabotage navigation;
  • Review the interrelationship of cabotage navigation policies to shipbuilding policies;
  • Encourage special cabotage operations and investments in port facilities to meet cargoes type, route or market not yet existing or consolidated in Brazilian cabotage;
  • Optimise the use of resources from the collection of the tax – additional freight for the renewal of the Merchant Navy (AFRMM).

The Program Council considered that cabotage waterway transport was comparatively more efficient, safer and had lower environmental costs and impacts than road or rail. It has a greater participation of the waterway modal, especially cabotage transport, in the country’s logistic matrix is the most effective and expeditious measure to balance the excessive expenditures of the Union, States, Federal District and Municipalities in road and rail infrastructure projects;

The Council also considered the need to allocate areas located within public ports for temporary use and viability of investments to meet cargoes in type, route or market not yet existing or not consolidated in Brazilian cabotage, seen as essential for the reconfiguration of the logistics matrix of the country; the feasibility of the cabotage stimulation policy encompasses measures that optimise the use of Union revenues from the collection of the Additional Freight for the Renewal of the Merchant Navy (AFRMM), including to ensure investments in coastal navigation safety by the Brazilian Navy;

Actions and other measures to encourage cabotage, in particular those allowing greater participation of foreign vessels in Brazilian cabotage, will be considered of relevant public interest and strategically prioritised for all legal purposes; the powers assigned to the Special Secretariat of the Investment Partnership Program to strengthen national policies for the integration of different modes of transport of persons and goods, in accordance with national, regional and urban development, national defense, environmental, and environmental policies. security, formulated by the various spheres of government.

The Ministry of Infrastructure already foresees, for 2025, that the cabotage will have a 29% participation in the Brazilian transport matrix, through 205 waterway interventions, at a cost of R$ 15,8 billion.

Brazilian office is finalist for Lloyd’s List Americas 2019

Promare | Rabb Carvalho Advogados is among the seven finalist offices of the international award, organised by Informa Group, the Lloyd´s List Americas Awards. The firm competes in the “Maritime Law Excellence” category and the result will be announced at a ceremony in Houston on September 24.

The firm is based in North-Northeast Brazil and is competing for the Americas prize against the largest law firms in the United States, being the only Latin American law firm on the finalist list. This is the top prize in the entire Shipping industry.

Lloyd’s List Americas is the industry awards program that recognises and rewards excellence in all fields of the maritime industry. Through extensive research with players in the segment, Lloyd’s publishes a list of finalists, who are judged and chosen as the best by a community of associations and industry leaders, making the Lloyds List Awards a highly desirable award of distinction.

The exclusive maritime event will feature two expert-led discussions on how marine fuels have advanced and how they meet decarbonisation targets, coupled with the presentation of awards judged by a panel of data-proven associations and industry leaders.

The firm was founded in 1999 focused on maritime commerce based in the north- northeast of Brazil with national and international reach. The firm provides advice on maritime commerce with simple but legally safe business transactions, offering a pragmatic approach to all the areas that are strategic to the operation and expansion of a businesses in this sector.

Promare is a dynamic, modern office with traditional values based on commitment, proactivity, passion, integrity, strategic vision and results.

The North-Northeast runs through our veins and in recent years we have been hard at defending the logistics of Northern Arc and the players that use it. We operate in the region in Emergency Response system 24 hours a day, 7 days a week, in situations of Shipping casualties and incidents.

We are extremely honored to be part of the Lloyd’s List Americas 2019 exclusive shortlist. We thank all our staff for their excellent work and all our clients and partners for their trust. Honored to be representing our country and the North-Northeast region!

São Paulo State Dock Company included in Privatisation Program

After first commanding an ordinary meeting of the Investment Partnership Program (PPI) on Wednesday, August 21, the Minister Onyx Lorenzoni, announced that the São Paulo State Dock Company (Codesp) was included in the National Privatisation Program (PND). The Minister of Infrastructure, Tarcísio Gomes de Freitas, celebrated the “destatisation of the largest port in the Southern Hemisphere”.

The minister emphasised that a Brazilian delegation led by the national secretary of ports, Diogo Piloni, is visiting Australia to understand details about conducting the destatisation studies of the ports of Melbourne, Brisbane, Darwin and Sydney, produced by PricewaterhouseCoopers, one of the largest companies of audit and consulting firm. The leader of the infrastructure portfolio also recalled that Brazil “today has the largest asset transfer program for the private sector in the whole planet”. The aim, according to him, is to reach the best format for the country. “It could be a public offering of shares, concession of services with public port authority or even privatisation.” PPI Special Secretary Martha Seillier said it is not yet possible to estimate the amount of investments related to concessions and privatisation at the Port of Santos. “But the values will certainly be very large,” concluded.

The São Sebastião (CDSS), Espírito Santo (Codesa) dock companies and Suape Industrial and Port Complex in Pernambuco have already been included in the PND at previous meetings. Other important state-owned companies such as Correios and Eletrobras were also qualified for a future transfer to private enterprise. “We are redefining the role of the state, after all we do not want an ‘entrepreneurial state’,” said Salim Mattar, special secretary for privatisation, development and markets at the Ministry of Economy. Modeling the sales format of each company will go through long study processes, which will hardly be less than 18 months.

In just over three years of operation, PPI qualified 248 projects, 151 of them already auctioned. The expectation of the Federal Government is to stimulate R$ 262.5 billion in investments in the coming years, in addition to raising grants of approximately R$ 52 billion.