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ConCourt dismisses housing corporation's US$22m bid against NSSA
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The Constitutional Court has dismissed an application by Housing Corporation of Zimbabwe (Pvt) Ltd seeking to overturn a Supreme Court ruling that nullified a US$22 million arbitral award in its favour against the National Social Security Authority (NSSA), ruling there was no constitutional matter warranting direct access.
Justice Bharat Patel, sitting with two other judges, said the property developer failed to prove that the Supreme Court's decision violated its rights under sections 56(1) and 69(2) of the Constitution.
"We were not persuaded that it would be in the interests of justice for direct access to be granted," Patel JCC said. "More specifically, we did not think that any basis had been established to show that the Supreme Court had failed to act in accordance with the principles governing the proceedings before it."
The dispute arose from a 2017 housing offtake agreement for 8,000 units in which NSSA paid US$16 million as a deposit. Only 53 units were completed before the project collapsed amid mutual allegations of breach.
An arbitrator awarded the developer US$30 million in lost profits, later revised to US$22 million. NSSA contested the award, labelling it "outrageous" and contrary to public policy. The Supreme Court agreed, finding the damages were "consequential" and breached clause 22.1 of the contract.
"The reasoning or conclusion in an award goes beyond mere faultiness or correctness and constitutes a palpable inequity… that a sensible and fair-minded person would consider… contrary to public policy," the Supreme Court held at the time.
Housing Corporation argued in the Constitutional Court that the Supreme Court acted as a court of first instance on public policy and failed to apply the two-stage test in ZESA v Maposa. Patel JCC rejected this argument, saying:
"The question of whether the arbitral award was contrary to public policy was a live issue before the High Court as well as the Supreme Court… The Supreme Court acted entirely within its mandate and is not bound by its previous decisions, including ZESA v Maposa."
On NSSA's position that paying millions for incomplete work undermined pensioners' interests, the Constitutional Court noted that the lower courts had rightly held NSSA, as a corporate entity, was bound by the contracts it entered into.
The application was dismissed with no order as to costs, leaving the Supreme Court ruling intact.
Justice Bharat Patel, sitting with two other judges, said the property developer failed to prove that the Supreme Court's decision violated its rights under sections 56(1) and 69(2) of the Constitution.
"We were not persuaded that it would be in the interests of justice for direct access to be granted," Patel JCC said. "More specifically, we did not think that any basis had been established to show that the Supreme Court had failed to act in accordance with the principles governing the proceedings before it."
The dispute arose from a 2017 housing offtake agreement for 8,000 units in which NSSA paid US$16 million as a deposit. Only 53 units were completed before the project collapsed amid mutual allegations of breach.
An arbitrator awarded the developer US$30 million in lost profits, later revised to US$22 million. NSSA contested the award, labelling it "outrageous" and contrary to public policy. The Supreme Court agreed, finding the damages were "consequential" and breached clause 22.1 of the contract.
"The reasoning or conclusion in an award goes beyond mere faultiness or correctness and constitutes a palpable inequity… that a sensible and fair-minded person would consider… contrary to public policy," the Supreme Court held at the time.
Housing Corporation argued in the Constitutional Court that the Supreme Court acted as a court of first instance on public policy and failed to apply the two-stage test in ZESA v Maposa. Patel JCC rejected this argument, saying:
"The question of whether the arbitral award was contrary to public policy was a live issue before the High Court as well as the Supreme Court… The Supreme Court acted entirely within its mandate and is not bound by its previous decisions, including ZESA v Maposa."
On NSSA's position that paying millions for incomplete work undermined pensioners' interests, the Constitutional Court noted that the lower courts had rightly held NSSA, as a corporate entity, was bound by the contracts it entered into.
The application was dismissed with no order as to costs, leaving the Supreme Court ruling intact.
Source - NewZimbabwe
