Online Reporter
Court Correspondent
THE High Court has set aside an arbitral award involving a high-stakes shareholder dispute between Big Diagnostics (Private) Limited and Medical Investments Limited, ruling that the arbitrator overstepped his legal mandate and violated the principles of justice.
In a judgment delivered on March 6, 2026, Justice Mambara found that the award was “contrary to public policy” because the arbitrator granted legal relief that was never formally requested and improperly handled jurisdictional issues involving the Companies and Other Business Entities (COBE) Act.
The dispute erupted after Medical Investments Limited moved to terminate Big Diagnostics’ participation as a shareholder, triggering a forced-sale mechanism.
However, Justice Mambara took issue with the arbitrator, Mr David Whatman, for declaring the termination lawful even though Medical Investments Limited had never filed a counterclaim or asked for such a declaration.
“A respondent who wishes to obtain affirmative relief must plead it. A defence is not a sword,” Justice Mambara noted. “The point is not semantic; it concerns notice and the right to be heard.”
The court found that by granting a positive declaration in favour of Medical Investments Limited without it being sought, the arbitrator exceeded the scope of the submission, rendering the award a “palpable inequity” that hurt the Zimbabwean conception of justice.
A significant portion of the judgment dealt with the arbitrator’s handling of Section 62 of the COBE Act. Big Diagnostics had argued that the dispute involved issues of shareholder oppression, which falls under the Act.
The arbitrator had initially declined to hear certain arguments on the basis that Section 62 remedies are reserved for the court rather than an arbitral tribunal. Despite this, he proceeded to uphold the termination of the agreement.
Justice Mambara slammed this approach as a structural defect.
He said under the Arbitration Act, the mere fact that a law mentions “the court” does not automatically prevent an arbitrator from deciding the underlying dispute between private parties.
“The tribunal effectively deprived the applicant (Big Diagnostics) of a determination of its core justification while simultaneously condemning it for the very conduct that justification sought to explain,” the judge ruled.
The court emphasised that while judicial restraint is necessary in arbitration matters, the “safety valve” of public policy must be used when an award is so flawed that it defies logic or accepted moral standards.
Following the findings, the High Court ordered that the entire arbitral award be vacated.
Justice Mambara directed that the dispute be remitted for a fresh hearing (de novo) before a different arbitrator. The new arbitrator is to be appointed according to the parties’ original agreement or by a competent appointing authority if they fail to agree.
Medical Investments Limited was ordered to pay the costs of the application on an ordinary scale.
