By Dickson Jere
A Zambian company was sub-contracted by an international firm to do some works in Zambia. The two signed contracts in which they agreed to refer any disputes to arbitration to be held in Spain before the Spanish Court of Arbitration. Few months into contract, a dispute arose over payment and works done at the site in Zambia.
The Zambian company sued in the High Court for Zambia demanding that the case be held in Zambia because it was a Zambian dispute as well as all witnesses were in Zambia. So the convenient forum for the parties was Zambia. It further argued that the Court should approve the appointment of a Zambian Arbitrator and that it will be cheaper.
On the other hand, the international company opposed the application and emphasized that once arbitration clauses have been signed by the parties, they cannot be altered by the Courts. In other ways, arbitration clauses are binding on the parties and must be followed to the later! In this case, it was vehemently argued that Parties must adhere to the terms and refer the case to Spain.
High Court Judge Wilson Mweemba had to decide this case based on the principles of arbitration law and forum convenience.
“I agree with Mr. (Dickson) Jere’s argument that although the dispute arose in Zambia, the Parties are in Zambia and the witnesses are in Zambia, the arbitration will be held in Spain…,” said Judge Mweemba in his Ruling.
“Courts lack jurisdiction to alter arbitration agreement agreed upon and signed by the Parties,” he further said and referred the case to the Spanish Court of Arbitration.
On forum convenience being Zambia, this is what the Judge said:
“The legal doctrine of forum conveniens does not apply to arbitration since the parties choose the arbitrators to adjudicate their disputes,” Judge Mweemba said.
Always read through the arbitration clauses before signing the contract or indeed seek counsel from lawyers. Most international companies come with standard contracts whereby arbitration clauses refer the dispute to the country of origin. Pay attention – the devil is in the detail.
I hope my students will read the full text of the Ruling for further discourse on arbitration law vs forum convenience.
Full details read the case of Global Banners Limited v Ceinsa Zambia Limited – 2017/HPC/0205