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Legislative Changes to the Zimbabwean Arbitration Landscape by Davison Kanokanga

27 Feb 2020 3:26 PM | Anonymous member (Administrator)

The recent promulgation of two new laws, the Consumer Protection Act [Chapter 14:44] and the Zimbabwe Investment and Development Agency Act [Chapter 14:37], represents far-reaching changes to domestic and international arbitration in Zimbabwe. This article addresses key elements of each law in turn.

The Consumer Protection Act [Chapter 14:44] and its impact on the Arbitration Act [Chapter 7:15]

On 10 December 2019, the Zimbabwe government promulgated the Consumer Protection Act [Chapter 14:44]. The Act seeks to:

(a)   protect the consumer of goods and services by ensuring a fair, efficient, sustainable and transparent marketplace for consumers and business;

(b)  provide for the establishment of the Consumer Protection Commission and its functions;

(c)   provide for the regulation of Consumer Advocacy Organisations

(d)  provide for alternative dispute resolution

(e)   repeal the Consumer Contracts Act [Chapter 8:03]

(f)   provide for matters connected therewith or incidental thereto

The repeal of the Consumer Contracts Act [Chapter 8:03] removes the prior prohibition of the arbitration of disputes between consumers and suppliers that had been established under the Arbitration Act [Chapter 7: 15]. Section 4 (2) of thelatter provides that the following matters shall not be capable of determination by arbitration:

(a)   an agreement that is contrary to public policy; or

(b)  a dispute which, in terms of any law, may not be determined by arbitration; or

(c)   a criminal case; or

(d)  a matrimonial cause or a matter relating to status, unless the High Court gives leave for it to be determined by arbitration; or

(e)   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.

By repealing the Consumer Contracts Act [Chapter 8:03], the Consumer Protection Act [Chapter 14:44] impliedly amended Section 4 (2) (e) of the Arbitration Act [Chapter 7:15] by deleting the same. Consequently, disputes between consumers and suppliers or services providers are now arbitrable. Moreover, Section 60 (1) of the Consumer Protection Act [Chapter 14:44] expressly provides that the Arbitration Act [Chapter 7:15] shall apply to any such disputes that are referred to arbitration, while Section 60 (7) establishes that an arbitrator shall have the same powers as the court in hearing and resolving any such dispute.[1]

The Zimbabwe Investment and Development Agency Act [Chapter 14:37]

The Zimbabwe Investment and Development Agency Act was promulgated on 7 February 2020. Before its promulgation, the laws governing investment in Zimbabwe were disjointed and uncoordinated.

The Zimbabwe Investment Development Agency Act helps address the inconveniences suffered by investors as follows:

(a)   it repeals the Zimbabwe Investment Authority Act; the Special Economic Zones Act and the Joint Ventures Act

(b)  it replaces the aforesaid pieces of legislation with one piece of legislation, the Zimbabwe Investment and Development Agency Act.

(c)   It provides for the One Stop Investment Services Centre

(d)  It provides for the promotion, entry, protection and facilitation of investment

(e)   It provides for the establishment of the Zimbabwe Investment and Development Agency

New Investment Institutions

The functions of the Zimbabwe Investment and Development Agency are, inter alia:[2]

(a)   To promote, plan and implement investment promotion strategies for the purpose of encouraging investment by domestic and foreign investors

(b)  To promote the decentralisation of investment activities

(c)   To implement and coordinate investment programmes and investment related activities

(d)  To facilitate entry and implementation of investment projects

(e)   To assist investors in all appropriate investment related support that may be required

The One stop Investment Services Centre facilitates the prompt processing of investment enquiries through relevant desks. There are approximately fifteen desks from departments or ministries that process investment enquiries within the Centre. [3]

Dispute Settlement

The Zimbabwe Investment and Development Agency Act [Chapter 14:37] provides that every dispute concerning an investment within the scope of the Act shall be governed by and construed in accordance with the laws of Zimbabwe, including where applicable:

(a)   Domestic arbitration as provided in the Arbitration Act, 1996; or

(b)  Any other International arbitration referred to by mutual agreement of the parties.[4]

In the case of foreign investors, the dispute may also be submitted to dispute settlement mechanisms provided for in any treaty or agreements on the promotion and protection of investments between Zimbabwe and the country from which the foreign investor originates.[5]

Every investor is entitled to equal access to the law and the protection of investments.[6]

Registration Requirement for Bilateral Investment Agreement Protection

A foreigner who established his or her investment in Zimbabwe before 7 February 2020 and claims to be protected by a Bilateral Investment Protection and Promotion Agreement concluded before 7 February 2020 must register their investment with the Agency no later than twelve months after such date.[7]

A foreigner who establishes his or her investment in Zimbabwe after 7 February 2020 and claims to be protected by a Bilateral Investment Protection and Promotion Agreement concluded before or after 7 February 2020 must register their investment with the Agency no later than ninety (90) days after such date.[8]

An investor who fails to register the investment within the period specified under the Act shall be deemed to have waived the protection of the Bilateral Investment Protection and Protection Agreements in question, with the result that any dispute in relation thereto can only be settled by a domestic court or domestic arbitration.[9]

___________________________

* Partner, Kanokanga and Partners

[1] Section 60 (7) of the Consumer Protection Act [Chapter 14:44]

[2] Section 4 of the Zimbabwe Investment and Development Act [Chapter 14:37]

[3] Section 5 of the Zimbabwe Investment and Development Act [Chapter 14:37]

[4] Section 38 (1) of the Zimbabwe Investment and Development Agency Act [Chapter 14:37]

[5] Section 38 (2) of the Zimbabwe Investment and Development Agency Act [Chapter 14:37]

[6] Section 16 (2) (a) and (b) of the Zimbabwe Investment and Development Agency Act [Chapter 14:37]

[7] Section 38 (3) of the Zimbabwe Investment and Development Agency Act [Chapter 14:37]

[8] Section 38 (6) of the Zimbabwe Investment and Development Agency Act [Chapter 14:37]

[9] Section 38 (5) of the Zimbabwe Investment and Development Agency Act [Chapter 14:37]




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