Mutanda fights CAPS govt shareholding claim

WAR veteran and businessman Fredrick Charles Mutanda has approached the High Court seeking an order to set aside an arbitration ruling that government is the majority shareholder of pharmaceutical company, CAPS Private Limited.

In the arbitration process between government and CAPS Pharmaceutical Trust (CPT), government argued that it had acquired 67,52% of the company’s shares following a shareholders agreement it made with Fred Mutanda Family Trust in 2016.

The matter went to arbitration which was presided over by retired Supreme Court judge Justice Ahmed Moosa Ebrahim, cited as the first respondent in the High Court application, after Mutanda objected to appointment of CAPS board members by Industry minister Sekai Nzenza, the second respondent.

Justice Ebrahim ruled that as the majority shareholder, government had the right to appoint board members of CAPS since it had become a public entity controlled by the State following the 2016 agreement.

But in his application filed at the High Court on Friday, Mutanda argued that he was never given notice of the referral of the contractual dispute under the 2016 agreement to arbitration.

Through his lawyers Gijima Attorneys, Mutanda also said he was never notified of the appointment of the first respondent as arbitrator to adjudicate on disputes arising from the 2016 agreement, and was thus unable to present his case.

“I seek to have the arbitral award set aside. Ideally, I would have sought the striking down of offending portions of the arbitral award. However, in this instance, the award itself is so heavily grounded upon the 2016 agreement and the grounds of invalidity raised herein above that the entire award is tainted. It is predicated on an invalid agreement to arbitrate, so it is itself invalid. Under the circumstances, I pray for the award to be set aside in its entirety,” Mutanda said in his application.

“The arbitration agreement relied upon by the first respondent in making award is invalid under the laws of Zimbabwe in that it was never reduced to writing and signed for by any of the parties thereto, and the agreement was entered into by persons who did not acquire any right or benefit under the 2011 or 2016 agreement and thus, people who were incapable of entering into such agreement.”

In the application, he agreed that he entered into a sale of shares agreement with government and sold his family’s entire shareholding in the CAPS companies. He further stated that on February 5, 2020, he cancelled the 2016 agreement and restituted the purchase price that he had received and tendered the Treasury Bills that had been issued and had not matured.

He said Justice Ebrahim presided over the arbitration process in which he (Mutanda) was not a participant, which was in contravention of the terms of the 2016 agreement.

Mutanda also argued that Justice Ebrahim did not formally invite him to make his submission in the process, thus he erred in adjudicating on the agreement without notifying him of his appointment.

“I hasten to remind this court that as of July 17, 2021, I had threatened to interdict the first respondent from adjudicating on the 2016 agreement. For that, he accused me of legal ignorance and directed me to seek legal advice. He went on to do the very ignorant thing that I, in my limited jurisprudence, had objected to,” he said.

Mutanda said the first respondent was alive to the 2016 agreement, but elected to usurp functions under that agreement without his consent and participation.

The matter is yet to be heard.