ZAMBIA Law and Practice Contributed by: Luckson Mwamba, Katongo Bwalya and Mumba Mwila, Mwamba & Milan Advocates
10. The Award 10.1 Legal Requirements
held that although mortgage disputes are not exclud - ed from arbitration under the Arbitration Act, an arbi - tration clause contained in a facility agreement does not automatically extend to separate mortgage deeds or guarantees. The Court held that the mortgage enforcement proceedings arose under the security documents, which contained no arbitration agree - ment, and therefore could not be referred to arbitra - tion. The same approach was adopted in Nyiombo Invest- ments Limited & Others v Standard Chartered Bank of Zambia Plc (Appeal No. 274 of 2024) (2026 ZMCA). The Court held that an arbitration clause contained in a collateral Field Warehousing and Storage Agreement did not extend to disputes concerning the enforce - ment of mortgages created under separate banking and security documents. The Court emphasised that the applicability of an arbitration agreement depends on the true nature of the dispute and the agreement from which it arises. These decisions confirm that arbitration is founded on consent and that the avail - ability of arbitral remedies depends upon the scope of the parties’ arbitration agreement. 10.3 Recovering Interest and Legal Costs Recovery of Legal Costs Where there is no agreement between the parties on costs, the general position in Zambian arbitration pro - ceedings is that, unless the award expressly provides otherwise, each party bears its own legal costs. The default position therefore departs from the principle that “costs follow the event”. In practice, however, arbitral tribunals typically exercise their discretion to award costs, and such awards usually follow the “costs follow the event” approach rather than legal costs being shared. This position does not extend to the fees of the arbitral tribunal, which are subject to a cost-sharing approach. Section 16 (5)(b) of the Arbitration Act provides that arbitral tribunal fees are to be shared equally between the parties. Recovery of Interest A party to an arbitration seated in Zambia may recover interest on sums awarded. Section 16 (6) of the Arbi - tration Act provides that, in an international arbitration,
The Arbitration Act prescribes the formal requirements for rendering an arbitral award. Section 16 (1) of the Act provides that an award must be made in writing and signed by the arbitrator or arbitrators, as the case may be. Where there is a panel of arbitrators, it is sufficient for the majority to sign the award, provided reasons are given for any omitted signature(s). In addition, the award must state the reasons for the decision, as well as the date and place of arbitration. The Act is silent on any statutory time limit for the delivery of an arbitral award. In practice, however, the tribunal will usually indicate an expected timeframe for delivery, and unless otherwise agreed in the pro - cedural timetable, the date of delivery is not a legal requirement. 10.2 Types of Remedies Arbitral tribunals in Zambia have wide discretionary powers to grant remedies that fall within the scope of the parties’ arbitration agreement. These include mon - etary damages, injunctive relief, specific performance, rescission and rectification. However, there are cer - tain limitations on the types of remedies that may be granted, and this discretion is subject to certain statu - tory and public policy limitations. In particular, arbitral tribunals may not grant the following remedies: • an award that is in conflict with public policy, such as punitive damages; • an award where the subject matter of the dispute is not capable of settlement by arbitration, for example, criminal sanctions, matrimonial causes, liquidation or other insolvency proceedings; more recently, the courts have guided that mortgage actions are not capable of arbitration in Zambia; or • an award that falls outside the scope of the dispute referred to the tribunal because of the consensual nature of arbitration proceedings. The Zambian courts have also clarified the limits of arbitral remedies in the context of mortgage enforce - ment. In Metalco Industries Company Ltd & Others v First National Bank Zambia Ltd & Another (Appeal No. 222 of 2021) (2022 ZMCA 16), the Court of Appeal
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