BMC rejects arbitration award to pay Dune Foods P1.2m
Goitsemodimo Kaelo | Monday December 15, 2025 06:00
Dune Foods and BMC will face each other in court next March after the latter rejected an arbitration award to pay the former, the sum of P1.2million and wants the decision reviewed and set aside.
The State-owned parastatal has been locked in a contractual battle with the company behind Setso products, which is known for selling packaged mogodu (tripe), since 2023. The dispute arose out of a breach of a Memorandum of Agreement for the manufacturing and canning of beef tripe signed between the two parties after BMC allegedly failed to honour its contractual obligation.
According to documents seen by this publication, Dune Foods is now out of business as a result of the dispute and is faced with financial implications which could force permanent closure of the company. The documents indicate that Dune Foods had initially demanded payment of P2 348 668 for contractual damages, P1 646 975 for business loss and P3 011 000 for reputational damage. These emanated from incidents where BMC had failed to produce stock and deliver per agreed terms and conditions.
The matter was referred for arbitration. However, an arbitrator who was agreed by the two parties awarded Dune Foods payment of P1 741 508, representing a total of 377 468 for contractual damage and P1 364 040 for reputational damage.
On the other hand, the arbitrator awarded BMC a total of P499 947.03 together with interest thereon at the rate of 2% above prime per annum, compounded monthly effective from the date of of the award on September 22, 2025. The arbitrator then ordered that in the circumstances, BMC shall offset the P499 947.03 from P1 741 508 and remit the balance of P1 241 560.97 to Dune Foods account.
However, BMC refused to accept the arbitrator's award, and wants the High Court to review and set it aside. The parastatal allege that the arbitrator who presided over the matter was biased and therefore, it wants the dispute between the parties referred for a fresh hearing before a different arbitrator.
BMC also wants the court to order the parties to agree on the identity of the new arbitrator within thirty (30) calendar days from the date of the order.
'In the event that the parties fail to agree on the appointment of the arbitrator within the period stipulated, an arbitrator shall be appointed by the Botswana Institute of Arbitrators upon written request by either party,' BMC said in its notice of motion.
In her opposition of the application, Marcia Sento, one of the directors of Dune Foods describes the application as nothing but a disguised appeal on the merits of some portions of the 2nd respondent's award. Sento argued that review applications deal with the procedure rather than the decision (the award in this case).
'It is the procedure that the applicant would and should in typical review proceedings attack rather than the decision. I have been advised by the 1st respondent's attorneys of record, which advice I immediately accept that, in general or common law review applications, the traditional grounds for review are: illegality, irrationality procedural impropriety.
She pointed that the mentioned traditional grounds for judicial review don't apply for purpose of reviewing and setting aside a decision of an arbitrator. the logic being that, arbitration proceedings are by nature private hence not subject to public law remedies like the common law judicial review in a strict sense.
'That being the case, even assuming that this review application was predicated on the three traditional grounds for judicial review, which it is not, the applicant would still be precluded from impugning the 2nd respondent's award on the merits save on the procedural aspect,'
She posited that the sum and substance of the 1st respondent's position at this stage is that, the applicant's application for review is actually an appeal on the merits of the award.
'To the extent that it is an appeal, it remains to reason that it is illicit and wrongful. it's impossible. On this ground without further reasons it deserves to be dismissed with costs,'
Furthermore, she argues that a review of an arbitration's award in this jurisdiction can only be done in terms of section 13 (2) of the Arbitration Act. The requirements for reviewing the arbitrator's award include when an arbitrator has misconducted the proceedings and where an award has been improperly procured.
Sento has dismissed assertions by BMC that the arbitrator was biased, careless and negligent in making his award in favour of the 1st respondent.
She argued that as a matter of law, the arbitrator is entitled to be wrong in fact and law and this doesn't amount to misconducting the proceedings.
She stated that the alleged bias of the arbitrator is surprising and unmerited because the appointment of the arbitrator was never challenged and there was never any objection to the alleged impartiality and independence of the arbitrator.
'At no particular time did the applicant make a verbal or written application for the recusal of the arbitrator from the proceedings. It seems therefore that the alleged bias is limited if not restricted to the award itself and not the proceedings from the appointment of the arbitrator to oral submissions,' she argued.
She reasoned that the bias argument is misleading as it gives an impression that the whole award was in favour of the Dune Foods, while in actual fact, it also favoured BMC in part.