INTERNATIONAL ARBITRATION 1/3LY
MARKET COMMENTARY 27
SOUTH AFRI C A – AN AT TRACT I VE VENUE FOR INT ERNAT IONAL ARBI TRAT ION?
Africa’s rise as an attractive international investment destination will invariably bring international disputes in its wake, creating exciting opportunities for countries within the continent to develop as seats for arbitration. However, many countries in Africa are not signatories to the New York Convention, throwing up problems in terms of enforceability of awards. South Africa on the other hand, signed the Convention in 1977 and boasts world class infrastructure and services in its major centres. Does South Africa have the potential to become an attractive seat for international arbitration? THE STORY SO FAR In some senses, onemight argue that Johannesburg and Cape Town are where Londonwas a short three decades ago. Although failure by the South African legislature to implement the UNCITRALModel Lawhas unfortunately fuelled the perception of South Africa as an unattractive venue for arbitration. A cursory review of the South African case law suggests this perception is unfounded. On the contrary, the South African Courts seem to bend over backwards to accommodate the principle of party autonomy in private arbitrations. WHAT L AW GOVERNS ARBITRATION IN SOUTH AFRIC A? Arbitration in South Africa is governed by the Arbitration Act 42 of 1965 (the “Act”) which contains empowering provisions which enable:
BY MAX EBRAHIM AND THOMA S HENSTRA , PARTNER AND C ANDIDATE AT TORNE Y AT CLYDE & CO
• Production of documents • Leading of oral evidence • Recording of evidence
It does not however prescribe any particular rules of procedure – this is left entirely to the discretion of the parties. Although cutting edge at the time of enactment, it is widely accepted, 50 years on, that the Act is out-dated and in need of reform. It predates the UNCITRALModel Law and does not distinguish between domestic and international arbitration. However, the Act does allowparties the freedom to choose the lawand legal rules that will apply to their arbitration agreement. Should there be no express choice of law clause contained in such an agreement, the arbitration tribunal will determine the appropriate laws by considering the implied choice of the parties and, if appropriate, by following the principles in the Rome Convention.
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