INTERNATIONAL ARBITRATION 1/3LY
AFRI C A ADR MA INTA INS I T S OWN SECRETARI AT AND SE T OF RULES AND I S INT ENDED TO FACIL I TAT E REGIONAL AFRI C AN ARBI TRAT ION.
WHAT T YPES OF CL AIMS ARE ARBITRABLE? The Act imposes only two restrictions. It prohibits the referral to arbitration of anymatrimonial or personal status disputes. Apart from this, any civil disputemay be resolved via themeans of arbitration. RULES OF PROCEDURE AND FORA As indicated above, the Act prescribes no specific rules of procedure and parties are free to elect the process of their own choice. In domestic arbitrations, parties frequently choose to apply the rules of the High Court of South Africa. Influenced heavily by English rules of process, such procedure would, in themain, be familiar to those in common law jurisdictions. Where foreign parties are involved, popular choices are the rules of the LCIA and the rules of the International Chamber of Commerce (ICC). There are twomain arbitration bodies in South Africa namely the Arbitration Foundation of Southern Africa (AFSA) and the Association of Arbitrators (AOA). Each has its own set of rules and its own secretariat which partiesmay elect to govern the arbitration process. More recently in 2009, the Africa ADR, endorsed by The NewPartnership for Africa’s Development (NEPAD) and supported by AFSA and AOA, has been established as an alternative to the traditional European based international arbitral authorities. Africa ADRmaintains its own secretariat and set of rules and is intended to facilitate regional African arbitration. Arbitrating parties are, however, not obliged to commence proceedings using these authorities. WHAT SUPERVISION IS THERE OF ARBITRATORS AND THEIR AWARDS? Where a party contests the validity of the contract containing the arbitration agreement, alleges the arbitrator has no jurisdiction or the arbitrator declines to proceedwith the arbitration, the other partymay apply to court for a declaratory order as to the validity of the contract and the jurisdiction of the arbitrator. Alternatively, where the arbitrator decides to proceedwith the arbitration in the same circumstances, the objecting partymay seek to enforce the objection by applying to court for an interdict if it can prove the defect in the underlying agreement. Should an arbitrator or tribunal exceed its powers, a court may, on the application of any party, make an order setting aside the decision. In addition, if the parties agree, or the court directs after an application by one of the parties, a court may determine any question of lawarising in the course of the arbitration proceedings. Thismay take place at any time prior to the final award being issued.
WHAT IS THE AT TITUDE OF THE COURTS? The failure of South Africa’s legislature to bring the Act in line with the UNCITRALModel Lawhas fuelled a perception that South Africa is an unreliable arbitration venue. It is true that the Act does allow for judicial interference in certain instances. For example, a party to an arbitration agreement may apply to court for the setting aside of an arbitration agreement on “good cause”. However, in reality, the South African judiciary, led by the apex Constitutional Court and the Supreme Court of Appeal, has adopted amuchmore guarded approach. In 1994, in the case of Amalgamated Clothing and TextileWorkers Union of South Africa v Veldspun, the Supreme Court of Appeal opined that that there weremany reasons for commending those who elect arbitration as opposed to litigation via the courts. Writing for the full court Goldstone JA noted that courts should not discourage parties from resorting to arbitration and “should deprecate conduct by a party to an arbitrationwho does not do all in its power to implement the decision of the arbitrator promptly and in good faith”. In Telcordia Technologies Inc v TelkomSA Ltd the same court highlighted that since the early part of the nineteenth century, South African courts have consistently given due deference to arbitration awards out of “concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes”. Writing for themajority of the Constitutional Court in LufunoMphaphuli v Andrewand Another O’Reagan ADCJ stated that “the decision to refer a dispute to private arbitration is a choice which, as long as it is voluntarilymade, should be respected by the courts. Parties are entitled to determine what matters are to be arbitrated, the identity of the arbitrator, the process to be followed in the arbitration, whether there will be an appeal body and other similar matters... Given the approach not only in the United Kingdom, ... but also the international lawapproach as evinced in the New York Convention (to which South Africa is a party) and the UNCITRALModel Law, it seems that the values of our Constitutionwill not necessarily be served by interpreting [it] in amanner that enhances the power of the courts to set aside private arbitration awards. Indeed, the contrary seems to be the case”. In amore recent decision, the Supreme Court of Appeal confirmed that it could not interfere with the decision of an arbitrator to determine his jurisdiction. In a separate judgment inwhich all but one Judge of Appeal concurred, Nigel Willis JA opined that the South African courts not only have a legal, but also a socio-economic and political duty to encourage the selection of South Africa as a venue for international arbitrations. Sensitive to the context withinwhich international arbitrations take place, he argued that international arbitration in South Africawill not only foster comity among the nations of the world, as well as international trade, but also bring about the influx of foreign spending to the country. The result further evidences awelcome trend emerging out of the South African courts to showdue deference to the institution of private arbitrations.
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