In most developed and developing countries there is strong support for arbitration and recognition of the importance of arbitration as a method of resolving commercial disputes, particularly when the parties are from different countries. This support is based on the recognition of the important principle of party autonomy. This principle has given rise to the adoption of a standard which seeks to preserve the autonomy of the forum selected by the parties and to minimise judicial intervention in arbitration proceedings.

INTRODUCTION

South Africa has lagged behind in the development of arbitration and progress has been hampered by long delays in the introduction of new legislation to replace our outdated Arbitration Act of 1965. However, new arbitration legislation is imminent and South Africa is rapidly becoming a more arbitration friendly jurisdiction. The progress which has been made has been facilitated by three important judgments of the Supreme Court of Appeal and the Constitutional Court in the past nine years. These judgments have all given strong support for the principle of party autonomy in arbitration and have stressed that there is a need for judicial intervention in arbitration to be minimised.

THE JUDGMENTS FORMING THE TRILOGY

  • Telcordia Technologies Inc v Telkom SA Limited [2007] 3 SA 266 SCA

In 2006 the Supreme Court of Appeal upheld an appeal by Telcordia, a US corporation, against an order by the Pretoria High Court in favour of Telkom, setting aside an international arbitration award by a London arbitrator. The court held that it was not for the High Court to reinterpret the contract between the parties: it should have determined whether gross irregularities as alleged by Telkom had been committed in conducting itself as it did. The High Court had, according to the Supreme Court of Appeal, impermissibly dealt with the matter as an appeal and not a review.

In reach this conclusion the Supreme Court of Appeal upheld the principle of autonomy in arbitration proceedings, and indicated that South Africa would continue to show a high degree of deference to arbitration awards and that there would be minimal judicial intervention when reviewing international commercial arbitration awards.

  • Lufuno Mphaphuli & Associates (Pty) Limited v Andrews CCT97/07 [2009] ZACC 6

The judgement of the Constitutional Court in Lufuno Mphaphuli in 2009 held that section 34 of the Constitution, which provides for a right to a fair public hearing, did not apply to private arbitrations. The arbitration in question was a domestic arbitration. In reaching this conclusion, the Constitutional Court indicated its strong support for the principle of party autonomy in arbitration proceedings.

  • Zhongji Development Construction Engineering Company Limited v Kamoto Copper Company Sarl 2014 JDR 2159 (SCA)

[The Supreme Court of Appeal dealt with the question of an arbitrator’s power to determine his or her jurisdiction in an issue which fell to be dealt with by the arbitration tribunal. The court held that the issues on which the appellant sought judicial pronouncement fell to be dealt with by the arbitration tribunal. This was because the rules imported in terms of the arbitration clause placed the question of the scope of the arbitrator’s jurisdiction and question whether any particular dispute fell within that jurisdiction in the hands of the arbitrator. This judgment upholds the principle of party autonomy and the importance of restricting court interference in arbitration proceedings.]

[I draw your attention to Chapter IV of the Bill, which deals with the jurisdiction of the arbitral tribunal. Article 16 includes an important provision regarding the principle of competence-competence, ie, the principle that the arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. This is an important principle, which was recently upheld on the Zhongji matter. The main principle stated by the SCA in this matter (in which I acted for Katanga Copper) was that a declaratory order regarding jurisdiction should not be sought from the court, as the arbitrator himself has the power to determine his own jurisdiction and the court should not interfere. This is a case that I will deal with more fully in a later lecture]