The promulgation of the International Arbitration Act in December 2017 gave South Africa's largely outdated and cumbersome arbitration regime a boost in the context of international law. Given the cross-border nature of shipping disputes, the act promises to enhance the attraction of what is already a litigation-friendly jurisdiction.
In essence, the new act gives the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (2006 revision) the force of law in South Africa. Its features include the following:
- Provision is made for international commercial arbitrations with South African public bodies (excluding investment disputes).
- Outdated South African legislation dealing with the recognition and enforcement of foreign awards is repealed in favour of a more streamlined and internationally uniform approach while maintaining the New York Convention as part of South African law.
- The Protection of Businesses Act provisions requiring the minister of economic affairs to give permission for the enforcement of certain foreign arbitral awards have been repealed.
- The operation of the existing Arbitration Act is excluded and will now be confined to arbitrations between South African parties.
- An arbitral tribunal or a court may refer to UNCITRAL reports when interpreting the act and the application of the model law for purposes of international uniformity.
- Arbitrators, arbitral institutions and employees of arbitrators are granted immunity in respect of any act or omission in the discharge of their functions carried out in good faith.
- Provision is made for the confidentiality of arbitral proceedings where they are held in private (with the exception of proceedings to which a public body is a party, which must be held in public – unless the arbitral tribunal directs otherwise, where compelling reasons so require).
- The model law is to apply to all international agreements, irrespective of whether the agreement was entered into before or after the commencement of the new act.
In the maritime law context, the application of the new act to disputes which are subject to the South Africa Carriage of Goods by Sea Act (COGSA) deserve special mention.
For some time, South African cargo interests with inbound cargo have enjoyed special statutory protection in the form of Section 3(1) of COGSA, which bestowed jurisdiction on any competent court in South Africa for any action:
- brought by any person carrying on business South Africa and the consignee under, or holder of, any bill of lading, waybill or like document;
- for the carriage of goods to a destination in South Africa or to any port in South Africa (whether for final discharge or for discharge for further carriage);
- where the action relates to the carriage of the goods or any such bill of lading, waybill or document; and
- notwithstanding any purported ouster of jurisdiction, exclusive jurisdiction clause or agreement to refer any dispute to arbitration.
Notably, the International Arbitration Act preserves this statutory protection in such a way that COGSA has been amended to make specific reference to the fact that the new act is excluded from the operation of Section 3(1). Local claimants of inbound cargo can therefore continue to pursue claims in the South African courts.
On balance, the introduction of the International Arbitration Act should be viewed as a step towards fostering an environment for international dispute resolution in South Africa in a manner consistent with internationals norms and practices. For the local maritime community, the act's preservation of statutory protection under COGSA will also be welcome news.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.