Stellenbosch University

Effective commercial arbitration in South Africa: potholes and pitfalls*

By Prof David W Butler**

Outline of discussion
 Introduction
 Definition of arbitration and its advantages to litigation
 Who is responsible for ensuring that the arbitration is effective?
 Ad hoc and institutional arbitration
 Arbitration legislation and the courts
 The arbitration agreement
 The appointment of the arbitral tribunal
 Case management and preliminary meetings
 Jurisdictional issues and interim measures
 The pre-hearing phase
 The evidentiary hearing
 The award
 Enforcing and challenging the award
 Conclusion

1 Introduction

The theme of today’s seminar is “Dispute Prevention and Resolution”, with a

pertinent reference to the old saying that prevention is better than cure. Once the
problem between the parties gets to arbitration, there is a dispute, so dispute
prevention has not worked in this case. The assumption is also that by this stage
ADR techniques like mediation have been tried but in this case were unsuccessful.
The goal of the parties, particularly the claimant, is to ensure that the arbitration is
effective – also from a procedural perspective. An effective arbitration is one that
achieves the object of arbitration. This is defined in the English Arbitration Act of
1996 as being “to obtain the fair resolution of disputes, by an impartial tribunal,
without unnecessary delay and expense” (section 1(a)).1

As a young attorney I was involved in a protracted arbitration in Cape Town

regarding compensation for expropriation. Nearly eighteen months after the first day
of the evidentiary hearing, and after the tribunal had sat intermittently for at least 150
days, an award was made, which finally resolved the dispute, except on the issue of
costs.2 The award, however, was certainly not obtained “without unnecessary delay
and expense”. Having taught and done research on arbitration for over 25 years I
am still convinced that if properly used, arbitration is certainly an effective way to

* Edited version of a paper presented at a seminar on ADR: “Prevention and Resolution of Disputes” at
Eversheds, Sandton on 29 September 2010.
** Professor in Mercantile Law, Stellenbosch University. The author is currently the vice-chairman of the

Association of Arbitrators. The comments in this paper are made in his personal capacity.
1 See too Saville “An Introduction to the Arbitration Act” (1996) 62 Arbitration 165 166, who states:

“Justice delayed or unnecessarily expensive justice is indeed justice denied. However ‘correct’ the final
decision can be said to be, it will have produced injustice if it took too long or was too expensive.” Lord
Saville, then a senior English judge, is regarded as the “midwife” of the English Arbitration Act of 1996.
2 See Cape Town Municipality v Yeld 1978 4 SA 802 (C).

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resolve commercial disputes.3 The aim of this presentation is to examine ways of
ensuring that a commercial arbitration is effective so that the arbitrator and parties
can avoid the potholes and pitfalls.

2 Definition of arbitration and its advantages to litigation

Arbitration is not an easy concept to define. The following definition is from Redfern
& Hunter on International Arbitration:
“[T]he concept of arbitration is a simple one. Parties who are in dispute agree
to submit their disagreement to a person whose expertise or judgement they
trust. They each put their respective cases to this person – this private
individual, this arbitrator – who listens, considers the facts and the arguments,
and then makes a decision. That decision is final and binding on the parties;
and it is binding because the parties have agreed that it should be … .
Arbitration, in short is an effective way of obtaining a final and binding
decision on a dispute … without reference to a court of law.”4

Arbitration has five essential characteristics:5

(a) it is a procedure for resolving disputes;
(b) it has a consensual basis derived from an enforceable agreement
between the parties;
(c) the adjudicator or arbitrator is appointed by or on behalf of the parties;
(d) the agreement must contemplate that the arbitrator will proceed
impartially and make an award after receiving and considering
evidence and other submissions from the parties; and
(e) the arbitrator's award is final.

Three of these characteristics require brief comment. Consensual or private

arbitration has its basis in an agreement between the parties. This characteristic
distinguishes private arbitration from statutory or compulsory arbitration.6 It is also the
basis for the principle of party autonomy: the freedom of the parties to agree how
their dispute should be resolved, subject only to such safeguards as are necessary in
the public interest.7 Party autonomy gives arbitration one of its major advantages
compared to litigation, namely flexibility. As regards the fourth factor, the arbitrator’s
function is that of an adjudicator,8 while under an obligation to observe the

3 Donaldson “Alternative Dispute Resolution” (1992) 58 Arbitration 102 104 and 106 is firmly of the view
that ADR techniques are more likely to succeed if the disputants are aware that should they fail to settle
the dispute, they face the imminent danger of an imposed decision by a judge or arbitrator. More
expeditious arbitration procedures and reduced court rolls in his view will therefore encourage the use of
mediation. Lord Donaldson succeeded Lord Denning as the presiding judge of England’s Court of
Appeal.
4 Blackaby & Partasides Redfern & Hunter on International Arbitration, 5th ed OUP, Oxford, 2009, 1-2

para 1.02.
5 See Butler & Finsen Arbitration in South Africa: Law and Practice, Juta, Cape Town, 1993, 1-3; Lawsa

(2 ed) vol 1 (2003) “Arbitration” 399 para 542. Compare Total Support Management (Pty) Ltd v
Diversified Health Systems (SA) (Pty) Ltd 2002 4 SA 661 (SCA) 673F-G.
6 In this case the parties are compelled to refer their dispute to arbitration because of a statutorily

imposed obligation to do so, for example in terms of the Labour Relations Act 66 of 1995.
7 See the English Arbitration Act of 1996 s 1(b).

8 “Adjudicator” is used here in its ordinary meaning of one who decides a dispute judicially, as opposed

to an “adjudicator” who decides certain construction disputes. In the latter sense the adjudicator
decides the dispute as an expert and not as an arbitrator and is not subject to the same requirements of

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requirements of procedural fairness. This certainly does not however mean that an
arbitrator is expected to follow the same procedure as in the high court. Regarding
the finality of the award the parties agree in advance to accept the award as final.
However the court may review the award and set it aside on limited grounds –
particularly where the procedure followed is unfair or if the arbitrator has exceeded
his or her jurisdiction (see the Arbitration Act 42 of 1965 section 33).

The advantages normally claimed for arbitration compared to litigation include the
following:9
 Specialised knowledge of the arbitrator;
 Saving in costs, including indirect costs;10
 Saving in time;
 Flexibility;
 Privacy and confidentiality;
 Finality;
 Convenience; and
 Informality.

In the context of international commercial arbitration, there are two specific reasons
for preferring arbitration to litigation in the national court of one of the parties: the
need for a neutral venue and the enforceability of the award.

Arbitration is not without certain disadvantages compared to litigation:

 The cost of the arbitral tribunal;
 The problems posed by multi-party disputes;
 Certain limitations on the powers of a “private arbitrator” and
 The problem of the “judicialisation” of arbitration, or the trend towards
“privatised litigation”.11

Arbitration is a particularly flexible procedure and in practice it assumes different

forms. It can be a formal procedure as in the High Court or informal and expedited.
The arbitrator can follow an adversarial approach or an interventionist (“inquisitorial”)
approach or a combination of the two. If both parties expressly agree, the arbitrator
can dispense with an oral evidentiary hearing and conduct a documents-only
arbitration. Other varieties are known as final offer or pendulum arbitration, “med-arb”
and “arb-med”.

3 Who is responsible for ensuring that the arbitration is effective?

Experts in international arbitration have identified four essentials for effective

arbitration, namely:

procedural fairness that apply to an arbitrator. The decision of the latter form of adjudicator is binding on
the parties but not final, in that after completion of the contract the matter can, depending on the terms
of the dispute resolution clause, be referred to either arbitration or the court.
9 See Butler & Finsen Arbitration in South Africa 19-24. For a detailed discussion in the context of

international arbitration, see Redfern & Hunter on International Arbitration, 5th ed 31-44.
10 Indirect costs refer to the time that senior management and other employees of the party will have to

spend on the case, as opposed to being engaged in normal commercial activities.

11 The classic example of privatised litigation, which apparently is unfortunately not uncommon in the

Western Cape, is where the parties agree to arbitrate under the High Court Rules.

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  Willing participants in the form of pragmatic business people adopting
arbitration with the determination to use it effectively;
 Appropriate modern arbitration law and supportive judges;
 A positive contribution by the parties’ lawyers to the arbitration process;
 The need for arbitrators themselves to play a more proactive role in improving
arbitration procedures to provide a better service.12

As will be seen, South African arbitration legislation is unfortunately outdated and

inadequate, particularly in the context of international arbitration. Lawyers
participating in domestic arbitration proceedings have tended to adopt a conservative
approach as to the procedures used. There are nevertheless a growing number of
practitioners who are prepared to use some of the internationally accepted
techniques, referred to below, which are designed to make arbitration more
effective.13

Currently in South Africa, the primary responsibility for ensuring that the arbitration
proceedings are effective falls on the parties and the arbitral tribunal. Particularly in
construction disputes, but also in commercial disputes, the parties may not have the
same interest in having the dispute resolved quickly. The claimant may be desperate
for payment, whereas the defendant, while privately accepting that it will have to pay
something, is anxious to postpone the day of payment for as long as possible. In
those circumstances, it will be up to the claimant to ensure that the arbitral tribunal
uses its procedural powers under the designated rules to conduct the arbitration
effectively and to deal with inappropriate delaying tactics on the part of the
defendant. The firm and experienced arbitrator can do so without creating the
perception of bias against the defendant.

Certain modern arbitration legislation14 and arbitration rules15 now impose an express
duty on the arbitral tribunal to adopt procedures suitable to the circumstances of the
particular case, avoiding unnecessary delay or expense, so as to provide a fair
means for resolving the dispute.

4 Ad hoc and institutional arbitration

It is customary to distinguish between ad hoc and institutional arbitration. “An ad hoc

arbitration is one which is conducted pursuant to rules agreed by the parties
themselves or laid down by the arbitral tribunal.”16 In practice, the parties will often
designate a set of rules designed for ad hoc arbitration in their arbitration agreement,

12 See Butler “The State of International Commercial Arbitration in Southern Africa: Tangible yet
Tantalizing Progress” (2004) 21(2) J Int’l Arb 169, citing Lew “Achieving the Potential of Effective
Arbitration” (1999) 65 Arbitration 283.
13 See paras 8, 10 and 11 below.

14 See the English Arbitration Act s 33(1)(b) and the Mauritian International Arbitration Act of 2008 s

24(1)(b). See too the SA Law Reform Commission’s Report on Domestic Arbitration (May 2001) paras
2.11 and 3.147-3.149 regarding s 28(1)(b) and (2) of the Draft Arbitration Bill recommended by the
Commission to replace the Arbitration Act 42 of 1965 for domestic arbitration.
15 The UNCITRAL Arbitration Rules, as revised in 2010, article 17(1) require the arbitral tribunal to

“conduct the proceedings so as to avoid unnecessary delay and expense and to provide a fair and
efficient process for resolving the parties’ dispute”.
16 See Redfern & Hunter on International Arbitration, 5th ed 52.

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rather than leaving the rules to be agreed on once the dispute has arisen.17 An
institutional arbitration may be defined as “one that is administered by a specialist
arbitral institution under its own rules of arbitration.”18 Even after the appointment of
the tribunal, communications between the parties and the tribunal, except at
preliminary meetings and hearings, will take place through the secretariat of the
institution. There is also what may be called a semi-administered arbitration, where
the institution controls the appointment of the tribunal and collects and administers
deposits for the institution’s and the tribunal’s fees and disbursements, but for the
rest, leaves the tribunal and the parties to communicate directly.19

Institutional and ad hoc arbitrations each have their advantages and disadvantages,20
and in an international arbitration, an inexperienced party would arguably be well
advised to go the institutional route. Ultimately the question is whether or not the
charges made by the institution in relation to the particular arbitration are justified by
the value of its contribution to the efficacy of the proceedings.21

As stated above, the parties to an arbitration agreement, even when they agree to an
ad hoc arbitration, will normally designate a set of rules in their arbitration agreement.
Particularly for a (domestic) arbitration to be held in South Africa, one should assess
the rules having regard to the following criteria:22
 To what extent do the rules empower the tribunal to grant interim measures?
 Do the rules have a well-defined procedure for dealing with the challenge of
an arbitrator?
 How do the rules deal with defining the issues in dispute, obtaining disclosure
of documents and the conduct of the hearing?
 Do the rules empower the tribunal to deal effectively with delaying tactics?
 Is the tribunal required to give reasons for its award?
 If the contract deals with a situation that is likely to give rise to multi-party
disputes, to what extent do the rules attempt to deal with such issues?

In the context of (domestic) commercial arbitration in South Africa, AFSA23 and

Tokiso24 offer a full administered arbitration service, whereas the Association of
Arbitrators (Southern Africa) provides rules for ad hoc arbitrations.25 Corporate

17 The best known ad hoc rules for an international arbitration are the UNCITRAL Arbitration Rules of
1976. (A revised version of these Rules, finalised in 2010, is available on UNCITRAL’s website:
www.uncitral.org.)
18 See Redfern & Hunter on International Arbitration, 5th ed 54.

19 See Redfern & Hunter on International Arbitration, 5th ed 54 n 180; Butler & Finsen Arbitration in

South Africa 300-301. In an international context, the ICC and ICSID offer full-service institutional
arbitration, whereas the LCIA offers a semi-administered arbitration service.
20 See Redfern & Hunter on International Arbitration, 5th ed 52-57.

21 Some arbitration institutions calculate their fees as well as the fees of the arbitrators primarily in

relation to the amount in dispute, for example the ICC Court of International Arbitration. It is argued by
the proponents of this approach that it makes the charges more predictable for the parties. Other
institutions, like the LCIA, calculate the institution’s fees and the fees of the arbitrators on the basis of
the time actually spent on the particular dispute, irrespective of the amount in dispute.
22 See Butler & Finsen Arbitration in South Africa 301-302.

23 See www.arbitration.co.za for AFSA’s Rules and services.

24 See www.tokiso.com. Tokiso is the primary private provider of ADR and arbitration services in South

Africa in the context of labour disputes, but is increasingly involved in resolving commercial disputes as
well. It has yet to publish its own arbitration rules.
25 See www.arbitrators.co.za for the Rules for the Conduct of Arbitrations (6 th edition, 2009).

5
lawyers will know that King III26 requires a company board to ensure that disputes
“are resolved effectively, efficiently and expeditiously as possible” and to this end
should adopt formal dispute resolution processes for internal and external disputes.
This obviously makes sense. More controversially, the Institute of Directors has
provided a Practice Note with a multi-tiered dispute resolution clause, providing for
negotiation, mediation under the AFSA Mediation Rules, followed by arbitration under
AFSA’s Rules for Expedited Arbitration as the default option.27 The board and the
company’s legal advisers must give serious consideration as to whether arbitration
administered by AFSA is indeed the most appropriate option for that company,
having regard to the alternatives offered by Tokiso and the ad hoc rules of the
Association of Arbitrators.28

5 Arbitration legislation and the courts

The internationally accepted standard against which a national arbitration statute is

measured is the UNCITRAL Model Law on International Commercial Arbitration of
1985, including the revisions approved in 2006.29 According to the South African
Law Reform Commission, the aims of the drafters of the Model Law were as follows:
“[F]irst, the liberalisation of international arbitration by limiting the role of
national courts and emphasising party autonomy by allowing the parties the
freedom to choose how their disputes should be determined; secondly the
establishment of a defined core of mandatory provisions to ensure fairness
and due process; thirdly to provide a framework for conducting an
international commercial arbitration so that in the event of the parties being
unable to agree on the procedure, the arbitration could still be completed; and
finally the incorporation of provisions to aid in the enforcement of awards and
to clarify certain controversial practical issues.30

This is not the occasion for a detailed discussion of South Africa’s Arbitration Act 42
of 1965. It was largely based on the now repealed English Arbitration Act of 1950,
although more logically arranged, and at the time of its commencement was
considered in some respects to be in advance of legislation in other jurisdictions.31 In
1998 the SA Law Reform Commission recommended that the UNCITRAL Model Law
should be adopted by South Africa for international commercial arbitration only, while
retaining the 1965 Act for domestic arbitration.32 In 2001 the Law Reform
Commission subsequently recommended a new Act for domestic arbitration, which

26 Institute of Directors King Code of Governance for South Africa 2009 para 10 and principle 8.6.
27 The Practice Note in footnote 1 states: “Parties are entitled to use any dispute resolution
administrator, but AFSA is recommended by the IoDSA. If another administrator is appointed, then its
name must be inserted in place of AFSA.” AFSA’s Rules for Expedited Arbitration are available at
www.arbitration.co.za.
28 Apart from possible objections to the designation of AFSA as the default service provider, the drafting

of the clause is open to criticism in other respects as being vague and lacking in the necessary
precision.
29 UNCITRAL is the United Nations Commission on International Trade Law. The Model law is available

at its website: www.uncitral.org.

30 See SA Law Reform Commission Report Arbitration: An International Arbitration Act for South Africa

(July 1998) para 2.7, citing Report of the Secretary-General: Possible Features of a Model Law on
International Commercial Arbitration A/CN.9/207 of 14 May 1981 paras 16-17; Redfern & Hunter Law
and Practice of International Commercial Arbitration 2nd ed Sweet & Maxwell, London, 1991, 509.
31 See Butler & Finsen Arbitration in South Africa 5-6.

32 See the report referred to in n 30 above.

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would retain certain features of the existing Act, but which would also include
provisions drawn from the UNCITRAL Model Law and the English Arbitration Act of
1996.33

Government and the legislature have as yet failed to act on these recommendations.
It may safely be said that perceptions that the procedure of private arbitration may in
some way be unconstitutional, have effectively been removed by the Constitutional
Court. In Lufuno Mphaphuli & Associates (Pty) Ltd v Andrews,34 Justice O’Regan,
who gave the majority judgment, considered the effect of section 34 of the
Constitution35 on private arbitration by firstly defining private arbitration’s
characteristics:
“The twin hallmarks of private arbitration are thus that it is based on consent
and that it is private, i.e. a non-state process.”36
Underlying the right in section 34 is the duty of the state to provide courts and other
suitable forums. Private arbitrators are not provided by the state. Section 34 does
not apply to private arbitration merely because the process should be fair. She came
to the conclusion that arbitration agreements do not involve the waiver of rights but
merely the choice not to exercise the rights contained in section 34.37 Private
arbitration proceedings are however still regulated by the law and the Constitution. In
terms of Roman-Dutch law, arbitration is always subject to an “implied term” that the
arbitrator should act fairly. What is fair will depend on the context, especially if the
arbitrator is authorised to adopt an “investigative” approach.38

In comparing the 1965 Act with the aims of the Model Law, referred to above, it is
sufficient to say that the existing Act generally meets the requisite standards as
regards party autonomy, and does have mandatory provisions to ensure procedural
fairness.39 However, in certain respects, the powers of the court are excessive and
the statutory powers of the arbitral tribunal are inadequate. In saying that the court’s
powers are excessive, the need for balanced powers for the court was accepted by
the drafters of the Model Law. The court’s powers to enforce the arbitration
agreement and the award are essential in the absence of voluntary compliance. In
exchange for these and other powers of support, the court has certain powers of
supervision. Under the Model Law, these powers of supervision may ordinarily only
be exercised after the award, to prevent them being abused as a delaying tactic. The
SA Law Reform Commission concluded that the Model Law achieves the right

33 See SA Law Reform Commission Report Domestic Arbitration (May 2001). The provisions taken from
the English Arbitration Act of 1996 are ss 1, 33, 40 and 65 of that Act, namely the provisions that were
particularly aimed at ensuring that arbitrations take place without unnecessary delay and expense.
34 Lufuno Mphaphuli & Associates (Pty) Ltd v Andrews [2009] ZACC 6; 2009 4 SA 529 (CC).

35 S 34 of the Constitution, Act 108 of 1996, (“Access to courts”) reads:

“Everyone has the right to have any dispute that can be resolved by the application of law decided in a
fair public hearing before a court or, where appropriate, another independent and impartial tribunal or
forum.”
36 Para 198.

37 Paras 214-216.

38 See paras 217, 221 and 223. She also points out that lawyers tend to equate “fairness” with the

procedure under the High Court Rules and adds that if this approach were to be adopted, the
advantages of arbitration as a speedy and cost-effective procedure would be undermined.
39 See s 13(2) regarding the court’s power to set aside an arbitrator’s appointment on good cause

shown and the grounds on which a court can set aside an award under s 33(1), particularly where the
tribunal has committed a gross procedural irregularity.

7
balance as regards the extent of the court’s powers and the stage of the arbitration
proceedings when they may be exercised.40 In contrast, by way of example, the
discretion of the South African court not to enforce an arbitration agreement is unduly
wide.41 Also applications to court in South Africa can be abused as a delaying tactic,
particularly by exercising the right to take the court’s decision on appeal to a higher
court. These provisions are in sharp contrast with the Model Law.42

Another power of the court, which can be abused as a delaying tactic, concerns the
power of the court, under section 20 of the Arbitration Act of 1965, to give an opinion
on a question of law, which has been referred by the arbitral tribunal to the court
during the arbitration as a so-called “consultative case”. The SA Law Reform
Commission was aware of this problem. It recommended that the power should be
excluded for international arbitration43 and that it should be retained for domestic
arbitration, but subject to increased safeguards to prevent abuse.44 The position of
arbitral tribunals to prevent applications to the tribunal for a question of law to be
referred to the court being abused as a delaying tactic has been strengthened by the
decision of the Supreme Court of Appeal in Telcordia Technologies v Telkom SA
Ltd.45 The court criticised earlier decisions to the effect that the tribunal ought to refer
the question of law if it meets certain criteria as improperly circumscribing the
tribunal’s discretion.46 In Telcordia the court also pointed out that the question of law
has to be one “arising” in the course of the arbitration. Therefore, where the parties
refer a question of law by agreement to the arbitrator, it cannot subsequently be
referred to the court. Moreover, if the question will only need to be decided by the
arbitrator once certain other findings have been made, the question remains
hypothetical and will not “arise” until those findings are made.47 On the facts, Telkom
had no right to approach the court under section 20 and its rights were therefore not
infringed by the arbitrator.

40 See SA Law Reform Commission Report on Domestic Arbitration (May 2001) 16-19, particularly para
2.21.
41 Compare s 6(2) of the Arbitration Act with article 8(2) of the Model Law. See Christie “South Africa as

a Venue for International Commercial Arbitration (1993) 9 Arbitration International 153 154-155. The
same criticism may be made of the court’s power under s 3(2) to order “on good cause shown” that the
arbitration agreement should cease to have effect. Sera v De Wet 1974 2 SA 645 (T) is a good example
of a situation where the court exercised this power on grounds, which on the facts, were not convincing.
See regarding the factors which the court takes into account in exercising its discretion Butler & Finsen
Arbitration in South Africa 65-67, Lawsa (2 ed) vol 1 (2003) “Arbitration” 414 para 562; Altech Data v MB
Technologies 1998 3 SA 748 (W); Rawstorne v Hodgen 2002 3 SA 433 (W).
42 See article 11(5), article 13(3) and 16(3) of the Model Law, which exclude a right of appeal. Articles

8(2), 13(3) and 16(3) give the arbitral tribunal the discretion to continue with the arbitration, while the
court application is pending, whereas under South African law the court will typically interdict the arbitral
tribunal from continuing with the arbitration (see See Inter-Continental Finance and Leasing Corporation
(Pty) Ltd v Stands 56 and 57 Industria (Pty) Ltd 1979 3 SA 740 (W) 754B-C; Sherwood Eleven Thirty
Investments CC v Robridge Construction CC 2001 4 SA 741 (W) 746B and 747D).
43 See its report Arbitration: an International Arbitration Act for South Africa (July, 1998) para 2.117 read

with paras 2.31-2.32.

44 See Report on Domestic Arbitration (May 2001) paras 3.196-3.200.

45 2007 3 SA 266 (SCA) paras 143-156. This case, together with Government of the RSA v Midkon

(Pty) Ltd 1984 3 552 (T), are arguably the two most blatant examples in the reported cases of attempts
to abuse s 20. In both cases, the court upheld the tribunal’s refusal to refer questions of law to the
court.
46 See para 151 with reference to Administrator, Transvaal v Kildrummy Holdings (Pty) Ltd 1978 2 SA

124 (T).
47 See paras 154-155. See also regarding s 20, Road Accident Fund v Cloete 2010 6 SA 120 (SCA) at

134-135.

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It is uncertain whether the parties can validly exclude the right to approach the court
under section 20 by agreement, although such agreements do occasionally occur in
practice. The SA Law Reform Commission was of the view that such agreements
were unobjectionable from a policy perspective, if entered into once the dispute has
arisen and once the tribunal has been appointed. At that stage the parties are aware
of the type of legal issue that is likely to arise in their dispute and the ability of the
appointed tribunal to decide those issues.48

Unlike the Model Law and modern arbitration rules, the existing Arbitration Act fails to
give the arbitral tribunal a broad discretionary power to conduct the proceedings as it
deems fit.49 The tribunal also lacks the power to grant interim measures,50 unless
these powers are conferred on the tribunal by the arbitration agreement. The lack of
adequate powers for the arbitral tribunal can easily be rectified by the choice of
appropriate rules in the arbitration agreement.51 The wide powers of the court remain
a cause of concern and the courts need to be alert to the danger of the courts’
powers being abused.52

In the context of international arbitration, the recommendation of the Law Reform

Commission in 1998 that the UNCITRAL Model Law should be adopted as a matter
of urgency remains valid.53 However, in view of the delay of more than 12 years
since the report was published, the Law Reform Commission’s proposed Draft Bill
requires updating in the light of subsequent developments regarding the contents of
legislation for international arbitration.54

48 See Report on Domestic Arbitration (May 2001) para 3.200.

49 Compare the Model Law article 19(2) and the ICC Rules of Arbitration (1998) article 15(1), with the list
of procedural powers in s 14(1) of the Arbitration Act.
50 An interim measure may be defined as including any temporary measure, by which, at any time prior

to the delivery of the final award, the arbitral tribunal orders a party to maintain or restore the status quo
pending determination of the dispute; or to provide a means of preserving assets out of which a
subsequent award may be satisfied; or to preserve evidence that may be relevant and material to the
resolution of the dispute (see the UNCITRAL Model Law (as amended in 2006) article 17(2)).
51 See for example the Standard Procedure Rules of the Association of Arbitrators (6 th edition 2009)

rules 6(1) and 35 regarding the general powers of the arbitral tribunal and rule 32(3) read with rule 1(11)
regarding the power of the tribunal to grant interim measures. See too the AFSA Rules for Expedited
Arbitrations, rules 6 and 7.
52 See Abrahams v RK Komputer SDN-BHD [2008] ZAWCHC 70; 2009 4 SA 201 (C), where a punitive

costs award was granted against a party who repeatedly made unfounded allegations of dishonesty
against the arbitrator.
53 According to UNCITRAL’s website (www.uncitral.org) ten African states have so far adopted the

Model Law. These are in alphabetical order Egypt (1994), Kenya (1995), Madagascar (1998), Mauritius
(2008), Nigeria (1988), Rwanda (2008), Tunisia (1993), Uganda (2000), Zambia (2000) and Zimbabwe
(1996).
54 In particular, it is necessary to consider to what extent the Draft Bill requires updating to take account

of the amendments made by UNCITRAL to the Model Law in 2006. The Mauritius International
Arbitration Act (2008) has incorporated most of these amendments. Ireland in 1998 initially adopted the
UNCITRAL Model Law for international arbitration only. Ireland has recently, by means of the
Arbitration Act 1 of 2010, adopted the Model Law, including most of the 2006 amendments, for both
international and domestic arbitration. (Under European law it is not permissible for a member of the
European Union to have different laws for domestic and international arbitration as this discriminates
against nationals of other member states.) Australia amended the federal International Arbitration Act
136 of 1974 to give effect to the 2006 amendments and also made other improvements. The new
Mauritian and Irish statutes and the amended Australian statute also need to be considered in updating
the Law Reform Commission’s proposals for draft legislation.

9
6 The arbitration agreement

The South African Arbitration Act, following the trend in most other jurisdictions,
requires the arbitration agreement to be in writing, although signature is not
required.55 An arbitration agreement relating to a contractual dispute can take one of
two forms. It can be contained in a separate contract, often only concluded once the
dispute has arisen. Typically, the arbitration agreement will take the form of a clause
in the contract which is the cause of the dispute.56

It has been said that there are four criteria regarding the essential functions of an
arbitration clause:
“The first, which is common to all agreements, is to produce mandatory
consequences for the parties.
The second is to exclude the intervention of state courts in the settlement of
the disputes, at least before the [delivery] of the award.
The third is to give powers to the arbitrators to resolve the disputes likely to
arise between the parties.
The fourth is to permit the putting in place of a procedure leading under the
best conditions of efficiency and rapidity to the rendering of an award that is
susceptible of judicial enforcement.” (Italics added.)57
This is the best advice I can give you for testing the efficacy of a draft arbitration
clause. Regarding the third criterion, the trend at least of English courts is to
construe the wording of an arbitration clause liberally as regards its scope. The
words “all disputes arising out of this contract” will be regarded as wide enough to
include a dispute as to the initial invalidity of the contract. If a business person wants
to exclude a dispute regarding initial invalidity from arbitration, it would be simple
enough to say so. The liberal interpretation of the scope of arbitration clauses is
justified by a presumption in favour of what may be called “one-stop adjudication”.58

It is important that the clause should set out a procedure for the appointment of the
arbitral tribunal and designate an appropriate set of rules to apply to the arbitration.
When choosing a particular set of rules, it is advisable to take note of the relevant
institution’s own recommended standard arbitration clause(s), rather than setting out
to reinvent the wheel.

In view of the desirability of commercial disputes being resolved expeditiously and

without unnecessary expense,59 in most commercial contracts it will be preferable to

55 See the Arbitration Act s 1 “arbitration agreement” and Mervis Brothers v Interior Acoustics 1999 3 SA
607 (W) 610E-G. The arbitration agreement can therefore be concluded orally with reference to terms
that are in writing. See Saville “The Denning Lecture 1995: Arbitration and the Courts” (1995) 61
Arbitration 157 at 161, who gives the example of the master of a ship in distress and the salvors
agreeing by radio that the salvage will be under the Lloyd’s form, including the arbitration clause. Lord
Saville adds that this avoids “the prospect of them trying to find a pen to sign a damp piece of paper in a
Force 10 storm in mid ocean.”
56 See Redfern & Hunter on International Arbitration, 5th ed, 86 paras 2.02-2.03.
57 Davis “Pathological Clauses: Frèdèric Eisemann’s still vital criteria” (1991) 7 Arbitration International

365-366.
58 See Fiona Trust & Holding Corporation v Yuri Privalov [2007] EWCA Civ 20 paras 17-19, upheld on

appeal as Premium Nafta Products Limited v Fili Shipping Company Limited [2007] UKHL 40 paras 12-
13.
59 See para 1 above.

10
provide for at least a two-tiered dispute resolution clause,60 that provides (i) for
mediation, and if mediation has failed to resolve the entire dispute within a stipulated
period, (ii) for the matter then to go to arbitration. A properly drafted mediation
clause, with sufficient objective criteria from which a court or arbitrator can assess
whether or not there has been compliance with it, is enforceable.61 Mediation is
consensual, and currently a court in England and South Africa cannot order parties to
a commercial dispute to use mediation. Nevertheless, the unreasonable failure to do
so may influence the subsequent award of costs in litigation or arbitration
proceedings. The normal rule in litigation and arbitration in South Africa is that costs
follow the result, in the absence of special circumstances.62 In the light of cases in
both English and South Africa, a party who unreasonably fails to consider mediation
runs the risk of being denied a portion of its costs, even if it is successful in
subsequent litigation or arbitration.63 It is submitted that although these cases
concerned litigation, they provide the necessary basis for an arbitrator in South Africa
to take into account an inappropriate refusal by a party to consider mediation when
making a costs award.

7 The appointment of the arbitral tribunal

One of the advantages of arbitration compared to litigation is that the parties can
choose their own tribunal with the necessary specialized knowledge, where
applicable, instead of having their dispute decided by a judge designated in terms of
court procedures. Nevertheless, as the parties may well be unable to agree on the
actual composition of the tribunal once the dispute arises, this matter should be
regulated in the arbitration agreement. This is often done with reference to the
provisions of the designated set of institutional rules which have been selected in the
arbitration agreement to govern the arbitration.

In domestic arbitrations it is customary to have a sole arbitrator. In international

arbitrations, if justified by the amount in dispute, it is more usual to have three
arbitrators, one appointed by each party and the third by the other two. 64 If South
Africa is to be the seat or place of the arbitration it is desirable to specify that the third
person is an arbitrator and not an umpire.65 The use of an umpire in a commercial
dispute cannot be recommended: it makes no sense to keep the person who is often
the most experienced of the three appointees in reserve, in case the two arbitrators
cannot agree.66

60 A multi-tiered dispute resolution clause could provide for negotiations between the parties, followed by
mediation and arbitration.
61 See Cable & Wireless plc v IBM United Kingdom Ltd [2002] EWHC 2059 (Comm). If a two-tiered

clause provides for mediation followed by arbitration, the arbitrator should therefore decline jurisdiction
unless satisfied that the mediation provision has been complied with or unless both parties have agreed
to proceed directly to arbitration.
62 See Lawsa (2 ed) vol 1 (2003) “Arbitration” 453 para 609.

63 Dunnett v Railtrack plc (Costs) [2002] EWCA Civ 303, [2002] 1 WLR 2434 paras 12-15; MB v NB

[2009] ZAGPJHC 76; since reported as Brownlee v Brownlee 2010 (3) SA 220 (GSJ) paras 48-61, citing
with approval Egan v Motor Services (Bath) [2007] EWCA Civ 1002.
64 See the UNCITRAL Model Law articles 10 and 11. Some international arbitration rules have special

provisions for appointments in multi-party arbitrations to guarantee procedural fairness: see the ICC
Rules of Arbitration (1998) article 10 and the LCIA Arbitration Rules (1998) article 8.
65 See the presumption in the Arbitration Act 42 of 1965 s 11(1)(b).

66 See Lawsa (2 ed) vol 1 (2003) “Arbitration” 416 para 465 and Kannenberg v Gird 1966 4 SA 173 (C)

179B for the distinction between an arbitrator and an umpire.

11
Some arbitral institutions wish to control who is appointed as an arbitrator under their
rules with a view to ensuring the quality of appointments. For this reason, under the
institution’s rules, parties may nominate an arbitrator for confirmation or appointment
or by the institution.67

The parties may specify certain qualifications for the arbitrator(s) in their arbitration
agreement. The writer is not personally in favour of the appointment of former judges
as arbitrators, except without first carefully investigating their attitude towards and
experience regarding case management, particularly in the phase before the
evidentiary hearing.

It is crucially important that the arbitrator is and is perceived to be impartial.

Therefore the UNCITRAL Model Law68 and some arbitration rules69 place a duty on a
prospective arbitrator, before accepting appointment, to disclose any circumstances
likely to give rise to justifiable doubts as to his or her impartiality or independence.
This is an ongoing duty should new circumstances arise during the arbitration.

A frequent refrain at arbitration at arbitration conferences in Africa is that for

international arbitrations involving at least one party from sub-Saharan Africa,
arbitrators from Africa are underrepresented on the tribunal and that there is a
preference for having the seat of the arbitration somewhere in Europe. A recent
example is provided by Piero Foresti v Republic of RSA.70

8 Case management and preliminary meetings

Case management by a judge or arbitrator is not contrary to the adversarial system,

which has been described by a senior English judge as follows:
“The essence of the adversarial procedure is that the judge listens to the
evidence and the arguments of the parties, and decides between them; he
does not make his own enquiries as to the facts, or adopt conclusions of fact
not proposed by either party; nor does he propose or adopt arguments or
conclusions of law differing from those which the parties put forward.”71
This definition neither precludes the arbitrator from engaging in case management to
design the procedure to be followed, nor does it prevent the arbitrator from playing an

67 See the ICC Rules of Arbitration (1998) article 9 and the LCIA Arbitration Rules (1998) articles 5.5
and 7.
68 Article 12(1). See too the IBA Guidelines on Conflicts of Interest in International Arbitration (2004)

available at www.ibanet.org, under publications.

69 See the ICC Rules of Arbitration (1998) article 7(1); the LCIA Arbitration Rules (1998) article 5.2-5.3

and, in a South African context, the Association of Arbitrators’ Rules for the Conduct of Arbitrations, rule
7.3.
70 Case No ARB(AF)/07/1. An award regarding the discontinuance of the proceedings, dated 4 August

21010 is available on ICSID’s website: www.worldbank/icsid. Para 5 deals with the composition of the
tribunal and the length of the gravy train involved at a hearing in the Netherlands appears from para 41.
See also paras 95-97 for an indication of the very substantial costs involved in an arbitration which did
not even proceed to an evidentiary hearing.
71 Lord Justice Staughton “Common Law and Civil Law Procedures: Which is the More Inquisitorial?” in

Current Problems in Arbitration and Litigation (Lecture Series published by the Chartered Institute of
Arbitrators (1988) 117 at 118, quoted by Butler “Expediting Commercial Arbitration Proceedings: Recent
Trends” (1994) 6 SA Merc LJ 251 at 260.

12
active role during the evidentiary hearing.72 In the English Courts, active case
management developed in the Official Referees’ Court73 (now known as the
Construction and Technology Court) and these techniques are now applied in all
divisions of the English High Court.74

The primary instrument for the arbitrator in being able to engage with the parties in
effective case management is the preliminary meeting. This statement finds support
in the revised IBA Rules on the Taking of Evidence in International Arbitration (May
2010), which contain the following new rule:
“The Arbitral Tribunal shall consult the Parties at the earliest appropriate time
in the proceedings and invite them to consult each other with a view to
agreeing on an efficient, economical and fair process for the taking of
evidence.”75

The purpose of the preliminary meeting is therefore far more than for the arbitrator
and the parties to agree on the arbitrator’s terms of remuneration and on
administrative matters like the timing of tea breaks during the evidentiary hearing.
The main functions of the preliminary meeting are:
 To enable the arbitrator to impose his / her authority on the proceedings; and
 To enable the arbitrator and the parties to review the agreed procedure
(rules) and adapt it to the needs of the particular dispute.76

It is perhaps useful for the arbitrator to make preliminary suggestions for an

expedited procedure in the notice convening the preliminary meeting, or at least to
indicate that the arbitrator intends adopting an interventionist approach with active
case management with a view to promoting the expeditious and cost-effective
resolution of the dispute.

At the time of the first preliminary meeting, the arbitrator may have insufficient
information about the dispute to be able to engage in really effective case
management. For this reason, the Standard Procedure Rules of the Association of
Arbitrators provide, at the discretion of the arbitrator, for two preliminary meetings.
The first would typically be held as soon as possible after the dispute is referred to
the arbitrator and the second once the issues in dispute have been defined.77

It is vitally important that parties in an arbitration, who are juristic persons, be

represented at preliminary meetings by senior executives, with the authority to make

72 See Butler (1994) 6 SA Merc LJ 261.

73 See Butler (1994) 6 SA Merc LJ 264. See too Saville “The Origin of the New English Arbitration Act
of 1996: Reconciling Speed with Justice in the Decision-making Process” (1997) 13 Arbitration
International 237 244-248 on how the adversarial procedure in the English Commercial Court was
adapted to provide for a more interventionist approach, even prior to the advent of the Woolf reforms,
referred to in the next footnote.
74 The reforms were based on the report by Lord Woolf Access to Justice (July 1996). In the context of

international arbitration, see also the additions to article 17(1) and (2) of the UNCITRAL Arbitration
Rules of 2010 (when compared to article 15 of the 1976 UNCITRAL Rules). The changes were clearly
made with a view to using active case management by the arbitral tribunal to promote expeditious and
cost-effective arbitration.
75 Article 2.1. See para 10 below regarding the purpose and utilisation of these Rules.

76 See further Butler (1994) 6 SA Merc LJ 265-269.

77 See the Standard Procedure Rules (6 th edition, 2009) rules 10 and 20.

13
decisions, in addition to the parties’ lawyers. Logically, the parties, in agreeing to
submit their dispute to arbitration, certainly expected the procedure to differ
substantially from that used in the High Court.78 When the arbitrator as case-
manager, makes sensible suggestions to give effect to those expectations, it is up to
the parties to resist any attempts by their lawyers to remain firmly anchored in the
lawyers’ comfort zone, which involves the use of procedures closely based on those
of the court.

9 Jurisdictional issues and interim measures

Jurisdictional issues
Perhaps the most important duty of an arbitrator is to deliver an enforceable award.79
One of the requirements for a valid award is that the award must be within the
arbitrator’s jurisdiction.80 Time constraints do not permit more than a brief discussion
of one of the more problematic aspects of South African law regarding jurisdiction,
namely, the problem which arises when the main contract containing the arbitration
clause is alleged to be void.

The international trend is to make the arbitral tribunal the first judge of its own
jurisdiction in these circumstances. Article 16 of the UNCITRAL Model Law, in the
case of an allegedly void main contract, combines two principles to achieve this:
Kompetenz-Kompetenz and severability.81 In short, the tribunal has the competence
to decide on its own competence, and for this purpose, the arbitration clause is
treated as an agreement separate from the main contract.82 However in Wayland v
Everite Group Ltd, which concerned an arbitration clause in an allegedly void main
contract, the court summarily rejected the severability of the arbitration clause.83
Ironically, in the same year, 1993, the English Court of Appeal accepted the doctrine
in the case of a main contract that was allegedly void for initial illegality, a position
confirmed by the English Arbitration Act of 1996.84 Nevertheless, at least one
commonly used set of arbitration rules in South Africa accepts both severability and
competence/competence.85 It must nevertheless be stressed that a decision by an
arbitral tribunal as to its own competence is subject to court review.86

78 See further Butler (1994) 6 SA Merc LJ 271.

79 See Horvath “The duty of the tribunal to render an enforceable award” (2001) 18(2) J Int'l Arb 135.
80 See Butler & Finsen Arbitration in South Africa 264.
81 For a useful and succinct discussion of this complex issue see Redfern & Hunter on International

Arbitration, 5th ed 344-354.

82 See further on severability Rogers & Launders “Separability – the Indestructible Arbitration Clause”

(1994) 10 Arbitration International 77-90.

83 1993 3 SA 946 (W) at 951H-952B.

84 See Harbour Assurance Co (UK) Ltd v Kansa General International Assurance Co Ltd [1993] 3 All ER

897 (CA) and the Arbitration Act of 1996 s 7. This approach was confirmed by the House of Lords in
Premium Nafta Products Ltd v Fili Shipping Co Ltd [2007] UKHL 40. An important reason underlying
this approach is the assumed desire of the parties for one-stop adjudication. If they wanted to exclude
issues regarding the initial validity of the main contract from arbitration, they should word their arbitration
agreement accordingly. Ironically, the Supreme Court of Appeal in South Africa accepted the Wayland
decision as correct, on facts that actually made this unnecessary, in North West Provincial Government
v Tswaing Consulting CC 2007 4 SA 452 (SCA).
85 See the Standard Procedure Rules of the Association of Arbitrators (6 th edition, 2009) rule 12.

86 See the UNCITRAL Model Law article 16, the English Arbitration Act s 67 and the South African

Arbitration Act s 33(1)(b) and Badenhorst-Schnetler v Nel 2001 3 SA 631 (C).

14
Interim measures
As in the case of jurisdiction, only a brief discussion of this increasingly important
topic is possible.87

An interim measure is any temporary measure, by which, at any time prior to the
delivery of the final award, the arbitral tribunal orders a party:
 to maintain or restore the status quo pending determination of the dispute;
 or to refrain from action that is likely to cause harm to the arbitration process;
 or to provide a means of preserving assets out of which a subsequent award
may be satisfied;
 or to preserve evidence that may be relevant and material to the resolution of
the dispute.88

An important question for consideration is whether a party should approach the

tribunal or the court. This will partly depend on whether the tribunal has the
necessary power (for example to order security for costs) and whether or not the
tribunal can impose effective sanctions to ensure compliance. However, the moral
authority of tribunal must not be under-estimated. Parties will think carefully before
deliberately disregarding a direction of the tribunal. Nevertheless, an application to
the tribunal for interim measures, for example for the preservation of evidence or
freezing of assets, cannot be made ex parte. The tribunal’s orders also cannot bind
third parties.

10 The pre-hearing phase

It seems self-evident that parties agreeing to arbitration would not expect the
proceedings be closely similar to those in the High Court.
The traditional adversarial procedure used in the High Court suffers from the three
English diseases, namely “uninformative pleadings, the abuse of the procedure for
the discovery of documents, and an excessive reliance on oral proceedings.”89
The tribunal’s powers to deal with these problems will depend on the applicable
rules. Particularly where the tribunal has a general discretion, two sets of useful
guidelines exist: the IBA Rules on the Taking of Evidence in International Arbitration
(2010) and the UNCITRAL Notes on Organizing Arbitral Proceedings (1996).

Modern international arbitration practice represents a blend of common-law and civil-

law traditions.

Defining the issues in dispute

An exchange of statements of claim and defence takes place rather than court-style
pleadings. Greater candour is required (no bare denials by the defendant are
acceptable) and relevant supporting documents must be attached.

87 The importance of this topic in practice for international arbitration can be gauged from the extensive
attention given to it in the 2006 revisions to the UNCITRAL Model Law: see articles 17 and 17 A – 17 J.
88 See The UNCITRAL Model Law (as amended in 2006) article 17(2) and the Rules for the conduct of

Arbitrations of the Association of Arbitrators (6th edition, 2009) rule 1.11

89 Butler (1994) 6 SA Merc LJ 254-255.

15
Controlling disclosure of documents
In arbitration, a party has no right to full discovery, as in the High Court, unless the
rules provide otherwise (s 14(1)(a)(i)).

The IBA Rules article 3(3), regarding a “request to produce” provide useful guidance
on the standards with which a party’s request for disclosure of documents by its
opponent in an arbitration should comply:
• a description of requested document(s);
• an explanation as to why the document(s) are relevant and material;
• a statement that the documents not in possession of applicant.
•
Written witness statements (IBA Rules Article 4)
An exchange of witness notices regarding witnesses of fact is compulsory. (There is
no trial by ambush.) The tribunal has the discretion to order an exchange of full
witness statements by witnesses to facts.

The witness statement, once confirmed by the witness at the hearing, takes the place
of evidence-in-chief and facilitates the preparation of effective cross-examination. It
is more usual for the exchange of written statements to be simultaneous rather than
consecutive, as this discourages manufacturing evidence in response to an
opponent’s statements. The written witness statement must be in witness’s own
words. The exchange of witness statements by witnesses to facts is now standard
practice in the English High Court.90

Tribunal appointed experts

(See the IBA Rules art 6, UNCITRAL Model Law article 26; Standard Procedure
Rules rule 30.)
The purpose of the tribunal appointing an expert witness is to avoid the need to hear
evidence on the issue from the parties’ experts. The tribunal’s power is subject to
procedural safeguards. The expert is a witness and there is therefore no delegation
of the tribunal’s decision making.

11 The evidentiary hearing

In principle, a party is entitled to an oral evidentiary hearing, unless the parties agree
on a documents-only arbitration. In complex commercial disputes, when substantial
amounts are in dispute, an oral hearing is virtually inevitable. In addition to the
exchange of written witness statements and the possibility of the arbitral tribunal
appointing its own expert, referred to above, there are two further techniques used in
international commercial arbitration to make the evidentiary hearing more cost
effective and to reduce the duration of the hearing:

Chess-clock arbitrations
Contrary to the practice in domestic arbitration in South Africa, where the duration of
the hearing will probably be estimated during the planning stages, but in the
expectation that this estimate is likely to be exceeded, it would be most unusual in an
international arbitration to have an “open-ended” hearing, that is one in which time

90Regarding South African arbitration practice see the Standard Procedure Rules, rule 28 which also
provide for witness notices and witness statements.

16
limits for the various stages have not been fixed before the hearing starts. Because
of the other commitments of busy arbitrators and counsel appearing for the parties,
only a limited number of days (or even hours) are available for the hearing. Given
the fundamental principle of due process, under which the parties must be treated
with equality and each given a reasonable opportunity to put its case and test that of
its opponent, 91 it is vital that this limited time should be allocated fairly and indeed
equally between the parties. One way of doing this is a so-called chess clock
arbitration, where each party is allocated a specific amount of time for its activities,
and the time taken for any particular activity is deducted from the allocation. Among
the practical advantages of chess clock arbitration are that it enables parties to
estimate the extent of their liability for costs with greater precision, it avoids the diary
problem92 which would arise were the hearing to overrun the estimated time and
makes it easier to determine with confidence a date by which the award may be
expected.93

For the method to work successfully it is necessary for the tribunal to be well
informed about the issues in dispute at the time when the directions for the
procedural timetable are given, after consultation with the parties. This directive
must be given well before the hearing. As all written materials should be taken to
have been studied by the tribunal before the hearing, the purpose of the hearing is to
highlight major points; provide clarifications; present and examine witnesses and to
present final conclusions and requests for relief.94 A procedural order issued by the
famous German arbitrator Prof Dr Karl-Heinz Böckstiegel provides an excellent
example of what the hearing of a chess-clock arbitration entails:
“Each Party will have a maximum of 4 hours for its first round presentation
and a maximum of 1 hour for its rebuttal presentation, after deduction of time
for breaks and other business. Each side is free to determine how much time
it will spend on the presentation of evidence, including witnesses and experts,
and on argument respectively. Time not used by a Party for its first round
presentation may be transferred to its rebuttal time. Time used by a Party
examining witnesses or experts presented by the other Party will be deducted
from the time allotted to the examining Party. … As the Hearing has to end
after 2 days, the Tribunal does not intend to grant any extensions of the
above time periods” (emphasis added).95

Under the Böckstiegel method, the agenda for the hearing could be an introduction
by the president of the tribunal; first round presentations by the parties; questions by
arbitrators; rebuttal presentations by the parties; and further questions by the
arbitrators. Questions by arbitrators are therefore normally kept until the end of
presentations to avoid disrupting their flow. Quick interventions to assist the
advocate (e g to clarify a reference) are nevertheless appropriate.96 The chair of the

91 Compare the UNCITRAL Model Law article 18; (English) Arbitration Act of 1996 s 33(1)(a).
92 In setting a date for continuing the hearing when the arbitrators and the parties’ lead counsel are
available.
93 See Bernstein’s Handbook of Arbitration Practice (3rd ed) 108 and Appendix 19, especially at 909.

94 See Paulsson J “The timely arbitrator: reflections on the Böckstiegel method” (2006) 22 Arbitration

International 19 at 21-22. The brief discussion here cannot do justice to this excellent article.
95 Quoted by Paulsson (2006) 22 Arbitration International 21 n 2. The use of the word “intend” makes it

clear that the tribunal will only grant an extension if there are compelling reasons (Paulsson 26 n 6).
96 Paulsson (2006) 22 Arbitration International 20-21.

17
tribunal is not however a passive arbitrator and must be poised to make judicious
interventions at the first sign of disruption, for example where a witness is giving
expansive and largely irrelevant answers under cross-examination, which are in
effect a theft of the cross-examining party’s time.97 The chess clock method can be
highly effective and can be varied as the circumstances of the case require, for
example by having post-hearing memoranda, with a view to making closing oral
submissions less indispensable. However, with reference to the parties and their
lawyers the Böckstiegel method is, in Paulsson’s words, “for adults only” and they
must be prepared to discharge their responsibilities professionally.98

Witness conferencing or hot tubbing

Arbitration is not going to be quicker and more cost-effective than litigation, if
arbitrators follow the same procedure as the court. One of the most expensive parts
of the traditional adversarial hearing is first the cross-examination of the experts
called by the claimant and then, at a subsequent stage, the cross-examination of the
witnesses called by the respondent. Witness conferencing is a modern alternative
approach, which makes it easier for an arbitral tribunal consisting of lawyers to
understand and assess conflicting expert testimony on specific issues. Witness
conferencing involves
“the experts for each party to be heard simultaneously. The experts are
seated opposite or alongside each other in front of the arbitral tribunal at the
same time and each is asked to comment and respond to the opinions of the
others on an agenda basis. This enables individual members of the arbitral
tribunal to obtain the opinions of the experts on specific issues with a degree
of immediacy that is not possible where there may be an interval of several
days between the particular topics being dealt with by the opposing
experts.”99

Under the traditional system of cross-examination, the strength and impact of

counsel’s questions often overshadows the witness’s response. With witness
conferencing, the questions from the tribunal or the parties’ lawyers are a catalyst for
the discussion, but the focus is on the contrasting opinions of the experts regarding
the disputed factual and technical issues. Witness conferencing requires careful
preparation by the arbitrators on the basis of the documents, including written
witness statements, submitted in advance. The arbitrators normally assume the
primary role in questioning the witnesses, although opportunity for effective cross-
examination by the parties’ lawyers of the opposing parties’ experts is by no means
excluded. Witness conferencing can in principle also be used effectively for
witnesses of facts but is best restricted to expert witnesses.100

12 The award

Unusually compared to other national arbitration statutes, the South African

Arbitration Act imposes a time limit for the making of the award: the award must

97 Paulsson (2006) 22 Arbitration International 22-23.

98 Paulsson (2006) 22 Arbitration International 22.
99 See Redfern & Hunter 4th ed 312-313. See too Russell on Arbitration 23rd edition para 5-202.

100 See generally Peter W “Witness ‘conferencing’” (2002) 18 Arbitration International 47-58 especially

50-51.

18
normally be made within four months of the arbitrator entering on the reference (ie
the date of the first preliminary meeting) unless the parties otherwise agree (s 23).
The Act requires the award to be in writing and signed by the arbitrator (s 24). The
Act also provides for an “interim” or partial award (s 26), which deals with only some
of the issues in dispute, for example in a breach of contract claim, the issue of
liability, leaving the issue of quantum for subsequent determination. A partial award
is nevertheless final on what it decides. The internationally accepted standard is that
the award should be reasoned, unless parties otherwise agree or in the case of a
“consent award” (UNCITRAL Model Law article 31(2)). In practice, arbitration rules in
South Africa increasingly require reasoned awards.

13 Enforcing and challenging the award

Regarding enforcement, section 31 of the Arbitration Act provides that an award, on

application, may be made an order of court, but does not identify the circumstances
in which enforcement may be refused. In contrast article 36 of the Model Law spells
out a list of limited grounds on whch enforcement may be refused.

Section 33 provides an exhaustive list of four grounds on which an arbitral award

may be set aside by the court. These are:
• “misconduct”;
• A gross procedural irregularity;
• excess of powers; and
• where the award has been improperly obtained.

A right of appeal to another arbitral tribunal is possible, but only if the parties so
agree.

The standard for the court review of an arbitral tribunal’s costs award in South Africa
differs from the standard for a review of the award on the merits of the dispute. A
costs award may be reviewed and set aside on the basis of an error of law: if the
tribunal fails to exercise its discretion in the same way that a court would have
done.101

14 Conclusion

In a conference paper delivered at an IBA Conference in Durban in 2002, I stated:

“Visitors from Europe and North America to Southern Africa are rightly
attracted to its game parks and the abundance of wild life. Outside {the
jurisdictions in the region with modern arbitration legislation], the respondent
with money involved in an international commercial dispute will find a largely
untamed jungle of old fashioned arbitration legislation, with maximum scope
for delaying tactics by using the courts. The culture of many of the local
lawyers regarding arbitration is such that it will unfortunately be some time
before those Southern African lawyers, who see arbitration merely as a form

101See Butler & Finsen 277-278 citing Kathrada v Arbitration Tribunal 1975 2 SA 673 (A), which has
been consistently followed in subsequent decisions.

19
 of privatized litigation, join the black rhino on the list of endangered
species.”102

To what extent is this view still valid? It is up to arbitration practitioners and the
business community to ensure that arbitration reaches its potential for resolving
commercial disputes in Southern Africa.

102 See Butler D “The state of international commercial arbitration in Southern Africa: tangible yet
tantalizing progress” (2004) 21 J Int’l Arb 169 at 203.

20