UNCLE OSWALD’S Q&A FORUM – JANUARY 2020
Yes, he’s back! Our irascible retired arbitrator is sitting idle on his veranda, smoking his pipe, awaiting your questions on ADR practice. Many years ago, when he did his articles with Hugo de Groot, Voet and Partners, he faced the same ADR issues that you face now.
HOPING TO HEAR ABOUT
THE HIGH COURT RULES IN ARBITRATION …
Best Uncle Oswald,
I am an attorney representing a respondent in an arbitration before an arbitrator appointed by the Association of Arbitrators (Southern Africa) NPC. We have a preliminary arbitration meeting scheduled for Monday and we must agree on the rules that will govern the arbitral proceedings. Because most lawyers know the High Court Rules/Uniform Rules of Court, I think that I should advise my client to propose that we run the arbitration under the High Court Rules. What do you think?
Regards
Fearless Freddie
___________________________________________________________________________
Dear Freddie,
My short answer is no. It would be counterproductive. I recently tried to negotiate Sani Pass in a little Volkswagen Polo rented from Avis. It took a very long time, and I had to spend a fortune on repairs to the damaged chassis. The Polo is a lovely car, but it was not designed for off-road mountain passes. The same applies to the use of the High Court Rules in an arbitration. There are various sets of arbitration rules specifically designed to expeditiously and cost-effectively resolve arbitrable disputes. They include, for example, the 2018 edition of the Standard Procedure Rules of the Association of Arbitrators (Southern Africa) NPC, which was specifically tailor-made to facilitate the expeditious and cost-effective resolution of arbitral disputes.
Some of the reasons why it is not useful to conduct an arbitration under the High Court Rules include the following (there are many more): The High Court Rules are more formal and time-consuming than your typical arbitration rules. Under the High Court Rules, an arbitrator will be bound by the strict rules of evidence that tend to complicate the task of an arbitrator and delay the procedure. Confidentiality and finality are not provided for in the High Court Rules. Discovery under the High Court Rules tends to become a costly and time-consuming exercise. Arbitration rules typically provide for a limited, focused, cost-effective and expeditious discovery process. Oral evidence and cross-examination are time-consuming and expensive hallmarks of litigation under the High Court Rules. Arbitration rules provide for limited, focused and relevant witness statements with equally limited and focused cross-examination on relevant disputed issues. The High Court Rules provide for absolution from the instance, which carries the risk that the dispute may not be resolved to finality, as dictated by the Arbitration Act 42 of 1965 and by most arbitration rules. The High Court Rules provide for an appeal procedure that is inherently foreign to the concept of arbitration. The High Court Rules prescribe the role of the presiding officer in detail. Arbitration rules provide an arbitrator with a wide discretion to ensure expeditious and cost-effective dispute resolution. So, my dear Freddie, Uncle Oswald’s advice is to leave the Polo for commuting to and from work and rather use your Land Rover Defender for the Sani Pass. It was specifically designed to get you to the top reliably, expeditiously and cost-effectively.
Uncle Oswald
WAIVING SECTION 20 OF THE ARBITRATION ACT 42 OF 1965?
Uncle Oswald,
I am an advocate representing the respondent in an arbitration. At our preliminary arbitration meeting, my opponent proposed that, by agreement, the parties waive reliance on Section 20 of the Arbitration Act 42 of 1965. We’ve agreed to revert to the arbitrator on this issue. The arbitrator is a senior legal practitioner and a Fellow of the Association of Arbitrators (Southern Africa) NPC. What is your advice?
Greetings
Savage Sally
___________________________________________________________________________
Dear Sally,
Section 20 of the Arbitration Act 42 of 1965 determines that an arbitrator may, on application by a party (and shall, if the court so directs on application by a party) at any stage before making a final award, state any question of law arising in the course of the arbitration in the form of a special case for the opinion of a court, or for the opinion of counsel. It is a statutory mechanism that can be – and often is – abused by a party playing for time. To have a special case for an opinion heard by a court or determined by counsel can take months, if not years. If the arbitrator is a legally trained person or a legal practitioner, which is very often the case, there is no reason why the arbitrator cannot conduct the necessary research, and answer the question of law herself, expeditiously and cost-effectively. Therefore, if the arbitrator is a legally trained person or a legal practitioner, it would be useful and beneficial for the parties to waive reliance on the provisions of Section 20 of the Act by agreement. Section 20 of the Act is ideally suited to the unlikely situation where the arbitrator is a person with no legal qualifications or experience. Therefore, Sally, in your situation, Uncle Oswald would agree to waive reliance on Section 20 of the Act.
Uncle Oswald
Please send your questions to our general manager, Rochelle Appleton, at rochelle@arbitrators.co.za. She will gladly take Uncle Oswald some tea and scones and ask him to share his pearls of wisdom with you.