UNCLE OSWALD’S Q&A FORUM – MAY 2020
Uncle Oswald, our resident know-it-all retired arbitrator, is sitting idle on his veranda smoking his pipe, awaiting your questions relating to ADR practice. Many years ago, when he did his articles with Hugo de Groot, Voet and Partners, he had the same ADR issues that you are faced with now.
ABSOLUTION? ABSOLUTION NOT!
Dear Uncle Oswald,
I have been appointed as arbitrator in an arbitral dispute governed by the 2018 Standard Procedure Rules of the Association (Southern Africa) NPC where the versions of both parties are equally probable. Because I’ve seen this happen in the High Court, my inclination is to grant absolution from the instance and just get out of here. Can I do that?
With absolute faith
Hesitant Harry
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Dear Harry,
In a court of law, absolution of the instance arises where a court decides that a plaintiff failed to prove the essential elements of its case, or that the evidence tendered by the plaintiff is as probable as that of the defendant. Without calling on the defendant, the court may then grant absolution from the instance, and the plaintiff may try again in a subsequent action.
In arbitral proceedings, an order of absolution from the instance will mean that no final award is made, and that the issue referred to you as arbitrator will remain undecided. There will be no finality. Section 28 of the Arbitration Act 42 of 1965 (the Act) determines that unless the arbitration agreement provides otherwise, an award shall … be final. Levy AJ in Irish and Co v Kritzas 1992 (2) SA 623 (W) 633 A expressed the view that I should add as well [with reference to the minority judgment in Bremer Vulkan v South India Shipping Corp [1981] 1 All ER 289 (HL)] that the finality of an award attributed to it by s28 of the Act argues forcibly against the validity of an award which lacks the essential element of finality.
An award of absolution would undoubtedly lack this essential element of finality. Therefore, as a general proposition, the lack of finality inherent in an award of absolution renders it in contravention of section 28 of the Act. However, the learned authors Butler & Finsen in Arbitration in South Africa on p161 at footnote 298 point out that because section 28 of the Act is subject to the arbitration agreement, the parties could confer the power to grant absolution on the arbitrator in their arbitration agreement. Uncle Oswald agrees. This situation could arise if the parties decide to arbitrate for example under the Uniform Rules of Court where rule 39(3) provides for absolution.
This is one of many reasons why Uncle Oswald regards it as a bad idea to arbitrate under the Uniform Rules of Court. This situation could equally arise if the parties decide to arbitrate under any set of rules which provides for absolution. If the arbitration agreement provides that the dispute between the parties shall be governed by the Standard Procedure Rules (either the 2013 or the 2018 edition) of the Association of Arbitrators (South Africa) NPC, an arbitrator shall not be entitled to award absolution. The Standard Procedure Rules contain no express provision for absolution. As such, dear Harry, as a general proposition you are not entitled to order absolution. You are obliged to bring finality to the dispute placed before you by dismissing or upholding the claimant’s claim on the merits of the evidence before you, undecided as you may be.
Uncle Oswald
THAT ALL-IMPORTANT PRELIMINARY ARBITRATION MEETING
Dear Uncle Oswald,
I’m about to embark on a preliminary arbitration meeting, and need some advice from a seasoned practitioner on a suitable format for the agenda I plan to set at such meeting. I know that what happens during a preliminary arbitration meeting is likely to determine the entire proceedings going forward. I am feeling the pressure. Can you assist?
Yours in hope
Pressured Peter
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Dear Peter,
Back in the day – it feels like yesterday – I played scrumhalf for Wanderers with Paul Kruger. Paul played flyhalf. That was long before he became the President of the Zuid-Afrikaansche Republiek. Paul was by then already an astute alternative dispute resolver, and I have learned a lot from him. The Suez Canal was under construction at the time and, predictably, ADR practitioners like Paul and me had a field day arbitrating construction disputes. Paul was, in his trademark euphemistic terms, averse to unnecessary work. We referred to him as lazy. He devised a pro forma agenda for his preliminary arbitration meetings. I have kept the agenda and I have, over the years, adapted it to keep abreast of statutory and regulatory developments in the world of arbitration.
I often receive enquiries, in particular from younger members of the Association, seeking guidance on the format and contents of an agenda for a preliminary arbitration meeting (to be distinguished from a pre-arbitration meeting). As you rightly state, what happens during a preliminary arbitration meeting determines the course of the proceedings. It is not something to be rushed over in 15 minutes, as often happens, with subsequent regret. The importance of upfront agreement between the arbitrator and the parties on matters, for example, relating to time periods have come to the fore lately during the COVID-19 lockdown. The annexed copy of the pro forma agenda in Word-format might come in handy. It lends itself ideally for use in both in-person meetings and meetings conducted by e-mail. You and your fellow arbitrators are welcome to consider and adapt it where necessary to suit your particular arbitration. It is not intended as a tool to be used indiscriminately, as is. It will require careful consideration in every arbitration. I would welcome constructive comments and I will share those with everyone in my column in future issues.
Before you make use of the annexed pro forma agenda, please consider the wise words of Professor David Butler and the late Mr Eyvind Finsen on pages 121 to 129 of Arbitration in South Africa: Law and Practice. You would be well advised, time and again, to consider what the learned authors have to say and to adapt the annexed pro forma agenda to the specific nature of the arbitration before you.
Because adjudication in South Africa is – unlike arbitration, which is statutory and contractual in nature – purely contractual in nature, it is a different kettle of fish. I intend to dedicate a further contribution to a pro forma agenda specifically for adjudication purposes.
Para bellum!
Uncle Oswald
Please send your questions to our General Manager Ms Rochelle Appleton at rochelle@arbitrators.co.za. She will gladly serve Uncle Oswald some tea, or G&T, and ask him to share his pearls of wisdom with you.