1. 1 ST ICC AFRICA REGIONAL ARBITRATION CONFERENCE LAGOS NIGERIA THE IMPACT OF THE JUDICIARY ON ARBITRATION IN SUB-SAHARAN AFRICA ROGER WAKEFIELD

2. 2 INTRODUCTION Outdated 1965 Arbitration Act (Excessive opportunities for disruption) v Pro-Arbitration judiciary

3. YORIGAMI MARITIMES CONSTRUCTION COMPANY LIMITED V NISSHO–IWAI COMPANY LIMITED 1977 (4) SA 733 (C)  Held : o Dispute to be determined by court despite mandatory arbitration clause. o Arbitration clause does not oust the jurisdiction of the court to determine the dispute. o Discretion whether or not to give effect to an Arbitration clause. o Discretion to be judicially exercised and very strong case for exercise must be made. o Convenience is a good ground for excluding arbitration.  Court ignored earlier Appellate division judgment - discretion must be exercised only when arbitration proceedings intrinsically unfair. 3

4. 4 Imminent enactment of International Arbitration Act, incorporating UNCITRAL Model Law including article 8 – court obliged to refer to arbitration

5. 5 TELCORDIA TECHNOLOGIES INC v TELKOM SA LIMITED 2007 (3) SA 26 (SCA)  Court a quo upheld Telkom’s review of arbitrator’s award. o Arbitrator’s incorrect interpretation of contract equals gross irregularity in terms of Section 33 of Arbitration Act. o Supreme Court of Appeal held: court a quo completely disregarded the principle of party autonomy. o Parties are bound by arbitrator’s findings whether it is right or whether it is wrong. That is a consequence of the agreement to arbitrate – party autonomy.

6. ENFORCEMENT OF FOREIGN ARBITRAL AWARDS  South Africa party to New York Convention.  Convention given effect to by the Recognition and Enforcement of Foreign Arbitral Awards Act, 1977.  Enforcement Act defective in certain respects: -eg  Section 2(1): “a foreign arbitral award may, subject to Sections 3 and 4, be made and order of court”.  Section 2(1) intended to give effect to Article 3 of the Convention: “each contracting state shall recognise arbitral awards as binding and enforce them”.  Does Section 2(1) provide a judicial discretion? 6

7. HOW DO SOUTH AFRICAN COURTS DEAL WITH ENFORCEMENT OF FOREIGN ARBITRAL AWARDS? > General attitude –  Only in the exceptional instances will courts not recognise foreign arbitral awards. -Refusal often on the grounds of public policy: -Phoenix Shipping v DHL and Bateman Engineering 2012 (3) 381 (C) o Court refused recognition because arbitration agreement invalid. o Enforcement contrary to South African Public Policy.  Enforcement Act to be repealed and replaced by International Arbitration Act. 7

8. OBSTACLE TO ENFORCEMENT: PROTECTION OF BUSINESSES ACT, 99 OF 1978, RESTRICTS ENFORCEMENT OF CERTAIN FOREIGN ARBITRAL AWARD  Section 1: - Foreign arbitral awards (and judgments) require ministerial consent for enforcement if they arise from “an act or transaction connected with the mining, production, importation, exportation, refinement, possession, use or sale, or ownership of any matter or material.“  Courts construe section 1 very narrowly.  In terms of latest judgments, ministerial consent is required only for awards arising from transactions involving the mining or sale of raw materials.  Act to be amended to exclude foreign arbitral awards. 8

9. CONCLUSION  South African courts respect party autonomy.  Arbitration can only be disrupted on very limited grounds.  Enforcement of foreign arbitral awards refused only in exceptional instances (usually public policy).  South Africa set to enter the international arbitration stage with the enactment of the International Arbitration Act. 9

10. THANK YOU Date 21 June 2016 Legal notice: Nothing in this presentation should be construed as formal legal advice from any lawyer or this firm. Readers are advised to consult professional legal advisors for guidance on legislation which may affect their businesses. ©2016 Werksmans Incorporated trading as Werksmans Attorneys. All rights reserved.