Ways to speed up arbitration in South Africa

This problem requires urgent attention and can be addressed by arbitrators within the powers available to them under South Africa’s legal framework.

By adopting efficient procedural measures, actively managing the arbitration process from its inception, maintaining effective communication, and ensuring compliance by the parties, arbitrators can fulfil their duty to resolve disputes promptly. Failure to do so may negatively impact arbitration proceedings and lead disputing parties to question whether arbitration remains a commercially viable option for resolving their disputes.

The legal framework

There is legislation and case law in South Africa that encourages businesses to consider resolving disputes without going to court.

Uniform Rules of Court, which came into effect on 9 March 2020, provides parties with a flexible and efficient alternative to litigation, by allowing parties in litigation to voluntarily enter into a process of appointing an impartial and independent mediator to assist the parties in resolving the dispute between them. This dispute mechanism is meant to assist the courts and parties alike, both from a cost and time perspective and reducing the amount of cases coming before South Africa’s already inundated courts.

The 1965 Arbitration Act specifically provides a framework for disputes to be resolved via arbitration. In 2021, in the case of WK Construction SA (Pty) Ltd v Transnet SOC Ltd, the High Court said that “the essential purpose of arbitration is to speedily resolve legal disputes arising from commercial relationships instead of going through the courts”.

The courts have also played a role in laying out the scope of arbitrators’ powers in conducting proceedings before them, since the wording in the Arbitration Act is drafted broadly.

For example, section 14 of the Arbitration Act provides that unless the arbitration agreement provides otherwise, the arbitration tribunal or arbitrator may “from time to time determine the time when and the place where the arbitration proceedings shall be held or be proceeded with”.

In 2023, the Supreme Court of Appeal (SCA) was tasked with determining whether an arbitrator possess the discretionary power to determine a dispute that is not contained in the pleadings, and whether the commercial rules of the Arbitration Foundation of Southern Africa (AFSA) confer such power to be exercised by the arbitrator. The SCA confirmed that, even though the AFSA rules do not confer such a discretionary power, parties engaged in arbitration proceedings can agree to bestow upon an arbitrator a discretion to decide a dispute that has not been pleaded.

The AFSA was established to provide a fair and reliable system for private dispute resolution, to build panels of mediators, conciliators and arbitrators and to train and develop arbitrators and mediators. Its rules of arbitration proceedings provide an important framework for guiding how arbitrators conduct arbitrations in South Africa.

Article 6 of AFSA’s rules grants arbitrators the widest discretion and powers allowed by law to ensure the just, expeditious, economical and final determination of all disputes raised in the proceedings, including the matter of costs. If necessary, an arbitrator acting under the AFSA Rules for Administered Arbitrations can exercise all the powers accorded to them under those rules, provided it adheres to the 1965 Act.

The Association of Arbitrators (AOA) is another organisation which was established to promote arbitration as a means of resolving disputes, and to provide a body of competent and experienced arbitrators. Article 18 of the 2021 edition of the AOA Rules stipulates that "the arbitral tribunal, in exercising its discretion, shall conduct the proceedings so as to avoid unnecessary delay and expense and to provide a fair and efficient process for resolving the parties’ dispute”.

The problems arising

In 2013 the Supreme Court of Appeal in South Africa, in the case of Dexgroup (Pty) Ltd v Trustco Group International (Pty) Ltd, considered that “the advantages of arbitration over litigation, particularly in regard to the expeditious and inexpensive resolution of disputes … are diminished or destroyed entirely if arbitrators are confined in a straitjacket of legal formalism that the parties to arbitration have sought to escape”, adding that “arbitrators should be free to adopt such procedures as they regard as appropriate for the resolution of the dispute before them, unless the arbitral agreement precludes them from doing so” and stressing that arbitrators “are required to ensure … 'the just, expeditious, economical and final' determination of the dispute'.

However, while arbitrators enjoy wide range of discretion and powers, there is an observable trend of arbitration proceedings extending over excessive periods. One of the causes, in our view, is arbitrators not taking sufficient control of how flexibilities over how proceedings are carried out are used in practice.

This lack of control often manifests where arbitrators fail to interfere where a party presents arguments having little to no impact on their case. This impedes the proceedings, resulting in delay to awards being issued. Arbitrator’s often exhibit excessive caution in curtailing a party from presenting the evidence they wish to lead. This results in unnecessary delays and expenses, thereby defeating the purpose of arbitration as a quicker and more economical form of dispute resolution.

Another issue concerns requests for extensions of time.

Article 27 of the AOA Rules provides that "the periods of time fixed by the arbitral tribunal for the communication of written statements (including the statement of claim and statement of defence) should not exceed 45 days”, adding that “the arbitral tribunal may extend the time limits if it concludes that an extension is justified".

In our experience, requests for extensions are often not justified, and the arbitrator does not question the parties on extended time periods agreed between them. This alone undermines the power of the arbitrator.

On these already extended timetables, it is also common for parties to request further extensions for the submission of documents, without providing justifiable reasons. On top of this, parties sometimes agree among themselves to extend the periods of time just days before their agreed submission deadlines, effectively strong-arming the arbitrator into accepting these extensions without prior input or comment.

Excessive extensions of time run contrary to the general theme of timely proceedings provided for in legislation.

For example, Rule 41A (4)(d) of the Uniform Rules of Court provides that where a dispute is referred to mediation, the process shall be concluded within 30 days from the date of signature of the minute. Rule 41A(8)(a) of the Uniform Rules further amplifies the point that the conclusion of the mediation must occur within 30 days from the date of signature. The express use of 30 days creates an obligation that the determination of these alternative dispute resolution processes must be expeditious.

It also has tensions with what is provided for in AFSA’s rulebook.

AFSA Rule 10 stipulates that the arbitrator must give their award within 30 days after finalisation of the proceedings unless the parties otherwise agree, or the AFSA Secretariat permits an extension of that time.

Article 36 further provides that "unless the parties otherwise agree, the arbitral tribunal shall make its award as soon as practicable, but in any event within 60 days after the closure of the proceedings, provided that the parties, at the request of the arbitral tribunal, can extend this period in writing signed by them".

The case for change

Despite the broad discretionary powers and various flexibilities open to parties, arbitrators still have the duty to determine disputes expeditiously. We are of the view that the following measures need to be consistently implemented and enforced by arbitrators to maintain the core values and philosophy underpinning arbitration:

Adoption of a hands-on role in early stages

Arbitrators should adopt a more hands-on role in the early stages of proceedings. By being more proactive then, arbitrators can facilitate the adoption of a realistic timetable. Understanding the value and number of claims upfront will help in this regard, providing the arbitrator with a fair assessment of realistic timetables that can be agreed upon by the parties.

Awareness of witnesses and expert testimonies

Arbitrators should be made aware of the anticipated number of factual witnesses and expert witnesses for each side, as well as the purpose of each witness. By being informed of these details, the arbitrator can, when dealing with the experts, request that the experts perform a joint ‘Scott Schedule’ to streamline the actual issues in dispute. This approach ensures that the arbitration process remains focused and efficient.

Robust enforcement of procedural timetables

Arbitrators should exercise greater rigour in enforcing procedural timetables agreed upon by the parties. As explained above, parties to a dispute often wait until the last moment to either agree on an extension or submit a request to the arbitrator for an extension. To mitigate this issue, arbitrators should establish a specific timeframe within which an extension can be requested, such as no later than five working days before a party’s submission is due. By implementing this measure, arbitrators can effectively prevent last-minute extension requests and ensure the adherence with the procedural timetable.

We further suggest that there needs to be a clearly defined threshold for what constitutes a justified extension. By providing explicit guidance on what is considered justified, arbitrators would have a solid foundation for determining valid reasons for an extension. This guidance should be on a case-by-case basis.