AFSA launches new international arbitration rules

Out-Law News | 02 Jul 2021 | 3:56 pm | 1 min. read

Parties to international arbitrations being heard in South Africa will now have access to third-party funding and be able to take advantage of electronic filing and digital hearings under new rules.

The Arbitration Foundation of Southern Africa (AFSA) International Arbitration Rules came into effect on 1 June 2021. The rules follow the introduction of the South African International Arbitration Act in 2017, and are intended to improve AFSA’s management of international cases and make their resolution easier. The rules were prepared by a panel of experts to reflect international best practice.

Arbitration expert Andrew Fawcett of Pinsent Masons, the law firm behind Out-Law, said: “The rules will go a long way in establishing South Africa as a hub for international arbitration. They have the potential to make AFSA the preferred choice for cross-border disputes that may arise in the African context, especially within the Southern African Development Community region.”

Fawcett Andrew July_2019

Andrew Fawcett

Senior Associate

The rules will go a long way in establishing South Africa as a hub for international arbitration.

The rules expressly provide for a party to the arbitration to make use of third-party funding, provided the existence and identity of the third-party funder is disclosed to the tribunal, secretariat and other parties involved as soon as possible.

The rules allow tribunals to hold hearings in person or by “any other means” they consider appropriate, including video and phone conferences or a combination of methods. This allows the tribunal to be more flexible in the manner in which it conducts hearings, particularly in the context of the Covid-19 pandemic.

In order to enable urgent interim or conservatory relief, the rules allow for the appointment of an emergency arbitrator who is required to decide the claim for interim of conservatory relief within 14 days of their appointment.

Fawcett said this was a useful addition to the rules as it meant parties in an international dispute would not need to go to court for urgent relief, which in cross border disputes may pose difficult jurisdictional challenges. However, the rules do not limit a party’s rights to apply for any interim or conservatory relief from the appropriate courts.

The new international rules also provide for the early dismissal of a claim or defence on the basis that a claim or defence is manifestly without legal merit, or the claim or defence is manifestly outside the tribunal's jurisdiction. Applications for early dismissal must be made with 30 days of the constitution of the tribunal.

The early dismissal rule is intended to ensure that unsustainable arbitrations are dealt with efficiently at the outset without the parties incurring substantial costs pursuing or defending unsustainable claims.

The rules also introduce provisions on multiple contracts, joinder and consolidation, which address the availability of such procedures both prior to the constitution of an arbitral tribunal and after the constitution of an arbitral tribunal.