International Construction Law Review
THE NEW DAWN IN INTERNATIONAL ARBITRATION IN SOUTH AFRICA
Patrick Lane SC
It has taken more than 24 years for South Africa to modernise its Arbitration law. The realisation that the World had moved beyond the domestic regime of arbitration and had developed a regime of rules peculiar to international arbitration was a long and hard battle fraught with political issues. There was also considerable debate as to whether the UNCITRAL Model Law should be adopted and to what extent the Act had to take cognisance of aspects which are particular to South Africa such as transparency of arbitrations in relation to disputes involving public bodies.
The promulgation of legislation which brings South Africa in line with international development will have a considerable impact on the construction industry. A number of international contractors are operating in Africa and there are South African contractors working outside the borders of South Africa. There has been a growing demand within the industry for appropriate legislation which would govern arbitrations in relation to cross-border disputes.
Another piece of legislation had also come under criticism. South Africa became a signatory to the New York Convention in 1976 and, in giving effect to it, passed the Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977. Although it had acceded to the Convention without reservation, it omitted one significant element, the recognition and enforcement of agreements to refer disputes to arbitration. In South Africa recourse had to be had to the domestic courts to enforce the agreement.
In 1978 South Africa passed The Protection of Businesses Act1 which restricted the enforcement of certain foreign judgements, orders, directions, arbitration award and letters of request. The Act adversely reflected on South Africa giving full effect to the Convention.
The Model Law was certainly the best and most efficacious means of bringing South Africa into the global arena. It came into existence in December 1985 and was regarded by the General Assembly of the United Nations as more likely to lead to a realistic degree of harmonisation in practise. It limits the scope of interference by National Courts and emphasises the consensual nature of arbitration. It sets out to establish a core of mandatory provisions to ensure fairness and due process and to provide a framework for conducting international arbitrations. It also
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