Arbitration in South Africa has become a far easier and more affordable way of settling disputes. Even the common layman can easily defend himself and his rights with out incurring great costs or waiting long periods of time waiting for court litigation. When a dispute involves technical matters, it is often useful to arbitrate the dispute as arbitration allows for the parties to appoint the arbitrator. This ensures that the person who arbitrates the dispute is experienced in the field to which the arbitration relates.
Currently, the waiting period for a trial date in the South Gauteng High Court is between eighteen months to two years from the date that pleadings close. Arbitration, however, does not have this time delay. Once pleadings have closed, the arbitrator and the parties can set the matter down for hearing at any time that is convenient. Furthermore, the fact that the arbitrator and the parties choose the dates of hearing (as opposed to merely having a date allocated) ensures that the parties’ legal teams are available to argue our matter. There is no such guarantee when trial dates are allocated by the courts.
In most cases arbitration agreements are upheld by both parties as it avoids any further complications. Arbitrations are governed by the Arbitration Act 42 of 1965. Usually, once parties agree to have a dispute arbitrated, an arbitration agreement is signed which sets out the rules by which the arbitration will be governed. Alternatively, if the Arbitration Foundation of South Africa (“AFSA”) is used, the AFSA rules will apply to the arbitration. However in some cases it might be necessary to take further action to secure payment.
In such cases where a party fails to meet the agreement, the prevailing party must seek to enforce the award by asking a court where the losing party has assets to turn the arbitration award into a court judgment, upon which the judge can then issue a fieri facias (“fi fa” in short), which is an order to the local sheriff to seize enough property of the losing party to make the prevailing party whole again, as well as to in most cases cover the court costs incurred by the entire process of enforcement. This is also helps for most arbitration agreements to be up held, as in most cases in would involve much higher court expenses and the loss of property and embarrassment of having it forcefully removed. Either party may also ask a court to recognize the arbitration award to prevent the other party from filing a lawsuit for the same dispute in that jurisdiction. Please note that the court should drop the lawsuit once you as the defendant show them the dispute has already been arbitrated.
Recognition of an award is simply a quicker and less costly prevention strategy for when you think the opposing party is likely to file a lawsuit against all odds. These two processes of recognition and enforcement of arbitration awards are possible in all jurisdictions of the 146 countries that signed the 1958 UN Convention of New York.
