Disputes are an unavoidable part of life. Wherever people interact or work together, there will eventually be a dispute of some kind, whether a difference of opinion or where one party has suffered at the hands of the other. In most cases, disputes are settled between the two parties without any intervention; however, in cases where there are legal issues involved, this is not always the case.
Fortunately, legal disputes don’t always have to go to court, which can be costly and public and may lead to further ill will between the disputing parties. An alternative dispute resolution (ADR) method is arbitration.
Despite this, not many people know about arbitration. We decided to write this article to spread awareness of this method of dispute resolution, which can save you time and money.
As an attorney, you need to be skilled at arbitration.
What is arbitration?
Arbitration is a method of resolving disputes where the dispute is submitted to one or more neutral arbitrators who then settle the dispute. This can only be done through the mutual agreement of all parties involved in the dispute. Arbitrators are chosen by the disputing parties, or they can request a professional through organisations such as the Arbitration Foundation of Southern Africa (AFSA). The main characteristics of arbitration are as follows:
- It’s consensual: Arbitration can only take place if both parties agree to it. This can be done when the dispute arises, or they can include an arbitration clause in their contract for any future disputes. Unlike mediation, a disputing party cannot withdraw from arbitration once agreed upon.
- Disputing parties choose the arbitrator/s: The disputing parties choose the arbitrator/s or can request a professional recommendation from an organisation. They can also directly appoint members of the arbitration tribunal, as long as it is agreed to by both parties.
- It’s neutral: As arbitration makes no distinction between domestic and international proceedings, disputing parties can choose applicable law, language, and venue. This ensures that no party has an advantage over the other due to a favourable environment.
- It’s confidential: As long as arbitration is not made an order of the court, arbitration is confidential. This includes the existence of the arbitration proceedings, any disclosures made in proceedings, and the award handed down by the arbitrator.
- Arbitrator’s decision is final: The arbitrator’s decision is final and can be made an order of the court to enforce compliance.
How arbitration works in South Africa
Arbitration in South Africa is governed by the Arbitration Act 42 of 1965 and follows a strict procedure. This begins when the disputing parties agree to enter into arbitration and record this agreement in writing. This agreement should:
- Clearly define the dispute to be arbitrated.
- Define the authority and powers of the arbitrator.
- Stipulate who the arbitrator is or how they will be appointed.
- Where arbitration proceedings will be held.
- Procedures and rules to be followed.
- Whether or not there will be an appeal process.
- The confidentiality of the proceedings.
- Determination of costs and assessment thereof.
Once an arbitration agreement has been reached and the arbitrator instated, all parties involved in the dispute and the arbitrator meet at the agreed time and place. The dispute is then heard in private by the arbitrator, who decides on a fair resolution to the dispute. This decision is final and must be complied with by both parties.
Winners of arbitration can vary and will depend on the circumstances in each case, as arbitrators strive to find a fair resolution to any dispute they are presented with. This ruling can also include who pays for the arbitration proceedings unless plans for payment are stipulated in the arbitration agreement.
Example of arbitration
A common form of arbitration in South Africa is done by the Commission of Conciliation, Mediation and Arbitration (CCMA). Though it is worth noting that arbitration at the CCMA can be statutory and is conducted in a formal hearing which is recorded.
The CCMA is most often concerned with labour disputes, therefore as an example let us imagine you were fired for what you deem to be unfair reasons, such as not answering a work call outside of office hours. This would be referred to the CCMA who would first attempt conciliation, which aims to reach a mutual settlement agreement between you and your employer.
Should this fail, it would move to statutory arbitration. At this stage, you and your employer would attend a hearing, and both present your case, with evidence. The arbitrators of the hearing will then reach a decision regarding the dispute, which must be adhered to by both parties. In this example, it would probably be a ruling of unfair dismissal as it was personal time.
Conclusion
Arbitration is a method of resolving disputes that can be preferable to litigation as it is more discreet and neutral to all parties involved. Arbitration is also a speedier process than going to trial, as you don’t waste time waiting for a court date. Should you ever find yourself involved in a dispute, consider arbitration for a fast and fair resolution.
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Last updated on 10 April 2023.