Arbitration Blues

Proposed legislation hampered by misconceptions

South Africa is being left behind its major trading partners in the arbitration arena as a consequence of its failure to promulgate two important pieces of legislation. This is the view of Chris Binnington, recently re-elected chairman of the Association of arbitrators for the ninth consecutive year.

The legislation, which the Association has been instrumental in developing, comprises the amendments to the present domestic arbitration act, now 40 years old, and the proposed new legislation for an international arbitration act incorporating the internationally accepted UNICITRAL-model law as endorsed by the United Nations.

“Regrettably this legislation has become entangled in the complex political system we are presently faced with where there is a perceived conflict between the judiciary and the state, as well as the perception by certain members of the judiciary that the use of arbitration calls into question the competence of our courts,” says Binnington.

Binnington says that in some quarters it is argued that the oft preferred freedom that arbitration allows in choosing the arbitrator as opposed to having a judge “arbitrarily” assigned to hear the court action, is a threat and an insult to the court system, which is already in many instances, bring bypassed.

It is interesting,” says Binnington, “that this particular aspect of ‘freedom of choice’ is the legal process has, both domestically and internationally, always been hailed as one of the benefits of arbitration and it is regrettable that the benefit is now being distorted by those who would prefer to see disputes heard in court.”

On the construction front, where the Association had its genesis, all four forms of the contract endorsed by the Construction Industry Development Board (CIDB) have now also introduced adjudication into the dispute resolution clause. To keep abreast with the changing trends, the Association amended its constitution three years ago to enable it to promote adjudication as one of its primary aims and objectives.

“If the trend, which wan established by legislation in the UK, is reflected in South Africa then adjudication is set to revolutionise the dispute resolution arena in this country,” adds Binnington, ‘adjudication has demonstrated a powerful ability to resolve disputes in a cost effective manner without the disruptive and indeed destructive costs associated with court litigation or arbitration.”

Construction World September 2005