The International Arbitration Act
ON POLICYMAKERS ’ DESKS
The International Arbitration Act
For decades , South African parties to international construction contracts have often been faced with trying to negotiate the seat of their arbitration , with the other party insisting on it being held in an expensive jurisdiction ( for South Africans ), such as Switzerland or the United Kingdom . This may be about to change . The International Arbitration Act ( the ‘ Act ’) was signed into law and published on 20 December 2017 . Section 6 of the Act incorporates the Model Law on International Arbitration (‘ Model Law ’) into South African law , to facilitate the resolution of international arbitrations . The enactment of the Model Law brings South Africa in line with 74 foreign jurisdictions . The Act is applicable to “ any international commercial disputes which the parties have agreed to submit to arbitration under an arbitration agreement and which relates to a matter which the parties are entitled to dispose of by agreement ”. The Act sets out when an arbitration is to be considered international as follows :
• The parties to an arbitration agreement have , at the time of the conclusion of that agreement , their business in different States ; or
• One of the following places is situated outside the State in which the parties have their places of business : 1 . the place of arbitration if determined in or pursuant to the arbitration agreement ; or 2 . any place where a substantial part of the obligations of the commercial relationship is to be performed ; or 3 . the place with which the subject matter of the dispute is most closely connected .
• The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country .
The Arbitration Act of 1965 is no longer applicable to arbitrations covered by the Act . Section 2 of the Arbitration Act , however , is still applicable when it comes to enforcement and recognition of arbitration awards . This is the section that states that matrimonial matters or matters relating to status may not be referred to arbitration . The parts of the Model Law that are applicable are set out in Schedule 1 . Parties must ensure that they consider this schedule when conducting international arbitrations , as it sets out the rules in respect of the conduct of international arbitration proceedings ( for example , how parties are to appoint arbitrators ; jurisdiction of the tribunal ; power of the tribunal to order interim measures ; provision of security ; statements of claim and defence ; form and contents of the award ; and grounds for refusing to enforce an award ). The Act incorporates the UNCITRAL Rules on Conciliation but does not incorporate the UNCITRAL Rules on Arbitration , the parties being free to agree on their own rules . Should the parties fail to agree , the tribunal may conduct the arbitration in a manner it considers appropriate . The Act provides for the recognition and enforcement of foreign arbitral awards , subject to certain exclusions set out in section 18 . The enforcement of an award made in South Africa would of course be subject to the laws of the country in which the award is enforced . The Act not only provides the legislative framework for the settling of disputes locally by parties engaged in international contracts , but also provide a basis for international parties to settle their dispute in South Africa , since it is not a requirement that one of the parties is South African . The Act is a welcome development in our law and provides the critical legal framework for parties engaged in international transactions to resolve their disputes , and enforce international awards , locally .
Source : MDA Construction and Technology Attorneys amicuspublico . com
The enforcement of an award made in South Africa would of course be subject to the laws of the country in which the award is enforced .
4 - CEC March 2018