Judicial Hostility Towards International Arbitration Disputes in South Africa: Case Reflections

by | Jan 19, 2021 | SAMLJ, SAMLJ V31 I3

Judicial Hostility Towards International Arbitration Disputes in South Africa: Case Reflections

Author R Baboolal-Frank

ISSN: 1996-2185 Affiliations: Senior lecturer in Procedural Law, University of Pretoria. Source: South African Mercantile Law Journal, Volume 31 Issue 3, 2019, p. 365 – 377

Abstract

The term judicial hostility in this context refers to the courts’ reluctance to enforce arbitration awards. Judicial hostility towards international arbitration had found its place in American courts as judges were reluctant to enforce the terms of an arbitration agreement that would subject the parties to the arbitration and subsequently bind them to an arbitration award. The judiciary pronounced on the dispute rather than making the arbitration award an order of the court. The court did not provide enforcement mechanisms or execution orders in respect of arbitration awards. However, judicial hostility decreased in America because of the amendment of the Federal Arbitration Act, which governed the enforcement of arbitral awards between parties. Judicial hostility had many facets in South Africa, from the judiciary taking away the force of arbitration awards by finding that the arbitration agreement was void to Hlophe JP not supporting arbitration forums. Despite this fact, the South African judiciary has overcome its hostility but the legislation that governs arbitration is outdated. The intention of the legislature was to ensure that the International Arbitration Bill was promulgated during 2016. This article critically discusses judicial hostility towards arbitration awards.

The Recognition and Enforcement of Foreign Arbitral Awards Under the International Arbitration Act 15 of 2017

by | Jan 19, 2021 | SAMLJ, SAMLJ V31 I3

The Recognition and Enforcement of Foreign Arbitral Awards Under the International Arbitration Act 15 of 2017

Author Marlene Wethmar-Lemmer

ISSN: 1996-2185 Affiliations: Associate Professor in Jurisprudence, University of South Africa, Pretoria. Source: South African Mercantile Law Journal, Volume 31 Issue 3, 2019, p. 378 – 398

Abstract

The enactment of the International Arbitration Act has changed the international arbitration landscape in South Africa drastically. This new legislation has the potential to increase substantially the desirability of South Africa as an arbitral seat for international commercial arbitration matters. The Act incorporates the UNCITRAL Model Law on International Commercial Arbitration as well as the full text of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The New York Convention recently celebrated its 60th anniversary and its efficiency has been re-examined in academic commentary. In this article I seek to analyse the main provisions of the New York Convention as incorporated into the Act. I shall discuss recommendations for updating the Convention to serve the needs of modern international business transactions. I shall also highlight the most important provisions of the Model Law although they are not the main concern of this article.

Demand Guarantees in the Construction Industry: Recent Developments in the Law Relating to the Fraud Exception to the Independence Principle

by | Jan 19, 2021 | SAMLJ, SAMLJ V31 I3

Demand Guarantees in the Construction Industry: Recent Developments in the Law Relating to the Fraud Exception to the Independence Principle

Author Cayle Lupton

ISSN: 1996-2185 Affiliations: Assistant lecturer in Mercantile Law, University of Johannesburg. Source: South African Mercantile Law Journal, Volume 31 Issue 3, 2019, p. 399 – 416

Abstract

Over the last decade or so, South African courts have had to decide many cases relating to demand guarantees. This article is, however, concerned with recent case law that dealt with fraudulent calls on demand guarantees in construction disputes. In dealing with this development, the article explores, in the first instance, the construction context and the main legal features of demand guarantees (documentary compliance and independence). It then deals with the fraud exception to the independence principle. Against this background, recent South African case law (Phenix Construction and Group Five) that explored the parameters and standard of proof of this exception, is evaluated. Then the principle of documentary compliance and bad or good faith on the part of the beneficiary is evaluated with regard to their respective relations to the fraud exception. In this respect, attention is paid to the judgments of the High Court and the Supreme Court of Appeal in Raubex Construction v Bryte Insurance. The article concludes with a brief reflection on the principles analysed in the case law, and confirms that the recent developments in the law relating to fraud are in alignment with international trends.

Constitutionalisation and Transformation of Credit Law Practices such as Set-Off: An Analysis of National Credit Regulator v Standard Bank Ltd of South Africa Ltd

by | Jan 19, 2021 | SAMLJ, SAMLJ V31 I3

Constitutionalisation and Transformation of Credit Law Practices such as Set-Off: An Analysis of National Credit Regulator v Standard Bank Ltd of South Africa Ltd

Author Brighton Mupangavanhu

ISSN: 1996-2185 Affiliations: Senior lecturer in Mercantile and Labour Law, University of the Western Cape. Source: South African Mercantile Law Journal, Volume 31 Issue 3, 2019, p. 417 – 434

Abstract

Often there is a gap between the black letter of the law, or the aspirations for law reform enunciated by a statute, and how the law actually transforms practices in relevant industries. This was the case in the credit industry, specifically with respect to the practice of set-off by banks who are in a credit agreement with a customer. Sections 90(2)(n) and 124 were inserted into the National Credit Act 34 of 2005 to introduce a new system of set-off that represents a complete break from set-off at common law. The common-law set-off practices resulted in injustices to consumers and favoured credit providers who could apply it without consultation with, or notice to, customers. The relevant purpose of the NCA in this regard was to address and to correct imbalances in negotiating power between consumers and credit providers. A relevant way of achieving this is through protecting consumers from deception and unfair conduct by credit providers. To address such deception and unfair conduct, the Act, through sections 90(2)(n) and 124 intended to exclude the common law from applying to credit agreements governed by the Act. Yet despite the existence of the new set-off provisions in the NCA, banks in South Africa, between 2007 and 2019, continued to apply the common-law rules even to credit agreements governed by the Act, contrary to the spirit, purposes, and objects of the Act. This all changed after the National Credit Regulator approached the court to seek a declaration by the court that the bank’s right to apply common-law set-off was ousted by the NCA. The court issued such a declaration in 2019. This article analyses National Credit Regulator v Standard Bank of South Africa Ltd 2019 (5) SA 512 (GJ). It looks at the facts, the legal question(s) answered by the court, the judgment, reasons for the judgment and the impact of the judgment on the development of credit law jurisprudence. Under impact, the note looks at the important role of contextual interpretation and the teleological interpretation of statutes in the transformation and constitutionalisation of credit law, and how the effective enforcement of the NCA can bring to life the aspirations of statutes and contribute towards transforming unconstitutional practices to align them with the spirit, purport and objects of the Bill of Rights. The case note also argues for improved clarity of some provisions of the NCA, and for the provision of an express ouster of the common law in section 124.