January 2009 - Arbitrarily speaking by sdsdfqw21


                                                                Arbitrarily speaking ...
                                          Newsletter of the Association of Arbitrators (Southern Africa)


3 Floor
                                                                                      CHAIRMAN’S LETTER
Sandown House
Norwich Close
Sandown                  Firstly, my very best wishes to all members for        developments in particular from organisations
                         the coming year. Whilst South Africa has, to           such as the Swiss Association of Arbitrators,
South Africa
                         some extent, been insulated from the global            who have introduced innovative developments
P.O. Box 653141          financial meltdown, it is inevitable that we shall     in their own rules. Whilst there is no fixed
Benmore                  increasingly feel the effects of the situation in      timetable for the publication of an amended
                         the months ahead. As far as the Association is         set of Rules it is probable that this will take
South Africa
                         concerned this might even be seen to be a              place in the first half of 2009.
Secretariat:             beneficial development given that the numbers
arbitrators@icon.co.za   of disputes are likely to increase. Whatever           Elsewhere in this newsletter you will find a
                         the impact the Association will continue to            report on the expert witness course which was
Tel: +27 (11) 884-9164
                         fulfil its overall objectives by providing a body      run by the Association in Cape Town and
Fax: +27 (11) 884-9167
                         of competent Arbitrators, Mediators and                Johannesburg. Whilst the turnout for these
                         Adjudicators to assist in finding commercial           courses was disappointing, those who did
                         resolution of disputes.                                attend were very complimentary in regard to
                                                                                the presentations, their content and the
                         The Association was saddened and shocked to            knowledge of the speakers involved.                In
                         hear that Professor Richard (Dick) Christie            particular the Association would like to express
                         suffered a serious stroke in December. Dick            its thanks to Bruce Brodie the UK Barrister and
                         has been the Hon President and a major                 fellow of this Association, Advocates Patrick
                         contributor to the Association over the years. I       Lane SC and Gary Myburgh SC. One of the
                         know you will all join me in wishing Dick a            interesting concepts which emerged during the
Chris Binnington         speedy recovery.                                                                 courses         was    the
cdb@bca.co.za                                                                                             discussion       on    “hot
                         Although Gauteng activities                                                      tubbing”, a process by
Vice Chairman                                                   THE ANNUAL GENERAL MEETING
                         were limited in 2008 the                                                         which       experts      of
Judge Fergus Blackie                                              WILL BE HELD IN MAY 2009
fcblackie@telkomsa.net   Association has continued                                                        similar         disciplines
                         to   be    active.      Several                                                  together        with   the
Treasurer                meetings    of    the    Rules                                                   Arbitrator participate
Prof Ronnie Schloss
schlossy@mweb.co.za      Committee have taken place with a view to              jointly in an interactive procedure designed to
                         revising the August 2005 rules for the conduct         provide    the     Arbitrator      with    firsthand
Editor                   of arbitrations. This has been necessitated by         knowledge of the respective positions of the
Donald Joubert           practical considerations of the import of              experts and to allow constructive debates
                         certain of the Rules together with cognisance          towards an agreed expert position.
                         having     been      taken        of   international

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                           Copies of the papers are available from the        appropriate experience to present a series of
      2009                 Secretariat for a small fee to cover duplication   evening lectures around the country.
                           and postage.
                                                                              As usual the Annual General Meeting will be
                           Regrettably the Association’s attempts to          held in May 2009, the format, content and
                           obtain a speaker for a series of presentations     venue will be disclosed in due course. I look
                           on the very topical issue of football stadia       forward to meeting as many of you as possible
                           while drawing on the expertise of someone          in the course of the year and in particular wish
                           who was intimately involved in Arsenal’s           all those who are involved in the certificate
                           Emirates Stadium in the United Kingdom, were       and/or fellowship admission course every
                           unsuccessful. With the 2010 world cup just         success with their studies.
                           around the corner we feel sure that this is an
                           objective worth pursuing and it is hoped to        Sincerely,
“Gentlemen, I fervently    bring out to South Africa someone with the         CHRIS BINNINGTON
 trust that before long
    the principle of
arbitration may win such                                  A WORD FROM THE VICE CHAIRMAN
confidence as to justify
its extension to a wider
                           Long ago Voet summarised the advantages of         alternative to litigation that it should be.
  field of international
                           arbitration over litigation:
                           “[I]t is a common thing for arbitrators to be      The problem is not new either internationally
                           approached with a view to the termination of a     or in South Africa. Fourteen years ago Butler
   Henry Campbell-
                           dispute and the avoidance of a formal trial. The   and Finsen wrote about it in their book
                           [reasons for resorting to arbitration] are the     Arbitration in South Africa Law and Practice.
                           fear of the too heavy expenses of lawsuits, the    “Practical experience and a perusal of the
                           din of legal proceedings, their harassing          arbitration literature prove that two of the
                           labours and pernicious delays, and finally the     main advantages traditionally claimed for
                           burdensome and weary waiting on the                arbitration compared to litigation, namely
                           uncertainty of the law”                            speed and reduction in costs are not achieved
                                                                              in practice, particularly where the procedure
                           Recently a member of the Association wrote         emulates the rules of the supreme court”.
                           complaining that arbitrations had become
                           increasingly         slow,                                                 The problem seems to be
                           legalistic and expensive.                                                  still with us today. The
                           There is too much delay,                                                   question    is    what,   if
                           too many lawyers, too           WHAT IS NEEDED IN ARBITRATION              anything can be done
                           much law, and the costs         ARE QUICK, SIMPLE, INEXPENSIVE             about it.
                                                              ANSWERS TO BUSINESS AND
                           are too high. He felt that
                                                                 TECHNICAL PROBLEMS.
                           this was defeating the
                           purpose of arbitration.                                                    A great deal of work is
                           What     is    needed     in                                               being                  done
                           arbitration, he said, are                                                  internationally    and    in
                           quick, simple, inexpensive answers to business     sophisticated      (mainly      western)       legal
                           and technical problems. He feels that, as          jurisdictions. Those of you who attended the
                           practised, arbitration is not the attractive       symposium on the specialist witness in

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                            arbitration (arranged by the Association and        to revive and promote the proposed acts.
  2009                      reviewed later in this newsletter) will have
                            heard about the work that has been done             Nevertheless, there is a responsibility on any
                            through revised legislation and rules to            arbitration association to do what it can to
                            improve the quality and delivery in arbitration     actively promote the best use of arbitration as
                            elsewhere and the role that the various             a means of resolving disputes.
                            arbitration   associations    have   played   in
                            improving procedures and delivery.                  This Association has a committee looking at the
                                                                                rules which will make recommendations for
                                                                                             amendments                 hopefully
                                                                                             incorporating as much of the new
                                                                                             and improved practice developed
                                                                                             elsewhere as possible and taking
   COMPOSITION OF FELLOWS                                                                    out some of the kinks in the existing
                                                                                             rules that have become apparent
                                                                                             with use.
                          1%                                                                 Ultimately, however, an important
                   17%             13%                     Attorney's
                                                                                             part of the solution to the problems
         2%                                    12%                                           of cost, delay and technicality will
                                                                                             depend on the quality of the
                                                           Education                         Association’s arbitrators and the
     28%                                                   Engineers                         way in which they deal with their
                                                           Judges                            arbitrations. We must look again at
                         1% 3% 1%                                                            our initial training, our continuing
                                                           Project Management
                                                           Quantity Surveyors                educational programmes and the
                                                           Valuer                            discipline of our members to make
                                                                                             sure that all members are aware of
                                                                                             their    responsibility   and    are
                            Unfortunately, in South Africa, the proposed        confident     in     the   discharge    of   that
                            new South African Arbitration Acts covering         responsibility. Hopefully in the course of the
                            both domestic and international arbitration         coming year we can deal with these matters
                            and aimed at bringing our legislation into line     with members in lectures and workshops and
                            with   common       and      improved   practice    make progress in minimising the problems.
                            elsewhere in the world seems to be buried and
                            lost at the bottom of Government priorities.        Sincerely,
                            The Association, with others, is actively trying    JUDGE FERGUS BLACKIE

                                                                          THE EXPERT WITNESS CONFERENCE

                            On the 4th and 6th November 2008, the               Litigation. The idea for the conference came
                            Association hosted, successively in Cape Town       from the Chairman of the Association, Chris
                            and Johannesburg, two one day conferences           Binnington.
                            on The Expert Witness in Arbitration and

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                              The conferences had two major objectives. The             by a workshop dealing with a problem arising
      2009                    first was to improve and develop the                      from the preceding lecture. The standard of
                              knowledge and understanding of the purpose,               presentations and the delivery from the
                              value, role and ethics of an expert witness               speakers was very high.
                              among arbitrators and practitioners dealing
                              with and presenting such evidence together                At the end of the conferences, the Association
                              with expert witnesses themselves. The second              expressed its thanks to the speakers for the
                              was to introduce participants at the conference           quality of their presentations and for the time
                              to current and developing practice in the                 and trouble that they had take to make the
                              presentation and treatment of such evidence               subjects discussed clear and interesting. Those
                              internationally and in South Africa.                      thanks are repeated here.

                              Four      speakers          were                                                   The topics covered in the
                              involved       in            the                                                   course were identical on
                                                                          IMPROVE AND DEVELOP THE
 “To give a satisfactory      conferences        –    Bruce                                                      each day.
                                                                       KNOWLEDGE AND UNDERSTANDING
decision as to the truth it   Brodie, a South African                  OF THE PURPOSE, VALUE, ROLE AND
is necessary to be rather     born member of the                         ETHICS OF AN EXPERT WITNESS             They started with two
  an arbitrator than a        London        Bar            and                                                   sessions on, firstly, the
 party to the dispute.”       experienced arbitrator in                                                          general     position    and
                              England                      and                                                   recent         developments
        Aristotle             internationally; Advocates Pat Lane and Gary              concerning the expert witness in South Africa,
                              Myburgh, both Silks practicing respectively at            in England and internationally together with
                              the Johannesburg and Cape Bars and both very              the more important rules of evidence in South
                              experienced in arbitration, together with Chris           Africa in litigation and the distinguishing
                              Binnington, who in addition to being Chairman             evidential features of arbitration and expert
                              of the Association, is a well known and                   evidence.
                              respected practitioner in arbitration.
                                                                                        The next session covered the expert witness
                              The speakers chose their own methods of                   himself – the definition, the purpose and role
                              presentation but the main method was by                   of the expert witness together with his
                                                                                                       responsibility in regard to ethics,
                                                                                                       impartiality,       accuracy      and
                                 Nomination Application Statistics
                                                                                                       The final session dealt with the
                                          2004                   71                                    expert witnesses report – its
                                          2005                   96                                    preparation     and       presentation
                                          2006                   114                                   together with cross examination
                                          2007                   131                                   of expert witnesses.
                                          2008                   172
                                                                                                       It is not possible here to go into
                                                                                                       the     full    detail      of   each
                                                                                                       presentation but there was some
                                                                                                       extremely interesting information

                              lecture    (with       or    without      power   point                  on streamlining and improving

                              assistance). Each lecture session was followed            the efficiency of the arbitration proceedings

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                           and the presentation of the evidence of expert
     2009                  witnesses.     In   regard    to   expert   witness   There was one disappointing feature of the
                           evidence, the early exchange of experts’              conferences – only a few members attended.
                           reports, pre-hearing meetings between the             Those who did attend learned a great deal. For
                           experts of the opposing sides and what was            that reason, it would be valuable to run a
                           called ‘hot-tubbing’(a procedure whereby the          similar conference in the future but this time
                           experts presented themselves before the               aim for a wider audience and publicity.
                           tribunal members – with or without their legal
                           representatives – to discuss their reports and        Sincerely,
                           differences with the tribunal members) were           JUDGE FERGUS BLACKIE
                           some of the areas covered.

“Wars will remain while                                        DEVELOPMENTS REGARDING ARBITRATION
human nature remains. I                                        LEGISLATION IN THE SADC REGION
  believe in my soul in
    cooperation, in
  arbitration; but the     Mauritius                                             users. There are no restrictions on the use of
soldier's occupation we    The Mauritian Parliament passed a new                 foreign lawyers as party representatives or
cannot say is gone until   International Arbitration Act on 25 November          arbitrators. Where the parties do not make
human nature is gone.”     2008 which apparently commenced on 1                  their own arrangements for the appointment
                           January 2009.       The Act has a number of           of the arbitral tribunal, appointments are
 Rutherford B. Hayes       features of interest to those working for the         handled by the Permanent Court of Arbitration
                           reform of South Africa’s arbitration legislation.     (PCA) in the Hague. The parties are free to
                                                                                 decide on their own procedure for challenging
                           The (Mauritian) International Arbitration Act         an arbitrator, and where the challenge is
                           applies only to international arbitration, while      unsuccessful, the challenger may refer the
                           a separate regime is retained for domestic            challenge to the PCA, instead of the local court.
                           arbitration. This was also
                           the route recommended                                                        The       court      with
                           for South Africa by the SA             THERE ARE AT LEAST SOME               jurisdiction under the
                           Law Reform Commission                INDICATIONS OF SUPPORT FOR              Act is the Mauritian
                           in     1998,        whereas        ARBITRATION LAW REFORM WITHIN             Supreme Court and all
                           Zimbabwe and Zambia                         THE STATE SECTOR                 applications are to be
                           have     adopted        the                                                  heard by a panel of three
                           UNCITRAL Model Law on                                                        judges. An appeal lies as
                           International Commercial Arbitration for both         of right to the Privy Council. These provisions
                           international and domestic arbitration.               are intended to promote confidence in the
                                                                                 quality of court support for and supervision of
                           Mauritius is the ninth jurisdiction in Africa to      arbitration under the Act.      There are also
                           adopt the UNCITRAL Model Law, but the first,          “contract-in” provisions on consolidation and
                           and to date, only African jurisdiction to include     joinder. The Act also gives special attention to
                           the amendments made by UNCITRAL to the                the needs of investment arbitration. For this
                           Model Law in 2006.           The Mauritian Act is     reason it does not contain any provision on the
                           designed to be particularly friendly to foreign       confidentiality of arbitration, which is regarded

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                          as a negative feature of arbitration in the            as opposed to the antagonism and indifference
     2009                 context of investment disputes. The passage of         of recent years.
                          the Act through parliament had
                          the direct personal backing of the
                          Mauritian prime minister.
                                                                          South African Law Reports
                          South Africa
                          The Department of Trade and                            Members are reminded that the
                          Industry is in the process of                          Association continues to
                          undertaking an investigation into                      provide access to the South
                          legislation     adversely     affecting                African Law Reports through
                          trade and investment in a South                        Jutastat
                          African context. It is almost self-
                          evident that South Africa’s lack of
    “International        modern arbitration legislation for
  arbitration may be
    defined as the        international arbitration will be
 substitution of many     identified as one of the defects. It
burning questions for a
                          is therefore probable that the Department of           Prof Dick Christie QC
   smoldering one”.
                          Trade and Industry will shortly start putting          Members will be sad to learn that the
                          pressure on the Department of Justice to take          Honorary President of the Association, Prof
   Ambrose Bierce
                          steps for the introduction of the UNCITRAL             Dick Christie, suffered a major stroke in mid-
                          Model Law for international arbitration only.          December, 2008. He is currently recovering
                          This will enable parliament to avoid the               slowly and is undergoing therapy in hospital.
                          political     sensitivities   regarding     domestic   Our thoughts are with Prof Christie, his wife
                          arbitration. There is as yet no indication of a        and family at this time.
                          timeframe for the introduction of legislation on
                          international arbitration. However, there are          Sincerely,
                          at least some indications of support for               PROF. DAVID BUTLER
                          arbitration law reform within the state sector,

                                  Chairman’s Lecture

                                                                    “Security for Costs”

                                            Security for Costs is a problem which arbitrators are
                                            regularly required to deal with. There have been some
                                            important changes in our law dealing with the
                                            entitlement to receiving an order for Security for
                                            Costs particularly in cases where there is little
                                            prospect of a successful defendant recovering costs.

                                            Chris Binnington will review the law in this regard and
                                            offer guidance to arbitrators

                                                                        The Pavilion
                                                                         Inanda Club
                                                                      24 February 2009
                                                                       17h00 for 17h30

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