Arbitration: International arbitration

178 Pages·2005·0.64 MB·English

SOUTH AFRICAN LAW COMMISSION

PROJECT 94

ARBITRATION: AN INTERNATIONAL ARBITRATION ACT FOR SOUTH AFRICA

REPORT

JULY 1998
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TO DR AM OMAR, MP, MINISTER OF JUSTICE

I am honoured to submit to you in terms of section 7(1) of the South African Law Commission Act,
1973, (Act 19 of 1973), for your consideration the Commission’s report on the investigation into
international commercial arbitration.

I MAHOMED
CHAIRPERSON: SOUTH AFRICAN LAW COMMISSION
JULY 1998
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ACKNOWLEDGEMENT

This report was prepared on behalf of the Commission by Prof David Butler who is a member
of the Project Committee.
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INTRODUCTION

The South African Law Commission was established by the South African Law Commission Act, 1973
(Act 19 of 1973).

The members of the Commission are -

The Honourable Mr Justice I Mahomed (Chairperson)
The Honourable Mr Justice P J J Olivier (Vice-Chairperson)
The Honourable Madam Justice J Y Mokgoro
Professor R T Nhlapo
Adv J J Gauntlett SC
Mr P Mojapelo
Ms Z Seedat

The Secretary is Mr W Henegan. The Commission's offices are on the 12th Floor, Sanlam Centre,
corner of Schoeman and Andries Streets, Pretoria. Correspondence should be addressed to:

The Secretary
South African Law Commission
Private Bag X668
PRETORIA
0001

Telephone: [phone]
Telefax: [phone]
E-mail: [email protected]
URL: http://www.law.wits.ac.za/salc/salc.html

The members of the Project Committee for this investigation are:

The Honourable Mr Justice J H Steyn
The Honourable Madam Justice Y S Meer (resigned, March 1998)
Adv J J Gauntlett SC
Professor D W Butler
Professor R H Christie QC

The project leader responsible for the investigation is The Honourable Mr Justice J H Steyn. The
researcher allocated to the project is Mrs AM Louw.
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TABLE OF CONTENTS
PAGE

INTRODUCTION
(v)

SUMMARY OF RECOMMENDATIONS
(x)

LIST OF SOURCES
(xiii)

REPORTS, MEMORANDA, CONVENTIONS AND SEMINARS (xx)

SELECTED LEGISLATION
(xxii)

TABLE OF CASES
(xxv)

CHAPTER 1 - INTRODUCTION 1

(a) The objects of the proposed Draft International Arbitration Bill 1
(b) A brief history of the Law Commission’s arbitration project 7
(c) The response to Discussion Paper 69 9
(d) Regional workshops and the draft report 12

CHAPTER 2 - SOUTH AFRICA’S RESPONSE TO THE
UNCITRAL MODEL LAW 13

(a) Proposed draft legislation 13
(i) South Africa's basic response to the Model Law 13
(ii) Basic form and contents of implementing legislation 18
(iii) Overview of the contents of the Draft Bill 20

(b) Brief commentary on the Model Law including recommended
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additions and changes 20

(c) Other possible additions for consideration 98

CHAPTER 3 - THE NEW YORK CONVENTION 106

(a) Introduction 106
(i) Overview of Chapter 106
(ii) The importance and scope of the New York Convention 107
(iii) The Recognition and Enforcement of Foreign Arbitral
Awards Act 40 of 1977 110
(iv) Comparative survey of certain other legislation
implementing the NYC 112

(b) Definitions 115
(i) Awards subject to the NYC 116
(ii) The place where an award is made 119
(iii) The court having jurisdiction 121

(c) Application of New York Convention to South Africa 121

(d) Enforcement of arbitration agreements 122

(e) Recognition and enforcement of arbitral awards 123
(i) Extent of court's power to refuse recognition or
enforcement 123
(ii) Need to deal with recognition and enforcement 125
(iii) Evidential requirements 126
(iv) Grounds on which recognition or enforcement may
be refused 127
(f) Other matters 128
(i) Preservation of other bases for recognition 128
(ii) Enforcement of awards in a foreign currency 129
(iii) Inclusion of the text of the Convention in a schedule 130

(g) Other legislation relevant to enforcement of foreign arbitral
awards 130

(h) Summary of recommendations 132
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CHAPTER 4 - THE WASHINGTON CONVENTION OF 1965 134

(a) Introduction 134

(b) Purpose and special features of the Washington 134
Convention

(i) Jurisdiction 136
(ii) Self-contained nature of ICSID arbitrations 140
(iii) Recognition and enforcement of ICSID awards 142

(c) International acceptance of the Washington Convention 143

(d) The Additional Facility 144

(e) Benefits for South Africa from ratifying the Convention 144

(f) Financial implications of ratification for South Africa 148

(g) Form and contents of legislation for implementing the Convention 148
(i) One consolidated statute? 149
(ii) Form of legislation 150
(iii) Matters to be dealt with 150

(h) Conclusion 153

CHAPTER 5 - TRANSITIONAL AND OTHER PROVISIONS 154

LIST OF ANNEXURES

ANNEXURE A : MEMBERS OF THE PROJECT COMMITTEE 158

ANNEXURE B : LIST OF RESPONDENTS: WORKING PAPER 59 159

ANNEXURE C1 : LIST OF RESPONDENTS: DISCUSSION PAPER 69 160
ANNEXURE C2 : LISTS OF DELEGATES: CONSULTATIVE MEETINGS 161
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ANNEXURE D : EXCERPTS FROM DRAFT BILL ACCOMPANYING
DISCUSSION PAPER 69 163

ANNEXURE E : DRAFT INTERNATIONAL ARBITRATION BILL
FOR SOUTH AFRICA (ANNOTATED TEXT) 181

ANNEXURE F : DRAFT INTERNATIONAL ARBITRATION BILL FOR
SOUTH AFRICA (PROPOSED FINAL VERSION) 217

ANNEXURE G : BILL TO AMEND THE PROTECTION OF BUSINESSES
ACT 99 OF 1978 287
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LIST OF SOURCES

Agyemang A A "African States and ICSID Arbitration" (1988) 21 CILSA 177-189

Asante S K B "The Perspectives of African Countries on International Commercial
Arbitration" in Muller S and Mijs W (eds) The Flame Rekindled Marthinus
Nijhoff Dordrecht (1994) 133-158

Asouzu A A "Conciliation under the 1988 Arbitration and Conciliation Act of Nigeria"
(1993) 5 African Journal of International and Comparative Law 825-849

Bernstein R, Handbook of Arbitration Practice 3 ed Sweet & Maxwell London
Tackaberry J & 1998
Marriott A L

Böckstiegel K-H "An Introduction to the New German Arbitration Act Based on the
UNCITRAL Model Law" (1998) 14 Arbitration International
19-31

Bowsher P "Security for Costs" (1997) 63 JCI Arb 36-40

Branson D "The Ken-Ren Case: It is an Ado where More Aid is Less Help" (1994) 10
Arbitration International 313-316

Broches A Commentary on the UNCITRAL Model Law on International
Commercial Arbitration Kluwer Deventer 1990

Broches A "Arbitration under the ICSID Convention" News from ICSID No1
(1991)

Brower C N & "Provisional Measures and the Protection of ICSID Jurisdictional
Goodman R E M Exclusivity against Municipal Proceedings" (1991) 6 ICSID Rev - Foreign
Investment LJ 431-461

Butler D W "South African Arbitration Legislation - the Need for Reform" (1994) 27
CILSA 118-163

Butler D W "The Recovery of Interest in Arbitration Proceedings: an Agenda for Law
Makers" (1995) 6 Stel LR 291-323

Butler D W "A New Domestic Arbitration Act for South Africa: What Happens after the
Adoption of the UNCITRAL Model Law for International Arbitration?"
(1998) 9 Stel LR 3-20

Butler D W & Arbitration in South Africa - Law and Practice Juta Cape Town
Finsen E 1993
10
Christie R H "South Africa as a Venue for International Commercial Arbitration" (1993)
9 Arbitration International 153-165

Christie R H "Arbitration: Party Autonomy or Curial Intervention II: International
Commercial Arbitrations" (1994) 111 SALJ 360-372

Davenport B "The Ken-Ren Case: Much Ado about Nothing Very Much" (1994) 10
Arbitration International 303-311

Davidson F P International Commercial Arbitration - Scotland and the
UNCITRAL Model Law W Green Edinburgh 1991

Davidson P J "International Commercial Arbitration Law in Canada" (1991) 12
Northwestern Journal of International Law and Business 97-123

Diamond A "Multiparty Arbitrations - A Plea for a Pragmatic Piecemeal Solution"
(1991) 7 Arbitration International 403-409

El-Kosheri A S "ICSID Arbitration and Developing Countries" (1993) 8 ICSID Rev -
Foreign International LJ 104-115

Forsyth C F Private International Law 3 ed Juta Cape Town 1996

Fox H "Sovereign Immunity and Arbitration" in Lew J D M (ed) Contemporary
Problems in International Arbitration Centre for Commercial Law Studies
Queen Mary College London 1986 323-331

Graving R J "Status of the New York Arbitration Convention: Some Gaps in Coverage
but New Acceptances Confirm its Vitality" (1995) 10 ICSID Rev - Foreign
Investment LJ 1-52

Hansard 18 March 1977 co1 3834

Herrmann G "The Role of the Courts under the UNCITRAL Model Script" in Lew J D M
(ed) Contemporary Problems in International Arbitration Centre for
Commercial Law Studies Queen Mary College London 1986 164-175

Hirsch M The Arbitration Mechanism of the International Center for the Settlement
of Investment Disputes Martinus Nijhoff Dordrecht 1993

Holtzmann H M & A Guide to the UNCITRAL Model Law on International
Neuhaus J E Commercial Arbitration: Legislative History and Commentary Kluwer
Deventer 1989

Jacobs M S The Law of Arbitration in South Africa Juta Cape Town 1977

Jarvin S "Consolidated Arbitrations, the New York Arbitration Convention and the
Dutch Arbitration Act 1986 - a Critique of Dr Van den Berg" (1987) 3
Arbitration International 254-262