Snowy Owl Properties 284 (Pty) Ltd v Mziki Share Block Limited [2023] ZASCA 2

Was the arbitration award made by Advocate Dodson SC enforceable, and did the KwaZulu-Natal Division of the High Court correctly make it an order of court despite the appellant's claims of illegality, vagueness, and conflict with the Maintenance Management Plan?

The case revolves around a long-standing dispute between Snowy Owl Properties 284 (Pty) Ltd (the appellant) and Mziki Share Block Limited (the respondent) concerning a registered notarial servitude agreement (No. K1287/1990S) that allows both parties to traverse each other's properties for game viewing purposes.

The relationship between the parties deteriorated over time, leading to a series of arbitration awards stemming from disputes related to the servitude agreement. The latest arbitration award, issued by Advocate Dodson SC on 2 April 2020, directed the appellant to reopen certain roads that it had closed in 2017 and to maintain others. The appellant had closed these roads, including Plover Drive and several linking roads, citing environmental concerns and a new road rehabilitation plan aimed at addressing erosion and protecting wetland areas.

The closure of the roads was met with resistance from the respondent, which argued that the appellant's actions constituted a breach of the servitude agreement. The respondent initiated arbitration proceedings to compel the appellant to reinstate and repair the closed roads, asserting its rights under the servitude agreement.

During the arbitration, the appellant contended that the servitude agreement allowed for the closure of roads for ecological reasons and that it had acted in compliance with national environmental laws. However, the arbitrator found that the appellant's justifications for the road closures were insufficient and that the servitude agreement did not permit such unilateral actions.

Following the arbitration award, the respondent sought to have the award made an order of court in the KwaZulu-Natal Division of the High Court. The appellant opposed this application, arguing that the award was unenforceable due to its alleged illegality, vagueness, and conflict with the Maintenance Management Plan (MMP) established for the Mun-Ya-Wana Conservancy, where both parties' properties are located.

The High Court ultimately granted the respondent's application, making the arbitration award an order of court. The appellant was granted leave to appeal this decision, primarily on the grounds that the award was incapable of enforcement. The appeal raised significant legal questions regarding the enforceability of arbitration awards, particularly in the context of environmental regulations and the obligations imposed by the servitude agreement.

The ratio decidendi of the case is that an arbitration award can be made an order of court if it does not sanction illegal activities, is not vague or imprecise, and is enforceable under the relevant legal framework. The court highlighted the importance of upholding the principles of private arbitration and the enforceability of arbitration awards, provided they do not conflict with statutory prohibitions or public policy. Thus, the court affirmed that the arbitration award was valid and enforceable, allowing it to be made an order of court despite the appellant's claims of illegality and vagueness.

The court relied on several cases in its reasoning process, including:

Cool Ideas 1186 CC v Hubbard and Another [2014] ZACC 16; 2014 (4) SA 474 (CC), which discusses the importance of enforcing arbitration awards and the balance between public policy and the utility of arbitration.

Schierhout v Minister of Justice 1926 AD 99, which establishes that acts performed contrary to a direct and express provision of the law are void and have no force and effect.

Morganambal Mannaru and Another v Robert MacLennan-Smith and Others [2022] ZASCA 137, which elaborates on the principles governing the reasonable exercise of servitudal rights.

Gardens Estate Ltd v Lewis 1920 AD 144, which addresses the rights of servitude holders and the implications of unilateral changes to specified servitude routes.

Linvestment CC v Hammersley and Another [2008] ZASCA 1, which discusses the conditions under which unilateral relocation of a specified right of way may be justified.