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[2014] ZAGPJHC 324
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Keyrouz v Whitehorn and Others (21360/2013) [2014] ZAGPJHC 324 (12 November 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 21360/2013
DATE:
12 November 2014
In
the appeal between:
EDWARD
MARTIN
KEYROUZ
..............................................................
Applicant
And
ROBIN
WHITEHORN
...............................................................
First
Respondent
ADV
G W
GIRDWOOD
........................................................
Second
Respondent
BCA
CIVIL ENGINEERING CO (PTY) LIMITED
...................
Third
Respondent
JUDGMENT
ROBINSON
AJ:
[1]
This is an application to review and set
aside an Arbitration Award published by the second respondent on 25
April 2013. The
review is brought in terms of sections 33(1)(b)
of the Arbitration Act, 42 of 1965 (“the Act”).
[2]
In his answering affidavit the first
respondent adopted the stance that, by section 33(2) of the Act, the
application for review
was required to be brought within a period of
six weeks from the date of publication of the award, being 25 April
2013. That
meant that the application for review ought to have
been brought by 6 June 2013, meaning that the application for review,
which
was launched during the fourth quarter of August 2013 and
served on 22 August 2013, was around 11 weeks out of time.
[3]
Section 33 of the Act reads as follows:
“
33
Setting aside of award
(1)
Where-
(a)
any member of an arbitration tribunal has misconducted himself in
relation to his duties as arbitrator or umpire; or
(b)
an arbitration tribunal has committed any gross irregularity in the
conduct of the arbitration proceedings or has exceeded its
powers; or
(c)
an award has been improperly obtained,
the
court may, on the application of any party to the reference after due
notice to the other party or parties, make an order setting
the award
aside.
(2)
An application pursuant to this section shall be made within six
weeks after the publication of the award to the parties: Provided
that when the setting aside of the award is requested on the grounds
of corruption, such application shall be made within six weeks
after
the discovery of the corruption and in any case not later than three
years after the date on which the award was so published.
(3)
The court may, if it considers that the circumstances so require,
stay enforcement of the award pending its decision.
(4)
If the award is set aside the dispute shall, at the request of either
party, be submitted to a new arbitration tribunal constituted
in the
manner directed by the court.”
[4]
The applicant admits that it launched the
application for review in response to an application brought by the
first respondent during
the first week of July 2013 to make the
Arbitration Award an Order of Court. The applicant admits
further that he held back
the review application until such time as
the application to make the award an Order of Court had been issued.
[5]
On 15 November 2013, the applicant
delivered an application seeking condonation for the delay in
bringing the review application.
[6]
The first issue to be considered,
accordingly, is whether the application for condonation should be
granted. Section 38 determines
that “
the
court may, on good cause shown, extend any period of time fixed by or
under this Act or whether such period has expired or not.”
The extension of the period of time contemplated in section 33
accordingly requires that good cause be shown therefor.
[7]
Whilst the applicant bases his application
for review and setting aside thereon that the second respondent
exceeded his powers and/or
committed a gross irregularity, he also
contends that his rights in terms of section 34 of the Constitution
to a fair trial were
denied as a result of the basis upon which the
arbitration was conducted and the summary procedural rules which were
made applicable
to the hearing. The applicant submits that
clause 46 of the summary procedure rules are unconstitutional and/or
in conflict
with clause 45.1.1 of the summary procedure rules.
The applicant states that he does not require condonation in regard
to
those grounds embodied in relation to section 34 of the
Constitution nor in relation to the constitutionality of clause 46 of
the
summary procedure rules.
[8]
The determination of good cause is a matter
that rests in the judicial discretion of the court, a discretion
which is to be exercised
having regard to all the circumstances of
the case. Relevant considerations may include the degree of
non-compliance with
the rules, the explanation therefore, the
prospects of success on appeal, the importance of the case, the
respondent’s interests
in the finality of his judgment, the
convenience of the court, and the avoidance of unnecessary delay in
the administration of
justice. The list is not exhaustive.
It has been said that “
these
factors are not individually decisive but are inter-related and must
be weighed one against the other; thus a slight delay
and a good
explanation may help to compensate the prospects of success which are
not strong.”
See Holmes JA
in
United Plant Hire & Others
1976
(1) SA 717
(A) at 720 E-G.
[9]
The applicant argues that condonation is
only required in terms of section 33(2) in relation to the question
whether the arbitrator
exceeded his powers by enquiring himself into
what was in effect his own jurisdiction. The questions revolving
around the validity
of the arbitration agreement, whether an
arbitration agreement was entered into, the application of the
constitutionality of the
summary procedural rules and whether or not
the applicant had a fair trial do not require condonation, so the
applicant argues.
The
applicant’s explanation for the delay in bringing the
application
[10]
The applicant attributes the delay in
bringing the review application to a mistaken understanding of the
law by his attorney, Mr
Weinstein. Mr Weinstein, so the
applicant says, did not consider the provisions of section 33(1)(b)
of the Act but considered
that rule 53 of the Uniform Rules of Court
could be relied upon as a basis of challenge of the Arbitration
Award. He took
the view that it would be appropriate to await
the first respondent to approach the High Court to make the award an
Order of Court
before launching the review proceedings.
[11]
It was only after this application to make
the award an Order of Court was served during the first week of July
2013 that Mr Weinstein
requested the applicant to obtain sufficient
cover to brief counsel to prepare an answering affidavit to the
founding affidavit
and to bring a counter-application to set aside
the award. The application to set aside the Arbitration Award was, as
stated above,
only launched on 23 August 2013.
[12]
The first respondent adopts the view that
the ignorance of Mr Weinstein and the failure of Mr Weinstein and the
applicant to take
action after 25 April 2013 evidence a lack of
diligence and a degree of carelessness that should not be condoned.
The
applicant’s opposition to the Award
[13]
The applicant argues in the first instance
that he concluded no arbitration agreement. Therefore, so it is
argued, the arbitrator
had no jurisdiction to hear the arbitration or
to make the award. The applicant claims that he signed the
agreement to the
appointment of arbitrator in a representative
capacity on behalf of the third respondent. Therefore, so it is
claimed, “
by even beginning,
conducting and finalising the arbitration the Second Respondent
exceeded his powers
”. The
applicant is of the view that the second respondent should have
enquired at the outset of the arbitration proceedings
whether there
was any referral to arbitration by the applicant and stated that the
second respondent failed to consider whether
the applicant had
consented to arbitration. The second respondent, so it is
alleged, merely assumed that all three parties,
namely the applicant,
first respondent and third respondent were before him.
[14]
As regards the reference to arbitration,
the evidence is as follows:
[14.1]
On 18 July 2002, the first respondent
addressed a letter to the Nominations Committee of the Association of
Arbitrators. The
particulars of the defendant are given in that
document as Edward Martin Keyrouz, namely the applicant in this
application.
[14.2]
Previously and on 4 July 2012, the
applicant signed a document submitted to him by the first respondent.
Because of the importance
of this document, I quote it in full :
“
AGREEMENT
TO THE APPOINTMENT OF AN ARBITRATOR CONSTRUCTION OF DWELLING STAND
350 EAGLE CANYON GOLF ESTATE
We
the undersigned
Robin
Whitehorn (claimant) and
Edward
Martin Keyrouz (defendant)
in
his personal capacity and/or as a director of BCA Civil Engineering
Co (Pty) Ltd and/or the sole trader of BK trading as BCA.
Hereby
agree to request the Association of Arbitrators to appoint an
arbitrator to arbitrate and resole all disputes relating to
a
building contract in respect of the dwelling referred to above”.
[15]
As is clear from the document, the
applicant expressly signed it in his personal capacity and/or as a
director of BCA Civil Engineering
Co (Pty) Limited and/or the sole
trader of BK trading as BCA. Upon signature the applicant
signed above his name and the
words “
Who
warrants that he is duly authorised
”.
[16]
Nevertheless, the applicant claims that he
signed this document in a representative capacity on behalf of BCA
Civil. He states
“
when I
signed the document, there was no doubt in my mind whatsoever that I
was signing as a director on behalf of BCA Civil and
was fortified in
this view by the appendage underneath my name ‘who warrants
that he is duly authorised’.”
[17]
The Association of Arbitrators in a letter
of 2 August 2002 advised the first respondent of the “
APPOINTMENT
OF AN ARBITRATOR IN THE DISPUTE BETWEEN ROBIN WHITEHORN / EDWARD
MARTIN KEYROUZ”
.
[18]
The minute of the preliminary meeting
before the second respondent records the applicant, namely Mr
Keyrouz, as the second defendant,
BCA Civil Engineering Co (Pty)
Limited as the second defendant and Edward Martin Keyrouz t/a BCA as
the third defendant. Paragraph
3 of those minutes reads as follows:
“
The
parties confirm having entered into a written agreement dated 3 July
2002 in terms whereof the parties agree to refer all disputes
relating to a building contract in respect of the dwelling Stand 350
Eagle Canyon Golf Estate, to arbitration.”
[19]
In his founding affidavit, the applicant
claims that he does not know why the second respondent came to cite
him as the first defendant,
BCA Civil as the second defendant and the
applicant t/a BCA as the third defendant.
[20]
Nevertheless, and as is apparent from the
answering affidavit, the applicant sent an email to the first
respondent on 3 July 2012
in which he states as follows:
“
I
confirm that
I
agreed to the appointment of an arbitrator...”.
(own
emphasis)
No
reference is made to a company on whose behalf the applicant would
have agreed to an arbitrator.
[21]
On 19 July 2012, the first respondent sent
a copy of the application for the appointment of an arbitrator to the
applicant.
As was mentioned, the defendant’s name is
given as that of the applicant.
[22]
The first respondent testifies in his
answering affidavit that, at the first administrative meeting of 21
August 2012, the applicant
was legally assisted by a Mr Schutte.
The first respondent points out that the applicant did not dispute
the recordal at
any time prior to the launching of the application of
Mr Schutte as representing the defendants. With the entry of Mr
Weinstein,
the attorney for the applicant, by way of a letter dated
11 October 2012, an intimation was given of a dispute being raised to
the arbitration agreement. As a result of submissions made by
Mr Weinstein, a second administrative meeting was held on 31
October
2012. The preliminary issues raised by the applicant and in
particular those as to whether the agreement signed by the
applicant
constituted an arbitration agreement, were heard on 6 November 2012.
The Arbitrator’s Award relating to the
preliminary issues
published on 7 November 2012.
[23]
The Award notes that the second respondent,
the arbitrator, convened a preliminary meeting on 21 August 2012 and
that he on that
day handed to the parties an agenda, having
identified the parties to the arbitration proceedings in the same
manner as are identified
in the template of this ruling. Apart
from the first respondent, identified as the claimant, the applicant
in this matter
is identified as such. BCA Civil Engineering Co (Pty)
Limited is identified as the second defendant and Edward Martin
Keyrouz t/a
BCA as the third defendant. The arbitrator notes
that the first three items listed on the agenda were confirmation of
an
arbitral dispute and the arbitrator’s jurisdiction;
confirmation of the parties thereto and confirmation of the
appointment
of the arbitrator.
[24]
The arbitrator notes further that in
paragraph 3 of the minute of the said preliminary meeting, he
recorded the parties’ confirmation
of having entered into a
written agreement dated 3 July 2012 in terms whereof the parties
agreed to refer all disputes relating
to a building contract in
respect of the dwelling Stand 350 Eagle Canyon Golf Estate to
arbitration. His appointment
as the arbitrator was also
confirmed. The parties to the arbitration were as set out in
the template of the agenda.
He points out that what was
recorded in his minute had not been challenged.
[25]
No evidence was led at the special hearing
to determine the jurisdictional issues. The arbitrator, in
interpreting the arbitration
agreement, came to the conclusion that
it was a written agreement providing for the reference to arbitration
of all disputes relating
to the subject matter identified, being a
building contract in respect of specified dwelling units. In
any event and in the
event of him being wrong on that score, the
arbitrator found that he was properly seized of a common law
arbitration on the basis
of the parties’ conduct and their
submission to an arbitration, as recorded in his minute of 21 August
2012.
[26]
In these circumstances he resolved the
challenge that no arbitration agreement had been entered into and
that the proceedings were
fatally defective against the applicant.
I mention that the second respondent permitted Mr Weinstein to
represent the defendants
(including the applicant in this
application) at the hearing of 6 November 2012.
[27]
The arbitrator issued a directive that the
third administrative meeting would be held on 15 November 2012.
Mr Weinstein requested
a 15 day postponement of the third
administrative meeting to enable the applicant to bring an
application for the review of the
preliminary issues to the above
Honourable Court. His letter of 15 November 2012 includes the
following paragraph:
“
My
client will be approaching the High Court for immediate relief prior
to the arbitration proceedings proceeding any further, and
in the
circumstances you are requested to postpone this meeting for 15 days,
being a reasonable period required by my client within
which he is to
institute such proceedings.”
[28]
This proved to be the first of a number of
threats to proceed to litigation to set aside the decision of 7
November 2012.
[29]
In response, the arbitrator postponed the
preliminary meeting pending the final determination of the
application proposed to be
instituted by the applicant and directed
that, should such application not be launched, the preliminary
meeting would proceed on
Monday 26 November 2012. The
application was not launched and at the preliminary meeting held on
26 November 2012 the arbitrator
made a directive that the arbitration
hearing would commence on 24 January 2013.
[30]
In a letter of 18 January 2013, Mr
Weinstein recorded a number of objections to the second respondent’s
conduct, including
calling upon him to recuse himself. He also
referred to proceedings being prepared and to be instituted shortly
for the setting
aside of the arbitration proceedings.
[31]
On 5 February 2013, the arbitrator handed
down a finding that the agreements alleged by the claimant in his
statement of claim have
been proved with a small exception.
[32]
The applicant thereafter withdrew from the
proceedings and claimed that he did not recognise the jurisdiction of
the second respondent.
[33]
The applicant claims that the question as
to whether there was an agreement of submission to arbitration and,
if so, which parties
submitted to arbitration, as well as which party
contracted with the first respondent, required proper legal
representation.
[34]
The applicant raises as a further cause of
complaint the fact that, at the first preliminary hearing, the second
respondent furnished
the sixth edition of the Rules for the Conduct
of Arbitrations to the first respondent and applicant as well as a
copy of the summary
procedural rules. He advised the parties
that they would be better off adopting the summary procedural rules.
These rules
exclude legal representation. He afforded the
parties until Friday 24 August 2012 to state whether they agreed to
adopt the
summary procedural rules. The applicant’s
claims that he did not have legal representation, do not explain the
presence
of Mr Schutte. He further claims that he did not
consult an attorney, regarding the choice of his rules, but does not
explain
why he did not do so.
[35]
The applicant’s case as regards the
adoption of the summary procedural rules is that he “
followed
the advice of the Second Respondent that the proceedings are a
‘simple matter’ and that the summary procedural
rules
were more appropriate in the circumstances”.
He
claims that, without having properly understood and properly read the
summary procedural rules or having considered them,
he sent an email
to the second respondent’s secretary, confirming that he
accepted those rules.
[36]
The applicant’s case appears to be
that the second respondent ought not to have expressed any kind of
view about which set
of rules would be appropriate.
Findings
of this Court
(i)
Condonation: the Merits
[37]
For a number of reasons I conclude that the
arbitrator’s finding that an arbitration agreement had been
concluded and that
the applicant was a party thereto is correct.
[37.1]
The wording of the arbitration agreement is
simple and unambiguous. It leaves no room for a mistaken belief
that it binds
only the company.
[37.2]
The applicant has made no attempt to
explain why he did not understand the words “
Edward
Martin Keyrouz (defendant) in his
personal
capacity
and/or as a director of
BCA Civil Engineering Co (Pty) Ltd and/or the sole trader BK trading
as BCA
”, to mean exactly what
they say. His bald allegation in paragraph 44 of the answering
affidavit that he signed the
agreement doing so in a representative
capacity with no doubt in his mind that he was signing as a director
on behalf of BCA Civil
is not explained, save by an allegation that
his views were “
fortified”
by the appendage underneath his name who warrants that he is duly
authorised. When asked by the arbitrator why he signed the agreement,
he answered, variously, that:
[37.2.1]
he had no intent;
[37.2.2]
he does not know why he signed the
document;
[37.2.3]
he just signed the document;
[37.2.4]
he should not have signed the document;
[37.2.5]
it was not his intention to sign the
document at that stage;
[37.2.6]
he was not thinking clearly.
[37.3]
Significantly, the applicant does not claim
that he did not understand the words in the document to mean anything
other than what
they clearly mean. There is no suggestion that he
battles with English.
[37.4]
The allegation that he signed in a
representative capacity is incompatible with the reference to
arbitration that refers to the
defendant by name. No reference
is made to any corporate entity in that reference.
[37.5]
A further indicator is that the minutes of
the preliminary meeting held on 21 August 2002 record the parties’
confirmation
of having entered into a written agreement. Those
parties include three defendants, two of whom are the applicant in
his personal
capacity and in a trading capacity as third defendant
and then the second defendant, being the corporate entity. The
applicant
had several days to consider those minutes as well as the
rules provided by the arbitrator and lodged no objection to his
citation
in his personal capacity as a defendant.
[38]
The submission that the arbitrator exceeded
his powers by giving any advice to the first respondent or the
applicant to adopt the
summary procedure rules is easily disposed
of. The question whether the arbitrator exceeded his powers
requires an investigation
into the question whether he “
purported
to exercise a power which [he] did not have or whether [he]
erroneously exercised a power that [he] did have
”.
See
Telcordia Technologies Inc v Telkom
SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
at
[52]
. In
expressing his views about the form of rules most suitable to the
arbitration, the arbitrator did not exercise a power.
He made
no finding. Had the parties not accepted his recommendation,
the ordinary rules would have applied.
[39]
It was not clear to me from the argument
presented on behalf of the applicant why section 46 of the summary
procedural rules would
be unconstitutional. If the submission
is that its unconstitutionality lies in the deprivation of the right
to legal representation,
then the answer must surely be that that
situation was arrived at by agreement between the parties. As Harms
JA said in
Telcordia
,
“
...
there is nothing to prevent parties from defining (at least in
private consensual disputes) what is fair for purposes of their
dispute.”
[1]
[40]
Parties
to arbitration typically waive a number of rights to which they would
otherwise be entitled, such as, for example, the right
to appeal and
even to have independent tribunals.
[2]
[41]
In
any event, section 34 does not directly apply to private
arbitrations. The Constitutional Court pronounced on these matters in
Lufuno
Mphaphuli & Associates (Pty) Ltd v Andrews and Another
[3]
as follows:
[
188]
First, in my view, section 34 of the Constitution does not apply to
private arbitration although I do hold that
it is an
implied term of every arbitration agreement that it be procedurally
fair. Secondly, it is my view that the arbitration
agreement at
issue in this case, properly construed, required the arbitrator to
adopt an informal, investigative method of proceeding
and not a
formal, adversarial one.
[195]
In approaching these questions, it is important to start with an
understanding of the nature of private arbitration.
Private
arbitration is a process built on consent in that parties agree that
their disputes will be settled by an arbitrator.
It was aptly
described by Smalberger ADP in Total Support Management (Pty) Ltd and
Another v Diversified Health Systems (SA)(Pty)
Ltd and Another
as follows:
“
The
hallmark of arbitration is that it is an adjudication, flowing from
the consent of the parties to the arbitration agreement,
who define
the powers of adjudication, and are equally free to modify or
withdraw that power at any time by way of further agreement.”
I
find it difficult to reconcile the latter portion of the reasoning
with the former portion. It seems to me that if one accepts
that parties to an arbitration have waived their rights under section
34 in such a manner that the fairness of the hearing will
be
determined only by reference to the
Arbitration Act, and
that
interference by courts with arbitration shall be limited to the
irregularities spelt out in
section 33(1)
of the
Arbitration Act, it
cannot be said that
section 34
has any direct application to private
arbitration at all. The thrust of the reasoning seems to me to
be that when parties
enter a private arbitration agreement, as long
as that agreement is not contra bonos mores, they waive the rights
that they would
otherwise enjoy under
section 34.
However, we
still need to consider whether
section 34
does indeed apply directly
to private arbitration.
[211]
As it is clear that a private arbitrator is not a court, the question
posed by Smalberger ADP in Total Support
Management remains.
When
section 34
refers to another independent and impartial tribunal,
does it include private arbitration? If it does not, then
section 34
can have no application to private arbitration. In
answering this question, one needs to read
section 34
closely to see
if its structure and purpose extend to private arbitration. It
is clear that the section provides a right
to have disputes resolved
(a) by the application of law in (b) a fair (c) public hearing before
(d) a court or (e) where appropriate
an independent and impartial
tribunal. Properly read, an independent and impartial tribunal
(if appropriate) must hold fair,
public hearings when it resolves
disputes by the application of law. It is not possible
textually to detach the requirement
of fairness from the requirement
of being in public: both requirements apply to proceedings before
courts and independent and impartial
tribunals.
[212]
Underlying this right, as this Court has held, is the rule of law and
the positive obligation upon the state
to provide courts and, where
appropriate, other fora for the resolution of disputes. Private
arbitrators are, of course,
not provided by the state but are private
agents employed by parties for the resolution of disputes.
[213]
In considering whether private arbitration fits into the framework of
section 34
, we have to acknowledge that private arbitration, as
conventionally understood, is ordinarily not held in public. It
is,
as its name implies, a private process. Nor can it
ordinarily be said that arbitrators have to be independent in the
full
sense that courts and tribunals must be. As the Suovaniemi
case suggests, parties can knowingly consent to an arbitrator who
may
not be entirely independent. Accordingly, it is not clear that
arbitrators can accurately be described as “independent
. . .
tribunals”. As private arbitration proceedings do not,
and, if international practice is to be accepted, should
not require
public hearings, and similarly if private arbitrators need not, as
long as parties knowingly accept this, always be
“independent”,
then the language of
section 34
does not seem to fit our conception
of private arbitration.
[214]
The only strong reason to read private arbitration to fall within the
meaning of
section 34
is the requirement imposed by that section that
the hearing be “fair” and, indeed, it seems to be on that
basis that
Kroon AJ concludes that
section 34
does apply to private
arbitration. However, I am not persuaded that it is appropriate
to understand the section to relate
to private arbitration, which
otherwise does not fit the language of the section, simply because it
might be seen to be desirable
to require arbitration proceedings to
be fair. The section must be interpreted on its own language
and with integrity, and
I cannot conclude, given the general lack of
fit between private arbitration and the language of the section, that
the section
has direct application to private arbitration.
In
concluding that
section 34
does not have direct application to
private arbitration, I do not finally consider what indirect
application it may have, if any.
Indirect application of rights
in the Bill of Rights operates generally through section 39(2) of the
Constitution which requires
courts when interpreting statutes or
developing the common law or customary law to promote the “spirit,
purport and objects”
of the Constitution. No argument was
addressed to us on this issue but, mindful of the role courts have in
giving effect
to arbitration agreements, it seems to me that section
34 may have some relevance to the interpretation of legislation or
the development
of the common law.
[216]
If we understand section 34 not to be directly applicable to private
arbitration, the effect of a person
choosing private arbitration for
the resolution of a dispute is not that they have waived their rights
under section 34.
They have instead chosen not to exercise
their right under section 34. I do not think, therefore, that
the language of waiver
used by both the European Court of Human
Rights in Suovaniemi and by the Supreme Court of Appeal in Telcordia
is apt. Indeed,
it may not be apt in relation to constitutional
rights at all, but that is a topic for another day.
[217]
Despite the choice not to proceed before a court or statutory
tribunal, the arbitration proceedings will still be regulated
by law
and, as I shall discuss in a moment, by the Constitution. Those
proceedings, however, will differ from proceedings
before a court,
statutory tribunal or forum. The first difference is that the
process must be consensual – no party
may be compelled into
private arbitration. The second is that the proceedings need
not be in public at all. The third
is that the identity of the
arbitrator and the manner of the proceedings will ordinarily be
determined by agreement between the
parties. The party who opts
for arbitration will have chosen these consequences.
[218]
In the light of the foregoing, on a proper construction of section 34
it should be understood not to apply directly to private
arbitrations. I differ in this respect, therefore, from the
conclusion of Kroon AJ. This conclusion, however, does
not mean
that the Constitution will have no relevance to private arbitration,
as I shall now discuss.
The
decision to refer a dispute to private arbitration is a choice which,
as long as it is voluntarily made, should be respected
by the
courts. Parties are entitled to determine what matters are to
be arbitrated, the identity of the arbitrator, the process
to be
followed in the arbitration, whether there will be an appeal to an
arbitral appeal body and other similar matters.
[220]
However, as with other contracts, should the arbitration agreement
contain a provision that is contrary to public policy in
the light of
the values of the Constitution, the arbitration agreement will be
null and void to that extent (and whether any valid
provisions remain
will depend on the question of severability). In determining
whether a provision is contra bonos mores,
the spirit, purport and
objects of the Bill of Rights will be of importance. As stated
above, it is not necessary to determine
what role section 34 might
play in this analysis.
[42]
Thus, section 34 is not directly applicable
to arbitrations and the right of parties to contract out of their
section 34 rights
is acknowledged. It was not argued that the
agreement to forego the right to legal representation at the hearing
was
contra bonos mores
.
In any event, no facts have been advanced why it should be so.
Condonation:
the delay
[43]
I do not agree that the “constitutional”
grounds need not have been raised within the 6 week period
contemplated in
section 33. A party to arbitration proceedings can
hardly be said to have all of infinity within which to raise
objections to an
arbitration award, even be they based on
constitutional grounds. The section is quite clear that application
to set aside an award
must be made within 6 weeks of the date of the
award. The nature of the ground of objection does not alter that
fact.
[44]
The applicant permitted the arbitration
proceedings to continue, despite continued threats to bring court
applications to review
the finding by the second respondent on 7
November 2012 that a valid arbitration agreement had been concluded
and that the applicant
in his personal capacity was a party to such
agreement.
[45]
The applicant failed to act after the
finding of the arbitrator on 7 November 2012. In the first
instance I consider that
the award handed down on 7 November 2012
constituted an award as contemplated in section 33(1) of the Act. The
six week period
to set that aside commenced running with the making
of that order. No explanation was provided for the failure to act
within 6
weeks of the award. In addition, the explanation for the
failure to act after the publication of the final award is not strong
enough to offset the weak merits in this case.
[46]
In any event, the delay in applying to set
aside the order is inexcusable. All the facts giving rise to the
complaints on which
this application is based had arisen by then.
Despite the numerous threats of applications to set the finding
aside, no such
steps were taken. In my view it was not
permissible for the applicant simply to have taken no further steps
and await the
outcome of the arbitration. In the event of his
attack on the arbitration agreement succeeding, the remainder of the
arbitration
proceedings would have been irrelevant and would have put
an end to the arbitration proceedings. The question was
considered
by Gauntlett AJ in
Abrahams &
Ano v RK Komputer SDN BHD & Others
2009 (4) SA 201
(C). In non-suiting the applicant in an attack
on the arbitrator for perceived bias the court held that she should
not be
permitted :
“
...
to fossick in the procedural ashes of the proceedings and to disinter
her perception when it suits. An attack based on bias
– with
its devastating legal consequences of nullity – is not to be
banked and drawn upon later by tactical choice.
As the Court of
Appeal in England has put it,
‘
It
is not open to [the litigant] to wait and see how her claims …
turned out before pursuing her complaint of bias …
[she]
wanted to have the best of both worlds. The law will not allow her to
do so.’”
This
is exactly what the applicant did. The law cannot permit her,
on the facts of the case, that tactic.
”
[4]
(iii)
Condonation: Conclusion
[47]
In
these circumstances, having found that the arbitration agreement is
valid and that section 34 is not applicable to the arbitration,
the
applicant has not shown good cause on the merits of the matter to
justify condonation. The prospects of success on the merits
are so
slim as not to justify condonation.
[5]
When the long period of delay from 7 November 2013 is added into the
mix before the application to set aside was launched, the
application
for condonation must be refused. Should I be wrong on that then, in
any event, I consider that no case to set aside
the award has been
made and that the application should also be refused on its merits.
[48]
The following order is made:
The
application is dismissed with costs.
R
M Robinson AJ
Heard
: 13 October 2014
Judgment
delivered: 12 November 2014
For
the applicant: Adv S Cohen instructed by Louis Weinstein
For
the first respondent: Adv Marais SC instructed by McCarthy Cruywagen
[1]
At
para 47 of the Judgment.
[2]
See
Telcordia
at paras 47 - 50
[3]
(CCT
97/07)
[2009] ZACC 6
;
2009 (4) SA 529
(CC) ;
2009 (6) BCLR 527
(CC)
[4]
See
also De Smith’s
Judicial
Review
6
th
Ed, 2007 at fn18 where it is stated as follows:
“…
(o)bjection
is generally deemed to have been waived if a party or his legal
representative knew of the disqualification and acquiesced
in the
proceedings by failing to take objection at the earliest practical
opportunity.”
[5]
United
Plant Hire
supra at p720H