terms of which I set aside an arbitration award issued in favour of the applicant
by the second respondent and dismissed the applicant’s application to make that
award an order of court in terms of s 31 of the Arbitration Act 42 of 1965 (“the
Act”).
[2] The application is brought under s 17(1)(a)(i) and, alternatively, s 17(1)(a)(ii) of
the Superior Courts Act 10 of 2013 (“the Superior Courts Act”). The applicant
advances nine grounds of appeal, but essentially only two grounds were
advanced in argument b y Mr Mashaba SC, who appeared for the applicant
(although he made it plain that the other grounds were not abandoned.)
[3] The grounds relied upon by the applicant were:
a. First, it was contended that the issue as to whether or not the applicant was
entitled to a ten percent revenue consultancy fee - irrespective of whether
services were rendered (“the issue”) , was sufficiently pleaded in the
replication and in the rejoinder. In the circumstances, it was contended that
the issue plainly fell within the terms of the second respondent’s jurisdiction
without the necessity for an amendment to paragraph 16 of the particulars
of claim.
b. The second ground of appeal relied upon was that I ought properly to have
adopted a more generous approach to the pleadings and the consequent
jurisdiction of the second respondent, particularly where the issue was fully
dealt with in the plea, the replication and the rejoinder, was canvassed in
cross-examination and fully argued before the second respondent. In
addition, it was pointed out that no formal objection was ever brought under
Rules 30 or 30A as authorised by AFSA to the evidence led on the issue
as one might have expected were it is felt that evidence may be prejudicial
to the first respondent; the objection was only raised in the course of the
hearing without establishing any prejudice.
[4] Having considered the notice of application for leave to appeal, the updated
[4] Having considered the notice of application for leave to appeal, the updated
heads of argument delivered on behalf of the applicant, the heads of argument
delivered on behalf of the first respondent, and having heard counsel, I have
come to the conclusion that leave to appeal must be granted, but only on the
grounds 3 and 4 in the notice of application for leave to appeal.
The applicable test for leave to appeal
[5] Section 17(1)(a) of the Superior Courts Act provides that leave to appeal may
only be given where the judge concerned is of the opinion that the appeal would
have a reasonable prospect of success, or that there is some other compelling
reason why the appeal should be heard.
[6] The threshold established by s 17 is more onerous than the “reasonable
possibility” test which applied under the repealed s 20 of the Supreme Court Act
59 of 1959. In The Mont Chevaux Trust v Tina Goosen and Others,1 Bertelsmann
J observed that the use of the word “ would” in s 17(1)(a)(i) imports a “ measure
of certainty” that another court will differ from the court whose judgment is sought
to be appealed against.
[7] That formulation has been endorsed in a series of decisions of the Supreme
Court of Appeal, most notably in MEC for Health, Eastern Cape v Mkhitha and
Another,2 where Plasket AJA emphasised that “there must be a sound, rational
basis for the conclusion that there are prospects of success on appeal ”; a mere
possibility of success, an arguable case or one that is not hopeless, is not
enough.
[8] The “compelling reason” aspect of s 17(1)(a)(ii) is directed at cases which raise
a substantial point of law, a matter of general or public importance, where
conflicting judgments exist, or where the interests of justice otherwise demand
that a higher court pronounce on the issue.
[9] It is against these standards that each of the grounds advanced by the applicant
must be measured. In doing so, I do not intend to repeat the factual background
or the reasoning contained in my principal judgment.
1 2014 JDR 2325 (LCC) at para 6
2 [2016] ZASCA 176 at paras 16-17. See also S v Smith 2012 (1) SACR 567 (SCA) at para 7
Grounds 1, 2, 5, 6, 7, 8 and 9
[10] Grounds 1, 2, 5, 6, 7, 8 and 9 in the notice may be dealt with shortly. In substance,
they contend that I impermissibly converted an alleged interpretive error by the
second respondent into a gross irregularity on the basis that he had strayed from
the pleadings and thus exceeded his powers, that I mischaracterised the pleaded
case, that I failed to give effect to the principle of party autonomy and the finality
of arbitral awards articulated in Amalgamated Clothing and Textile Workers
Union of SA v Veldspun (Pty) Ltd,3 Telcordia Technologies Inc v Telkom SA Ltd
4 and Lufuno Mphaphuli & Associates (Pty) Ltd v Andrews,5 and that I improperly
relied on the obiter observations at paragraphs [74] to [79] of the judgment
concerning public policy.
[11] In relation to th ese grounds of appeal, no reasonable prospect of success on
appeal has been demonstrated for the following reasons:
a. First, the ratio of the judgment is not that the arbitrator misinterpreted clause
9.1 of the consultancy agreement. The ratio, set out at paragraphs [55] to
[73], is the narrower and different proposition that the arbitrator determined
the dispute on a bas is not covered by the pleadings, namely that the
applicant was entitled to the 10% revenue consultancy fee as a retainer
irrespective of whether the services referred to in clause 6.2 had been
rendered.
b. That is a well -established and independent ground of review under s
33(1)(b) of the Act, being a matter falling squarely within the passage in
Rabinowitz v Levy and Others ,6 where the SCA held that “ an arbitrator
might also exceed his or her jurisdiction if a matter is decided on a basis
not covered by the pleadings ,” which is “ a question to be decided on the
facts of each case.”
3 1994 (1) SA 162 (A)
4 2007 (3) SA 266 (SCA)
5 2009 (4) SA 529 (CC)
6 [2024] ZASCA 8 at para [20]
c. Second, the SCA in Close-Up Mining (Pty) Ltd and Others v The Arbitrator,
Judge Phillip Boruchowitz and Another7 has confirmed that under the AFSA
Rules an arbitrator does not enjoy a general discretion to entertain a dispute
not raised in the pleadings; if the pleadings do not sufficiently reflect a
dispute, the remedy is an amendment. No amendment was sought or
granted in the arbitration before the second respondent , notwithstanding
the objection recorded and the concession by counsel that the point had
not been pleaded.8
d. Third, the applicant’s own admissions in the answering affidavit filed to the
founding affidavit to the counter -application,9 to the effect that it “ did not
plead that it was entitled to payment without rendering the consultancy
services” and that this “ was not the question before the Second
Respondent” and “ did not arise from the pleadings ,” stand in the record ;
they were not resiled from in reply and cannot now be re-opened on appeal.
e. I must mention that Mr Machaba SC suggested that the statements made
in the answering affidavit relied upon by Mr. Tsatsawane SC were taken out
of context and urged me to read the whole of paragraphs 92-95 where it is
made plain that the first respondent contended that it was entitled to
revenue consultancy fees after the signing of the RFP agreements. Mr
Machaba SC urged me to distinguish between the consultancy fees earned
prior to the conclusion of the RFP agreements , and those fees rendered
afterwards, where those rendered before the conclusion of the RFP
agreements required consultancy services to be rendered, but those
rendered afterwards did not. It was argued that paragraph 16 of the
particulars of claim plainly referred to the rendering of consultancy services
before the RFP agreements were concluded.
f. Moreover, Mr Machaba SC argued out that the statements made in the
answering affidavit to the counter-claim in which the first respondent sought
answering affidavit to the counter-claim in which the first respondent sought
to review and set aside the arbitration award was not before me , as I was
7 Close-Up Mining (Pty) Ltd and Others v The Arbitrator, Judge Phillip Boruchowitz and Another
(286/2022) 2023 ZASCA 43; 2023 (4) SA 38 (SCA) at paras [25]-[27] and [34]
8 Referred to at paragraphs [61] and [64] of the principal judgment.
9 at paragraphs 92 and 95
not seized with the review proceedings. He thus contended that I should
limit myself to the pleadings and not have regard to the alleged concessions
made in these affidavits that the issue now before me had not been
pleaded.
g. Mr. Tstsawane SC disagreed; he stressed that the purpose of pleadings in
arbitral disputes is to delineate the arbitrator’s jurisdiction. He stressed that
the purpose of a replication is not to plead a new case and is not required
simply to refute the allegations in the plea that are in any event, deemed to
be denied. He insisted that while paragraph 16 of the particulars of claim
remained in the form that it did, the replication was of no assistance to the
applicant.
h. It is trite that an arbitrator’s jurisdiction to determine the matter before him
is limited by the pleadings. This distinction was highlighted in the foreign
authorities referred to by Mr Tstsawane SC in the course of his argument
in the main application that were uploaded onto Caselines by him.
i. Mr. Machaba SC sought to distinguish Covexity10 on the basis that a formal
objection had been raised regarding an amendment sought with re gard to
the penalty issue on the basis that this raised a new case . Although the
objection was upheld, the arbitrator nevertheless sought to re-introduce the
penalty issue that was found to be irregular and justified the setting aside
of the arbitrator’s award. In the present matter, Mr Machaba SC argued that
the applicant had elected to file a replication instead of filing a formal
objection and thus the matter was not on all fours with that in Covexity. I do
not see how this distinguishes the present case from that in Covexity.
j. On the basis of South African Reserve Bank and Another v Khumalo and
Another,11 Mr Tstsawane SC argued that an appeal lies against an order,
not against the reasons set out in the judgment. Thus, even if some of the
reasoning in the principal judgment was open to legitimate criticism, Mr
reasoning in the principal judgment was open to legitimate criticism, Mr
Tstsawane SC insisted that my order would still stand so long as the ratio
10 Phoenixfin Pte Ltd and others v Covexity Ltd [2022] SGCA 17. See also Coal & Oil Co LLC v GHCL
Ltd [2015] SGHC 65
11 2010 (5) SA 449 (SCA) at para [4]
was supportable on the concessions in the record - which, in his view , it
was. This was premised on the basis that the concessions made in
paragraphs 92 and 95 of the applicant’s answering affidavit to the counter-
application were fatal to the applicant’s case for leave to appeal as they
were dipositive; the concessions made were that the applicant’s entitlement
to post RFP revenue services without the rendering of services had not
been pleaded. Thus, on its own version, the fact that this issue was raised
in the replication and dealt with by the first respondent in its rejoinder, was
not sufficient to confer jurisdiction on the arbitrator to determine the issue
objected to.
k. Fourth, as regards ground 8, I recorded expressly at paragraph [79] of the
principal judgment that the observations concerning the possibility that the
contract might disguise an “influence peddling” arrangement were obiter
and did not form part of the rea soning by which the order was reached.
Nothing in the ratio turns on those observations. To the extent that any
doubt may exist on the point, I take this opportunity to reiterate that the ratio
of the principal judgment is confined to paragraphs [55] to [7 3], and that
paragraphs [74] to [79] are obiter dicta that had no bearing on the setting -
aside of the award. That formal restatement disposes of ground 8.
l. Fifth, no compelling reason within the meaning of s 17(1)(a)(ii) has been
shown to exist in respect of the aforementioned grounds for leave to appeal.
There are no conflicting judgments to be reconciled , the principles are
settled and were correctly applied to the facts before me.
[12] For th ese reasons, grounds 1, 2, 5, 6, 7, 8 and 9 do not meet the Mkhitha
standard and leave to appeal on those grounds must be refused.
Grounds 3 and 4: the “generous approach” and the absence-of-prejudice
[13] The position is different in respect of grounds 3 and 4 : Ground 3 asserts that I
[13] The position is different in respect of grounds 3 and 4 : Ground 3 asserts that I
failed to adopt the “rather generous approach” to arbitral pleadings endorsed by
the SCA in Rabinowitz at para [20] and by the older cases there collected.
Ground 4 asserts that, in any event, no gross irregularity was established
because the first respondent was not, on the facts of this case, denied a fair
hearing on the point that ultimately founded the award ; the issue was raised in
the replication, engaged with in the rejoinder, put to the applicant ’s witness in
cross-examination, canvassed with the first respondent’s witness, and expressly
addressed in argument. The applicant’ counsel thus argued that the ventilation
of the point at the hearing cured any pleading deficiency and, in the absence of
prejudice, there could be no gross irregularity as contemplated in s 33(1)(b) of
the Act.
[14] These two grounds are interrelated: If a generous approach to arbitral pleadings
is warranted where the true dispute has been fully ventilated without prejudice,
then the finding of gross irregularity on the part of the second respondent or that
he exceeded his powers may be open to reconsideration on appeal. I propose to
address each in turn.
The generous approach to arbitral pleadings
[15] The starting point is the well -known passage in Rabinowitz at para [20], which I
cited at paragraph [70] of the principal judgment, namely that “Courts, however,
generally remain reluctant to interfere with an arbitrator’s award and are prepared
to adopt ‘a rather generous approach’ to the pleadings…”
[16] That passage is significant because it makes plain that a “generous approach”
to the pleadings is necessary because of the general reluctance of our courts to
interfere with arbitral awards. This approach is closely aligned with the principle
of party autonomy affirmed in Lufuno Mphaphuli ,12 and with the purposes of
arbitration recorded by the SCA in Telcordia.13
[17] Equally significant is footnote 35 to Rabinowitz, which draws a distinction
between two very different situations : In the first, the arbitrator ’s jurisdiction is
confined to disputes as formulated in the pleadings. In the second, the arbitrator’s
referral is of “disputes arising from an agreement”, in which case “the pleadings
only serve to identify the contentions of the parties regarding the various issues
12 at paras [214]-[219]
12 at paras [214]-[219]
13 at para [51].
referred to arbitration ” and “ the ambit of the arbitration is then not restricted to
the pleadings.”
[18] Mr Machaba SC contends that the present matter is of the second kind. The
arbitration clause in the consultancy agreement was in wide terms, and the
dispute referred to the second respondent was a dispute arising out of the
agreement between the parties, particularly concerning the applicant ’s
entitlement to revenue consultancy fees. On that construction, the pleadings did
not exhaustively define the arbitrator ’s jurisdiction; they served only to identify
the parties’ contentions on the various issues arising for determination.
[19] At paragraph [72] of the principal judgment, I acknowledged that , but for the
objection recorded during the arbitration and the concession by counsel that the
point had not been pleaded, I would have been inclined to accept that the
pleadings, read holistically and together with the replication, put the true dispute
before the arbitrator. This reflected my acknowledgement that the issue before
me was difficult balance and, on reflection, another court could reasonably
conclude that a more generous approach ought to have been taken by me to the
pleadings on the facts, particularly having regard to the terms of the arbitration
agreement and the fact that the referral was of disputes arising from that
agreement.
Prejudice and the ventilation of the issue on the merits
[20] An arbitrator’s award is only reviewable under s 33(1)(b) of the Act if he or she
has “ committed any gross irregularity in the conduct of the arbitration
proceedings or has exceeded [his or her] powers ”. As the Constitutional Court
held in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others,14 and
as re-emphasised in Telcordia15 and in Palabora Copper (Pty) Ltd v Motlokoa,16
an irregularity is not “gross” merely because it exists; the enquiry is whether, as
a result of the irregularity, the aggrieved party was denied a fair hearing of the
a result of the irregularity, the aggrieved party was denied a fair hearing of the
issues that arose for determination.
14 2008 (2) SA 24 (CC) at paras [267]-[268]
15 at paras [50]-[52]
16 [2018] ZALAC 15
[21] The extracts from the transcript to which counsel for the applicant drew my
attention17 suggest, at least prima facie, that the very issue on the basis of which
the arbitrator ultimately decided the matter - namely, whether payment under
clause 9.1 was linked to the rendering of specific services under clause 6.2 - was
in fact canvassed at the arbitration hearing. The applicant ’s witness, Mr Sigasa,
was cross-examined on the point and repeatedly said that “ our payment is not
linked to us rendering specific services.” The second respondent himself directed
questions on the point to Dr Mahanjana, the first respondent’s witness. Counsel
addressed the arbitrator on the point in argument.
[22] If, on a proper analysis of the transcript, the point was fully ventilated by both
parties and both had the opportunity to lead evidence, to cross -examine, and to
address the arbitrator on it, another court might well conclude that no prejudice
was suffered and that any pleading deficiency was cured by the manner in which
the arbitration was conducted. On that view, the requirements of a “ gross”
irregularity - as opposed to a mere irregularity - would not be established,
notwithstanding the objection raised or concession made by counsel that had
been relied upon by me in the principal judgment.
[23] I remain of the view that the objection recorded during the arbitration, together
with the concession made by counsel then acting for the applicant that
entitlement to payment without the rendering of services had not been pleaded,
was material to the finding of gross irregularity. That view finds support in Close-
Up Mining, where the SCA emphasised that the AFSA Rules do not confer on an
arbitrator a general discretion to adjudicate matters outside the pleadings, and
that the proper course, if the pleadings do not sufficiently reflect the dispute, is
an amendment. No such amendment was ever sought.
[24] The question, however, is not whether I stand by my own reasoning; it is whether
[24] The question, however, is not whether I stand by my own reasoning; it is whether
an appellate court would have a reasonable prospect of coming to a different
conclusion. I am persuaded that, on grounds 3 and 4, another court could well
conclude:
17 Caselines 015-952, 015-1015 to 015-1029, and 015-1167 to 015-1170
a. that the arbitration referral, being one of “ disputes arising from the
agreement,” engaged the second category identified in footnote 35 of
Rabinowitz, with the consequence that the ambit of the arbitration was not
restricted to the strict formulation of the pleadings;
b. that, applying the “generous approach” endorsed in Rabinowitz at para [20],
the pleadings read as a whole (statement of claim, plea, replication and
rejoinder) sufficiently identified the true issue for determination; and
c. that, on a full consideration of the transcript, the first respondent was not
denied a fair hearing on the issue and, in the absence of demonstrable
prejudice, no gross irregularity within the meaning of s 33(1)(b) of the Act
was established.
[25] These are difficult and closely related questions supported by equally compelling
lines of authority, namely, the “ generous approach ” doctrine as reaffirmed in
Rabinowitz, and the “ no discretion outside the pleadings ” doctrine confirmed in
Close-Up Mining. There is genuine scope for reasonable judicial disagreement
about how those doctrines apply where an un-pleaded issue has been objected
to, but nonetheless fully ventilated in evidence and argument. It is precisely the
kind of question on which an appellate court ’s guidance would be of assistance
not only to the parties but to the broader legal community which has an interest
in the finality and effectiveness of consensual arbitration.
[26] I am accordingly satisfied that grounds 3 and 4 meet the threshold in s 17(1)(a)(i)
of the Superior Courts Act. There is a reasonable prospect that another court,
weighing the objection and concession relied upon in the principal judgment
against the terms of the arbitration agreement, the pleadings read holistically, the
transcript, and the absence of demonstrable prejudice, would conclude that no
gross irregularity was established. I am also satisfied that, given the developing
state of the case law on the interplay between Rabinowitz and Close-Up Mining,
state of the case law on the interplay between Rabinowitz and Close-Up Mining,
there is a compelling reason under s 17(1)(a)(ii) for the appeal to be heard.
The scope of the leave to appeal
[27] Leave to appeal should not be granted more broadly than the reasoned
prospects justify. The principle of finality of litigation, and the demands on the
Full Court and the Supreme Court of Appeal, require that leave be confined to
those grounds on which the Mkhitha threshold has been met.18
[28] Leave is therefore granted only on grounds 3 and 4 as set out in the notice of
application for leave to appeal. It is refused on grounds 1, 2, 5, 6, 7, 8 and 9. To
avoid any ambiguity, the issue on appeal is confined to the single, discrete
question: whether, on the facts of this case, the arbitrator committed a reviewable
gross irregularity or exceeded his powers within the meaning of s 33(1)(b) of the
Act by determining the matter on a basis said not to have been pleaded, having
regard to (i ) the terms of the arbitration agreement and the character of the
referral; (ii) the pleadings read holistically, including the replication and rejoinder;
and (iii) the manner in which the disputed issue was ventilated in evidence, cross-
examination and argument at the arbitration hearing.
Forum
[29] Section 17(6)(a) of the Superior Courts Act provides that if leave is granted, the
court concerned “ shall direct that the appeal be heard by a Full Court of that
Division, unless it considers that the decision to be appealed against involves a
question of law of importance, whether because of its general application or
otherwise, or in respect of which a decision of the Supreme Court of Appeal is
required to resolve differences of opinion, or the administration of justice, either
generally or in the particular case concerned, requires consideration by the
Supreme Court of Appeal of the decision.”
[30] While the appeal raises a question of some general importance concerning the
interaction between the “generous approach” doctrine and the confinement of an
arbitrator’s jurisdiction to the pleadings under the AFSA Rules, I do not consider
arbitrator’s jurisdiction to the pleadings under the AFSA Rules, I do not consider
18 See Acting National Director of Public Prosecutions and Others v Democratic Alliance In Re:
Democratic Alliance v Acting National Director of Public Prosecutions and Others [2016] ZAGPPHC
489 at para [25]; Notshokovu v S [2016] ZASCA 112 at para [2].
Date of hearing: 31 July 2026
Date of judgment: 8 September
2026
Appearances:
For the applicant: Adv. Machaba
SC, instructed by MT Raselo
Incorporated
For the first respondent: Adv.
Tsatsawane SC, instructed by
Shandu Attorneys Inc.