As attorneys, we often include dispute resolution provisions in the agreements we draft for our clients. In many instances, alternative dispute resolution is a powerful way in which to resolve an array of different disputes.
Advantages include:
- the confidentiality of the process,
- often being less formal, and
- it is generally faster than litigation.
In my personal experience, there is rarely a cost-benefit, but in most instances, it does ensure a definite time benefit.
In many instances, though debates seem to ensue as a result of whether or not all disputes are referable to arbitration. Especially when these clauses are included in contracts. In North East Finance (Pty) Ltd v Standard Bank of South Africa Ltd, the Supreme Court of Appeal held that the agreement between and intentions of the parties as to the scope of an arbitration clause should apply.
In the context of international arbitrations, the court in Zhongi Development Construction Engineering v Kamoto Cooper Company Sarl held that an arbitration agreement embodies an agreement distinct from the contract of which it forms part of as such it should apply to all dispute situations.
In Seabeach Property Investment No 28 (Pty) Ltd v Nunn, the court held that the parties envisaged and intended, at the time of agreeing, that all their disputes regarding the main agreement whether void or voidable would be determined by arbitration. The arbitration clause was therefore severed from any defects from which the main agreement may suffer.
Conclusion
In an instance where parties intend all disputes regarding their agreement, including the formation, validity, and enforceability of the agreement, be determined by arbitration, it is imperative that the arbitration agreement and the rules say explicitly so. Contact an expert at SchoemanLaw to review your contracts to construct what suits the situation best today!
Mrs. Nicolene Schoeman – Louw founded the firm in 2007, aged 24, and is now the Managing Director of the firm.
She is an admitted Attorney of the High Court of South Africa, Conveyancer, Notary Public and Mediator; with a passion for entrepreneurs and helping them reach their most ambitious goals.
She obtained her LLB degree cum laude and successfully completed her LLM degree (dissertation) in commercial law and B-BBEE, both at the University of the Free State. In addition, she obtained her postgraduate diploma in financial planning (CFP) at the University of Stellenbosch.
An abstract of her LLM dissertation was published in the Journal for Estate Planning in 2006. Now, she regularly writes for academic publications such as De Rebus (the SA attorneys’ journal) as well as Without Prejudice and Polity.org (legalbriefs). She also regularly contributes to various online publications such as Spice4Life and other mainstream publications such as The Entrepreneur Magazine, Business Briefs and Personal Finance Magazine (to name a few).
