Arbitration in South Africa is designed to be a binding and enforceable process.
1. The Arbitration Award
Once the arbitrator has heard both sides and considered the evidence, they will issue a written, final, and binding arbitration award. This award is similar to a court judgment in that it resolves the dispute between the parties.
2. Enforcing the Award
Generally Binding: In most cases, the parties will comply with the arbitration award voluntarily. This is because the arbitration agreement they signed usually states that the award will be final and binding.
- Making the Award an Order of Court: If one party refuses to comply, the other party can apply to the High Court to have the arbitration award made an order of court. Once the court makes the award an order, it has the same force and effect as a court judgment, and can be enforced in the same way. This may involve:
- Execution: The winning party can use court processes to seize and sell the losing party's assets to satisfy the award.
- Contempt of Court: If the losing party still refuses to comply, they can be held in contempt of court, which can lead to fines or even imprisonment.
3. Challenging the Award
Limited Grounds - The grounds for challenging an arbitration award are very limited. This is intentional, as it promotes the finality of arbitration and prevents parties from using delaying tactics.
- Grounds for Challenge: The main grounds for challenging an award include:
- Procedural irregularities: If the arbitration process was not conducted fairly or in accordance with the arbitration agreement.
- Bias: If there is evidence of bias on the part of the arbitrator.
- Public policy: If the award is contrary to the public policy of South Africa.
- Court Review: A party can apply to the High Court to have the award set aside on these limited grounds. However, the court will generally be reluctant to interfere with the award unless there is a clear case of impropriety or illegality.
In summary, arbitration awards in South Africa are generally binding and enforceable. The legal framework provides mechanisms to ensure compliance, and courts will only interfere in limited circumstances to uphold the integrity of the arbitration process.