South Africa’s new International Arbitration Bill brings new dawn of new area

December 1st, 2016

By Kgomotso Ramotsho

The Deputy Minister of Justice and Constitutional Development, John Jeffery, said South Africa’s (SA) development of a new International Arbitration Bill, brings a new dawn of era in arbitration. Mr Jeffery was speaking at the International Arbitration – the Dawn of a New Era in South Africa Seminar held in Johannesburg on 14 October. He said the new Bill comes at an opportune time for SA, to opt into the international standard for the resolution of commercial dispute. ‘Not only does it have the potential to attract foreign direct investment, but also give greater legal protection to South African investments abroad,’ he said.

Mr Jeffery said SA was a party to the New York Convention and in 1976, SA acceded to the Convention without reservation. He added that SA enacted the Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977 in order to give effect to the principles of the Convention. He stated that the Arbitration Act 42 of 1965 governs arbitration proceedings in SA, however, he added that the Act makes no distinction between domestic and international arbitration and the Arbitration Act is not based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law.

Mr Jeffery said the International Arbitration Bill emanates from a report of South African Law Reform Commission dealing with international arbitration. ‘The main thrust of the Bill is the incorporation of the United Nations Commission on International Trade Law Model Law, as the cornerstone of the international arbitration regime in SA.’ He said: ‘The Model Law defines arbitration as “international” if parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States. This definition is used to determine, which arbitration matters qualify as “international” and are, therefore, subject to the Model Law,’ he added.

Mr Jeffery noted that the Bill seeks to incorporate the Model Law into SA law and that the provisions of the Bill reflect many of the provisions of the Model Law. He said provision is made for the Model Law to apply to all international agreements, irrespective of whether the agreement was entered into before or after the commencement of the envisaged legislation. Mr Jeffery, however, said the Bill will not apply to the proceedings for the enforcement of awards under the Recognition and Enforcement of Foreign Arbitral Awards Act or for the enforcement, setting aside or remittal or an award under the Arbitration Act.

Mr Jeffery pointed out that the proposed legislation will not only assist SA businesses in resolving their international commercial disputes, but will ensure that SA is an attractive venue for parties around the world to resolve their commercial disputes. He said that after Cabinet had approved the introduction of the Bill into Parliament, the Department of Justice received advice that the UNCITRAL Model Law could be adapted in order to accommodate local circumstances.

‘We are now in the process of going back to Cabinet, with the suggested amendments, for noting and endorsement before proceeding with the introduction of the Bill into Parliament. And we expect that it will be introduced before the end of this year,’ he said.


Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.

This article was first published in De Rebus in 2016 (Dec) DR 14.