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06 July 2020

Expert panel revises South Africa arbitration rules to boost regional status

The Arbitration Foundation of South Africa takes 'bold step' to create 'truly international set of rules'

By Ben Rigby

Johannesburg cityscape (west part) seen from the Carlton Center viewing deck

Johannesburg: new rules aim to underpin international investment Shutterstock; WitR

A committee of leading international and African experts has given one of South Africa’s best-known set of arbitration rules a makeover.

The Arbitration Foundation of South Africa (AFSA) has launched a new draft set of international arbitration rules, updating them in the light of market trends and and previous legislation in a bid to bolster South Africa’s commercial arbitration regime.

The rules have been produced by a drafting committee and associated advisory board chaired by Wilmer Cutler Hale Pickering & Dorr special counsel Maxi Scherer, a professor at Queen Mary University in London.

Scherer said she was confident they would “provide additional certainty and clarity to businesses trading across borders on the African continent and beyond and continue to make AFSA a highly attractive choice for parties in international arbitration proceedings".

She was assisted by leading African legal practitioners, including advocate Patrick Lane SC, who chairs AFSA’s international committee, Ndanga Kamau, the chair of the International Chamber of Commerce’s Africa Commission, and director (partner) Jonathan Ripley-Evans, of Herbert Smith Freehills.

International assistance came from Chiann Bao, formerly secretary-general of the Hong Kong International Arbitration Centre, and Remy Gerbay, a partner at US law firm MoloLamken. 

While the process has been delayed by South Africa’s stringent lockdown, which commenced in March 2020, consultation on the new provisions was formally launched at the start of July, with responses sought by September.

Among the revised topics are the role of emergency arbitrators, expedited proceedings and early dismissal of claims — all issues whose importance has been heighted by the pandemic, especially given South Africa’s status as a regional finance centre and infrastructure and commercial hub.

There are also changes to rules on multi-party contract proceedings (including joinder and consolidation), which are significant for construction claims, and new rules on confidentiality and third-party funding – the use of which is expected to fuel disputes in Africa.

There are also innovations such as the use of tribunal secretaries – who work administratively with arbitrators – and remote arbitration filings and hearings, where reforms have recently been proposed. 

Given South Africa’s strong mining sector, the rules also strike a balance between civil society demands for transparency and arbitral confidentiality.  

Ripley-Evans said: “Building on the legislative reform of 2017 which saw the introduction of the UNCITRAL Model Law into law in South Africa, AFSA has taken the bold step to revise their procedural rules for international arbitration. The objective of the revision process is to ensure that the new rules display the international familiarity expected of a truly international set of rules, whilst at the same time, addresses the needs of a developing seat on the continent.”

AFSA is one of South Africa’s best-established arbitral institutions; the 2017 reforms aimed to offer corporates alternatives to litigation, especially given South Africa’s membership of the African Continental Free Trade Area, which aims to integrate Africa’s disparate economies more closely, while the pandemic will inevitably bring commercial disputes to prominence, and so require resolution. 

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