The Constitutional Court judgment in De Lange v Presiding Bishop of the Methodist Church of Southern Africa dealt with a number of interesting issues. One was whether good cause existed, as contemplated by the Arbitration Act, to set aside an arbitration agreement concluded between the parties.
Neither the Arbitration Act nor our courts have expressly defined what good cause is. The Constitutional Court, however, said that it was clear that the onus to demonstrate good cause is not easily met and the courts will only exercise the discretion to set aside an arbitration agreement where a persuasive case has been made out.
It is neither possible nor desirable for the courts to define precisely what circumstances constitute a persuasive case. The question is whether it is in the interests of justice to hold a party to an arbitration agreement that would result in a futile, unfair or unreasonable outcome or perhaps unconscionable burden.
Good cause must also embrace an enquiry into whether the agreement, if implemented, would unjustifiably diminish or limit the protection afforded by the Constitution. Absent infringement of the constitutional norms, the courts will hesitate to set aside an arbitration agreement untainted by misconduct or irregularity unless a truly compelling reason exists.
Our courts have firmly held that the values of the Constitution are not necessarily best served by enhancing the power of the courts to set aside private arbitration awards.
The court held that the complaints which had been raised by the claimant could properly and fruitfully be determined in an arbitration. There was no factual basis to the complaint of bias on the grounds that the arbitrator was a member of the church whose members were involved.
The arbitration would not be vitiated only by reason that the arbitrator was a member of the voluntary association concerned. Often, a member well-versed with the norms and rules of an association may be more suited to the arbitration task than an outsider.
Accordingly no good reason had been shown why the arbitration was not suited to resolving the dispute. In any event, the outcome of the arbitration would be open to judicial review if there is bias.
Our courts, including the Constitutional Court, have now firmly and unequivocally held that the values of the Constitution are not necessarily best served by enhancing the power of our courts to set aside private arbitration awards. The courts should not be too quick to find fault with the manner in which an arbitration has been conducted because, in so doing, the goals of private arbitration may well be defeated.
