The Supreme Court of Appeal has reaffirmed some important principles about arbitrations. An arbitrator ‘has the right to be wrong’ on the merits of the case and being wrong does not mean that the arbitrator misconceived the nature of the enquiry. Secondly, an arbitrator only has the powers afforded to them in terms of the relevant arbitration agreement and has no inherent power. The arbitrator cannot stray beyond the submissions of the parties who have expressly defined and limited the issues and may not decide a matter not so defined unless the arbitration agreement is amended. Thirdly, although the Arbitration Act, 1965 makes no specific mention of appeal arbitrations, an arbitrator’s award can be referred to an appeal body and the provisions of the Act will apply to the appeal tribunal as well. If the appeal arbitration award is set aside on review by a court, the original arbitration award is not revived or reinstated. In that case the dispute must, at the request of the parties, be submitted to a new arbitration tribunal constituted in the manner directed by the court setting aside the appeal award.
In this matter, the arbitrator was criticised for taking into account information about a settlement between the parties which had brought the disputes before the arbitrator to an end before the arbitration commenced. The compromise constituted a complete defence to the claims. The compromise had been raised in a different context. It was held that it would be wholly artificial and unjust for the arbitrator to disregard the pleaded and proved compromise simply because it had not been pleaded directly in answer to the settled claims. There was no gross irregularity by the arbitrator in dismissing the claims that were subject to the compromise.
JVE Civil Engineers Inc. v Blue Bantry Investments 235 (Pty) Ltd [2023] ZASCA 12 (16 February 2023)
