SOUTH AFRICA Law and Practice Contributed by: Jonathan Ripley-Evans, Fiorella Noriega Del Valle, Kyle Melville and SooBin Park, Herbert Smith Freehills Kramer
5.4 Standard of Judicial Review for Jurisdiction/Admissibility
of the matters referred to arbitration (Article 34 of Schedule 1 to the IAA); and (b) a court may refuse to enforce the award on the basis that the tribunal has gone beyond the scope of the dispute (Article 36 of Schedule 1 to the IAA). • If court proceedings are launched and, when analysing whether the dispute should be referred to arbitration, the court finds that the arbitration agreement is null and void, inoperative or incapa - ble of being performed, it can proceed to hear the dispute (Article 8 of Schedule 1 to the IAA). These provisions reflect a deliberate legislative intent to limit judicial interference and uphold the integrity of the arbitral process. As such, courts are expected to exercise their powers of intervention sparingly and only in accordance with the express provisions of the IAA. 5.3 Timing of Challenge Parties may challenge the tribunal’s jurisdiction at the outset of the arbitration process; however, it is only once the tribunal has made a ruling on this issue that a party has the right to go to court to challenge its jurisdiction. According to the IAA, objections to the tribunal’s juris - diction within the arbitration proceedings must be raised no later than the submission of the statement of defence (unless the delay is justified in the view of the tribunal), and a party is not precluded from doing so by virtue of the fact that it has participated in the appointment of the arbitrator (Article 16 (2) of Sched - ule 1 to the IAA): • if the tribunal makes a preliminary ruling on juris - diction, the court review process must be launched within 30 days after the preliminary ruling has been handed down – however, the arbitration proceed - ings will not be suspended during the court review; or • if the tribunal makes a ruling in the final award, the court review process must be launched within three months after the award is received.
South African courts adopt a deferential standard of judicial review when addressing questions of admis - sibility and jurisdiction in arbitration proceedings. This approach reflects the broader arbitration-friend - ly stance of the judiciary, which seeks to uphold the autonomy and procedural integrity of arbitral tribunals. The South African courts will generally respect the tribunal’s findings, unless there is a clear and compel - ling reason to intervene, such as gross irregularity or inconsistency with public policy. 5.5 Breach of Arbitration Agreement The IAA mandates that the courts must stay judicial proceedings and refer the matter to arbitration, unless the agreement is found to be null and void, inopera - tive or incapable of being performed. This stance has since been reinforced in several cases, including Tee Que , Kalagadi and Lukoil . 5.6 Jurisdiction Over Third Parties The IAA does not explicitly allow an arbitral tribunal to assume jurisdiction over parties who are not party to an arbitration agreement nor signatories to the con - tract containing the arbitration agreement. However, if those parties subsequently agree to become a party to the arbitration, jurisdiction may be assumed. The “group of companies” doctrine, which is found in other jurisdictions and allows for the possible exten - sion of arbitration agreements to non-signatory com - panies within the same group, is not recognised in South African law. However, an exception could exist under the doctrine of “piercing of the corporate veil”, which is recog - nised in South Africa and where the courts may, in exceptional circumstances, disregard the separate legal personality of a company to hold the associated companies accountable. Even outside the context of arbitration, this approach has been cautiously applied and requires compelling evidence of fraud, improper conduct or abuse of the corporate form. This doctrine has not yet been applied (or considered) by the South African courts in order to justify the extension of an arbitration agreement to non-signatories.
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