SOUTH AFRICA Law and Practice Contributed by: Jonathan Ripley-Evans, Fiorella Noriega Del Valle, Veronica Connolly and Kyle Melville, Herbert Smith Freehills Kramer
Herbert Smith Freehills Kramer 4th Floor, Rosebank Towers 15 Biermann Avenue Rosebank 2196 Gauteng South Africa Tel: +27 010 500 2690 Email: Jonathan.ripley-evans@hsfkramer.com Web: www.hsfkramer.com/locations/south-africa
1. General 1.1 Prevalence of Arbitration
ing appeal as a seat, particularly among parties from SADC jurisdictions. Part of this growth is attributable to the considerable strain on South Africa’s courts, arising from high case volumes and constrained judi - cial capacity. These pressures, combined with broader systemic challenges, have driven commercial litigants towards arbitration with increasing frequency. Arbitra - tion also affords parties the ability to appoint arbitra - tors with specialist expertise and to resolve disputes confidentially and efficiently – outcomes that the court system cannot consistently guarantee. Notwithstanding this position, court litigation remains the primary dispute resolution mechanism in a number of sectors, particularly those concerned with public procurement and regulatory compliance, where stat - ute requires disputes to be adjudicated by the courts. Domestic and ad hoc arbitrations also remain a popu - lar alternative to the courts. 1.2 Key Industries Identifying industries with significant international arbitration activity is inherently difficult, as arbitration proceedings are not publicised in South Africa and arbitral institutions do not routinely publish details of parties’ sectors. However, AFSA data collected between 2013 and 2023 indicates that arbitrations under AFSA rules have been concentrated in the financial sector (33% of total cases), followed by energy and resources (20%), industrial and manufacturing (12%), and com - modities and trading (10%). These are all sectors in
South Africa has seen a growing use of international arbitration, particularly in complex cross-border com - mercial disputes. The country’s legal framework was modernised with the adoption of the International Arbi - tration Act 15 of 2017 (IAA), bringing it into alignment with the UNCITRAL Model Law on International Com - mercial Arbitration (the “UNCITRAL Model Law”). The IAA establishes a comprehensive regime governing all stages of the arbitral process, limits court intervention to narrowly defined grounds, and is complemented by South Africa’s accession to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). Since the adoption of the IAA, there has been a marked increase in international arbitrations seated in South Africa. This upward trend is reflected in statistics published by the Arbitration Foundation of Southern Africa (AFSA), which recorded 49 new international arbitrations between June 2021 and December 2023 alone. The data also reveals growing participation by non-African parties: AFSA’s 2022 report indicates that 71% of parties were drawn from the Southern African Development Community (SADC) region more widely, with 29% originating from outside the African conti - nent entirely. The availability of skilled arbitrators, modern legislation and a supportive judiciary with transparent decision- making have all contributed to South Africa’s grow -
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