SOUTH AFRICA Law and Practice Contributed by: Jonathan Ripley-Evans, Fiorella Noriega Del Valle, Veronica Connolly and Kyle Melville, Herbert Smith Freehills Kramer
5.2 Circumstances for Court Intervention The IAA mandates that no court may intervene in arbitral proceedings save where it expressly so pro - vides, reflecting a restrained and arbitration-friendly approach. In jurisdictional disputes, the IAA permits judicial inter - vention only in the following circumstances. • Where the tribunal has ruled on jurisdiction as a preliminary matter, a party may seek judicial review within 30 days. This does not suspend the arbitra - tion (Article 16 of Schedule 1 to the IAA). • Where the tribunal has addressed jurisdiction in its final award: (a) a party may apply to set aside the award on the grounds that the arbitration agreement is invalid or that the award exceeds the scope of the dispute (Article 34 of Schedule 1 to the IAA); and (b) a court may decline enforcement on the same basis (Article 36 of Schedule 1 to the IAA). • Where court proceedings are instituted and the court determines that the arbitration agreement is null and void, inoperative or incapable of being performed, it may retain jurisdiction (Article 8 of Schedule 1 to the IAA). 5.3 Timing of Challenge A tribunal’s jurisdiction may be contested at the outset of the arbitration, but court intervention is unavailable until the tribunal has ruled on the matter. Under Article 16 (2) of Schedule 1 to the IAA, any juris - dictional challenge must be raised no later than the fil - ing of the statement of defence, although the tribunal retains discretion to permit a later challenge where justified. Participation in appointing the arbitrator does not preclude a party from raising a challenge. The timeframe for court review depends on the form of the tribunal’s ruling. Where the tribunal has made a preliminary ruling on jurisdiction, court review must be commenced within 30 days, and the arbitration continues uninterrupted. Where jurisdiction has been addressed in the final award, court review must be initiated within three months of receipt.
5.4 Standard of Judicial Review for Jurisdiction/Admissibility
South African courts adopt a deferential standard of judicial review when addressing questions of admis - sibility and jurisdiction in arbitration proceedings, mir - roring the broader arbitration-friendly stance of the judiciary. Unless there is a clear and compelling reason to inter - vene, such as gross irregularity or inconsistency with public policy, the South African courts will generally respect the tribunal’s findings. 5.5 Breach of Arbitration Agreement Unless the arbitration agreement is found to be null and void, inoperative or incapable of being performed, the IAA prescribes that the courts must stay judicial proceedings and refer the matter to arbitration. This stance has since been reinforced in several cases, including the Tee Que , Kalagadi and Lukoil judgments. 5.6 Jurisdiction Over Third Parties The IAA does not expressly confer on an arbitral tri - bunal the power to assume jurisdiction over parties who are not signatories, being parties neither bound by the arbitration agreement nor signatories to the underlying contract. Jurisdiction may nonetheless be established where such parties subsequently consent to participate in the arbitration. Additionally, two doc - trines warrant consideration in this context. • First, the “group of companies” doctrine, applied in certain jurisdictions to extend arbitration agree - ments to affiliated companies within the same corporate group, is not recognised in South African law. • Second, the doctrine of piercing the corporate veil is recognised under South African law and permits courts in exceptional circumstances to disregard a company’s separate legal personality. Its applica - tion is strictly circumscribed and requires compel - ling evidence of fraud, improper conduct or abuse of the corporate form. However, the South African courts have not yet applied or considered it as a basis for extending an arbitration agreement to non-signatory parties.
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