SOUTH AFRICA Law and Practice Contributed by: Jonathan Ripley-Evans, Fiorella Noriega Del Valle, Veronica Connolly and Kyle Melville, Herbert Smith Freehills Kramer
The general position adopted in South African court proceedings and domestic arbitrations is that costs are calculated by reference to a “tariff” published in the rules of the High Court, together with the arbitra - tor’s fees, experts’ fees, and institutional fees and dis - bursements. The “tariff” does not reflect actual legal costs incurred, and accordingly the winning party does not always recover its full legal expenditure. However, in an international arbitration there is no reason why the parties need to agree to apply the High Court “tariff”, and they are entitled to agree that costs will be awarded in the award, at the discretion of the arbitrators. It should be noted, however, that to the extent that a South African arbitrator is appointed the arbitrator may be inclined to revert to the “tariff” approach, unless there is express agreement on costs between the parties. Historically, South African arbitrators have awarded costs but deferred quantification to court “taxing masters”, leading to delays and additional expenses. However, there is a growing expectation that arbitra - tors should include both the allocation and quantifi - cation of costs in the final award, ensuring that it is complete, final and more easily enforceable in line with international standards. In South Africa, unless the parties have expressly agreed that there will be a right to appeal the mer - its of the award, international arbitral awards are not appealable. Judicial Reviews of Arbitral Awards Notwithstanding that an appeal mechanism may not have been included in the arbitration agreement, par - ties are entitled to judicially review the award in one of two ways: • by way of application to set aside the award – this application must be made to the High Court within three months of the date on which the party mak - ing the application received the award; or 11. Review of an Award 11.1 Grounds for Appeal Appeals of Arbitral Awards
• by opposing an application to enforce the award. Under the IAA, an award may only be judicially reviewed on the following grounds. • If the arbitration agreement is found to be invalid. • If there were procedural irregularities in the arbitra - tion, on the following grounds: (a) a party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to pre - sent their case; or (b) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement or the IAA. • If the award deals with a dispute not contemplated by or not falling within the terms of the submis - sion to arbitration or contains decisions on matters beyond the scope of the submission to arbitration (lack of jurisdiction). • If the court finds that the subject matter of the dispute is not capable of settlement by arbitration under South African law. • If the court finds that the award is in conflict with the public policy of South Africa. 11.2 Excluding/Expanding the Scope of Appeal Inclusion of an Appeal Mechanism Parties in international arbitrations seated in South Africa can agree to include an appeal mechanism in their arbitration agreement, even though this is not expressly provided for under the IAA. This is more commonly done in domestic arbitrations. Excluding/Expanding the Judicial Review Grounds South African law offers no precedent for attempts to contractually exclude or expand the grounds of judicial review prescribed by the IAA. Such attempts would in any event appear unlikely to succeed, as the relevant provisions are mandatory in nature, admit of no express party variation, and exist to safeguard the integrity, finality and efficiency of the arbitral process. 11.3 Standard of Judicial Review The standard of judicial review for arbitral awards in South Africa is deferential rather than de novo. South African courts respect the autonomy of the arbitral
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