SOUTH AFRICA Law and Practice Contributed by: Jonathan Ripley-Evans, Fiorella Noriega Del Valle, Veronica Connolly and Kyle Melville, Herbert Smith Freehills Kramer
Arbitral awards in South African-seated arbitrations
Foreign Awards Subject to Ongoing Set-Aside Proceedings The IAA states that, if an application for the setting- aside or suspension of an award has been made to a competent authority at the seat, the South African court may, if it considers it appropriate: • adjourn its decision on the enforcement of the award; and • on the application of the party claiming enforce - ment of the award, order the other party to provide suitable security. South African courts will not enforce an arbitral award that has been set aside by the courts at the seat of arbitration. Awards Subject to Ongoing Set-Aside Proceedings at the Seat Where set-aside proceedings are ongoing at the seat of arbitration, South African courts retain the discre - tion to suspend enforcement pending their resolution. Although no case law has yet addressed this point directly, such an approach would serve to prevent conflicting judgments and to preserve the authority of the courts at the seat of arbitration. State and State Entity Immunity Under the Foreign States Immunities Act, 1981, for - eign states generally enjoy immunity from the jurisdic - tion of South African courts. That immunity is, how - ever, displaced in the context of arbitration: where a foreign state has agreed in writing to submit a dispute to arbitration, Section 10 of the Foreign States Immu - nities Act renders it subject to the jurisdiction of South African courts in relation to arbitration. 12.3 Approach of the Courts General Approach of the South African Courts to the Recognition and Enforcement of Arbitral Awards Foreign arbitral awards As mentioned previously, the IAA states that a foreign arbitral award must be recognised and enforced in South Africa, except as expressly provided for in the IAA. The grounds provided for in the IAA accord with the grounds set out in the New York Convention.
The IAA also states that awards in international arbi - trations seated in South Africa must be recognised, except as provided for in the IAA. The grounds for refusal essentially mirror those applicable to foreign arbitral awards. The IAA has reduced the scope for challenging awards for tactical reasons. For example, in Snowy Owl Prop- erties 284 ( Pty ) Ltd v Mziki Share Block Limited [2024] ZASCA 79, the Supreme Court of Appeal found that, although enforcing an arbitral award at odds with leg - islation may be contrary to public policy, this must be weighed against the important goals of private arbitra - tion. The court held that raising such a defence only after the award has been rendered “self-evidently” erodes the utility of arbitration as an expeditious, out- of-court means of finally resolving disputes. A further example is GFE MIR Alloys and Minerals SA ( Pty ) Ltd v Momoco International Limited [2023] ZAG - PJHC 946, in which the High Court rejected a request for leave to appeal against an order enforcing an arbi - tral award and directed that the award be enforced pending any future appeals the losing party may wish to lodge, in order to avoid delays. Under South African law, further appeals generally suspend the enforce - ment of court orders. The court emphasised that public policy considerations support the general rule that arbitration awards should be enforced by South African courts. Refusal of Foreign Arbitral Awards on Public Policy Grounds While the South African courts are supportive of arbi - tration, they will refuse enforcement on public policy grounds if the award is fundamentally offensive to the country’s notions of justice and morality. As can be seen from the Snowy Owl and Momoco judgments, this standard is applied narrowly to ensure that only awards that egregiously violate public policy are refused at the enforcement stage. Grounds for refusal include fraud, corruption, serious procedural irregu - larities and awards that contravene fundamental prin - ciples of South African law.
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