The Arbitration Foundation of Southern Africa’s new Rules, which came into effect on 1 June, are a welcome move that will help to grow South Africa's reputed position as an international arbitration seat.
On 1 June 2021, the Arbitration Foundation of Southern Africa's (AFSA) new international arbitration rules came into effect (the Rules). The Rules usher AFSA's international arbitral protocols into a new era of arbitration that reflects both international best practice and modern trends. The changes are a welcome addition to AFSA's repertoire and promise to facilitate the continued growth of South Africa's reputed position as an international arbitration seat.
The aim of this article is to provide you with a high-level overview of the key features introduced by the Rules.
Oversight and administration
Perhaps the most significant change brought about by the Rules is the introduction of the AFSA Court (the Court), together with a Secretariat responsible for the Court’s day-to-day administration. The members of the Court have been appointed and consist of senior international and African practitioners.
The function of the Court is to supervise the administration of the resolution of disputes by the Arbitral Tribunal (the Tribunal). Specifically, the Court is empowered to appoint and sanction the appointment of arbitrators, and to deal with challenges to appointments and issues of jurisdiction.
AFSA has started the arbitrator accreditation process, with the aim of appointing individuals with appropriate qualifications and practical experience from across Africa, the UK, America, Europe and Australia. AFSA has indicated that it welcomes applications for inclusion on its list of accredited arbitrators.
Efficiency and speed
To promote the efficient and timely resolution of disputes, AFSA introduced Article 10 of the Rules to provide for an expedited arbitration procedure when the quantum in dispute of any claim (or counterclaim) does not exceed the equivalent amount of USD 500 000. Any parties to a dispute may also agree to "opt-in" to the expedited procedure under Article 10, whatever the amount claimed.
Article 10 empowers the AFSA Secretariat to shorten any time limits under the Rules and vests the Tribunal with the power to decide the dispute between the parties on the basis of documentary evidence alone, unless the Tribunal deems it appropriate to hold one or more hearings.
To ensure a streamlined path to judgment, Article 10 allows judgment to be given in summary form. However, the final award must be communicated within six months of the Tribunal receiving the case file, unless exceptional circumstances justify an extension.
In keeping with the theme of expeditiousness, Article 12 of the Rules provides for the early dismissal of a claim or defence, on the basis that it is either manifestly without legal merit or manifestly outside the jurisdiction of the Tribunal.
Article 12 provides a welcome addition to the arsenal of any litigant in warding off claims or defences that are plainly without merit at an early stage, before substantial legal costs are incurred.
Innovation and pragmatism
Article 11 of the Rules provides for the appointment of an emergency arbitrator when urgent relief is required prior to the constitution of the Tribunal.
An application under Article 11(1) is first made to the Secretariat, which should include, among other things, the specific grounds for requiring the appointment of an emergency arbitrator, including reference to the specific claim, with reasons, for emergency measures.
If the Secretary-General accepts the application under Article 11(1), the Court shall seek to appoint an emergency arbitrator within 48 hours of the Secretariat receiving the application, accompanied by the payment of the administration fee and deposits.
The emergency arbitrator is empowered to conduct the emergency proceedings in any manner he/she determines to be appropriate. Interestingly, the emergency arbitrator may not act as an arbitrator in any future arbitration relating to the dispute, unless the parties agree to it.
The emergency arbitrator must decide the claim as soon as possible, but no later than 14 days after being appointed.
To ensure an effective and pragmatic process in which all relevant parties to a dispute are involved in its resolution, Article 29 of the Rules introduces the mechanisms of joinder and intervention into the arbitral fray.
Article 29 allowsfor joinder prior to the constitution of the Tribunal, provided that:
- all parties, including the party to be joined, have consented to the joinder; or
- the additional party to be joined is
prima facie bound by the arbitration agreement upon which the pending arbitration is made.
If an application for joinder is necessary after the constitution of the Tribunal, a party or non-party may apply to the Tribunal for one or more additional parties to be joined, provided that all parties, including the additional party to be joined, have consented to the joinder.
The Tribunal, after giving all parties the opportunity to be heard, will then decide whether to grant the joinder or not.
Confidentiality and transparency
Article 36 of the Rules provides for the confidentiality of all awards, all materials created for the purpose of the arbitration and all other documents produced by a party in the proceedings, as well as the deliberations of the Tribunal.
However, in striking a balance between confidentiality and transparency, Article 36(3) contains an exception. AFSA is permitted, in principle, to publish all arbitral awards in an anonymised and pseudonymised form, unless a party to the arbitration proceedings objects in writing.
The theme of transparency is repeated in Article 27, which deals with third-party funding. Notably, if a third-party funding agreement is entered into, the party who is being funded shall, among other things, notify all other parties, the Tribunal and the Secretariat of the existence of the agreement, and the identity of the funder.
COVID-19 and virtual hearings
Article 21(6) of the Rules provides that a hearing may take place in person or by any other means (including video or telephone conference) that the Tribunal considers appropriate, taking all relevant circumstances into account.
This is a positive, "catch-all" provision that covers the encumbrances of the current global pandemic and any other unforeseen event which may impede an in-person hearing in the future. In addition, the parties and Tribunal may need to have reference to AFSA's "Remote Hearing Protocol" guidance document when agreeing the procedural details of a remote hearing.
Conclusion
Other noteworthy features of the new Rules that are not canvassed in this article include rules on multi-party/multi-contract issues, and rules that deal with the event that a party indicates an intention not to participate, or to no longer participate, in an arbitration.
In summary, the Rules promise to bring international arbitration under the auspices of AFSA in line with innovations embraced by other leading international arbitral institutions.
A copy of the Rules can be found
here.
