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JAW 2024: Highlights from the second day of Johannesburg Arbitration Week

11 April 2024
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Overview

  • Johannesburg Arbitration Week (JAW), which is currently being held at the Sandton Convention Centre aims to explore the issues and challenges in the rapidly evolving field of international commercial arbitration, with a special focus on the key initiatives shaping and revolutionising dispute resolution in Africa.
  • Our team on the ground has compiled the following highlights of the second day’s discussions, which covered arbitration as an enabler in the African energy transition, international treaty arbitration, experts in arbitration, chartered accountants as experts or arbitrators, and whether arbitrations can unwittingly facilitate corruption.

Bowmans is a proud co-host, in conjunction with the Arbitration Foundation of Southern Africa (AFSA SA), of the inaugural Johannesburg Arbitration Week (JAW), which is currently being held at the Sandton Convention Centre.

JAW aims to explore the issues and challenges in the rapidly evolving field of international commercial arbitration, with a special focus on the key initiatives shaping and revolutionising dispute resolution in Africa.

Our team on the ground has compiled the following highlights of the second day’s discussions.

Arbitration as an enabler in the African energy transition

In the panel discussion titled ‘Arbitration as an Enabler in the African Energy Transition’, Thomas King highlighted that arbitration is the key dispute resolution mechanism for public-private partnership projects and is especially necessary for the efficient resolution of energy disputes.

This is due to various practical reasons including the facts that: parties can choose an arbitrator with the right technical expertise; confidentiality; speed and efficiency.

Generally, court systems are perceived as being less reliable and the consistent choice to have disputes resolved by way of arbitration is telling and a positive sign of its effectiveness.

International treaty arbitration

As part of the discussion on arbitration as it relates to international treaties:

  • Matthew Weiniger KC emphasised that a clean energy future requires private investment and, to support this, a stable and conducive investment environment is required. This necessitates active participation by states as seen in the shift under the AfCFTA away from a fair and equitable treatment model towards a fair administrative treatment model. Treaties speak to matters that are in state hands and can be controlled and improved by states alone. While private investment is necessary, it is essential that any strategies also engage state role-players.
  • Toby Landau KC stressed that there is a key concern when it comes to procedure in relation to the substance of investment treaty disputes. Due to the growing definition of ‘investment’, the breadth and scope of disputes being subjected to arbitration has grown, and Arbitration Tribunals are being asked to make rulings on controversial and political issues (for example, policy considerations, warfare and environmental issues). The impact of these disputes and rulings then goes beyond merely the immediate dispute at hand and can have far-reaching regional and global consequences. There are three procedural issues that arise from circumstances where investors challenge acts of state:
    • Due to the nature of arbitration proceedings, third parties affected by decisions of the Arbitration Tribunal do not always have the required access and participation rights when it comes to the process.
    • Where an Arbitral Tribunal does not take initiative to investigate issues beyond the scope of the proceedings, the dispute is not considered in its full social and political context. Often, burning issues outside the realm of the disputed issues are not raised directly by parties.
    • The adversarial nature of arbitration can cause further distance between parties and their stated positions, resulting Arbitration Tribunals failing to consider grey areas.
  • Dr Fola Adeleke argued that true reform requires a focus on the substance of investment law. What needs to be interrogated are those items that states are including in their treaties and how they are addressing issues like investor protections and human rights violations.
  • Sarah McKenzie directed the discussion to South Africa’s decision to terminate its bilateral investment treaties, with the rationale being that there is no direct link between bilateral investment treaties and foreign direct investment. There was also a concern around the different treatment of foreign vs domestic investors. South Africa’s approach has led to the adoption of the Protection of Investment Act, which is a divergence from what the bilateral investment treaties envisioned. In particular, the Act replaces arbitration as the default dispute resolution mechanism with mediation, and arbitration permitted if specifically consented to by parties after the fact. Some investors have responded to these changes by adopting a more conservative approach in their investment activities.

How helpful are experts in arbitration?

As part of the breakaway session titled ‘How Helpful are Experts in Arbitration?’ Adv Bham SC opened the discussion with an overview of the types of characteristics that make experts helpful generally: professional independence; fairness; and open-mindedness. Of particular importance is open-mindedness and, in Adv Bham’s experience, the most helpful experts are able to meet one another and make concessions where appropriate to narrow the issues in dispute. The panel agreed that the best experts are those who properly understand and embrace their roles of assisting the Arbitration Tribunal to come to a finding on matters that are not within the scope of their expertise.

In a discussion on what kind of experts are not helpful in arbitration proceedings, Hannah Ambrose emphasised that a ‘hired-gun’ only serves to harm the credibility of the case as they are usually quite easy to spot. She added that experts should be credible, robust, experienced and thorough.

Adv Bham SC emphasised that, where a case is won based on expert evidence that is incorrect or not independent, this is only a short-term win and can do more harm in the long run. He explained that the credibility of an arbitration centre is based on the perception of clients – not solely the perception of legal practitioners. In the long term, the impact of ‘wrong’ awards being made based on ‘bad’ experts will harm the institution as a whole – and the responsibility to safeguard arbitration as an institution, rests on each individual practitioner.

Chartered accountants: expert, expert in a dispute or arbitrator?

In KPMG’s breakaway session titled ‘Chartered Accountants: expert, expert in a dispute or arbitrator?’, the characteristics that make the appointment of a chartered accountant attractive as either an expert or an arbitrator were debated.

In particular, it was highlighted that chartered accountants are trained to be objective, make use of data that meets a certain standard of integrity and to be non-judgmental in their reports.

Louise Jordaan noted that the typical formulation of a dispute resolution clause provides only for mediation and arbitration, without provision for expert determinations.

Can arbitrations unwittingly facilitate corruption?

In a final breakaway session for the day titled, ‘Can Arbitrations Unwittingly Facilitate Corruption?’, Professor David Butler took the opportunity to quiz his former student, Adv Engelbrecht SC, making for an engaging and exciting session.

While no consensus was reached on the topic in question, some of the key issues that arose from the discussion included: whether the defence of corruption can be adjudicated in arbitration proceedings; whether there are public policy considerations mitigating in favour of allegations of corruption being aired in a public forum; and whether an arbitrator has the requisite jurisdiction to entertain arguments around corruption.

Gala Dinner

In the evening, delegates attended a Gala Dinner at which the Honourable Chief Justice Zondo was the keynote speaker. In his address, he emphasised that arbitrators and judges are partners in the business of dispensing justice and that, throughout the years, the courts have lent their support to arbitration. In return, the courts have adopted case management processes based on the pre-arbitration procedures developed by arbitration practitioners. The Chief Justice read from case authority extolling the virtues of arbitration and highlighted that arbitration is strengthened by a rich jurisprudential tapestry.