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Johannesburg - South Africa's arbitration laws have failed to keep up with the modern legislation which governs most of the country's commercial activity.
According to Werksmans Attorneys chairperson Des Williams, South Africa - unlike countries such as Mauritius - finds it difficult to promote itself as a regional arbitration centre for resolving commercial disputes.
Williams said this is not due to lack of expertise or opportunity, but because South African law, still embodied in the Arbitration Act of 1965, provides an outdated legislative platform.
"Mauritius operates within a modern international arbitration law framework and is promoting itself as a regional arbitration centre. By comparison, South African arbitration law has not been modernised and South Africa has failed to keep pace," he said.
"SA's failure to modernise its arbitration law is a deterrent to foreign investors, who expect international standards to apply in commercial dispute resolution," he said.
"It is also retarding the development of a potentially lucrative foreign exchange-earning industry where international arbitrators, lawyers and witnesses travel to arbitration centres, stay in hotels, hire arbitration venues, recording and transcription facilities and the services of local lawyers."
There is a great need for credible African centres of excellence for arbitration, as was again highlighted at a conference held in Cape Town in March this year under the auspices of the International Bar Association.
The African delegates felt strongly that arbitration involving African parties should be dealt with in Africa instead of overseas. The overwhelming sentiment was that the continent should have regional arbitration centres, one of which should be in Johannesburg.
"If we are to play a leading role on the African continent we must develop Johannesburg as a regional arbitration centre for the resolution of African disputes," said Williams.
"We have an Arbitration Act that harks back to 1965, making it hopelessly out of date," he said. "The rest of the world is operating to a different standard."
One of the biggest gaps between SA and the rest of the world is that this country has not yet adopted the Model Law of the United Nations Commission on International Trade Law (UNCITRAL).
"Until South Africa adopts the UNCITRAL Model Law, we will not be able to develop as a major international arbitration centre," said Williams.
UNCITRAL Model Law is the gold standard of international arbitration. Followed by about 135 countries and adopted by UNCITRAL in 1985, this provides the basis for countries' procedural arbitration rules.
It is consistent with the New York Convention (which South Africa is party to), which established a simple regime for the recognition of arbitration clauses and the enforcement of foreign arbitration awards.
The Law Reform Commission recommended that South Africa adopt the UNCITRAL Model Law more than 10 years ago.
- Fin24.com
According to Werksmans Attorneys chairperson Des Williams, South Africa - unlike countries such as Mauritius - finds it difficult to promote itself as a regional arbitration centre for resolving commercial disputes.
Williams said this is not due to lack of expertise or opportunity, but because South African law, still embodied in the Arbitration Act of 1965, provides an outdated legislative platform.
"Mauritius operates within a modern international arbitration law framework and is promoting itself as a regional arbitration centre. By comparison, South African arbitration law has not been modernised and South Africa has failed to keep pace," he said.
"SA's failure to modernise its arbitration law is a deterrent to foreign investors, who expect international standards to apply in commercial dispute resolution," he said.
"It is also retarding the development of a potentially lucrative foreign exchange-earning industry where international arbitrators, lawyers and witnesses travel to arbitration centres, stay in hotels, hire arbitration venues, recording and transcription facilities and the services of local lawyers."
There is a great need for credible African centres of excellence for arbitration, as was again highlighted at a conference held in Cape Town in March this year under the auspices of the International Bar Association.
The African delegates felt strongly that arbitration involving African parties should be dealt with in Africa instead of overseas. The overwhelming sentiment was that the continent should have regional arbitration centres, one of which should be in Johannesburg.
"If we are to play a leading role on the African continent we must develop Johannesburg as a regional arbitration centre for the resolution of African disputes," said Williams.
"We have an Arbitration Act that harks back to 1965, making it hopelessly out of date," he said. "The rest of the world is operating to a different standard."
One of the biggest gaps between SA and the rest of the world is that this country has not yet adopted the Model Law of the United Nations Commission on International Trade Law (UNCITRAL).
"Until South Africa adopts the UNCITRAL Model Law, we will not be able to develop as a major international arbitration centre," said Williams.
UNCITRAL Model Law is the gold standard of international arbitration. Followed by about 135 countries and adopted by UNCITRAL in 1985, this provides the basis for countries' procedural arbitration rules.
It is consistent with the New York Convention (which South Africa is party to), which established a simple regime for the recognition of arbitration clauses and the enforcement of foreign arbitration awards.
The Law Reform Commission recommended that South Africa adopt the UNCITRAL Model Law more than 10 years ago.
- Fin24.com
