ATC171122: Report of the Select Committee on Security and Justice on the International Arbitration Bill [B10B – 2017] (National Assembly – sec 75), dated 22 November 2017
NCOP Security and Justice
Report of the Select Committee on Security and Justice on the International Arbitration Bill [B10B – 2017] (National Assembly – sec 75), dated 22 November 2017:
The National Assembly referred the International Arbitration Bill [B10B–2017] (hereinafter referred to as the Bill) to the National Council of Provinces and subsequently to the Select Committee for concurrence on 24 October 2017.
- Enquiry into subject of the Bill
The Select Committee enquired into the subject of the Bill and invited the Department of Justice and Constitutional Development to brief the Select Committee on the purpose and content of the Bill on 1 November 2017.
- Subject of the Bill
The International Arbitration Bill proposes the incorporation of the United Nations Commission on International Trade Law (UNICITRAL) Model Law, as the cornerstone of the international arbitration regime in South Africa.
International arbitration is similar to domestic court litigation, but instead of taking place before a domestic court it takes place before private adjudicators known as arbitrators. It is a consensual, neutral, binding, private and enforceable means of international dispute resolution, which is typically faster and less expensive than domestic court proceedings.
The primary benefits of using international arbitration to resolve a dispute rather than traditional court litigation include:
· International Arbitration can resolve disputes more swiftly than traditional court litigation since there are only limited appeals from arbitration awards.
· International Arbitration can be less expensive than traditional court litigation.
International Arbitration can provide better-quality justice, since many domestic courts are overburdened, which does not always allow judges sufficient time to produce legal decisions of high quality.
- Public Involvement
The Select Committee, in keeping with the principle of facilitating public involvement in the legislative processes of the NCOP, agreed to facilitate public participation by advertising the Bill on radio media, on the Parliamentary website and other parliamentary social media platforms and stakeholder platforms, between 1 and 10 November 2017.
The Select Committee received one submission from the Maritime Law Association of South Africa.
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Maritime Law Society of South Africa and
China Africa Joint Arbitration Centre (CAJAC)
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During the course of the proceedings, a concern arose about the absence of a definition of the words ‘public policy of the Republic’ as they occur in sections 7(1)(b) and 18(1)(a)(ii) of the Bill, and the possible impact of the provisions of section 7(2) of the Bill on importers.
By way of summary the MLA’s concern was that the arbitration bill, in its then proposed form, may override the provisions of Section 3 of the South African COGSA and thereby deprive South African claimants’ of the right to have disputes relating to cargo discharged in South Africa heard in the Republic.
As regards the impact of section 7(2) on disputes falling under section 3 of the COGSA the following textual tweaking of section 3 of the COGA is proposed in order to address the concern raised: “3 Jurisdiction of courts (1) Notwithstanding any purported ouster of jurisdiction, exclusive jurisdiction clause or agreement to refer any dispute to arbitration, and notwithstanding the provisions of the Arbitration Act, 1965 (Act 42 of 1965), the International Arbitration Act (Act x of 2017) and of section 7 (1) (b) of the Admiralty Jurisdiction Regulation Act, 1983 (Act 105 of 1983), any person carrying on business in the Republic and the consignee under, or holder of, any bill of lading, waybill or like document for the carriage of goods to a destination in the Republic or to any port in the Republic, whether for final discharge or for discharge or for discharge for further carriage, may bring any action relating to the carriage of the said goods or any such bill of lading, waybill or document in a competent court in the Republic. (2) The provisions of subsection (1) of this section shall not apply to arbitration proceedings to be held in the Republic which are subject to the provisions of the arbitration laws of the Republic.”
The above amendment to section 3 of the COGA will ensure that local claimants are not put to the cost and expense of proceeding with domestic claims by way of arbitration against foreign ship-owners in [a] foreign arbitration tribunal.
It is nevertheless suggested that a consequential amendment to subsection (2) is necessary as a result of the recommended amendment to subsection (1). If a South African party wishes to refer an international commercial dispute to arbitration in South Africa, there is no logical reason for the arbitration to be held under the Arbitration Act 42 of 1965 as required by the existing section 3(2) of the COGA. The international commercial arbitration, like any other with its seat in South Africa, should take place under the new legislation.
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Dear Mr Greiner,
I address this e-mail to you in response to your letter as President of the Maritime Law Association of South Africa, dated 7 November 2017, to the Secretary of the Select Committee on Security and Justice.
Your letter appears to be based on a misapprehension. You will note from the attached copy of the International Arbitration Bill (B10B-2017) that Schedule 4 of the Bill on page 32 contains the amendment to section 3 of the Carriage of Goods by Sea Act 1 of 1986. As you are aware, this amendment was suggested by Adv Nkosi-Thomas SC of CAJAC and the writer in response to the original concern raised by the MLA regarding the interaction between clause 7 of the International Arbitration Bill and s 3 of COGSA.
I trust that schedule 4 of the Bill addresses the concern raised in your letter. Email dated 7 November 2017.
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International Arbitration Bill [B10B-2017] Schedule 4 Act No. 1 of 1986 Carriage of Goods by Sea Act, 1986
The substitution for section 3 of Act 1 of 1986 of the following section: ‘‘Jurisdiction of courts 3. (1) Notwithstanding any purported ouster of jurisdiction, exclusive jurisdiction clause or agreement to refer any dispute to arbitration, and notwithstanding the provisions of the Arbitration Act, 1965 (Act No. 42 of 1965), [and of] section 7(1)(b) of the Admiralty Jurisdiction Regulation Act, 1983 (Act No. 105 of 1983) and the International Arbitration Act, 2017, any person carrying on business in the Republic and the consignee under, or holder of, any bill of lading, waybill or like document for the carriage of goods to a destination in the Republic or to any port in the Republic, whether for final discharge or for discharge or for discharge for further carriage, may bring any action relating to the carriage of the said goods or any such bill of lading, waybill or document in a competent court in the Republic. (2) The provisions of subsection (1) of this section shall not apply to arbitration proceedings to be held in the Republic which are subject to the provisions of the [Arbitration Act, 1965] arbitration laws of the Republic.’’.
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Dear Mr Dixon
Thank you for your email received this morning Wednesday, 8 November 2017. We also received a response to our submission from Professor Butler. His response does indeed satisfy the concerned raised. Accordingly, the Maritime Law Association has no further comment on the draft bill. |
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- Deliberation on the International Arbitration Bill [B 10B-2017]
The Select Committee on Security and Justice on 22 November 2017 considered the response from the Maritime Law Society of South Africa and the Department’s reply to the submission. The Maritime Law Society of South Africa was satisfied with the Department’s response and noted that their concerns had been addressed in the amendments made by the Portfolio Committee. The Select Committee had no further concerns to raise on the matter of the International Arbitration Bill.
- Adoption of Bill
The Select Committee considered the subject of the International Arbitration Bill [B 10B– 2017] (National Assembly – sec 75), referred to it, and reports that it has agreed to the Bill without proposed amendments.
Report to be considered
Documents
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