Why opt for arbitration?
Arbitration is a private judicial hearing, with an outcome that binds the parties, and puts an end to the dispute between them. The parties choose their arbitrator, or ask AFSA to appoint a suitable person. The matter is heard privately at a time and place that is agreed upon by all parties. Parties choose a system that promises a fair and private resolution in a comfortable, purpose-built venue and in circumstances most suited to their needs. Furthermore disputants have the security of an administered system with carefully drafted Rules for Arbitration.
When arbitration is not appropiate or when AFSA cannot assist
- Matters that cannot be arbitrated are divorce, criminal matters, crime, issues of status (eg. determining a person's sanity) or the liquidation of a company.
- AFSA can only arbitrate a matter when parties have agreed to refer their matter to us. In other words, if an agreement between parties does not have an arbitration clause referring the parties to AFSA, then AFSA cannot administer the matter until the parties have agreed to do so. The parties can sign an Agreement to Arbitrate, thereby binding themselves to an AFSA arbitration.
- If the agreement to arbitrate does not refer to any particular administrative body and merely states that arbitration is the mechanism to settle the dispute, parties can refer the matter to AFSA to administer the matter, once they have jointly agreed to do so.
The matter can then, at the parties request, be administered in terms of our Commercial Rules for Arbitration or our Expedited Rules, the latter being suitable for smaller, less complex matters. If the parties are unsure of which rules to use, they can either contact the Secretariat at AFSA or decide, with the arbitrator's advice, at their preliminary arbitration meeting.
To initiate an arbitration please look at the Rules for Commercial Arbitration or the Expedited Rules.
Why opt for mediation?
When parties are involved in a dispute but need to preserve their relationship because of ongoing interests, mediation is often a recommended route. Mediation is not in itself a binding process, but once consensus is reached, a contract is drawn which keeps the parties to their agreement.
The mediator assists the parties in reaching consensus by identifying common ground, establishing needs as opposed to rights and keeps the balance of power between the sides at all times. The mediator expresses no views and remains impartial throughout the process.
Once the parties have agreed to mediation, they either agree on a mediator or ask AFSA to appoint one on their behalf. The mediator may request background information on the issues and invite both parties to write an outline of their dispute. Ground rules for the process are established by agreement with the parties at the commencement of the process. Once the mediator has heard both sides' positions, he or she steers them to a mutual agreement. The beauty of mediation is that the parties arrive at a win-win solution, as opposed to a win-lose outcome found in adversarial processes.
- Both parties must really want mediation to work. A party can frustrate the process by not co-operating in a mediation and this can lead to a breakdown of the process. Therefore mediation is appropriate when there is goodwill and a determination between the parties to reach consensus. If parties agree to mediate, the can sign the AFSA Agreement to Mediate.
Putting a mediation clause in an agreement often is not enough. It is recommended that the clause makes provision for arbitration as a secondary resort should the mediation fail. This is called Med-Arb (see Clauses). If either party believes the dispute has become too intractable, it may, if it wishes, elect to abandon the mediation clause, and request to proceed directly to arbitration.
Why opt for administered arbitration?
Without an administered system parties are largely unprotected. Arbitrations arranged by the parties for and by themselves rely on mutual goodwill and, if necessary, require each to police the other. This leaves both parties helpless if the arbitrator does not do his or her work as expected and makes the process easy to manipulate. In an AFSA administered arbitration the AFSA Secretariat ensures that the arbitration is not derailed and that it proceeds purposefully in accordance with its rules.