AFSA Takes its Rightful Place in the International Arbitration Arena

It seems only yesterday when we were all, perhaps too carelessly, hopping on and off planes, flying half way round the world to participate in half-day directions hearings, case management conferences, and mediations which necessity has now taught us, perhaps for good, can adequately and properly be dealt with “virtually” at a fraction of the cost. It was just as the first tsunami of the Covid pandemic hit us that I, together with lots of far more distinguished international arbitration practitioners, was greatly looking forward to gathering in Johannesburg to share a conference at which the new AFSA international Rules were to be launched and the AFSA Court was to have its first plenary session. Covid put paid to all that too.

However, the pandemic has yet again taught us that necessity is the mother of invention. Undaunted by it, the Rules have now been published and provide a welcome breath of life into the establishment of South Africa as a hub for international arbitration. The drafting committee led by Professor Maxi Sherer has given impressively careful attention to the production of a set Rules which, though unfussy and straightforward are at the cutting edge of internationally accepted and func-tional procedure.  They are a massively important part of the renaissance of AFSA which is now able, equipped and determined to provide a world class, inclusive and much needed dispute resolution service for Southern Africa – and beyond.     

My own contribution to the launch of the proposed new Rules had been insignificant encouragement from the touch-line. I had been a too passive supporter of AFSA since the early days of its formation a quarter of a century ago.  But it was not until the passing of the International Arbitration Act in 2019 that it really took its place on the world stage and the launch of its new Rules became eagerly anticipated in Europe – which then still included the United Kingdom!  For far too long, far too many African disputes had been resolved by foreign arbitrators and mediators, under the auspices of foreign institutions. Being acutely conscious of the enthusiasm with which this renaissance of AFSA and the launch of its draft new Rules were anticipated in London, I had been privileged to host a seminar at 39 Essex Chambers, which I share with Patrick Lane SC who, with Michael Kuper SC had done so much of the impressive work on this, to introduce both them and the Rules to a packed audience for which we ran out of seating! Not only were we all impressed to learn about the new inclusive and truly international shape of AFSA but also by the draft Rules. No one is now surprised to witness the rapid steps which AFSA has already taken to occupy its rightful place in the international arbitration arena. It was by then already  administering 62 international arbitrations.  That has grown to nearly 100 today. The breadth of the referrals stretches across the globe, with cases from 41 different Countries, albeit in all of them to date at least one of the parties has been domiciled in South Africa. It is unsurprising to note that the internationally respected School of Oriental and African Studies in London has ranked AFSA as the leading arbitration centre in Africa.

The significance of the establishment of an arbitral administrative body in Southern Africa whose Rules are modern, clear, user friendly and easily recognizable by the international arbitration community cannot be over-stated. Its reach now extends to the SADC countries adopting the Rules which significantly broadens their acceptance in a world which is increasingly trading with Southern Africa. The character of the disputes that are being referred to AFSA ranges from general contractual issues and commercial disputes to engineering, construction and large infrastructure matters – with many billions of dollars, Euros, pounds and Rand being at stake.

South Africa enacted the International Act in December 2017 based principally and necessarily on the UNCITRAL Model Law. Its stated objectives were to: 7.1. Facilitate the use of arbitration as a method of resolving international disputes; 7.2. Adopt the Model Law for use in international commercial disputes; 7.3. Facilitate the recognition and enforcement of certain arbitration agreements and arbitral awards; 7.4. Give effect to the obligations of SA under the Convention. The Act thus rectified earlier legislation relating to the enforcement of foreign arbitration awards and properly and essentially aligned South Africa with the  New York Convention. It provided the legal framework to host international arbitrations and AFSA has been able to provide the administrative platform which is now established and enhanced by the Rules.

A reading of the Rules, which were drafted with the new statutory provisions firmly in mind, provides a real sense of non-invasive, independent and efficient arbitral practice which both respects the agreements of the parties and provides for effective enforcement of them. A Court has been established like that of the LCIA and the ICC to govern and control the appointment of arbitrators and rule on issues such as joinder, third party intervention and emergency arbitration. Under the Chairmanship of the widely respected retired Chief Justice Ngcobo, the court has twenty members who are drawn from among the leading international practitioners but with a limit on the number that can be appointed from any one jurisdiction so as to avoid any potential perception of  national bias.

AFSA has scrupulously and deliberately avoided the pitfall of introducing invasive powers and practices to interfere with party autonomy or with the work done and awards made by arbitral Tribunal. It offers assistance, but not interference or intervention save where the Court is required to act in cases where any Tribunal encounters problems which it cannot effectively resolve or is failing properly to fulfill its function.

The passage of the new Act placed South Africa on the global arbitration map but, although being an essential prerequisite for the establishment of an effective arbitration hub, it left the real work to be done on the ground. And it has been! Equally, the publication of modern and effective rules, while being essential, can do not more than enable that hub to function. The success of the entire enterprise ultimately depends on the support of a the vibrant and growing Southern African business community with its increasing international reach. Confidence in AFSA as the go to institution depends, and will always rightly depend, on the efficiency with which it and the arbitrators whom it appoints conduct the arbitrations. The appointment of skilled neutral arbitrators, qualified and experienced in the practices of international arbi-tration has been and will be a core, indispensable requirement.

South Africa has a buoyant active business community operating internationally.  Inevitably disputes arise. For far too long these disputes were, more often than not, referred to arbitration administered by one of the European institutions and determined usually by European, and almost invariably non-African, arbitrators. The FIDIC rainbow suite of contracts are widely used by the construction industry and provided, understandably for historical reasons, for the disputes to be decided under the administration of the ICC.  It is rewarding to see that the tide has changed and that there is an increasing number of international disputes now being referred to and administered by AFSA.

Another noticeable change to the South African legal landscape is the emergence of an increasing number of large international law firms setting up practices in South Africa where, unlike some other jurisdictions, they are welcomed on to a level playing field as a base for penetration into the whole of Southern Africa. There is strong and active support of AFSA by these firms, more than a dozen of which are active Members.

The number of referrals of international arbitrations to AFSA speak for them-selves. The South African and interna-tional business communities have given it a very real vote of confidence. This will be enhanced by the publication of the Rules which have been drafted with impressive care.  Determined vigilance is going to be required to maintain the standards that have attracted these referrals and to embrace the dynamic practice of international arbitration.

The integration of South Africa and its practitioners into the global arena, and the inclusive way in which AFSA has developed, was long overdue but is now universally welcomed and embraced with enthusiasm.