Abrahams and Another v RK Komputer Sdn Bhd and Others

• Jurisdiction: South Africa

Abrahams and Another v RK Komputer Sdn Bhd and Others
2009 (4) SA 201 (C)

2009 (4) SA p201

Citation	2009 (4) SA 201 (C)
Case No	7893/2008
Court	Cape Provincial Division
Judge	Gauntlett AJ
Heard	December 4, 2008
Judgment	December 9, 2008
Counsel	MA Albertus SC for the first applicant.; No appearance for the second applicant.; JH Josephson for the first respondent.; No appearance for the second and third respondents.

Flynote : Sleutelwoorde B

Arbitration — Award — Review — Costs — Special order — When warranted — Applicant seeking review of arbitration appeal award on grounds of misconduct and gross irregularity — Applicant's allegations not supported by facts and rejected — Mere allegations of misconduct and/or irregularity, even C when rejected, not justifying punitive costs order — Exceptional circumstances required — Applicant's allegations impugning arbitrators' personal and professional integrity — Allegations vexatious — Punitive costs order awarded against applicant.

Headnote : Kopnota

The applicants (applicant) made application in the High Court for the review D and setting aside, under s 33(1) of the Arbitration Act 42 of 1965, of an award by an arbitration appeal tribunal dismissing an appeal against a dismissal of the applicant's claims. The award was not presented as a joint award but as an award by the first appeal arbitrator (the third respondent), with the second appeal arbitrator (the second respondent) stating his E concurrence. The applicant brought the application on three grounds: (1) gross irregularities in the conduct of the arbitration proceedings, as contemplated in s 33(1)(b) of the Act; (2) misconduct on the part of the arbitrators, as contemplated in s 33(1)(a) of the Act; and (3) reasonable perception of bias. Grounds (1) and (2) were advanced on the basis that, in the case of the third respondent, he allegedly failed to source his findings in F the evidence and his failure to do so led to the conclusion that his findings were mala fide or motivated by an ulterior or improper purpose; and, in the case of the second respondent, the inference was irresistible that he uncritically and slavishly went along with the final award by his co-arbitrator. The first respondent's counsel sought, in the event of the review application being dismissed, an order of costs de bonis propriis and on the G attorney and client scale.

Held, as to (1) and (2), that the attacks on the second and third respondents were fundamentally misconceived: the facts belied them and the threshold tests for neither gross irregularity nor misconduct were met. (At 208G.)

Held, further, as to (3), that the test for bias was whether a reasonable, objective H and informed person would, on the correct facts, reasonably apprehend that the judge had not or would not bring an impartial mind to bear on the adjudication of the case. (At 209B.)

Held, further, that, applying that test to the facts of the present case, there could not be said to have been any reasonable apprehension of bias. (At 209E.)

Held, further, as to the first respondent's request for a punitive costs order, that I such an order required exceptional circumstances. Simply because a party made allegations (in a context such as the present) of inferred misconduct or irregularity would not ordinarily make such an order appropriate, even if the allegations were rejected. (At 212A.)

Held, further, that there did not seem to be a proper basis to order costs to be paid personally by the applicants' legal representatives. They had not made J

2009 (4) SA p202

A themselves personally guilty of such actions or statements in the course of the review proceedings such as would warrant such an order to be made personally against them. (At 211H.)

Held, further, that the court was however required to mark its particular disfavour towards an approach by the applicant which impugned the personal and professional integrity of practitioners selected by the parties to arbitrate B their dispute. The allegations had been roundly and repeatedly made. (At 212E - F.)

Held, further, that the allegations were vexatious and, for that reason, called for a special order as to costs. (At 212G.)

Application dismissed and the applicant ordered to pay the first respondent's costs on attorney and client scale. (At 212H.)

Cases Considered

Annotations C

Reported cases

Southern Africa

Administrator, Transvaal v Theletsane and Others 1991 (2) SA 192 (A): D referred to

BTR Industries (Pty) Ltd and Others v Metal and Allied Workers' Union and Another 1992 (3) SA 673 (A): referred to

Council of Review, South African Defence Force, and Others v Monnig and Others 1992 (3) SA 482 (A): referred to

Dickinson & Brown v Fisher's Executors 1915 AD 166: referred to

Goldfields Investments Ltd and Another v City Council of Johannesburg and Another 1938 TPD 551: referred to E

Govan v Skidmore 1952 (1) SA 732 (N): referred to

Government of the Province of Kwazulu-Natal and Another v Ngwane 1996 (4) SA 943 (A): referred to

Hyperchemicals International (Pty) Ltd and Another v Maybaker Agrichem (Pty) Ltd and Another 1992 (1) SA 89 (W): dicta at 94F and 101C applied F

In re Alluvial Creek Ltd 1929 CPD 532: referred to

Johan Louw Konstruksie (Edms) Bpk v Mitchell NO and Another 2002 (3) SA 171 (C): referred to

Lufuno Mphaphuli and Associates (Pty) Ltd v Andrews and Another G 2008 (2) SA 448 (SCA) (2008 (7) BCLR 725; [2008] 1 All SA 321): referred to

Moch v Nedtravel (Pty) Ltd t/a American Express Travel Service 1996 (3) SA 1 (A): referred to

Naude and Another v Fraser 1998 (4) SA 539 (SCA) ([1998] 3 All SA 239): referred to

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A): dictum at 635C applied H

President of the Republic of South Africa and Others v South African Rugby Football Union and Others 1999 (4) SA 147 (CC) (1999 (7) BCLR 725): dictum at 177B - E applied

R v Dhlumayo 1948 (2) SA 677 (A): referred to

S v Shackell 2001 (4) SA 1 (SCA) (2001 (2) SACR 185; [2001] 4 All SA 279): I referred to

Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2008 (2) SA 24 (CC) (2008 (2) BCLR 158; (2007) 28 ILJ 2405;[2007] 12 BLLR 1097): referred to

Smit v Arthur 1976 (3) SA 378 (A): referred to

Sole v Cullinan and Others 2003 (8) BCLR 935 (LesCA) ([2003] 3 All SA 466): J referred to

2009 (4) SA p203

Telcordia Technologies Inc v Telkom SA Ltd 2007 (3) SA 266 (SCA) (2007 (5) BCLR 503;[2007] 2 All SA 243): A referred to

Total Support Management (Pty) Ltd and Another v Diversified Health Systems (SA) (Pty) Ltd and Another 2002 (4) SA 661 (SCA): referred to.

Unreported cases

Minister of Justice v Sapire (civ app 49/01, 10.06.02 (unreported, Swaziland) 9): B referred to.

Foreign

England

Locabail (UK) Ltd v Baysfield Properties Ltd and Another; Locabail (UK) and Another v Waldorf Investment Corp and Others; Timmins v Gormley; Williams v HM Inspector of Taxes and Others; R v Bristol Betting and C Gaming Licensing Committee, Ex parte O'Callaghan [2000] 1 All ER 65 (CA): dictum at 76 applied

Man O'War Station Ltd v Auckland City Council [2002] UKPC 28: referred to

R v Gough [1993] 2 All ER 724 (HL): referred to. D

Statutes Considered

Statutes

The Arbitration Act 42 of 1965, ss 33(1), 33(1)(a) and 33(1)(b): see Juta's Statutes of South Africa 2007/8 vol 1 at 1 - 10.

Case Information

Review of an arbitration appeal award. The facts appear from the E reasons for judgment.

MA Albertus SC for the first applicant.

No appearance for the second applicant.

JH Josephson for the first respondent.

No appearances for the second and third respondents.

Cur adv vult. F

Postea (December 9).

Judgment

Gauntlett AJ: G

The arbitral and review proceedings

This is a review under the Arbitration Act 42 of 1965 (the Act) of an award by an arbitration appeal tribunal.

The arbitration proceedings arose from a contractual dispute between H the first respondent and the first applicant. In July 2005 the first respondent instituted action against the first applicant in this court, claiming payment of the sum of R3 469 527 against a tender by the first respondent to the first applicant of shares which the former held in the second applicant. The first applicant triggered an arbitration. She did so I by raising a special plea that the matter should have been referred to arbitration. The parties then agreed to do that. In this process the parties exchanged the names of potential arbitrators for consideration: the first respondent put forward five names, including that of the third respondent. In response the first applicant put forward the name of the second respondent. As a result of their unavailability on the agreed date for the J

2009 (4) SA p204

Gauntlett AJ

A commencement of the arbitration, another senior counsel was selected as the arbitrator at first instance.

He dismissed the first applicant's claims. Thereupon the parties again exchanged names, ultimately agreeing that the second and third respondents should be appeal arbitrators. The second respondent is a senior B counsel and the third respondent a junior.

In March this year the appeal arbitrators handed down an award dismissing the appeal. Unusually, it was not presented as a joint award but as an award by the third respondent, the second respondent stating his concurrence. It comprises a detailed analysis of issues, dealing at C some length with the applicants' argument, rejecting aspects of the argument for the first respondent, and not upholding the reasoning of the arbitrator at first instance in all respects.

The basis for the review

The review has been instituted by the first applicant (the second D applicant has ceased trading). The second and third respondents abide the result, but have filed affidavits...