South Africa's jurisdictional challenge with the under-development of cross-border commercial litigation: Litigation v Arbitration

• Author: Primrose E.R. Kurasha
• DOI: 10.17159/2225-7160/2022/v55a1
• Published date: 01 June 2022
• Date: 01 June 2022
• Pages: 1-27

Litigation v Arbitration 1

South Africa’s jurisdictional challenge with

the under-development of cross-border

commercial litigation:

Litigation v Arbitration

Primrose E.R. Kurasha

BAlaw LLB LLM (UP)

Doctoral Candidate, University of Pretoria

SUMMARY

Private international law is a globally established field of law however, its

pre-eminence in Africa is insignificant and this has been as a result of its

relevance, which according to many scholars is arguable. It follows logically

therefore, that it is underdeveloped in Africa, and as this article posits,

specifically in South Africa. This article advocates for the development of

South African private international law by endorsing South Africa as a

viable neutral jurisdiction venue for cross-border commercial disputes, in

future. According to this article, this is to be achieved by the recognition of

neutral jurisdiction clauses in South African courts. This can only be done

by developing an effective and just system of cross-border/trans-national

litigation. The proposed sound cross-border jurisdictional rules will

supplement the newly established transnational arbitration regime. In

order to achieve this, this research reflects an integrated comparative

approach by establishing comparative perspectives mainly from the UK,

USA, Brazil, Kosovo and South Africa.1 Based on its constitutional values of

inalienable human rights and access to courts (justice), South Africa stands

to gain immensely from incoming commercial arbitration and commercial

litigation as forms of dispute resolution. This will establish the country as

the preferred venue for arbitration and litigation on the African continent

and beyond.

1Introduction

South Africa recently adopted the International Arbitration Act (“IAA”),2

the aim of which is to position and promote South Africa as a desirable

neutral arbitration venue for Africa and the rest of the world. While our

international arbitration regime now represents best practice

internationally, this is not the case when it comes to our international

commercial litigation regime which continues to turn away foreign

litigants. Since arbitration and litigation go hand-in-hand, it follows

logically that South Africa should also become a desirable neutral venue

for international or cross-border commercial litigation. Nonetheless,

1 These were chosen because they have sound jurisprudence juxta-

positioning litigation and arbitration as will be seen in the paragraphs that

follow.

2 15 of 2017.

How to cite: Kurasha ‘South Africa’s jurisdictional challenge with the under-development of cross-border

commercial litigation: Litigation v Arbitration’ 2022 De Jure Law Journal 1-27

http://dx.doi.org/10.17159/2225-7160/2022/v55a1

2 2022 De Jure Law Journal

various schools of thought in private international law are at loggerheads

on the relevance of employing both dispute resolution mechanisms in

cross-border commercial disputes, especially litigation, in the face of

rising popularity in arbitration globally.

It is therefore behind this backdrop that this article focuses on the

alternative dispute resolution discourse, with an analytic comparison

between litigation and arbitration. Section 1 is a theoretical study of

litigation accompanied by case law. Section 2 follows the same pattern

but applies it to arbitration. The advantages and disadvantages of both

litigation and arbitration are the focal points in sections 3 and 4

respectively. Section 5 is a conclusion arguing for the peaceful co-

existence of both arbitration and litigation as equally appropriate dispute

resolution mechanisms in the adjudication of cross-border commercial

disputes. It is in this sense that section 5 also provides recommendations.

2 Litigation v Arbitration: Theory and

application

Globally recognised dispute resolution mechanisms are litigation,

arbitration, mediation, and conciliation. The focus of this paper is on two

of these, litigation and arbitration. Litigation is defined as a judicial

process used by parties to resolve disputes by appearing in a court of law

before a judge. Arbitration is an alternative dispute resolution

mechanism which is not court driven and is characterised by a

settlement in the form of an arbitration award (as opposed to litigation’s

“judgment”).3 An arbitration award is recognised and can be enforced by

litigation in a court of law. It is generally not subject to appeal unless an

appeal board is set up by the parties from the outset. This speaks to curial

intervention in arbitration and is discussed later in this paper.

Having provided a basic distinction between litigation and arbitration,

I now progress to an in-depth examination of both, within a domestic

and a global context.

The interaction between litigation and arbitration has evolved over the

decades from a tense relationship to present-day amicable and

accommodating coexistence. The original tense interaction was evident

in the courts’ judicial apathy towards arbitration, which alternatively

manifested as contempt or disdain in the case of legislation. So rampant

was it, that it earned its own official name – “judicial hostility” – coined

by Justice Frank in the case of Kulukundis Shipping Co v Amtorg Trading

Corp.4 Judicial apathy can be defined as an approach by the judiciary

characterised by disregard or contempt – whether blatant or subtle – for

arbitration, which manifests in courts’ refusal to acknowledge and

3 Imhoos and Verbist “Settling out of Court” Issues 4/2002 International

Tra de Fo ru m M ag a zi ne https://www.tradeforum.org/Settling-Out-of-Court/

(accessed 19 May 2021).