The Recognition and Enforcement of Foreign Arbitral Awards Under the International Arbitration Act 15 of 2017

• Jurisdiction: South Africa
• Date: 20 September 2020
• Published date: 20 September 2020
• Author: Wethmar-Lemmer, M.
• Pages: 378-398

THE RECOGNITION AND ENFORCEMENT

OF FOREIGN ARBITRAL AWARDS UNDER

THE INTERNATIONAL ARBITRATION ACT

15 OF 2017

MARLENE WETHMAR-LEMMER*

Associate Professor in Jurisprudence, University of South Africa, Pretoria

Abstract

The enactment of the International Arbitration Act has changed the

international arbitration landscape in South Africa drastically. This

new legislation has the potential to increase substantially the

desirability of South Africa as an arbitral seat for international

commercial arbitration matters. The Act incorporates the UNCITRAL

Model Law on International Commercial Arbitration as well as the

full text of the New York Convention on the Recognition and

Enforcement of Foreign Arbitral Awards. The New York Convention

recently celebrated its 60th anniversary and its efficiency has been

re-examined in academic commentary. In this article I seek to analyse

the main provisions of the New York Convention as incorporated into

the Act. I shall discuss recommendations for updating the Convention

to serve the needs of modern international business transactions. I shall

also highlight the most important provisions of the Model Law

although they are not the main concern of this article.

IINTRODUCTION

The enactment of the International Arbitration Act

1

at the end of 2017

marked an important development in South African international trade

and commercial law. The Act introduces a legislative framework for

conducting international commercial arbitration matters where the

chosen seat of arbitration

2

is South Africa. In this regard, the UNCI-

TRAL Model Law on International Commercial Arbitration

3

was

*B Com LLB MA (UP) LLM LLD (UJ).

1

Act 15 of 2017 (‘the Act’ or the ‘IAA’).

2

The law applicable to the procedural aspects of arbitration at the seat of arbitration is

referred to as the lex arbitri.

3

United Nations Commission on International Trade Law (UNCITRAL), ‘Model Law on

International Commercial Arbitration (1985), with amendments as adopted in 2006’

378

(2019) 31 SA Merc LJ 378

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incorporated into the Act as schedule 1. The adoption of a dedicated set

of procedural rules for international commercial arbitration is widely

welcomed in the business community and it is foreseen that this

development will greatly enhance South Africa’s standing as an arbitra-

tion jurisdiction of choice in international commercial disputes. This

legal advancement in the f‌ield of international commercial arbitration

will also lead to increased international trade opportunities for South

African merchants, as it boosts the conf‌idence of foreign merchants and

investors in the effective settlement of international trade disputes under

South African law. It is well known that arbitration is the preferred

regime for the settlement of international commercial disputes.

For arbitration to function as an effective dispute settlement regime

for international commercial disputes, the recognition and enforcement

of foreign arbitral awards are also very important. South Africa acceded

to the Convention on the Recognition and Enforcement of Foreign

Arbitral Awards

4

in 1976,

5

and enacted the Recognition and Enforce-

ment of Foreign Arbitral Awards Act

6

to comply with its international

law obligations as a Contracting State of the New York Convention. The

IAA repeals the 1977 Act in its entirety;

7

the New York Convention is

incorporated into the IAA in schedule 3. The Convention itself was

never incorporated into the 1977 Act, and thus it is important that legal

practitioners acquaint themselves with the full text of the Convention,

since it is now enacted as part of the arbitration regime of South Africa. I

shall outline these provisions in this article.

The New York Convention celebrated its sixtieth anniversary in 2018

and underwent detailed scrutiny in international legal literature to

(‘the Model Law’), available at https://uncitral.un.org/en/texts/arbitration/modellaw/

commercial_arbitration, accessed on 21 December 2019.

4

United Nations Commission on International Trade Law (UNCITRAL), ‘Convention

on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958)’ (‘the

New York Convention’), available at http://www.uncitral.org/uncitral/en/uncitral_texts/

arbitration/NYConvention.html, accessed on 19 December 2019.

5

United Nations Commission on International Trade Law (UNCITRAL), ‘Status: Con-

vention on the Recognition and Enforcement of Foreign Arbitral Awards’, available at

https://uncitral.un.org/en/texts/arbitration/conventions/foreign_arbitral_awards/status2,

accessed on 21 December 2019.

6

Act 40 of 1977 (the ‘1977 Act’).

7

See schedule 4 of the IAA. Note also that schedule 4 amends the scope of application of

the Protection of Businesses Act 99 of 1978 (PBA) substantially by terminating its application

to arbitration awards. Prior to this amendment, section 1(3) of the PBA required that the

approval of the Minister of Finance be obtained to recognise and enforce any arbitral award in

respect of ‘an act or transaction which took place at any time, whether before or after the

commencement of this Act, and is connected with the mining, production, importation,

exportation, ref‌inement, possession, use or sale of or ownership to any matter or material, of

whatever nature, whether within, outside, into or from the Republic’.

THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS 379

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