Enforcement of arbitral awards in South Africa: overview

A Q&A guide to enforcement of arbitral awards law in South Africa: overview.

The Q&A gives a structured overview of the key practical issues concerning enforcement of arbitral awards in this jurisdiction, including definitions and preliminary proceedings; applicable conventions; enforcing awards; public policy, enforcement proceedings; formalities; actual enforcement; and any reform proposals.

This Q&A is part of the Enforcement of Judgments and Arbitral Awards in Commercial Matters Global Guide.

Patrick Holloway and Andre October, Webber Wentzel
Contents

Enforcement of arbitral awards

Definitions and preliminary proceedings

1. What is the definition of an arbitral award in your jurisdiction for the purpose of enforcement proceedings?

Arbitrations in South Africa are subject to the Arbitration Act 42 of 1965. An award, when used in the general sense, includes the decision of the arbitrator or a tribunal in arbitration proceedings, made by submission or other proper reference. The Act defines "award" to include an interim award.

Section 1 of the Recognition of Foreign Arbitral Awards Act 40 of 1977 defines a "foreign arbitral award" as any arbitral award made outside South Africa, which cannot be enforced under the Arbitration Act, but is not in conflict with it.

 
2. Are decisions in preliminary/provisional proceedings recognised and enforceable?

Unless the arbitration agreement provides otherwise, a tribunal can make an interim award at any time within the relevant period (section 26, Arbitration Act 42 of 1965).

Applicable conventions

3. What conventions is your jurisdiction a contracting party to?

On 3 May 1976 South Africa ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention) without reservation. The Recognition and Enforcement of Foreign Arbitral Awards Act gives effect to the Convention.

In 1997, South Africa acceded to the HCCH Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970 (Hague Evidence Convention), subject to certain reservations and declarations. South Africa's succession to the Hague Evidence Convention facilitates obtaining evidence abroad for use in litigation and arbitration.

Enforcing awards

4. What is the applicable statutory framework for enforcement of awards?

Arbitration is governed by the Arbitration Act No 42 of 1965 which provides for the resolution of disputes by arbitration tribunals under written arbitration agreements and the enforcement of any awards.

The Recognition and Enforcement of Foreign Arbitral Awards Act No 40 of 1977 provides that foreign arbitral awards can be made an order of a South African court and enforced.

 
5. What are the grounds for refusing enforcement?

Domestic awards

The following are grounds for refusing to enforce a domestic award (section 33, Arbitration Act):

  • The award is not final.

  • It is subject to challenge.

  • It is contrary to public policy.

A court can also refuse to enforce the award if the parties to it had no capacity to contract.

International awards

The grounds for refusing to enforce an award include:

  • Where a reference to arbitration is not permissible in South Africa due to the subject matter of the dispute.

  • Where enforcement of the award would be contrary to public policy in South Africa.

The courts will assess the grounds ex officio.

 
6. Is the enforcing court required to examine the refusal grounds during the enforcement proceedings ex officio?

The court will of its own accord examine the refusal grounds during the enforcement proceedings. It will refuse to recognise any award that does not comply with the conditions of enforcement.

 
7. What is the effect of pending challenge proceedings in the foreign State where the decision is granted?

The decision will not be recognised and enforced as foreign actions must be final and conclusive. The general rule is that the foreign award must be unalterable.

 
8. What types of arbitral awards are enforceable?

Money awards

Money awards are enforceable. The sum must, unless the award provides otherwise, carry interest from the date of the award and at the same rate as a judgment debt.

Awards containing injunctions ordering or prohibiting the doing of acts

Awards providing for injunctions or interdictory relief are enforceable.

Decisions or awards by arbitral tribunals (including emergency arbitrators) granting provisional measures

Interim award decisions can be granted within the period for making the award, unless the arbitration agreement provides otherwise (section 26, Arbitration Act). To be enforceable they must be classified as interim measures or as securing possible claims and they must be rendered by an arbitral tribunal (Ramsden, The Law of Arbitration, 2009, page 171).

Declaratory awards

In labour law arbitrations, an arbitrator or commissioner can make an appropriate award, including a declaratory order (Erasmus, South African Human Resource management, page 616).

Other awards

Not applicable.

 
9. Can parties seek to enforce only part of the award?

Where the invalid portions of the award are severable from the rest, the court can grant an order to enforce the remainder (section 4(1)( b)(iii), Recognition of Foreign Arbitral Awards Act). Interim or partial awards are enforceable.

 
10. Are any class of awards excluded from recognition and enforcement? If so, what types of awards?

The following awards are excluded from enforcement:

  • Awards for the payment of punitive or revenue damages.

  • Foreign decisions granting preliminary or provisional awards, or ones that have been suspended pending an appeal because the foreign award must be final and conclusive.

  • Foreign awards relating to immovable property in South Africa.

  • Cognovit proceedings (which are contrary to public policy).

  • A foreign warrant of execution unless the warrant and award are the same in the foreign law and are equivalent to a judgment under South African law.

 
11. Will service that does not conform to the requirements of international treaties/regulations in force automatically result in a denial of the enforcement of a judgment/award/deed?

A foreign judgment or award will not be recognised and enforced in South Africa if the defendant was not given proper notice. This is against public policy.

 
12. What methods of service are not acceptable against defendants domiciled in the State where enforcement is sought?

There is no specific requirement about the method of service in the country where the judgment or award was rendered when enforcement of the foreign judgment is sought against a defendant domiciled in South Africa. The rules of natural justice require that the defendant be given due notice of the proceedings against him. Any judgment or award rendered contrary to this rule of natural justice will be neither recognised nor enforced.

Public policy

13. Which country's public policy applies? Does the court approach the issue differently depending on whether the award is a domestic or international award?

Domestic awards

South African public policy applies to both domestic and international awards so the court does not approach the issue differently.

International awards

Recognition and enforcement of an award can be refused if the award is contrary to the public policy of that state (Article V( 2)(b), Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958). The wording of the Recognition and Enforcement of Foreign Arbitral Awards Act has wording to the same effect.

 
14. In which cases and against which awards has the principle of public policy generally been applied?

The court has held that natural justice bears its normal meaning and requires that "the hearing" should take place before an impartial tribunal, that the defendant must have due notice of the proceedings against him and that he should have an opportunity to present his case. South African courts will not recognise or enforce a judgment obtained by fraud (Jones v Krok 1995 (1) SA 677 (A)).

The court held, in Lissack v Duarte 1974 (4) SA 560 (N) that more than bare notice be given to the defendant and that the defendant had been unfairly deprived of the opportunity of presenting his side of the case.

In Taylor v Hollard (1886) 2 SAR the court found that a judgment on a grossly usurious contract should be refused recognition, since the courts were not bound to enforce foreign judgments which violated the policy of South African law.

 

Enforcement proceedings

Procedure

15. What is the procedure for enforcing arbitral awards?

Domestic awards

An award must be enforced by application/motion proceedings in the High Court (section 31, Arbitration Act). South African applications to enforce arbitration awards are brought before the motion court (Rule 6(5)(a) of the Uniform Rules of Court).

Ex parte or on notice. An application is brought on notice to the other party (section 31, Arbitration Act).

Applicable court. The applicable court is the High Court.

Limitation period. Enforcement proceedings must be brought within three years from publication of the award. Once the award has been made an order of court it becomes a judgment debt which expires after 30 years.

Timing. If unopposed, proceedings can take between two to three months and, if opposed, up to a year.

Court fees. No court fees are applicable but there are costs involved in the sheriff serving the application papers on all affected parties.

Recourse. The aggrieved party does not have an automatic right of appeal once the award has been made an order of court, unless the arbitration agreement specifically provides for this right.

International awards

An application for an order enforcing a foreign arbitral award is brought by way of application on notice of motion and supported by a founding affidavit. An award can also be enforced by provisional sentence proceedings. Foreign judgments can be enforced by way of an action.

A provisional sentence will be granted on monetary judgments. This is an extraordinary and speedy procedure which is available to a plaintiff who has liquid documentary proof of his claim against the defendant.

Ex parte or on notice. An application is made on notice to the other party.

Applicable court. Any foreign arbitral award can on application by any person to the High Court of South Africa be made an order of court (Recognition of Foreign Arbitral Awards Act).

Limitation period. There are no time limits for seeking the enforcement of an award.

Timing. If the order is not opposed it can take around two or three months. If opposed it could take up to a year.

Court fees. There is no court fee.

Recourse. The aggrieved party does not have an automatic right of appeal once the award has been made an order of court, unless the arbitration agreement specifically provides for this right.

 
16. Can the enforcing court review the foreign award if all formalities were complied with and if the award meets all requirements?

In general, if the foreign judgment satisfies the necessary requirements, a South African court will not reconsider its merits. There are two exceptions to this rule (Forsyth, Private International Law, Fifth Edition (2012), page 438).

  • Where there is an allegation of fraud.

  • Where there is a flaw in the foreign judgment that nullifies it.

Formalities

17. What are the documentary requirements for enforcement?

Documentary requirements

The original judgment or a certified copy of it.

For arbitral awards, the original foreign arbitral award and the original arbitration agreement under which the award was made, or certified copies of the award and the agreement.

Authentication

All foreign documents must be authenticated under the Uniform Rules of Court. A judgment is authenticated by a properly authorised officer attesting to its form under law. Rule 63 of the High Court Rules lays down the procedure for the proper authentication of documents.

Documents executed in the United Kingdom, Zimbabwe, Lesotho, Botswana and Swaziland can be authenticated by a notary public. If a document is executed anywhere else in the world, it must be authenticated by one of the following:

  • The head of the South African diplomatic or consular mission or a person in the administrative or professional division of the public service serving as a South African diplomatic, consular or trade officer abroad.

  • A consul-general, consul, vice-consul or consular agent of the United Kingdom or anyone acting in any of those capacities or a pro-consul of the United Kingdom.

  • Any government authority charged with the authentication of documents under the law of that foreign country.

  • Any person certified by any of the people above or any diplomatic or consular officer of that country in South Africa.

 
18. Is it required to translate the award into the language of the State where enforcement is requested?

Translations

The award should be translated unless it is in English or Afrikaans.

Other languages

All 11 official South African languages are recognised without the need for translation. In practice English and Afrikaans are used predominantly.

Certification

Arbitral awards require sworn translations to be authenticated in the same way as foreign documents to enable them to be produced in any court (section 3(b), Recognition of Foreign Arbitral Awards Act).

 
19. What is the format of the application for a declaration of enforceability?

For judgments, the plaintiff must use a provisional sentence summons to begin a provisional sentence procedure.

For arbitral awards, the notice of motion must be supported by a founding affidavit as well as any necessary supporting affidavits.

 
20. What information must be included in the application regarding the award, the claim as awarded in the award, the facts and legal grounds of the case, and that the judgment is no longer appealable?
Award

Award

The court will not examine the merits of the case.

Claim as awarded

The court will not examine the merits of the case.

Facts and legal grounds

The court will not examine the merits of the case.

Appeals

It must be stated that the foreign award was made under the relevant foreign law and that it is final and not an interlocutory or provisional award.

The essential allegations to make are that the:

  • South African court requested to enforce the foreign judgment has jurisdiction over the person or property of the defendant.

  • Foreign court, in terms of its national law, had jurisdiction over the defendant and had jurisdiction to decide the case.

  • Foreign judgment was made in terms of the relevant foreign law and that it was a final judgment and not an interlocutory or provisional judgment; and

  • Foreign judgment satisfies all the requirements for recognition and enforcement.

 
21. Is it possible to request the enforcing court for provisional measures pending the enforcement proceedings?

No (section 21, Arbitration Act).

 
22. Is it required to convert the value of the award into the local currency?

Judgments

A South African court has the power to grant a judgment in a foreign currency. According to common law, if an original judgment was in a foreign currency and the court decides that it is to be enforced in South African rand, then conversion must be made at the date of payment.

Arbitral award

A foreign arbitral award ordering money to be paid and expressed in a foreign currency must first be converted to rand for it to be enforceable in South Africa. The award must be made an order of court as if it were an award for payment of the equivalent amount in rand, on the basis of the exchange rate prevailing at the date of the award and not at the date of the order of enforcement (section 2(2), Recognition of Foreign Arbitral Awards Act).

Maritime awards

In the exercise of its admiralty jurisdiction, a court can order payment in a currency other than rand if appropriate and make an order as to when the currency conversion should take place (section 5(2), Admiralty Act).

It has been suggested that the general rule should be that in contractual claims the creditor should be paid in the currency for which it contracted, and that in delictual claims the plaintiff should be compensated for its loss in the currency in which the loss is suffered (Hofmeyr, Admiralty Jurisdiction Law and Practice in South Africa, Second Edition at page 239).

 
23. Can the enforcing court stay the enforcement proceedings pending the outcome of proceedings to set aside the award at the seat of arbitration? If so, will the court order the party seeking the stay to provide security?

Yes, the enforcing court can stay the enforcement proceedings and can order security for costs (section 21, Arbitration Act).

Actual enforcement

24. What is the enforcement procedure when a declaration of enforceability is granted?

Once judgment is obtained, the judgment creditor is entitled to attach and to sell the debtor's property (whether movable, immovable or incorporeal). This is done by obtaining a writ of execution, which is issued by the court and which will be enforced by service of it by a sheriff of the court.

Debts can also be attached and the court can order the periodic deduction of a specific sum of money from a person's salary to be paid to the judgment creditor.

 
25. Can defendants oppose the actual enforcement procedure, and if so, on what grounds/defences?

A writ of execution will be set aside if:

  • The award was not definite and certain.

  • The debt in respect of which the award was obtained was extinguished before being handed down.

  • It has been extinguished by compensation or novation.

  • The award on which the writ is based has been rescinded.

  • It erroneously refers to a certain person as a party.

  • It is no longer justified by the cause or debt.

Proposals for reform

26. Are any changes to the law currently under consideration or being proposed?

Not applicable.

 

Contributor profiles

Patrick Holloway, Partner

Webber Wentzel

T + +27 21 431 7278
E patrick.holloway@webberwentzel.com
W www.webberwentzel.com

Professional qualifications. Lawyer, Postgraduate Diploma (Shipping), University of Cape Town, 1996

Areas of practice. Shipping, marine insurance and transport.

Non-professional qualifications. LLB, University of Cape Town, 1990;

BA, University of Cape Town, 1987

Andre October, Associate

Webber Wentzel

T + 021 431 7350
E andre.october@webberwentzel.com
W www.webberwentzel.com

Professional qualifications. Lawyer, Postgraduate Programme in Advanced Marketing Management, University of South Africa, 1998

Areas of practice. Shipping, marine insurance and transport.

Non-professional qualifications. LLB, University of South Africa, 2011;

BSocSci (Economics and Industrial Sociology), University of Cape Town, 1994


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