Autonomy and Due Process in Arbitration

• A. Introduction

  Conflicts of jurisdiction between a state court and an arbitral tribunal occur in two different scenarios: (a) claimant X institutes a court action and the defendant subsequently commences with arbitration or requests to be referred to arbitration (as envisaged by the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards – NYC); and (b) claimant X commences arbitration and the defendant subsequently challenges in a national court. X should be able to seek a stay of the parallel litigation on the ground of the existence of a valid agreement to arbitrate the dispute,¹x International Law Association (ILA), ‘Final Report of the International Arbitration Committee on Lis Pendens and Arbitration’, Report of the 72nd Conference, Toronto, June 2006, pp. 186-204, available at <www.ila-hq.org/en/committees/index.cfm/cid/19>. In general also F. De Ly & A. Sheppard, ‘Res Judicata and Arbitration’, 25 Arb. Int. 2009, pp. 35-66, which is the preceding Interim Report of the International Arbitration Committee of the International Law Association, Berlin Conference, London, 2004, pp. 826-861, available at <www.ila-hq.org/en/committees/index.cfm/cid/19>. but the duty on the part of South African courts to do so is not clearly legislated for, nor is it as well-understood as it deserves to be. Various interests have fallen into disharmony in this area of the law.
  Abuse of process may ensue if an arbitral tribunal were able to proceed completely independently from a supervisory court in particular circumstances. From the viewpoint of safeguarding the time and cost benefits of arbitration as the mode of dispute settlement, it is vital to manage the tensions between procedural guarantees on the one hand, and the autonomy of the arbitration and of the parties to have recourse to arbitration on the other. The judiciary guards procedural guarantees that enable parties to realize other rights, such as access to court and the right to a fair trial, but also needs to balance their protection with arbitral autonomy and party autonomy.²x J. Lurie, ‘Court Intervention in Arbitration: Support or Interference?’, 76 Arbitration 2010, p. 447. Recent jurisprudence illustrates that the focus of the South African judiciary is on procedural guarantees. Despite the iconic status of party autonomy at the intersection between arbitration and litigation in many developed legal systems, it is not optimised in South African law. The point at which judicial intervention starts to resemble court interference with arbitration is difficult to pinpoint, and semantic confusion thrives in this context. Nonetheless, it is evident that arbitral autonomy is being diluted by the multiple layers of protection that safeguard the right of access to court.
  Given that accelerated forms of dispute resolution are not open to the same safeguards of the public adjudicatory system, but cannot do away with adequate protections either, the implications of waiving the right of access to court and the contractual right to arbitrate remain significant.³x T. Schultz, ‘Human Rights: A Speed Bump for Arbitral Procedures? An Exploration of Safeguards in the Acceleration of Justice’, 9 Int’l A. L. R. 2006, p. 1 and 13. If the restriction of the parties’ rights corresponds to a legitimate interest and is not disproportionate, accelerated procedures with fewer protections may still be admissible even in the absence of true consent. Nonetheless, constitutional rights are mandatory in nature and many implications remain to be worked out in South African law.
  The UNCITRAL Model Law on International Commercial Arbitration tackles the issues associated with the priority and exclusivity in conflicts of jurisdiction between courts and arbitral tribunals directly. It was originally designed for countries lacking in a strong arbitration culture, to signal that court intervention was to be limited to what was laid down by the Model Law.⁴x UNCITRAL Report of the United Nations Commission on International Trade Law on the work of its 18th session, Vienna, 3-21 June 1985, U.N. Doc. A/40/17, paras. 61-63; F. Davidson, H. Dundas & D. Bartos, Arbitration (Scotland) Act, 2010, p. 13. Despite the relative popularity of this model as an arbitration framework for Sub-Saharan Africa,⁵x 31 contracting parties to the U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 1958 (cited as: New York Convention) are African States, available at <www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention_status.html>. Nine African states (Egypt, Kenya, Mauritius, Nigeria, Tunisia, Uganda, Madagascar, Zambia and Zimbabwe) have enacted the UNCITRAL Model Law on International Commercial Arbitration, Vienna, 1985, with amendments as adopted in 2006, available at <www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_arbitration.html> (cited as: UNCITRAL Model Law). South Africa has not pursued suggestions for law reform based thereon. South Africa is part of the system based on the 1958 New York Convention,⁶x South Africa acceded on 3 May 1976, entry into force 1 August 1976. The Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977 was enacted to give effect to South Africa’s accession to the New York Convention in 1976. SADC countries are free to adopt the OHADA Model Law on Arbitration to ensure regional uniformity for international commercial arbitration, but South Africa has not done so. that differs in some respects from the Model law system. As the Model Law has not prevailed in South Africa, the devices by which procedural conflict can be resolved assume importance insofar as they can manage tensions between courts and arbitral tribunals. These devices include concurrent consideration, sequential consideration, time bars and waiver.⁷x C. McLachlan, Lis Pendens in International Litigation, Leiden 2009, pp. 89 and 198-203. These procedural devices are bound to intersect with fundamental rights doctrine. In fact, this interface is likely to give shape, meaning and form to the ‘new science of conflict of litigation’ that McLachlan envisions.⁸x Id. The legal implications of curial proceedings meeting with extra-curial proceedings have not been systematically addressed in a transnational African context.⁹x The mandate of the African Union Commission on International Law permits it to develop private international law in Africa. See R. Frimpong Oppong, ‘Private International Law Scholarship in Africa (1884-2009) – A Selected Bibliography’, 58 Am. J. Comp. L. 2010, p. 322. The need for systematic research¹⁰x D.W. Butler, The Desirability of a Common Arbitration Statute for International Commercial Arbitration in SADC jurisdictions: A Comparison between the UNCITRAL Model Law and the OHADA Uniform Act, pp. 1-36 (unpublished paper on file with author); E. Onyema, ‘Regional Approaches to Enforcement of Arbitral Awards in Sub-Sahara Africa’, Paper delivered at the Inaugural Conference of Alumni and Friends of the School of International Arbitration (AFSIA), London, 3 December 2008, available at <www.eprints.soas.ac.uk/5996/1/Enforcement_of_Awards_in Sub-Sahara_Africa.pdf>, p. 3; C. Roodt, ‘Conflicts of Procedure between Courts and Arbitral Tribunals in Africa: An Argument for Harmonization’, 25 Tulane European and Civil Law Forum 2010, p. 65; C. Roodt, ‘Conflicts of Procedure between Courts and Arbitral Tribunals with Particular Reference to the Right of Access to Court’, African Journal of International and Comparative Law 2011, p. 236. has been highlighted in two recent South African rulings on human rights standards in arbitration proceedings, i.e. Telcordia Technologies Inc v. Telkom SA Ltd and Lufuno Mphaphuli & Associates (Pty) Ltd v. Nigel Athol Andrews and Bopanang Construction CC. ¹¹x Telcordia Technologies Inc v. Telkom SA Ltd 2007 (3) SA 266 SCA (order of court a quo in Telkom SA Ltd v. Boswood and others (unreported) 2005 High Court Pretoria set aside); Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another (CCT 97/07) [2009] ZACC 6 (20 March 2009). These rulings have confused the issue of waiver of the right of access to court by having recourse to arbitration (which is an aspect of party autonomy).
  The optimum point of balance between the competing concepts of party autonomy and due process is likely to differ depending on the individual case. Recalibration is possible with reference to a wide array of procedural and jurisdictional tools, including the doctrine of compétence-compétence, its negative aspect, lis pendens, res judicata, a strict approach to waiver or a discretionary approach. These concepts do not carry autonomous or universal meanings. They are context-bound and their implications differ across different jurisdictions. The work that the International Law Association performs is important to promote understanding of cultural, semantic and legal differences.
  In its Final Report on Lis Pendens and Arbitration, the ILA International Commercial Arbitration Committee considered the correct approach to the doctrine of compétence-compétence and its negative aspect and endorsed the notion of the positive operation of the doctrine of compétence-compétence.¹²x See ‘International Law Association’, Final Report on Lis Pendens and Arbitration, supra note 1; McLachlan, supra note 7, p. 422. In its ordinary and positive sense, compétence-compétence requires an arbitral tribunal to proceed with the arbitration and the determination of its own jurisdiction “regardless of any other proceedings pending before a domestic court.”¹³x See ‘International Law Association’, Final Report on Lis Pendens and Arbitration, supra note 1, para. 5.13. Other permutations of the doctrine permit it to assume the function of a prior temporis mechanism, however. There are differences not only in regard to the positive and negative effects of compétence-compétence but also the definition of the effects shift across jurisdictions. Broadly speaking, however, negative compétence-compétence’ implies that the arbitral tribunal determines the question of jurisdiction and that state courts should refrain from ruling, in parallel and to the same degree of scrutiny, on the same issue at the outset of the arbitration process.
  The same fluidity underlies the other devices. We may ask, therefore, how the most attractive arbitration seats in the world effect and maintain balance. More particularly, it is of great importance to ascertain how the attractive seats deal with waiver and the implications it has for the right of access to court and for res judicata.
  Section B sketches the legislative framework and the law reform proposals that have suffered delayed implementation in South Africa. Section C highlights the recent jurisprudence and maps the implications of the cases in the face of the stultification of law reform. Section D traces international trends, illustrating that Swiss law reform is particularly instructive on the inter-relationship of the compétence-compétence, waiver and res judicata doctrines.

• B. South Africa: An Unattractive Seat for International Commercial Arbitration

  I. Legislative Framework Based on Judicial Discretion

  Domestic and international arbitrations conducted in South Africa are regulated by the Arbitration Act 42 of 1965, regardless of whether the parties are local or foreign, and provided there is no agreement to the contrary.¹⁴xSouth African Arbitration Act No. 42 of 1965, available at <www.wipo.int/wipolex/en/details.jsp?id=6664>. The Act reflects the position as it stood in English law over forty years ago. The old common law shows a measure of diffidence for arbitration which meant that the balance of power has always tilted in favour of the courts. The most recent statutory reform in England, namely the Arbitration Act 1996, was intended to reduce court intervention in the arbitral process and to increase judicial support. Opinion is mixed as to whether this objective has been realised.¹⁵x E.g. Lurie, supra note 2, p. 447.
  The 1965 Act still presents litigants with many opportunities to resort to the formal court process.¹⁶x P.J. Conradie, ‘A Q & A Guide to Arbitration in South Africa’, available at <http://competition.practicallaw.com/7-381-3144>. Discretion to refuse to enforce an arbitration agreement is safeguarded in ss 3(2) and 6(2) and an application for a stay of the court proceedings may be turned down on good cause shown. Courts take into account a number of factors that, individually or cumulatively, may be sufficient to discharge the onus that rests on the party who is seeking to avoid arbitration.¹⁷x E.g. Nick’s Fishmonger Holdings (Pty) Ltd v. De Sousa 2003 (2) SA 278 (SECLD) at 282D-283F. These factors include the risk of conflicting decisions if separate proceedings were to be permitted; the importance of enforcing the arbitration agreement reached between the parties; an election to arbitrate despite knowing about potential disadvantages associated with arbitration at the time; and the time and money saved because the arbitrator is able to use his or her expert knowledge to dispense with expert evidence. See Universiteit van Stellenbosch v. JA Louw (Edms) Bpk 1983 SA 321 (A) at 342E; D. Williams, ‘Arbitration World – South Africa’, available at <www.europeanlawyer.co.uk/referencebooks_7_153.html>. Parties also have leeway to attempt to neutralize the effects of an arbitral ruling on the jurisdiction of the court.¹⁸x In Yorigami Maritime Construction Co Ltd v. Nissho-Iwai Co Ltd 1977 (4) SA 682 (C) at 694B-D the court held fast to its discretion not to enforce the arbitration agreement as such an agreement was not considered to be absolutely binding. Arbitration in Japan was provided for but the court refused to stay the action in order to pre-empt a multiplicity of proceedings leading to conflicting decisions. In Intercontinental Export Co. (Pty) Ltd v. M V Dien Danielsen 1982 (3) SA 534 (N) and Polysius (Pty) Ltd v. Transvaal Alloys (Pty) Ltd 1983 (2) SA 630 (W&T) stays were granted on the basis of foreign arbitration elsewhere. In this regard, the defective implementation of the NYC is evident. Article II(3) of the NYC obliges the court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an arbitration agreement, to refer the parties to arbitration at the request of one of them, unless it finds that the said agreement is null and void, inoperative or incapable of being performed. Its discretionary approach permits the courts to determine jurisdiction, refer a case to arbitration, or to grant a stay of proceedings brought in violation of an arbitration agreement. As such, the absence of a provision that mirrors Article II(3) is understandable. In common law courts, it is practice to leave it to the parties to pursue arbitration after the court has stayed its proceedings. There is authority for the view that the referral by a court pursuant to Article II(3) of the NYC is an internationally uniform rule that is mandatory in its operation and supersedes domestic law that leaves a margin for judicial discretion.¹⁹x A.J. Van Den Berg, ‘The New York Convention of 1958: An Overview’, available at <www.arbitration-icca.org/media/0/12125884227980/new_york_convention_of_1958_overview.pdf>. This view takes no account of the monist and dualist theories on the relationship between treaties and domestic law; nor does it address the failure of Article II(3) to take account of jurisdictions that do not ‘refer’ parties to arbitration under Article II of the NYC. Since there is no general treaty rule that differentiates between mandatory and dispositive treaty rules, this interpretation and its erga omnes effect is thus open to question.
  Domestic legal systems may prefer different analyses – such as a repudiation of contract analysis, or a construction of loss of rights. Indeed, in classical private international law tradition, the legal effect of a choice of one kind of dispute resolution or forum rather than another may require classification. If the question is how waiver is supposed to be classified, questions of conflict of laws methodology and applicable law assert themselves.²⁰x F. De Ly, ‘Conflicts of Law in International Arbitration: An Overview’, in F. Ferrari & S. Kröll (Eds.), Conflict of Laws in International Arbitration, Munich, 2011, p. 5. If consequences of substantive law nature are expected to ensue, the applicable law must be identified. An international commercial arbitration tribunal may adopt a comparative approach that considers all potentially applicable conflict rules of the seat and of respective home countries’ laws when faced with the conflict of laws rules of its seat and other conflict rules.²¹x See De Ly, supra note 20, p. 5. Looked upon as a purely procedural issue however, the question will be settled with reference to jurisdiction rules of forum law. Why should the proper law of the arbitration agreement be considered relevant?²²x The New York Convention permits a court to refuse to uphold an arbitration agreement if the arbitration agreement was not valid under its governing law. The validity of the incorporation of an arbitration agreement into a contract was governed by the proper law of the contract in National Navigation Co v. Endesa Generacion SA [2009] EWHC 196 (Comm). J. Gloster found that English law was the proper law to apply to the question whether an arbitration agreement had been incorporated into the relevant bill of lading. She concluded that there is “clear statutory and conventional obligation under English law for an English court to give effect to an arbitration agreement that is valid in accordance with its proper law”, at para. 102. In Dallah Real Estate and Tourism Holding Company (Appellant) v. The Ministry of Religious Affairs, Government of Pakistan (Respondent) [2008] EWHC 1901 (Comm) at para. 3, the High Court in England refused to enforce the award on the ground that the arbitration agreement was not valid under the applicable law which was French law (the arbitral tribunal sat and made its award in France). The ruling of the Court of Appeal turned on Art. V(1) New York Convention and s. 103 of the Arbitration Act 1996 (Dallah v. Pakistan [2009] EWCA 755), whereas the UKSC ruled on the basis that enforcement of an arbitral award could be resisted anywhere and not only in the supervisory court in the seat (Dallah v. Pakistan [2010] UKSC 46). The Pakistani government could not be held bound to a trust established by the Ministry of Religious Affairs and as it was not a party to the arbitration agreement, the enforcement of the award against it was refused. Yet, neither approach is appropriate. The forum’s arbitration system and the quality and standard of incorporation of its treaty obligations ought to determine the issue and the balance. It is necessary to distinguish clearly between different subsets of conflicts.
  Nonetheless, the point at which judicial intervention starts to resemble interference is difficult to identify. In addition, semantic confusion tends to thrive in this context.
  The bench tends to respect arbitration agreements,²³x I.M Rautenbach, ‘Private Arbitrasie en die Handves van Regte’, 1 Tydskrif vir Suid-Afrikaanse Reg 2010, p. 185 and 186. but the legislative framework is not synchronized with internationally accepted standards. More importantly, the constitutional framework conditions the residual discretion of the judiciary further, and compounds the safeguarding of the right of access to court at the jurisdiction and award stages.²⁴x Res judicata may have a role to play. See Henderson v. Henderson (1843) 3 Hare 100 at 144-115; Consol Ltd t/a Twee Jonge Gezellen (Pty) Ltd (2) 2005 (6) SA 23 (C). Such over-protection fortifies court intervention in arbitral proceedings and erodes compétence-compétence. Arguably, achieving a balance would require a different approach²⁵x Id. in which it might help to go back to basics. Party autonomy is not all that well guarded in South African law. Abitrators may rule on their own jurisdiction to arbitrate the dispute should a party request this, but the arbitrators may, in turn, request the parties to obtain a court ruling in this regard. Neither forum has exclusive jurisdiction over this issue. The parties determine which forum enjoys priority. If they do not agree on this issue, their conduct settles the matter. The forum seized first is the one that has jurisdiction. A party may also apply to have an award set aside where the arbitrator has exceeded his or her powers and jurisdiction, or to have a case on which an award had been made re-opened on the merits before a civil court. This evokes a ‘minimalist approach’ to compétence-compétence. Unfortunately, the entitlement of the judiciary to intervene in the arbitral proceedings on the application by one or the other party, neutralises the positive effect of compétence-compétence. While stays and injunctions are available where proceedings are started in the local court in breach of an arbitration agreement, judicial discretion determines whether or not these remedies will be granted.²⁶x Sect. 6 Arbitration Act 42 of 1965. Moreover, the powers of the judiciary go beyond procedural issues in as far as s 20 of the 1965 Act permits a court to determine a question of law arising in the course of a reference to arbitration. This is reminiscent of the controversial ‛stated case’ procedure in Scots law under the Administration of Justice (Scotland) Act 1972. One finds a much more sensible and tighter regulation of this issue in the recently adopted progressive Scottish legislation. The jurisdiction of the Outer House to settle any point of Scots law arising in the arbitration is a default rule that parties can modify.²⁷x Sect. 9 and Rule 41 Arbitration (Scotland) Act of 2010. When a party makes such an application, the consent provisions set out in Rule 42 of the Arbitration (Scotland) Act of 2010 apply, and the arbitral tribunal is free to continue with the arbitration pending determination of the application.²⁸x Rule 42(3) Arbitration (Scotland) Act of 2010.

  II. How Likely is Legislative Reform?

  The South African Law Reform Commission urged reforms at various points in the last 15 years.²⁹x E.g. ‘Project 107’, Report on an International Arbitration Act for South Africa (July 1998), in particular the Draft International Arbitration Bill; Project 94 Report on Domestic Arbitration (May 2001), para. 2.16-para. 2.23. It recommended the statutory incorporation of the UNCITRAL Model Law mainly for the balance it achieves between the powers of the court and the tribunal,³⁰x At viii; para. 1.10 at 3. and the positive effect this has on preventing unnecessary delay and avoiding expense, as well as what this has meant for foreign investment and economic development in the region. These initiatives have been on hold ever since. The current dispensation has many comparative and international shortcomings. Both the legislation and the jurisprudence favour the courts. Not only does the law lag behind other jurisdictions in several respects,³¹x At para. 2.53. but the legislative framework has also fallen out of step with international law. The Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977 was enacted to give effect to South Africa’s accession to the NYC in 1976, but it lacks any equivalent to Article II(3) of the NYC which minimises undue court interference at the front-end of the arbitration process.³²x See Butler, supra note 10, p. 12; ‘South African Law Commission Project 107’, Report on an International Arbitration Act for South Africa, July 1998, paras. 3.56-3.59 and 3.98. Arguably a court that exercises its discretion in an international arbitration must take into account that South Africa is in breach of its obligations under international law.³³x Butler, supra note 10, p. 12 refers in this regard to p. 233 of the Constitution, which obliges courts to interpret legislation in a manner consistent with international law.
  The impetus for modernising the law has been neutralized by the perception that a pro-arbitration stance undermines national courts, and that arbitration competes with and runs contrary to judicial transformation. Judicial Service Commission appointments resulted in delays in the delivery of judgments, and the delays sparked a wider recourse to arbitration so as to avoid the courts. Political pressure was brought to bear on retired judges not to act as arbitrators,³⁴x The Hlope Report, which was released in February 2005, alleged racism in parts of the South African judiciary and called for retired judges to be prevented from becoming arbitrators. The reasoning seems to be that a well-developed arbitration system erodes confidence in the court system. and for now at least, political tension continues to dilute the levels of commitment to maintaining and improving the arbitration framework. The unhealthy appropriation of jurisdictional competence to the judiciary in the name of transformation has contributed to the absence of much-needed structural and substantive reform in this sector. If a new science of conflicts of jurisdiction is going to develop, the legislature is not likely to be the main driver.

• C. Recent South African Jurisprudence: Law Reform at Last?

  Notwithstanding the amenability of the written law to court intervention, the judiciary has always tended to discourage judicial intervention in arbitration in practice.³⁵x See Rautenbach, supra note 23, p. 186. There is authority in South African law for the proposition that an arbitrator may rule on his own jurisdiction, without detracting from the power of the local court to determine jurisdiction by way of declaratory order.³⁶x Universiteit van Stellenbosch v. JA Louw (Edms) Bpk 1983 SA 321 (A) at 333G-H. The courts guard the litigant’s right to invoke an arbitration clause, and consequently the onus on the party seeking to avoid arbitration is a heavy one.³⁷x Id. at 334A.
  Two rulings provide a fresh impetus for reform in this area. Telcordia Technologies Inc v. Telkom SA Ltd³⁸x Telcordia Technologies Inc v. Telkom SA Ltd 2007 (3) SA 266 SCA (order of court a quo in Telkom SA Ltd v. Boswood and others (unreported) 2005 High Court Pretoria set aside). underscores the importance of limiting the involvement of the courts in the arbitral process,³⁹x Id., at 279C and 279I-J. while Lufuno Mphaphuli & Associates (Pty) Ltd v. Nigel Athol Andrews and Bopanang Construction CC⁴⁰x Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another (CCT 97/07) [2009] ZACC 6 (20 March 2009). reiterates the need to balance the powers of the courts to scrutinize arbitral awards without enabling unscrupulous litigants to use the courts in order to delay justice.⁴¹x At para. 196; paras. 222-232. Unfortunately, the apparent awareness of the acute need to balance the powers of the courts and the arbitral tribunals has not prevented the courts from operating rather on the basis that centralised judicial review of disputes related to arbitration is desirable. This schism introduced risks for international commercial arbitration.
  The conflicts dimension was not prominent in either of the two cases. As such, little guidance can be gleaned on the application of private international law mechanisms designed for conflicts between courts and tribunals, apart from the extent to which they cover waiver. Intriguingly, both rulings turn the spotlight on the relationship between a choice in favour of arbitration as a means of dispute settlement, the right of access to court as guaranteed as part of a fair hearing in Article 6 of the ECHR, and waiver as a means to manage conflict of jurisdiction between courts and arbitral tribunals.

  I. Telcordia Technologies Inc v. Telkom SA Ltd

  Telkom, a state-owned company that provides telecommunication services for South Africa, was dissatisfied with the arbitrator’s application of South African law on the point of variations of written contracts in Telkom SA Ltd v. Boswood.⁴²x (Unreported) 2005 High Court Pretoria. Boswood was a London barrister whose appointment as arbitrator had been made under the rules of the International Chamber of Commerce. Thus his nationality differed from that of the parties. Boswood handed down an arbitral award pursuant to an arbitration clause that stipulated that (a) all disputes between the parties that may arise, including disputes related to interpretation of the agreement, had to be determined by an arbitrator; and (b) the award would be final and binding. The arbitration clause made no provision for any appeal process. Telkom instituted proceedings before the Supreme Court of Appeal (SCA), averring that the arbitrator had exceeded his powers under South African law. Telkom raised (a) its right to rely on material error (which does not feature as a ground of review in the Arbitration Act); and (b) its right of access to court under s 34 of the Constitution.⁴³x At paras. 44 and 45, 289E-F.
  On the point of review, it was necessary to determine whether the arbitrator, having committed a material error of law, was guilty of misconduct or a reviewable irregularity under s 33(1) of the Arbitration Act of 1965. The case was not directly concerned with bias nor was it originally claimed that there had been a breach of standards enshrined in the Bill of Rights on the part of the arbitrator. The SCA gave a decidedly pro-arbitration ruling to the effect that the award was not reviewable. An error of law or fact did not amount to gross irregularity in the eyes of the SCA. Nonetheless, the ruling invited the risk of delays and protracted litigation in setting aside the order given in Telkom v. Boswood. This aspect necessitates closer investigation.
  Acknowledging that waiver is one of the mechanisms by which procedural conflict can be solved, the court regarded the agreement to arbitrate as a waiver of the parties’ right to a judicial decision on the merits of the case. The court eagerly engaged in comparative law analysis,⁴⁴x At para. 48, 290-291. and proceeded on the basis that parties may waive the right of access to court ‘unless the waiver is contrary to some other constitutional principle or is otherwise contra bonos mores.’⁴⁵x At para. 48, 290H. In this regard the court relied on Suovaniemi v. Finland, ⁴⁶x ECHR case No. 31737/96 (23 February 1999). Quoted at 290D. Compare also Appel v. Leo 1947 (4) SA 766 (W). an ECtHR ruling of 1999 that to agree to the appointment of an arbitrator who used to represent the counterparty in prior legal action, constituted a permissible waiver of the right to a fair trial. The SCA understood this to mean that parties may define what is fair in a private consensual dispute.⁴⁷x At para. 47, 290D.
  On the feasibility of waiver of the right to rely on particular grounds of review in an arbitration context, the Telcordia case relied on a dictum taken from a famous American case, First Options v. Kaplan.⁴⁸x First Options v. Kaplan, 514 U.S. 938 (1995). American courts may order a full examination of the validity of an arbitration clause at any stage of the arbitral process to determine whether, as a matter of fact and law, the parties have indeed agreed to arbitrate. If a dispute arises at the outset of the arbitration, the courts decide the preliminary questions of existence and validity, and Kaplan permits the parties to give arbitrators the final word on some aspects of arbitral power only where the agreement evidences clear and unmistakable terms. This is a high standard that should not be stretched so far as to imply a presumption that the arbitration agreement is invalid. The court makes reference to Kaplan to justify the conclusion that, by agreeing on arbitration, the parties ‘waive their rights pro tanto’.⁴⁹x At para. 48, 291A. The parties ‘necessarily agree that the fairness of the hearing will be determined by the provisions of the [Arbitration] Act and nothing else. … [T]o waive the right of appeal … means that they waive the right to have the merits of the dispute re-litigated or reconsidered’.⁵⁰x At para. 50, 291F. The court took account of the freedom of parties to define what is fair for purposes of their private consensual disputes,⁵¹x At para. 47, 290D-E. In this regard see Brisley v. Drotsky 2002 (4) SA 1 (SCA) at para. [94] and para. [95]; Napier v. Barkhuizen 2007 (5) SA 323 para. [12]; S. Woolman, ‘Category Mistakes and the Waiver of Constitutional Rights: A Response to Deeksha Bhana on Barkhuizen’, South African Law Journal 2008, Vol. 125(1), pp. 10-24, available at <www.jutalaw.co.za/catalogue/itemdisplay.jsp?item_id=3591>; Rautenbach, supra note 22, p. 193. and the relevance of the Constitution to private arbitration.⁵²x At para. 47, 290D-E. However, less interventionist and presumptive approaches⁵³x E.g. as in Howsam v. Dean Witter Reynolds 537 US 79, 84 (2002). were not noted.
  The case is laudable for insisting that waiver deserves recognition as a device in conflicts of jurisdiction, but absent any clarification on what exactly constitutes waiver in a system calibrated on judicial discretion and on express exclusion agreements in respect of court review of an award on the merits, it is open to criticism. Constitutional lawyers have been quick to indicate that constitutional rights cannot possibly be waived by way of a private contractual arrangement that is inconsistent with the content of s 34 of the Constitution, as this arrangement would not constitute a justifiable limitation of the right.⁵⁴x See Woolman, supra note 51, p. 20. Arguably, the autonomy of the parties to define the content, exercise and waiver of the right of access to court is what attracts ordinary businessmen to international commercial arbitration in the first place, and to refer to norms and imperatives that inform court adjudication only is problematical in principle. Greater sensitivity towards the doctrine of compétence-compétence would be desirable. The international dimension renders it necessary to determine also whether the content of a right as prescribed by law constitutes an overriding mandatory rule or forms part of the forum’s public policy for purposes of private international law. Had the court addressed itself to the need for the choice for arbitration to be voluntary, lawful and unequivocal, the case could have offered firmer guidance concerning when and to what extent courts may intervene to review or to pre-empt the arbitrator’s jurisdictional ruling.

  II. Lufuno Mphaphuli & Associates (Pty) Ltd v. Nigel Athol Andrews and Bopanang Construction CC

  This ruling is a first consideration of the constitutionality of commercial arbitration since the inception of the Constitutional Court.⁵⁵x See Rautenbach, supra note 23, p. 185. There was no international element to the arbitration that formed the subject-matter of the case. An application was made for leave to appeal to the Constitutional Court against a decision of the SCA⁵⁶x Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another [2007] ZASCA 143. that had upheld a judgment of the High Court in Pretoria.⁵⁷x Bopanong Construction CC v. Lufuno Mphaphuli & Associates (Pty) Ltd; Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another, Case Nos. 27225/04 and 33188/2004, North Gauteng High Court, Pretoria, 22 February 2006, unreported. The High Court had dismissed an application for the review and setting aside of a quantity surveyor’s arbitral award that fixed the amount owed by the respondent for services rendered to the applicant. The application for the review of the arbitrator’s award was based on his alleged commission of an error of law or fact on procedural grounds pursuant to s 33 of the 1965 Act. He was alleged to have had secret meetings with the other party, to have failed to provide the applicant with access to correspondence between himself and the respondent and to have awarded an amount that was more than the amount claimed in the pleadings.⁵⁸x At paras. 189 and 239. The grounds for setting aside an arbitration award are confined to (a) misconduct by an arbitrator; (b) gross irregularity in the conduct of the proceedings; and (c) the fact that an award has been improperly obtained. The SCA also turned down the application.
  The court adopted a comparative law approach. The progressive ideas of the UNCITRAL Model Law on the point of the limitation of undue court interference in the arbitration process, found their way into the guidance contained in the ruling. Reference was also made to the recommendations of the Law Commission⁵⁹x Its Report on Domestic Arbitration (May 2001) para. 2.16 notes that court support for the arbitral process is essential and extends to the enforcement of arbitration agreements and arbitral awards. Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another [2009] ZACC 6 at para. 229. and the English Arbitration Act 1996.
  The application for leave to appeal was granted, which appeal was then dismissed. The Constitutional Court concluded that the interests of justice would be served by granting leave to appeal,⁶⁰x At para. 238. There was no consensus in Lufuno on the issue of award review on appeal. J. Ngcobo addressed the conflict of procedure at para. 281 et seq., and held that the application for leave to appeal to the Constitutional Court in this instance had to be dismissed with costs. but held that the appeal had to fail. The arbitration agreement did not provide for appeal, however, and the 1965 Arbitration Act states that arbitral awards are not subject to appeal unless the parties agree otherwise. The challenge of arbitral awards on the merits is precluded in principle. The SCA may, on appeal, overrule a court order in violation of procedural fairness. It may also review a decision to allow an appeal. In principle these issues may also be vented in the Constitutional Court with all the concomitant adverse implications for the resolution of procedural conflicts that this may imply. The position in South Africa seems to indicate that the constitutional standard of fairness in arbitration will prevail over the statutory framework. Comparative analysis shows that appeal of awards to the courts is often restricted quite severely where dispute resolution is of a speedier and less formal kind. The arbitration process itself is not necessarily open to proper appeal.⁶¹x See Schultz, supra note 3, p. 16; H.R. Dundas, ‘The Finality of Arbitration Awards and the Jurisdiction of the Court of Appeal’, Arbitration 2007, p. 127.
  Since the implications of the right to a fair trial for award review was a focal point to the Constitutional Court,⁶²x At para. 194. the issue of voluntary waiver of a constitutional right by referral of issues in dispute to arbitration was addressed. O’Regan ADJC, as she then was, refused to regard the Suovaniemi case as authority for the proposition that parties waive the right of access to court when they elect arbitration and rejected unequivocally the conclusion that waiver can be inferred. The point was made that particular rights may not be waived, whether by arbitration agreement or otherwise.⁶³x At 5. O’Regan quotes the relevant passage at para. 205. A rather illogical conclusion followed:

  ‘If we understand section 34 not to be directly applicable to private arbitration, the effect of a person choosing private arbitration for the resolution of a dispute is not that they have waived their rights under section 34. They have instead chosen not to exercise their right in section 34.’⁶⁴x At para. 216.

  Arbitrators construct their jurisdictional framework on the basis of the will of the parties and their legitimate expectation that the award will be enforceable.⁶⁵x C. Pamboukis, ‘On Arbitrability: The Arbitrator as a Problem Solver’, in L. Mistelis & S. Brekoulakis (Eds.), Arbitrability: International and Comparative Perspectives, Alphen aan den Rijn 2009, p. 121 para. 7.33. Thus, it would be correct to think that instead of launching proceedings in a national court, parties choose to participate in a private process which must be fairly conducted on the basis that the arbitrator’s award will be respected and enforced by the courts. Nonetheless, it is unclear from this statement whether parties to private arbitration have rights under section 34. The court stated that the difference between exercising and not exercising their right rendered the language of waiver used in Telcordia and Suovaniemi inappropriate in the context of constitutional rights.⁶⁶x At para. 216. Rautenbach, supra note 23, p. 194 describes this as an emotional reaction rather than a response based on legal principle. However, if parties contract not to exercise those rights, their agreement will bind them, and a unilateral decision taken subsequently to exercise the right cannot invalidate the original agreement. If the arbitration clause is clearly drafted and the objection timeously made, the waiver has to be effective.⁶⁷x See Rautenbach, supra note 23, p. 193.
  The Constitutional Court insisted that, where private arbitration is at issue, courts construe the grounds for setting aside an arbitral award strictly so as not to enlarge judicial powers of scrutiny imprudently.⁶⁸x At para. 235. O’Regan ADJC, as she then was, gave the principle of party autonomy its due. In her view, courts need to be slow to conclude that the arbitrator conducted the proceedings unfairly or that a fault in the procedure was unfair or grossly irregular within the meaning of s 33(1).⁶⁹x At para. 236. The approach was very similar to what is now found in the modern Arbitration (Scotland) Act of 2010, which constrains the grounds upon which a court may hear challenges to an arbitral award.⁷⁰x Art. 13 Arbitration Act Scotland read with Part 8 of the Rules refer to serious irregularity that has or is likely to cause substantial injustice to the parties; are contrary to public policy or have been obtained by fraud. There are Rules in the ASA that permit the issue of jurisdiction to delay the arbitral proceedings twice over. This may potentially work against boosting international commercial arbitration in Scotland. Rule 21 safeguards the right of parties to file an objection against the tribunal’s ruling on jurisdiction to the Outer House provided that this is done within two weeks; Rule 67 permit parties to challenge an award on the basis of a lack of jurisdiction on the part of the tribunal that made it. Considering how problematical court interference can be in disputes that do not concern existence and validity of an arbitration agreement, legal certainty is promoted by disallowing appeals. If the merits of the award are engaged all the way to constitutional court level, while the arbitration agreement in issue did not provide for appeal, the implications for finality, timing and cost are decidedly negative.
  The Lufuno case recognized the need for minimizing undue court interference in the arbitration process, took account of what the law ought to be as the Law Commission recommended, and mapped out guidelines for a sensible relationship between due process and arbitral autonomy.⁷¹x At para. 238 Rautenbach, supra note 23, p. 187 et seq. gives a critical discussion of these guidelines. It breathed new life into procedural jurisdiction at a point when legislative overhaul is being inordinately delayed. In the absence of an appropriate legislative policy, a judicial policy has to fill the void. In both the US and France, courts were able to develop such a policy, and this raises the question whether the South African bench will assume a legislative function to limit its own discretion and enable waiver. The fundamentals of the science of jurisdictional conflict need to be set out. The odds against the enforcement of arbitral agreements and awards are simply compounded if waiver is neglected. What effect ought the right of access to court to have on waiver and res judicata in South African law?

  III. The ‘Language’ of Waiver

  The Telcordia case permitted waiver to assert itself and Harms JA maintained that the language of waiver is apt in determining competence. The SCA was equally comfortable with the notion of waiver of the right to have the merits of a dispute re-litigated or reconsidered when the matter in Lufuno served before it.⁷²x Lufuno Mphaphuli & Associates (Pty) Ltd) v. Andrews and Another [2007] ZASCA 143 (RSA) at para. 14, where Ponnan JA relied on Telcordia para. 50. Concerns over semantics prevented the Constitutional Court from counting waiver among the means by which to manage conflict of jurisdiction between courts and arbitral tribunals in the context of procedural conflicts analysis. It simply declared the language of waiver inappropriate in a constitutional rights context.

  IV. Waiver by Implication

  The iconic status of party autonomy⁷³x Grimaldi Compagnia di Navigazione SpA v. Sekihyo Lines Ltd [1999] 1 WLR 708. at the intersection between arbitration and litigation underscores the constitutional right to subject disputes to private arbitration.⁷⁴x Rautenbach, supra note 23, pp. 198-199 discusses this aspect. But what if a party proceeds to a foreign court? Would that mean its right to invoke an arbitration agreement has been waived? It is submitted that the content and the scope of rights derived from party autonomy depend on the hue that compétence-compétence takes on in the particular context in which it functions. If the prism of compétence-compétence is taken account of, and the subtle influence of its status, form and shape is clear, the validity and effect of waiver becomes predictable in both a commercial and a constitutional context.⁷⁵x But see P. Gillies & A. Dahdal, ‘Waiver of a Right to Arbitrate by Resort to Litigation, in the Context of International Commercial Arbitration’, 2(4) Journal of International Commercial Law and Technology 2007, pp. 221-230, p. 229. They think it necessary to have regard to the underlying policies of any principles that may claim application.
  In the Telcordia case, the conclusion was drawn that the right to rely on particular grounds of review may be waived by implication.⁷⁶x At para. 51, 292A-B. Earlier interpretations of s 3(2) of the 1965 Act and the relationship between compétence-compétence and waiver were not taken on board. Of course, only if negative compétence-compétence is adopted as a baseline, will an agreement to arbitrate be tantamount to a waiver of the parties’ right to a judicial decision on the merits of the case. Perhaps, if the Telcordia ruling had dealt with a clear conflict of jurisdiction between national courts of the place of referral and the tribunal, this might have been more evident.⁷⁷x S. Brekoulakis, ‘Law Applicable to Arbitrability: Revisiting the Revisited Lex Fori’, in L. Mistelsis & S. Brekoulakis (Eds.), Arbitrability: International and Comparative Perspectives, Alphen aan den Rijn 2009, p. 99 para. 6.25. If a clear conflict of jurisdiction exists, the lex fori is relevant because the national law of the place of referral is relevant. National courts will apply the lex fori to safeguard their exclusive jurisdiction over a dispute.

  V. The Quest for Balance: Restoring Waiver to its Proper Place

  Waiver is a logical consequence and a function of party autonomy. Nonetheless, it is also conditioned by the default and mandatory provisions of the legislation that apply in the seat, prevailing conceptions of the constitutional context concerned and the residual discretion of the court. The judiciary may favour a strict rule on waiver whereas the legislative or constitutional framework may not.
  It has been stated that constitutional values must be employed to strike out the ‘excesses of contractual freedom’ on the one hand, and on the other permit the dignity of regulating one’s affairs on the basis of contractual autonomy.⁷⁸x In Brisley v. Drotsky 2002 (4) SA 1 (SCA) at para. 94, J. Cameron stated that the constitutional framework within which the forum functions requires the court to exercise ‘perceptive restraint’ when deciding to limit the freedom that underlies contractual autonomy. The context of this statement did not have anything in common with efforts to prevent a competition between party autonomy, arbitral autonomy and fundamental rights. In this competitive game, fundamental rights and freedoms will win the competition at every turn, and proper balancing of autonomy will be impossible. Due process rights are not easily compromised where parties are allowed to raise issues that were never raised in earlier proceedings at both jurisdiction and award stages; may freely invoke the jurisdiction of a national court on the matter of validity or effectiveness of the arbitration agreement; no or minimal compétence-compétence applies so that courts decide whether and when the arbitral tribunal gets to decide on its own jurisdiction; and appeals are allowed despite their exclusion in the arbitration agreement and the Arbitration Act of 1965.
  It has been argued that the need to justify the limitation of constitutional guarantees is greater whenever private arbitration is chosen in order to avoid shortcomings in adjudication.⁷⁹x See Rautenbach, supra note 23, p. 200. Were this view to govern international commercial arbitration, waiver becomes a mere trigger for scrutiny of the motive for preferring arbitration to litigation. Worse, it then provides a new justification for court intervention in arbitral proceedings.
  The difficulty lies with the discretionary approach of the court on the point of whether or not to refer parties to arbitration where the wider agreement includes an arbitration clause. In the Telcordia case, Harms JA readily admitted to consent as a jurisdictional basis for arbitration without raising the basic incompatibility between a discretionary referencing system and a strict rule on waiver. The Constitutional Court, on the other hand, threw but a sideways glance in the direction of waiver. The majority ruling left the discretionary referencing system unchallenged and the guidelines give no indication at all that the interplay between waiver and compétence-compétence counts for anything in the exercise of judicial discretion.⁸⁰x A repudiation of contract approach was not considered either. When repudiation is accepted, the arbitration agreement ends. This requires both the denial of the arbitration agreement by one party and the institution of legal proceedings by the other. J. Chitty, Chitty on Contracts, 29th ed, London 2004, para. 32.041; National Navigation Co v. Endesa Generacion SA [2009] EWHC 196 (Comm) para. 113. An award handed down in concurrent proceedings without the consent of one of the parties is unlikely to have legal effect. In Midgulf International Ltd v. Groupe Chimiche Tunisien [2010] EWCA Civ 66 the Court of Appeal held that an application to a foreign court for a declaration that the arbitration agreement does not exist, was tantamount to a repudiation of the agreement. However, the court concerned itself with the formation of the main contract and assumed that the fate of the arbitration agreement was bound up with it, which is unconvincing. The case sheds no light on waiver either.
  In fact, the guidelines are distinctly anti-waiver. Its commitment was to the constitutional and human rights framework of the forum which, in the primary human rights dimension of private international law, conditions all the pillars of private international law. Human rights law applies to procedural conflicts and the court was quick to do so, but the guidelines raise a number of uncomfortable questions for international commercial arbitration.
  The closest the Constitutional Court comes to effecting a balance is where it is stated that ‘litigation before ordinary courts can be a rigid, costly and time-consuming process and … it is not inconsistent with our constitutional values to permit parties to seek a quicker and cheaper mechanism for the resolution of disputes’.⁸¹x At para. 197. The potential of waiver to mould compétence-compétence into negative compétence-compétence remains unacknowledged.
  Semantic games on the issue of waiver enable courts to equivocate on the country’s treaty obligations under the NYC and are contrary to what the UNCITRAL Model Law tries to achieve. One may agree that waiver bears a contractual characterization as ILA has suggested,⁸²x International Law Association, supra note 1, p. 28 para. 12. but recognition of prior or intervening court judgments and arbitral awards raise res judicata issues. Which court gets to decide the argument that another ruling exists to the effect that there is a valid arbitration agreement between the parties (res judicata)? The interplay between different approaches to res judicata and different manifestations of the doctrine of compétence-compétence will lead to different results. A minimalist approach to the doctrine of compétence-compétence permits arbitrators to rule on their own jurisdiction, but leaves parties free to apply to a court to rule on the issue before the arbitrator has done so. As such, neither the court nor the arbitral tribunal has exclusive jurisdiction, nor is it determined which forum comes first. Waiver has scope to operate when jurisdiction runs concurrently. Involvement in proceedings in whatever venue without making a timely objection will constitute waiver of right to proceed in the other venue. However, in many states on the continent compétence-compétence is seen as a prior temporis mechanism, so that waiver would be effective only if parties’ involvement in court proceedings rules out the prior temporis effect associated with the arbitral proceedings. A ‘timely objection’ to the jurisdiction of the tribunal can therefore only be an immediate objection and estoppel could preclude the raising of an issue that could have, but were not, raised in earlier proceedings.
  As with the Telcordia ruling, the neglect of waiver and res judicata may be due to the fact that the matter in issue did not concern a cross-border situation.
  The minority ruling in Lufuno tackles the issue of waiver satisfactorily. Ngcobo J treated the late objection to jurisdiction similar to ‘statutory waiver’. In his view, where a party had ample time and opportunity to raise objections either before or during the proceedings, late objections ought to be barred. This approach establishes res judicata. This point would have been decisive if the NYC had been incorporated properly and the judicial discretion better controlled. A discretionary approach strengthened by fundamental rights theory cannot leave the decision as to the legal effect of a choice of one kind of dispute resolution or forum rather than another, to a foreign court. Thus, in a complex international case, classification is simply irrelevant.
  While the limits imposed by the ECHR can be instructive for third states, Suovaniemi does not really change the basic position in regard to the permissibility of waiving the right to an independent and impartial tribunal. Waiver has not been found to be invalid in an arbitration context under the ECHR. In an earlier controversial decision, the ECHR did not require national courts to ensure that arbitration proceedings are consistent with Article 6 but in a recent case, the ECtHR held that a non-curial arrangement for dispute resolution is not in itself sufficiently unambiguous to constitute a waiver of the rights to a ‘tribunal’.⁸³x Nordström-Janzen and Nordström-Lehtinen v. Netherlands App. No. 28101/95 (1996) by the now defunct Commission. Suda v. Czech Republic (App. No. 1643), 28 October 2010. Any due process right that has already been violated may be voluntarily waived after the fact by simply failing to take immediate corrective steps.⁸⁴x But see D. Butler & E. Finsen, Arbitration in South Africa – Law and Practice, Cape Town 1993, pp. 72-73. The Suovaniemi ruling does not shed much light on waiver of the right to challenge the ruling of the arbitral tribunal during proceedings, and waiver of the right to do so by way of an advance declaration. The possibility of waiver by advance declaration calls for incisive investigation, considering that states are entitled to decide the grounds on which an arbitral award may be challenged even if the standards they employ are less stringent than the standard set in Article 6(1) ECHR. This view co-incides with the essentially permissive character of the grounds for non-recognition and non-enforcement of foreign arbitral awards in the NYC and it is in accordance with the Swiss approach.⁸⁵x Swiss Federal Supreme Court, 4 February 2005, ATF 131 III 173. The Suovaniemi case did not discount this approach.
  International, regional and comparative trends that prove instructive are canvassed in the section that follows.

• D. International Trends

  The NYC allows courts to refuse jurisdiction over disputes that are within the arbitrator’s jurisdiction, and to refuse enforcement of a court judgment that failed to respect the arbitrators’ jurisdiction. At this juncture, revision of the NYC is unlikely to win wide support.⁸⁶x V.V. Veeder, ‘Is There a Need to Revise the NYC?’, 1(2) Journal of International Dispute Resolution 2010, p. 499.
  Parallel proceedings in the courts of the seat are among the exceptions to the positive operation of the doctrine of compétence-compétence considered by the Committee in the Final Report on Lis Pendens and Arbitration.⁸⁷x See supra note 1. Its recommendation reads as follows:

  Where the Parallel Proceedings are pending before a court of the jurisdiction of the seat of the arbitration, in deciding whether to proceed with the Current Arbitration, the arbitral tribunal should be mindful of the law of that jurisdiction, particularly having regard to the possibility of annulment of the award in the event of conflict between the award and the decision of the court.⁸⁸x At 26, Recommendation No. 3.

  Where parallel judicial proceedings were taking place in other courts outside the seat, the Committee recommended that the arbitral tribunal should continue “unless the party initiating the arbitration has effectively waived its rights under the arbitration agreement or save other exceptional circumstances”.⁸⁹x At 26, Recommendation No. 4. Since the Committee considered a negative compétence-compétence rule vis-à-vis the courts of the seat presumptuous, it refrained from advocating such an approach.⁹⁰x See C. McLachlan, supra note 7, pp. 422-423.
  ILA’s Interim Report highlights the nature of the relationship that exists in a limited number of Common Law jurisdictions between waiver and an extended version of res judicata. The res judicata doctrine prevents the same claimant from bringing the same claim against the exact same respondent. It could also prevent the same parties re-arguing an issue that has been determined in earlier proceedings against them. However, in a limited number of Common Law jurisdictions, it prevents also a party raising issues in subsequent proceedings against the same respondent that could have been but were not raised in the earlier proceedings.⁹¹x ‘International Law Association’, Interim Report, supra note 1. Whereas the minority judgment in the Lufuno ruling permitted the doctrine such an extended application, the majority ruling reframed the questions so as to improve their ‘logic’ and ‘helpfulness’ in a constitutional context.⁹²x At para. 194. As such, the definition of res judicata was not considered.
  What is the take of the Final Report on Lis Pendens and Arbitration released by ILA on the underlying pernickety question as to the nature of the issue of the legal effect of litigation in the face of arbitration agreement? If merely a procedural matter, why should party autonomy and the proper law of the arbitration agreement be considered relevant in determining the effectiveness of an arbitration agreement?⁹³x See text, supra note 20-22. The Final Report on Lis Pendens and Arbitration released by ILA requires mindfulness on the part of arbitrators of the legitimate supervisory role of the lex arbitri and its likely ability to annul the award in the event of conflict between the award and the decision of the court.⁹⁴x At 26, Recommendation No. 3. If the parties have expressly excluded the jurisdiction of the courts on the issue of the arbitrator’s jurisdiction thereby adopting negative compétence-compétence, and the lex arbitri permits the exclusion, it is sensible to allow party autonomy to prevail.

  I. Lis Pendens and Procedural Public Policy in the Swiss Model

  The quality of the codification of Swiss law and practice on arbitration in Chapter 12 of the Federal Private International Law Act of 1987 contributes to Switzerland’s reputation in commercial arbitration. The Swiss model is finely attuned to the NYC and offers respect for arbitral autonomy. When the hidden tensions between courts and arbitral tribunals were brought to the fore,⁹⁵x Swiss Federal Supreme Court, 14 May 2001, ATF 127 III 279, 19 ASA Bull. 2001, p. 544 (Fomento de Construccuones y Contratas SA v. Colon Container Terminal SA). Winston & Strawn, ‘Swiss Arbitration Update: First Amendments of International Arbitration Law’, International Arbitration Practice 2006, available at <www.winston.com/siteFiles/publications/SwissArbitrationUpdate.pdf>. law reform quickly followed. The Swiss model now gives firm direction not only in respect of the requirements for the application of the lis pendens principle (which is based on prior temporis or a first past the post rule), but also distinguishes the different forms of compétence-compétence and how their operation is affected by the timely submission of an objection to jurisdiction, or waiver. In fact, the reform has potential to guide future law reform initiatives in South Africa.
  The lis pendens rule is relied upon in intra-EU cases today to determine the sequence whenever two different courts are seised involving the same parties and the same cause of action in order to prevent concurrent jurisdiction and the risk of conflicting judgments. The prior temporis formula grants the judge first seized an absolute priority to rule on their own jurisdiction, and the court second seized has to accept the inevitable implications for its own jurisdiction. Article 21 of the Lugano Convention⁹⁶x Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, Lugano, 30 October 2007. contains the lis pendens principle. If lis pendens confers a right to adjudicate first, res judicata can prevent the subject-matter of the judgment or award from being re-litigated.
  The relationship between lis pendens and the doctrine of compétence-compétence in Swiss law is instructive for South Africa. Lis pendens does not apply, under South African law, of course, but the interaction between the negative effect of compétence-compétence and procedural public policy is highly topical for the future of commercial arbitration.
  The Federal Private International Law Act of 1987 (PILA) grants a “once-shot appeal” to the Federal Tribunal, the sole appeal body for all challenges to arbitral awards rendered in Switzerland.⁹⁷x Art. 191 Swiss Private International Law Act (PILA), 18 December 1987, available in the original version at <www.admin.ch/ch/d/sr/c291.html>; Winston & Strawn, supra note 95, p. 1 and 3. Article 7 PILA provides that Swiss courts must decline jurisdiction if the parties are bound by an arbitration agreement, and gives full effect to negative compétence-compétence. A first amendment of Article 186 PILA was triggered by the Fomento de Construcciones case⁹⁸x See Fomento de Construccuones y Contratas SA v. Colon Container Terminal, supra note 95; Winston & Strawn, supra note 95, p. 2 et seq.; ‘International Law Association’ Report, supra note 1, para. 4.5, para. 4.36 and para. 4.37. in which the Federal Tribunal set aside an arbitral award for having been rendered in a dispute already pending in Panama. The Federal Tribunal held that there is no priority rule under Swiss law that would give the arbitral tribunal precedence to decide upon the validity of an arbitration agreement and the tribunal’s jurisdiction (i.e. negative compétence-compétence). Because the tribunal had not carried out the examination required in Article 9, which addresses the risk of incompatible judgments, the Court set aside the tribunal’s jurisdiction award. Lis pendens was not only held to apply to conflicts between courts and arbitral tribunals, but it was classified as a jurisdictional mechanism and not a procedural one. Failure to apply it to resolve conflicts would infringe public policy.
  The ruling was not interpreted as obliging arbitral tribunals to stay arbitration proceedings in every case of prior litigation abroad where the foreign court accepted jurisdiction, given that the requirements of Article 9 PILA had to be met.⁹⁹x The requirements are (i) the court proceedings were filed in a foreign court within the geographical scope of the Brussels/Lugano regimes first; (ii) the action has the same subject matter between the same parties; (iii) the foreign court’s decision is enforceable in Switzerland; (iv) and the foreign court’s decision is due within reasonable time and no delay is foreseen with the application of a prima facie standard of review of the validity of the arbitration agreement. If a summary examination of the arbitration agreement does not permit the court to make a finding on this, it must decline jurisdiction. If the requirements have been met but the arbitral tribunal does not stay the arbitration while an action filed earlier is pending in a foreign court, its award can be set aside. Nonetheless, Fomento de Construcciones was widely criticized for undermining the autonomy of arbitration, permitting litigation rules to govern arbitration, and for rendering arbitration vulnerable to tactical manoevres in the form of rapid institution of a law suit elsewhere.¹⁰⁰x This is known as the Gasser problem (Case C-116/02 Erich Gasser v. MISAT SRL 2003 ECR-I 4693); Winston & Strawn, supra note 95, p. 2 and 3; L. Levy & M. Liatowitsch, ‘The Swiss Private International Law Act 1987 with respect to Arbitration: A First Amendment in the Offing?’, 63 Int’l A. L. R. 2006, p. 215 et seq., raises the issue of how the reforms will in future interact with the Lugano regime. The vulnerability of Swiss arbitrators to mischievous court filings soon led to the amendment of Article 186.¹⁰¹x Swiss Private International Law Act (PILA), 18 December 1987, Amendment of October 6, 2006 (FF No. 41, 17 October 2006, 7877). It entered into force in 2007. The PILA is available in its original language at <www.admin.ch/ch/d/sr/c291.html>. The arbitral concept compétence-compétence was restored to trump a concept associated with procedural justice in the courts, litis pendens.¹⁰²x See Winston & Strawn, supra note 95, p. 3. Article 186 (1bis) PILA fully implements the principle of compétence-compétence in its positive effect, providing that arbitral tribunals having their seat in Switzerland do not have to await a court ruling as they are competent to decide on their own jurisdiction, and even on the merits, regardless of whether there are parallel court proceedings or arbitral proceedings pending between the same parties on the same matter in Switzerland or abroad, “unless serious reasons require a stay of the proceedings”.¹⁰³x M. Scherer & W. Jahnel, ‘Anti-suit and Anti-arbitration Injunctions in International Arbitration: a Swiss Perspective’, 66 Int’l A. L. R. 2009, p. 67 call it negative effect of compétence-compétence, indicating a measure of semantic and conceptual confusion in scholarly work.
  The interface of the lis pendens principle and compétence-compétence is clearly regulated therefore, and Article 9 PILA is comprehensive enough to cover also the timely submission of an objection to jurisdiction and waiver. It can be argued that legislative intervention was not strictly necessary. Panama has been a party to NYC since 1985. The judgement of the Panamanian court in proceedings initiated before arbitration was filed in Switzerland would be unenforceable in Switzerland given that a valid arbitration agreement existed for purposes of Swiss law; the Panamanian courts lacked jurisdiction as they were treaty bound to admit the existence of an arbitration agreement and refer parties to arbitration from a NYC perspective. Given that a requirement under Article 9 PILA was unmet, one of the prerequisites for a stay of arbitration was unmet, and the arbitration ought to have proceeded.
  The only question that remains unsettled in Swiss law is whether Swiss courts may proceed on the basis of negative compétence-compétence where the seat of the arbitral tribunal is not in Switzerland and where full examination of the validity of the arbitration agreement is required by law.

• E. Conclusion

  Judging from recent rulings, the potential relevance of fundamental rights doctrine to conflicts between courts and arbitrators is as well understood in South Africa. However, the classical mechanisms for avoiding procedural conflict have been overlooked and under-estimated. As a very basic first step, it seems necessary to determine the modality and of the compétence-compétence doctrine that is to hold sway. In addition, the effect of total compétence-compétence, namely that arbitrators possess decisional authority over the wider agreements and arbitration clauses, must be strengthened by more appropriate definitions of the res judicata principle.
  Despite the bench shows respect for voluntary arrangements entered into by contractual parties to arbitrate in practice, the discretionary residual judicial powers of the courts to order enforcement of awards and stays and to intervene at several junctures of arbitral proceedings give rise to problems in South African arbitrations. The relationship between the doctrine of compétence-compétence and waiver of the right to challenge an arbitral tribunal in court or rely on particular grounds of review, requires urgent attention. Recent rulings made much of the need to balance powers, but none of them supplied the support needed by international commercial arbitration. The SCA was willing to recognize the role of waiver and thus of negative compétence-compétence in the Telcordia and the Lufuno disputes, but unfortunately also neglected the basic incompatibility between a discretionary referencing system and a strict rule on waiver. The commitment of the Constitutional Court to the constitutional and human rights framework of the forum manifested in the guidelines it laid down for arbitration, but it ought to have been much more critical of parties raising issues that could have been raised in the earlier proceedings but were not.
  The constitutional framework conditions the discretion of the judiciary in such as way as to confer double protection at both jurisdiction and award stages on due process rights. This compounds the odds against speedy enforcement of arbitral awards and increases the chances that waiver and estoppel will be overlooked as potential means by which to manage conflict of jurisdiction between courts and arbitral tribunals. The primary human rights dimension of private international law is as important as compétence-compétence, waiver and res judicata, but modernisation requires more than merely imposing constitutional protections onto an outdated legislative framework. The new science of conflict of jurisdiction demands not only a basic respect for fundamental rights, but also, and particularly in jurisdictions that have not predicated their law on the UNCITRAL Model Law, a respect for the procedural devices that private international law offers. Thus one hopes that the trend set by the Constitutional Court will not become the rule for future international commercial cases.
  Given the inordinate delays facing legislative overhaul, the bench now needs to assume a legislative function to limit its own discretion and enable the autonomy of parties to set in motion the waiver of certain rights. Clear judicial policy direction is vital with regard to sequential consideration; when courts may intervene; and the possibility of express exclusion of the right of access to court. Both the res judicata principle and the contractual basis of the jurisdiction of the arbitral tribunal, require more active support to fortify party autonomy further. This is necessary because (a) procedural public policy has not crystallized so that procedural conflicts can be solved with reference thereto; (b) a clear and detailed lis pendens rule does not exist; and (c) parties are free to agree to delegate the power to decide jurisdictional challenges to the arbitrators, give them the chance to do so first, and to enter into an exclusion agreement in respect of a review of the arbitral award on the merits. By the same token, they have the right to increase the likelihood of parallel litigation on both the front-end and the back-end of arbitration. If the waiver is valid, the court must decline the review of the arbitrator’s jurisdictional ruling or may be required to refrain from taking recourse to particular grounds of review, depending on the situation.
  Ultimately, the balance between curial and extra-curial dispute resolution is less about the loss or retention of power on the part of courts than it is about dislodging the misunderstandings that stand in the way of a new science of conflicts of jurisdiction.

Noten

• 1 International Law Association (ILA), ‘Final Report of the International Arbitration Committee on Lis Pendens and Arbitration’, Report of the 72nd Conference, Toronto, June 2006, pp. 186-204, available at <www.ila-hq.org/en/committees/index.cfm/cid/19>. In general also F. De Ly & A. Sheppard, ‘Res Judicata and Arbitration’, 25 Arb. Int. 2009, pp. 35-66, which is the preceding Interim Report of the International Arbitration Committee of the International Law Association, Berlin Conference, London, 2004, pp. 826-861, available at <www.ila-hq.org/en/committees/index.cfm/cid/19>.

• 2 J. Lurie, ‘Court Intervention in Arbitration: Support or Interference?’, 76 Arbitration 2010, p. 447.

• 3 T. Schultz, ‘Human Rights: A Speed Bump for Arbitral Procedures? An Exploration of Safeguards in the Acceleration of Justice’, 9 Int’l A. L. R. 2006, p. 1 and 13.

• 4 UNCITRAL Report of the United Nations Commission on International Trade Law on the work of its 18th session, Vienna, 3-21 June 1985, U.N. Doc. A/40/17, paras. 61-63; F. Davidson, H. Dundas & D. Bartos, Arbitration (Scotland) Act, 2010, p. 13.

• 5 31 contracting parties to the U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 1958 (cited as: New York Convention) are African States, available at <www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention_status.html>. Nine African states (Egypt, Kenya, Mauritius, Nigeria, Tunisia, Uganda, Madagascar, Zambia and Zimbabwe) have enacted the UNCITRAL Model Law on International Commercial Arbitration, Vienna, 1985, with amendments as adopted in 2006, available at <www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_arbitration.html> (cited as: UNCITRAL Model Law).

• 6 South Africa acceded on 3 May 1976, entry into force 1 August 1976. The Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977 was enacted to give effect to South Africa’s accession to the New York Convention in 1976. SADC countries are free to adopt the OHADA Model Law on Arbitration to ensure regional uniformity for international commercial arbitration, but South Africa has not done so.

• 7 C. McLachlan, Lis Pendens in International Litigation, Leiden 2009, pp. 89 and 198-203.

• 8 Id.

• 9 The mandate of the African Union Commission on International Law permits it to develop private international law in Africa. See R. Frimpong Oppong, ‘Private International Law Scholarship in Africa (1884-2009) – A Selected Bibliography’, 58 Am. J. Comp. L. 2010, p. 322.

• 10 D.W. Butler, The Desirability of a Common Arbitration Statute for International Commercial Arbitration in SADC jurisdictions: A Comparison between the UNCITRAL Model Law and the OHADA Uniform Act, pp. 1-36 (unpublished paper on file with author); E. Onyema, ‘Regional Approaches to Enforcement of Arbitral Awards in Sub-Sahara Africa’, Paper delivered at the Inaugural Conference of Alumni and Friends of the School of International Arbitration (AFSIA), London, 3 December 2008, available at <www.eprints.soas.ac.uk/5996/1/Enforcement_of_Awards_in Sub-Sahara_Africa.pdf>, p. 3; C. Roodt, ‘Conflicts of Procedure between Courts and Arbitral Tribunals in Africa: An Argument for Harmonization’, 25 Tulane European and Civil Law Forum 2010, p. 65; C. Roodt, ‘Conflicts of Procedure between Courts and Arbitral Tribunals with Particular Reference to the Right of Access to Court’, African Journal of International and Comparative Law 2011, p. 236.

• 11 Telcordia Technologies Inc v. Telkom SA Ltd 2007 (3) SA 266 SCA (order of court a quo in Telkom SA Ltd v. Boswood and others (unreported) 2005 High Court Pretoria set aside); Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another (CCT 97/07) [2009] ZACC 6 (20 March 2009).

• 12 See ‘International Law Association’, Final Report on Lis Pendens and Arbitration, supra note 1; McLachlan, supra note 7, p. 422.

• 13 See ‘International Law Association’, Final Report on Lis Pendens and Arbitration, supra note 1, para. 5.13.

• 14 South African Arbitration Act No. 42 of 1965, available at <www.wipo.int/wipolex/en/details.jsp?id=6664>.

• 15 E.g. Lurie, supra note 2, p. 447.

• 16 P.J. Conradie, ‘A Q & A Guide to Arbitration in South Africa’, available at <http://competition.practicallaw.com/7-381-3144>.

• 17 E.g. Nick’s Fishmonger Holdings (Pty) Ltd v. De Sousa 2003 (2) SA 278 (SECLD) at 282D-283F. These factors include the risk of conflicting decisions if separate proceedings were to be permitted; the importance of enforcing the arbitration agreement reached between the parties; an election to arbitrate despite knowing about potential disadvantages associated with arbitration at the time; and the time and money saved because the arbitrator is able to use his or her expert knowledge to dispense with expert evidence. See Universiteit van Stellenbosch v. JA Louw (Edms) Bpk 1983 SA 321 (A) at 342E; D. Williams, ‘Arbitration World – South Africa’, available at <www.europeanlawyer.co.uk/referencebooks_7_153.html>.

• 18 In Yorigami Maritime Construction Co Ltd v. Nissho-Iwai Co Ltd 1977 (4) SA 682 (C) at 694B-D the court held fast to its discretion not to enforce the arbitration agreement as such an agreement was not considered to be absolutely binding. Arbitration in Japan was provided for but the court refused to stay the action in order to pre-empt a multiplicity of proceedings leading to conflicting decisions. In Intercontinental Export Co. (Pty) Ltd v. M V Dien Danielsen 1982 (3) SA 534 (N) and Polysius (Pty) Ltd v. Transvaal Alloys (Pty) Ltd 1983 (2) SA 630 (W&T) stays were granted on the basis of foreign arbitration elsewhere.

• 19 A.J. Van Den Berg, ‘The New York Convention of 1958: An Overview’, available at <www.arbitration-icca.org/media/0/12125884227980/new_york_convention_of_1958_overview.pdf>.

• 20 F. De Ly, ‘Conflicts of Law in International Arbitration: An Overview’, in F. Ferrari & S. Kröll (Eds.), Conflict of Laws in International Arbitration, Munich, 2011, p. 5.

• 21 See De Ly, supra note 20, p. 5.

• 22 The New York Convention permits a court to refuse to uphold an arbitration agreement if the arbitration agreement was not valid under its governing law. The validity of the incorporation of an arbitration agreement into a contract was governed by the proper law of the contract in National Navigation Co v. Endesa Generacion SA [2009] EWHC 196 (Comm). J. Gloster found that English law was the proper law to apply to the question whether an arbitration agreement had been incorporated into the relevant bill of lading. She concluded that there is “clear statutory and conventional obligation under English law for an English court to give effect to an arbitration agreement that is valid in accordance with its proper law”, at para. 102. In Dallah Real Estate and Tourism Holding Company (Appellant) v. The Ministry of Religious Affairs, Government of Pakistan (Respondent) [2008] EWHC 1901 (Comm) at para. 3, the High Court in England refused to enforce the award on the ground that the arbitration agreement was not valid under the applicable law which was French law (the arbitral tribunal sat and made its award in France). The ruling of the Court of Appeal turned on Art. V(1) New York Convention and s. 103 of the Arbitration Act 1996 (Dallah v. Pakistan [2009] EWCA 755), whereas the UKSC ruled on the basis that enforcement of an arbitral award could be resisted anywhere and not only in the supervisory court in the seat (Dallah v. Pakistan [2010] UKSC 46). The Pakistani government could not be held bound to a trust established by the Ministry of Religious Affairs and as it was not a party to the arbitration agreement, the enforcement of the award against it was refused.

• 23 I.M Rautenbach, ‘Private Arbitrasie en die Handves van Regte’, 1 Tydskrif vir Suid-Afrikaanse Reg 2010, p. 185 and 186.

• 24 Res judicata may have a role to play. See Henderson v. Henderson (1843) 3 Hare 100 at 144-115; Consol Ltd t/a Twee Jonge Gezellen (Pty) Ltd (2) 2005 (6) SA 23 (C).

• 25 Id.

• 26 Sect. 6 Arbitration Act 42 of 1965.

• 27 Sect. 9 and Rule 41 Arbitration (Scotland) Act of 2010.

• 28 Rule 42(3) Arbitration (Scotland) Act of 2010.

• 29 E.g. ‘Project 107’, Report on an International Arbitration Act for South Africa (July 1998), in particular the Draft International Arbitration Bill; Project 94 Report on Domestic Arbitration (May 2001), para. 2.16-para. 2.23.

• 30 At viii; para. 1.10 at 3.

• 31 At para. 2.53.

• 32 See Butler, supra note 10, p. 12; ‘South African Law Commission Project 107’, Report on an International Arbitration Act for South Africa, July 1998, paras. 3.56-3.59 and 3.98.

• 33 Butler, supra note 10, p. 12 refers in this regard to p. 233 of the Constitution, which obliges courts to interpret legislation in a manner consistent with international law.

• 34 The Hlope Report, which was released in February 2005, alleged racism in parts of the South African judiciary and called for retired judges to be prevented from becoming arbitrators. The reasoning seems to be that a well-developed arbitration system erodes confidence in the court system.

• 35 See Rautenbach, supra note 23, p. 186.

• 36 Universiteit van Stellenbosch v. JA Louw (Edms) Bpk 1983 SA 321 (A) at 333G-H.

• 37 Id. at 334A.

• 38 Telcordia Technologies Inc v. Telkom SA Ltd 2007 (3) SA 266 SCA (order of court a quo in Telkom SA Ltd v. Boswood and others (unreported) 2005 High Court Pretoria set aside).

• 39 Id., at 279C and 279I-J.

• 40 Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another (CCT 97/07) [2009] ZACC 6 (20 March 2009).

• 41 At para. 196; paras. 222-232.

• 42 (Unreported) 2005 High Court Pretoria.

• 43 At paras. 44 and 45, 289E-F.

• 44 At para. 48, 290-291.

• 45 At para. 48, 290H.

• 46 ECHR case No. 31737/96 (23 February 1999). Quoted at 290D. Compare also Appel v. Leo 1947 (4) SA 766 (W).

• 47 At para. 47, 290D.

• 48 First Options v. Kaplan, 514 U.S. 938 (1995).

• 49 At para. 48, 291A.

• 50 At para. 50, 291F.

• 51 At para. 47, 290D-E. In this regard see Brisley v. Drotsky 2002 (4) SA 1 (SCA) at para. [94] and para. [95]; Napier v. Barkhuizen 2007 (5) SA 323 para. [12]; S. Woolman, ‘Category Mistakes and the Waiver of Constitutional Rights: A Response to Deeksha Bhana on Barkhuizen’, South African Law Journal 2008, Vol. 125(1), pp. 10-24, available at <www.jutalaw.co.za/catalogue/itemdisplay.jsp?item_id=3591>; Rautenbach, supra note 22, p. 193.

• 52 At para. 47, 290D-E.

• 53 E.g. as in Howsam v. Dean Witter Reynolds 537 US 79, 84 (2002).

• 54 See Woolman, supra note 51, p. 20.

• 55 See Rautenbach, supra note 23, p. 185.

• 56 Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another [2007] ZASCA 143.

• 57 Bopanong Construction CC v. Lufuno Mphaphuli & Associates (Pty) Ltd; Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another, Case Nos. 27225/04 and 33188/2004, North Gauteng High Court, Pretoria, 22 February 2006, unreported.

• 58 At paras. 189 and 239.

• 59 Its Report on Domestic Arbitration (May 2001) para. 2.16 notes that court support for the arbitral process is essential and extends to the enforcement of arbitration agreements and arbitral awards. Lufuno Mphaphuli & Associates (Pty) Ltd v. Andrews and Another [2009] ZACC 6 at para. 229.

• 60 At para. 238. There was no consensus in Lufuno on the issue of award review on appeal. J. Ngcobo addressed the conflict of procedure at para. 281 et seq., and held that the application for leave to appeal to the Constitutional Court in this instance had to be dismissed with costs.

• 61 See Schultz, supra note 3, p. 16; H.R. Dundas, ‘The Finality of Arbitration Awards and the Jurisdiction of the Court of Appeal’, Arbitration 2007, p. 127.

• 62 At para. 194.

• 63 At 5. O’Regan quotes the relevant passage at para. 205.

• 64 At para. 216.

• 65 C. Pamboukis, ‘On Arbitrability: The Arbitrator as a Problem Solver’, in L. Mistelis & S. Brekoulakis (Eds.), Arbitrability: International and Comparative Perspectives, Alphen aan den Rijn 2009, p. 121 para. 7.33.

• 66 At para. 216. Rautenbach, supra note 23, p. 194 describes this as an emotional reaction rather than a response based on legal principle.

• 67 See Rautenbach, supra note 23, p. 193.

• 68 At para. 235.

• 69 At para. 236.

• 70 Art. 13 Arbitration Act Scotland read with Part 8 of the Rules refer to serious irregularity that has or is likely to cause substantial injustice to the parties; are contrary to public policy or have been obtained by fraud. There are Rules in the ASA that permit the issue of jurisdiction to delay the arbitral proceedings twice over. This may potentially work against boosting international commercial arbitration in Scotland. Rule 21 safeguards the right of parties to file an objection against the tribunal’s ruling on jurisdiction to the Outer House provided that this is done within two weeks; Rule 67 permit parties to challenge an award on the basis of a lack of jurisdiction on the part of the tribunal that made it.

• 71 At para. 238 Rautenbach, supra note 23, p. 187 et seq. gives a critical discussion of these guidelines.

• 72 Lufuno Mphaphuli & Associates (Pty) Ltd) v. Andrews and Another [2007] ZASCA 143 (RSA) at para. 14, where Ponnan JA relied on Telcordia para. 50.

• 73 Grimaldi Compagnia di Navigazione SpA v. Sekihyo Lines Ltd [1999] 1 WLR 708.

• 74 Rautenbach, supra note 23, pp. 198-199 discusses this aspect.

• 75 But see P. Gillies & A. Dahdal, ‘Waiver of a Right to Arbitrate by Resort to Litigation, in the Context of International Commercial Arbitration’, 2(4) Journal of International Commercial Law and Technology 2007, pp. 221-230, p. 229. They think it necessary to have regard to the underlying policies of any principles that may claim application.

• 76 At para. 51, 292A-B.

• 77 S. Brekoulakis, ‘Law Applicable to Arbitrability: Revisiting the Revisited Lex Fori’, in L. Mistelsis & S. Brekoulakis (Eds.), Arbitrability: International and Comparative Perspectives, Alphen aan den Rijn 2009, p. 99 para. 6.25. If a clear conflict of jurisdiction exists, the lex fori is relevant because the national law of the place of referral is relevant. National courts will apply the lex fori to safeguard their exclusive jurisdiction over a dispute.

• 78 In Brisley v. Drotsky 2002 (4) SA 1 (SCA) at para. 94, J. Cameron stated that the constitutional framework within which the forum functions requires the court to exercise ‘perceptive restraint’ when deciding to limit the freedom that underlies contractual autonomy.

• 79 See Rautenbach, supra note 23, p. 200.

• 80 A repudiation of contract approach was not considered either. When repudiation is accepted, the arbitration agreement ends. This requires both the denial of the arbitration agreement by one party and the institution of legal proceedings by the other. J. Chitty, Chitty on Contracts, 29th ed, London 2004, para. 32.041; National Navigation Co v. Endesa Generacion SA [2009] EWHC 196 (Comm) para. 113. An award handed down in concurrent proceedings without the consent of one of the parties is unlikely to have legal effect. In Midgulf International Ltd v. Groupe Chimiche Tunisien [2010] EWCA Civ 66 the Court of Appeal held that an application to a foreign court for a declaration that the arbitration agreement does not exist, was tantamount to a repudiation of the agreement. However, the court concerned itself with the formation of the main contract and assumed that the fate of the arbitration agreement was bound up with it, which is unconvincing. The case sheds no light on waiver either.

• 81 At para. 197.

• 82 International Law Association, supra note 1, p. 28 para. 12.

• 83 Nordström-Janzen and Nordström-Lehtinen v. Netherlands App. No. 28101/95 (1996) by the now defunct Commission. Suda v. Czech Republic (App. No. 1643), 28 October 2010.

• 84 But see D. Butler & E. Finsen, Arbitration in South Africa – Law and Practice, Cape Town 1993, pp. 72-73.

• 85 Swiss Federal Supreme Court, 4 February 2005, ATF 131 III 173.

• 86 V.V. Veeder, ‘Is There a Need to Revise the NYC?’, 1(2) Journal of International Dispute Resolution 2010, p. 499.

• 87 See supra note 1.

• 88 At 26, Recommendation No. 3.

• 89 At 26, Recommendation No. 4.

• 90 See C. McLachlan, supra note 7, pp. 422-423.

• 91 ‘International Law Association’, Interim Report, supra note 1.

• 92 At para. 194.

• 93 See text, supra note 20-22.

• 94 At 26, Recommendation No. 3.

• 95 Swiss Federal Supreme Court, 14 May 2001, ATF 127 III 279, 19 ASA Bull. 2001, p. 544 (Fomento de Construccuones y Contratas SA v. Colon Container Terminal SA). Winston & Strawn, ‘Swiss Arbitration Update: First Amendments of International Arbitration Law’, International Arbitration Practice 2006, available at <www.winston.com/siteFiles/publications/SwissArbitrationUpdate.pdf>.

• 96 Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, Lugano, 30 October 2007.

• 97 Art. 191 Swiss Private International Law Act (PILA), 18 December 1987, available in the original version at <www.admin.ch/ch/d/sr/c291.html>; Winston & Strawn, supra note 95, p. 1 and 3.

• 98 See Fomento de Construccuones y Contratas SA v. Colon Container Terminal, supra note 95; Winston & Strawn, supra note 95, p. 2 et seq.; ‘International Law Association’ Report, supra note 1, para. 4.5, para. 4.36 and para. 4.37.

• 99 The requirements are (i) the court proceedings were filed in a foreign court within the geographical scope of the Brussels/Lugano regimes first; (ii) the action has the same subject matter between the same parties; (iii) the foreign court’s decision is enforceable in Switzerland; (iv) and the foreign court’s decision is due within reasonable time and no delay is foreseen with the application of a prima facie standard of review of the validity of the arbitration agreement. If a summary examination of the arbitration agreement does not permit the court to make a finding on this, it must decline jurisdiction.

• 100 This is known as the Gasser problem (Case C-116/02 Erich Gasser v. MISAT SRL 2003 ECR-I 4693); Winston & Strawn, supra note 95, p. 2 and 3; L. Levy & M. Liatowitsch, ‘The Swiss Private International Law Act 1987 with respect to Arbitration: A First Amendment in the Offing?’, 63 Int’l A. L. R. 2006, p. 215 et seq., raises the issue of how the reforms will in future interact with the Lugano regime.

• 101 Swiss Private International Law Act (PILA), 18 December 1987, Amendment of October 6, 2006 (FF No. 41, 17 October 2006, 7877). It entered into force in 2007. The PILA is available in its original language at <www.admin.ch/ch/d/sr/c291.html>.

• 102 See Winston & Strawn, supra note 95, p. 3.

• 103 M. Scherer & W. Jahnel, ‘Anti-suit and Anti-arbitration Injunctions in International Arbitration: a Swiss Perspective’, 66 Int’l A. L. R. 2009, p. 67 call it negative effect of compétence-compétence, indicating a measure of semantic and conceptual confusion in scholarly work.