Arbitration

1. What is Arbitration?

Arbitration is a procedure whereby parties to a dispute refer the dispute to a third party, also called and an arbitrator. The arbitrator considers evidence provided by the parties and then make a final decision. It is a recognised and well established means of resolving disputes, particular in the commercial sectors such as the construction industry. There are cases where private labour disputes can be arbitrated. These are pursuant to an agreement between the parties and fall outside the procedural provisions of the Labour Relations Act, 1995.

2. Can any matter be referred to Arbitration?

In order for a matter to be referred to arbitration, there must be an agreement between the parties that provides specifically that a dispute can be referred for arbitration. It is therefore import to ensure that an agreement provides for disputes to be resolved through arbitration.

3. What is the difference between Mediation and Arbitration?

Arbitration differs from mediation in so far as the arbitrator acts in the same way a judge would in a normal court case. However, the procedure is less formal than that of a court. The arbitrator also does not take active part in the discussion.

Mediation on the other hand strives to reach a win-win situation. The Mediator will participate in the discussion with the aim of getting the parties together on common ground and to resolve the dispute on that basis. The outcome in arbitration is win-loose and the successful party can be awarded costs of the arbitration. In mediation, the fees and expenses are normally apportioned equally between the parties.

4. What is the difference between Arbitration and Litigation?

The procedure followed in an Arbitration does not necessarily correspond to that of the Courts. In Arbitration the parties agree to the resolution of their dispute outside the ordinary courts by a person of their own choosing. Arbitration is less formal that the court procedures followed in litigation and a faster method to settle a dispute.

5. Who is the Arbitrator?

It is not an ordinary court, but a person who is chosen by the parties and appointed by them to act as Arbitrator. The Arbitrator is impartial and after having heard both sides in a judicial manner, the Arbitrator makes an award, which is final and binding on the parties.

6. What factors to consider when choosing between Arbitration and Litigation?

• Cost and duration of procedure
• How confidential/privte the matter is
• Complexity of the matter

7. Advantages of Arbitration ?

• Parties can appoint an Arbitrator with specialised knowledge where the dispute is complex;
• Can be less expensive;
• Convenience;
• Saving in time;
• Privacy;
• Flexibility;
• Finality;
• Informality; and
• Resolving disputes internationally