PRESENTATION BY HERMAN STEYN AT THE ICC NAMIBIA ARBITRATION DAY HELD AT WINDHOEK ON 9 MAY 2019 UNDER THE AUSPICES OF THE ICC INTERNATIONAL COURT OF ARBITRATION 1 Introduction 1. I thank Dr Meyer van den Berg of Koep & Partners for the invitation to speak to: 1.1. The drafting of final arbitral awards. 1.2. The practicalities of arbitration proceedings. 1.3. The appointment of arbitrators. 2. I first run through the formal, substantive and structural requirements of a final award. I then liven things up with guidelines on style and references to some good and bad writing. I am brief on the practicalities of arbitration proceedings, with reference to an exemplary arbitration. Finally, I express a few controversial views on the selection of arbitrators to stimulate debate. Award writing 3. The paramount obligation of the arbitrator is to write an award at the end of the arbitration proceedings that communicates the decision of the arbitrator, together with the reasons therefore, in an enforceable form. This communications function of the award informs most, if not all, its requirements. 4. The trouble with a final award is that it may be wrong on the facts or the law, but nevertheless binding on the parties. Thus, the arbitrator bears the heavy burden of taking care that the award is right, for a wrong award may cause the losing party grave injustice. 1 To be posted in due course on the website of ADR Forum at www.adrforumlaw.com.
2 Formal requirements 5. Compliance with the formal requirements of the final award is a prerequisite for its validity and enforceability. Absent such compliance, the award may be void, voidable or unenforceable. 6. Generally, the formal and procedural requirements of the award are determined by: 6.1. The laws of the seat of the arbitration. 6.2. The arbitration agreement, including any institutional rules governing the arbitration in terms thereof. The New York Convention 2 , if applicable to the arbitration or the recognition 6.3. or enforcement of the final award made pursuant thereto. 7. This paper is limited to the requirements of an award by the Namibian Arbitration Act 42 of 1965 (the Arbitration Act), the UNCITRAL Model Law 3 (the Model Law) and UNCITRAL Arbitration Rules 4 (the UNCITRAL Rules). 8. Writing and signature . Section 24 of the Arbitration Act provides that the award shall be in writing, and signed by the members of the arbitration tribunal, except if the minority refuse to sign, such refusal shall be mentioned in the award, but shall not invalidate the award. Article 31 paragraph 1 of the Model Law, in addition, requires that the reason for any omitted signature must be stated, as do article 34 paragraphs 2 and 4 of the UNCITRAL Rules. 2 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958). 3 United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration 1985 with amendments as adopted in 2006. 4 UNCITRAL Arbitration Rules (with new article 1, paragraph 4, as adopted in 2013) UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration.
3 9. Identification of the parties . The award must identify the parties by stating their full names, legal capacity and address. This is normally done in the heading and recitals of the award. 5 Unless the parties to which the award applies, are therein identified as legally competent persons, it may be void. 10. Reasons . Neither the Arbitration Act nor the Namibian common law requires the arbitrator to give reasons for the award. 6 However, the Model Law and the UNCITRAL Rules provide that the award shall state the reasons upon which it is based, unless the parties agreed otherwise or a settlement is made an award by consent between the parties. 7 11. Date . The award must state the date on which it is made, as opposed to the date on which the award is published to the parties. Section 23 of the Arbitration Act stipulates that the arbitration tribunal shall, unless the arbitration agreement otherwise provides, make its award within four months after the date on which the arbitrator entered on the reference or was by written notice from any party called on to act, whichever is the earlier. An award made out of time in terms of section 23 of the Arbitration Act is void, but may be saved from invalidity by extending the time for its making, before or after it was made, by agreement between the parties or by the Court on good cause shown. 8 5 Wong Fook Keong, The Arbitration Award , p 6, www.myiem.org.my/assets/download/PMTD-Talk- TheArbitrationAward-121206.pdf, accessed 29 April 2019; Turner, Arbitration Awards , 2005, Blackwell Publishing Ltd, p 9. 6 Butler and Finsen, Arbitration in South Africa Law and Practice , 1993, p 269. 7 Article 31 paragraphs 2 of the Model Law; Article 34 paragraphs 3 of the UNCITRAL Rules. 8 Sherwood Eleven Thirty Investments CC v Robridge Construction CC and Another 2001 (4) SA 741 (W) 746B-747H.
4 12. The Model Law and the UNCITRAL Rules require the award to state the date on which it is made. 9 The UNCITRAL Rules, in addition, states that all awards shall be made without delay. 10 Interest runs from the date the award is made at the same rate as a judgment debt by virtue of section 29 of the Arbitration Act. 13. Seat of the arbitration . The award must give the seat of the arbitration. The law of the seat of the arbitration governs the procedural aspects of the arbitration, for example, it determines the Court which has jurisdiction to deal with certain matters concerning the arbitration. 11 14. Publication . The award takes effect on publication thereof to the parties. Prior thereto the issues referred to arbitration do not become res judicata (a matter already adjudicated that cannot be raised again), and the arbitrator does not become functus officio (of no further official or legal effect) either. Thus, the arbitrator retains the power and authority to amend the award between the making and the publication thereof to the parties. 15. Section 25(1) of the Arbitration Act stipulates that the award shall be delivered by the arbitrator to the parties being present or having being summoned to appear. It has been held that the parties and the arbitrator may contract out of strict compliance with this mode of publication of the award. 12 16. The date of publication of the award is significant. Firstly, it creates the right of the winning party to enforce, and the corresponding obligation of the losing party to comply with, the award. 13 Secondly, the time limits for the correction of, clerical, computational or typographical errors 14 in, and the interpretation, of 9 Article 31 paragraph 3 of the Model Law; Article 34 paragraph 4 of the UNCITRAL Rules. 10 Article 34 paragraph 4 of the UNCITRAL Rules. 11 Zhongji Development Construction Engineering Co Ltd v Kamoto Copper Co SARL 2015 (1) SA 345 (SCA) [51]. 12 Buildcure CC v Brews and Others NNO 2017 (6) SA 562 (GJ) [6]-[29.4]. 13 Article 31 paragraph 4 of the Model Law; Article 34 paragraph 2, read with paragraph 6, of the UNCITRAL Rules; Section 25, read with section 28, of the Arbitration Act. 14 Article 33 of the Model Law; Article 38 of the UNCITRAL Rules.
5 the award starts to run from this date. Thirdly, the time limit for the loser to apply to the Court for the review and setting aside of the award usually commences to run from the date of publication of the award. 15 Substantive requirements 17. Cogent . An award must be founded on, and informed by, convincing, persuasive and consistent reasoning. 16 18. Complete . The arbitrator must in the award decide each and every issue that was referred to arbitration, but no more or less than those. 17 Voet’s summary is still the best: "So on the other hand an arbitrator should also take care not to exceed the bounds of the submission nor to dispose of matters other than those which have been entrusted to his personal discretion, nor to do so in any other way than that indicated by the terms of the submission..." 18 19. Certain . Exactly what the arbitrator decided, must be ascertainable from the award without assistance from material external thereto. It must be clear and consistent, and not vague and ambiguous. Where an employer claims damages from the contractor for defective building work, the arbitrator must say: “I award that the respondent shall immediately pay to the claimant N$100 000.00, plus value-added tax thereon at 15%, together with interest on the total thereof at 20% per annum from the date of this award to the date of payment.” Never say: “Accordingly, I have formed the opinion that the respondent ought to pay the claimant’s reasonable expenses relating to the defective work.” An award that is vague for uncertainty is invalid. 19 15 Section 33 of the Arbitration Act; Article 34 paragraph 3 of the Model Law. 16 Turner (note 5) p 11. 17 Harlin Properties (Pty) Ltd v Rush & Tomkins (SA) (Pty) Ltd 1963 (1) SA 187 (D). 18 Quoted from Cone Textile (Pvt) Ltd v Ayres and Another 1980 (4) SA 728 (ZA) 732A-C. Mustill and Boyd, The Law and Practice of Commercial Arbitration in England , 2 nd ed (1989), 386- 19 387.
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