Detailed Study Notes: Sections 2.1 – 2.
6
Module Title: International Commercial Arbitration (Stellenbosch
University, LLM)
Part 2 Focus: The UNCITRAL Model Law and the South African Arbitration
Framework
2.1 Introduction
This section introduces the core objective of the seminar: to provide
students with a foundational understanding of the UNCITRAL Model Law on
International Commercial Arbitration and how it differs from South Africa’s
Arbitration Act 42 of 1965, particularly in the context of international
arbitration.
At this early stage of the module, the goal is not to develop an exhaustive
knowledge of every provision of the Model Law, but rather to identify its
major themes and develop a general appreciation of its structural and
functional attributes. More granular study of specific provisions will follow in
later parts of the course.
A central focus of the discussion is the role of the courts in arbitration
proceedings. The interventionist powers of South African courts under the
1965 Act and common law are significantly broader than the more restrained
role allowed to courts in international commercial arbitrations governed by
the Model Law. This distinction is crucial to understanding the shift in
philosophy toward greater respect for arbitral autonomy.
Legal scholars have proposed certain evaluative criteria to assess the
quality of arbitration legislation. These include:
• (a) Respect for party autonomy, which allows disputing parties to
determine the rules and forum for resolving their disputes.
• (b) Providing the arbitral tribunal with sufficient procedural
authority, particularly where the arbitration agreement is silent;
• (c) Ensuring a balanced but minimal scope of court powers—where
courts assist the arbitration process but do not dominate or obstruct
it.
The classic observation by Mustill & Boyd that "the law of private arbitration
is concerned with the relationship between the courts and the arbitral
process" highlights the continuing tension between judicial authority and
arbitral independence. While civil law jurisdictions often incorporate
arbitration rules within procedural codes, the preferred view (also relevant
in common law jurisdictions like South Africa) is that arbitration belongs to
commercial law, as it is primarily a private dispute-resolution mechanism
traditionally favored by merchants.
Blackaby and Partasides characterize the relationship between arbitral
tribunals and courts as fluctuating "between forced cohabitation and true
partnership." Their point underscores that although arbitration is
autonomous, it remains dependent on the courts for enforcement and
protection against procedural sabotage.
Gary Born adds a practical note: given these variations in court involvement
under different national laws, the choice of the seat of arbitration becomes
a matter of great strategic importance in international commercial
arbitration.
2.2 The UNCITRAL Model Law: Origin, Aims, and Content
The UNCITRAL Model Law on International Commercial Arbitration, first
adopted in 1985 and amended in 2006, was developed to harmonize and
modernize national arbitration laws, particularly in countries seeking to
participate in the global trade regime.
Origin and Development:
The roots of modern international arbitration lie in the early 20th century,
particularly with the Geneva Protocol (1923) and Geneva Convention
(1927), which provided a framework—albeit limited—for the enforcement of
arbitration agreements and awards.
A more robust framework was introduced with the New York Convention of
1958, which remains the foundational treaty for the recognition and
enforcement of international arbitration agreements and foreign arbitral
awards. This Convention introduced two key innovations:
1. The burden of proof in resisting enforcement shifted to the opposing
party.
2. The double exequatur requirement was abolished, allowing parties
to enforce awards internationally without first confirming them at the
seat of arbitration.
UNCITRAL subsequently identified that the New York Convention only dealt
with narrow procedural aspects. Broader legislative reform was necessary
to guide arbitration proceedings themselves. Thus, the Model Law was
proposed as a non-binding legislative template that states could adopt to
promote consistency and predictability.
Aims of the Model Law:
According to the South African Law Reform Commission (SALRC), the Model
Law was designed to:
• Encourage party autonomy by limiting state interference in arbitration
proceedings;
• Establish a core set of mandatory rules that uphold fairness and due
process;
• Provide a default procedural framework in the absence of party
agreement; and
• Clarify and improve provisions for the recognition and enforcement
of arbitral awards.
Content and Structure:
The Model Law comprises six chapters:
1. General Provisions
2. Arbitration Agreement and Referral to Arbitration
3. Composition of the Arbitral Tribunal
4. Jurisdiction of the Arbitral Tribunal
5. Conduct of the Arbitral Proceedings
6. Recourse Against and Enforcement of the Award
2006 Amendments:
The 2006 revisions introduced:
• Article 2A, mandating interpretation in line with international
standards and promoting uniformity.
• Revised Article 7, which broadens the definition of a written
arbitration agreement to accommodate technological changes.
• A new Chapter IV-A, detailing interim measures and preliminary
orders, including rules for their enforcement.
Adoption Models:
Binder identifies two legislative approaches:
• Schedule approach: the Model Law is incorporated nearly verbatim
(as in South Africa and Zimbabwe).
• Direct incorporation: the text is rewritten in the legislative style of the
state (as in Nigeria and Germany), which may cause unintended
deviations from the original meaning.
2.3 National Arbitration Legislation and Classification of Court Powers
2.3.1 Monistic vs. Dualistic Systems:
National arbitration laws are classified into:
• Monistic systems: a single statute governs both domestic and
international arbitration (e.g., England, the Netherlands).
• Dualistic systems: separate laws apply to domestic and international
arbitration (e.g., France, South Africa post-2017).
Prior to the enactment of the International Arbitration Act in 2017, South
Africa operated a quasi-monistic regime. Now, the 2017 Act introduces a
deliberate dualistic framework: the Model Law governs international
arbitration, while the 1965 Act continues to apply to domestic arbitration.
2.3.2 Constitutional Impact on Court Powers:
South African courts have confirmed that private arbitration is not subject to
the administrative law protections of section 33 of the Constitution (Total
Support case). However, section 34 (access to courts) may still apply,
though it can be waived contractually (Telcordia case).
In the Mphaphuli judgment, the Constitutional Court clarified that section
34 does not apply directly to private arbitration. When parties choose
arbitration, they opt out of public court processes—not waive their rights,
but exercise a different contractual right.
Nonetheless, fairness remains an implied requirement of all arbitration
agreements, consistent with South Africa’s constitutional ethos and public
policy.
2.3.3 Court Jurisdiction and the Arbitration Agreement:
An arbitration clause does not remove the court’s jurisdiction but requires
the parties to arbitrate first, as held in Parekh v Shah Jehan Cinemas.
However, under the Model Law (and Article II(3) of the New York Convention),
courts must refer disputes to arbitration if a valid arbitration agreement
exists, removing the court’s discretion present under the 1965 Act.
In civil law systems, courts typically dismiss proceedings due to lack of
jurisdiction; in common law systems, they usually stay the proceedings.
2.3.4 Classification of Court Powers:
Court powers in arbitration may be grouped as follows:
1. Recognition and enforcement powers (of arbitration agreements
and awards);
2. Assistance powers (e.g., issuing subpoenas or appointing
arbitrators);
3. Supervisory powers (review and annulment);
4. Interim relief powers (addressed in Model Law Article 17J).
The Model Law deliberately limits supervisory and interventionist powers to
enhance arbitration efficiency and party control. Excessive court powers in
earlier English law were curtailed by reforms in 1979 and 1996 to maintain
London’s position as a favored seat of arbitration.
2.4 Particular Aspects of the Model Law
2.4.1 Scope of Application (Article 1):
The Model Law applies to “international commercial arbitration.” The term
“international” is defined using:
• The place of business of the parties;
• The location of the arbitration seat;
• The location where the obligations are to be performed;
• The subject-matter’s transnational nature.
The term “commercial” is broadly construed, though it excludes matters like
employment and consumer disputes. South Africa chose not to define
“commercial” in the International Arbitration Act, avoiding potential
limitations in scope.
2.4.2 Interpretation and Travaux Préparatoires:
Article 2A obliges national courts to interpret the Model Law in a manner
that:
• Reflects its international origin;
• Promotes uniformity across jurisdictions;
• Upholds good faith in the conduct of arbitration.
“Good faith” includes refraining from delay tactics and conducting
proceedings efficiently. Courts are encouraged to refer to the travaux
préparatoires and case law from other jurisdictions when interpreting the
Model Law, to avoid national idiosyncrasies.
2.5 Changes and Additions via the International Arbitration Act 15 of
2017
South Africa adopted the Model Law as a schedule to its International
Arbitration Act, almost verbatim, ensuring consistency with UNCITRAL’s
framework.
Notable additions include:
• Section 6: Incorporates the Model Law directly.
• Section 7: Addresses the arbitrability of disputes.
• High Court jurisdiction: Defined as the competent forum for all
Model Law-related proceedings.
This legislative approach was chosen to promote investor confidence,
reduce court interference, and position South Africa as a viable seat for
international arbitration.
2.6 Global Provision for International Commercial Arbitration
Today, over 80 jurisdictions have adopted the Model Law, illustrating its
success in creating a coherent international arbitration framework.
Globally, prestigious institutions such as the ICC, LCIA, SIAC, and HKIAC
offer rule-based arbitration proceedings. In Africa, efforts are underway to
create regionally competitive arbitration centers. Examples include:
• AFSA International and CAJAC in Johannesburg;
• MIAC in Mauritius;
• CRCICA in Egypt;
• KIAC in Rwanda;
• NCIA in Kenya.
South Africa’s adoption of the Model Law and establishment of AFSA
International support a broader SADC objective to harmonize international
arbitration law and facilitate cross-border dispute resolution on the
continent.