Close-Up Mining (Pty) Ltd and Others v The Arbitrator, Judge Phillip Boruchowitz and Another (286/2022) [2023] ZASCA 43; 2023 (4) SA 38 (SCA) (31 March 2023)

Close-Up Mining (Pty) Ltd and Others v The Arbitrator, Judge Phillip Boruchowitz and Another (286/2022) [2023] ZASCA 43; 2023 (4) SA 38 (SCA) (31 March 2023)

The Supreme Court of Appeal held that the arbitrator's jurisdiction is determined by the arbitration agreement and the AFSA rules, which require substantive disputes to be raised in the pleadings. The AFSA rules do not confer a discretionary power on the arbitrator to adjudicate unpleaded substantive disputes. The principle of party autonomy allows parties to agree otherwise, but in this case, the agreement did not do so. The arbitrator did not err in refusing to entertain the defence of repudiation, nor did he exceed his powers regarding Mr Tenner, as the relief sought included specific performance involving his shares. No gross irregularity was established, and the appeal was dismissed.

Citation
[2023] ZASCA 43
Parties
Appellant: Close-Up Mining (Pty) Ltd; Appellant: Willem Pieter Tenner; Appellant: Close-Up Machinery and Plant Hire (Pty) Ltd; Respondent: Judge Phillip Boruchowitz; Respondent: Lutzkie Group of Companies (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
31 March 2023
Case Number
286/2022
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal dismissed with costs, including costs of two counsel where so employed. Second respondent ordered to pay costs of volumes 4-12 of the record.
Judges
Van der Merwe, Mocumie, Meyer, Matojane, Unterhalter
Legal Topics
Arbitration Review, Gross Irregularity, Party Autonomy, Pleadings, Specific Performance
Alternative Dispute Resolution Civil Procedure Arbitration Review Gross Irregularity Party Autonomy Pleadings Specific Performance

Case Brief

Summary, issues, holding and outcome

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Parties

Close-Up Mining (Pty) Ltd

Appellant

Willem Pieter Tenner

Appellant

Close-Up Machinery and Plant Hire (Pty) Ltd

Appellant

Judge Phillip Boruchowitz

Respondent

Lutzkie Group of Companies (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether an arbitrator is precluded from deciding a defence not pleaded in the arbitration proceedings.
  2. 2 Whether the arbitration agreement and AFSA rules confer discretionary competence on the arbitrator to entertain unpleaded defences.
  3. 3 Whether the arbitrator exceeded his powers by making Mr Tenner a party to Transaction 1.

Ratio Decidendi

The Supreme Court of Appeal held that the arbitrator's jurisdiction is determined by the arbitration agreement and the AFSA rules, which require substantive disputes to be raised in the pleadings. The AFSA rules do not confer a discretionary power on the arbitrator to adjudicate unpleaded substantive disputes. The principle of party autonomy allows parties to agree otherwise, but in this case, the agreement did not do so. The arbitrator did not err in refusing to entertain the defence of repudiation, nor did he exceed his powers regarding Mr Tenner, as the relief sought included specific performance involving his shares. No gross irregularity was established, and the appeal was dismissed.

Court Disposition

Appeal dismissed with costs, including costs of two counsel where so employed. Second respondent ordered to pay costs of volumes 4-12 of the record.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel, where so employed.
  • The second respondent is ordered to pay the costs of volumes 4-12 of the record.