Croock v Lipschitz and Others (2019/18319) [2020] ZAGPJHC 80 (12 March 2020)

Croock v Lipschitz and Others (2019/18319) [2020] ZAGPJHC 80 (12 March 2020)

The court found that the arbitrators failed to consider the applicant's substantive plea that the agreement was contra bonis mores and unenforceable, as pleaded in the arbitration. This omission constituted a gross irregularity, as the arbitrators were obliged to determine all issues placed before them. However, following the approach in Palabora Copper, the court held that only the affected part of the award should be set aside and referred back to the arbitrators, rather than disturbing the entire award. The interests of justice required that the arbitrators hear argument and determine the defence pleaded in paragraph 35.5 of the applicant's plea, with the remainder of the award...

Citation
[2020] ZAGPJHC 80
Parties
Applicant: Brian Stephen Croock; Respondent: Larry Lipschitz; Respondent: M.D. Kuper N.O.; Respondent: C.M. Eloff N.O.; Respondent: T. Beckerling N.O.
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
12 March 2020
Case Number
2019/18319
Procedural Posture
Review Application / Judgment After Hearing on Review of Arbitration Award
Outcome
Paragraph 106 of the arbitration award is set aside and the matter is referred back to the same arbitration panel to determine the defence of unenforceability based on public policy.
Judges
Wepener
Legal Topics
Arbitration Review, Gross Irregularity, Public Policy Enforceability, Arbitrator Duties, Setting Aside Award
Alternative Dispute Resolution Commercial and Corporate Arbitration Review Gross Irregularity Public Policy Enforceability Arbitrator Duties Setting Aside Award

Case Brief

Summary, issues, holding and outcome

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Parties

Brian Stephen Croock

Applicant

Larry Lipschitz

Respondent

M.D. Kuper N.O.

Respondent

C.M. Eloff N.O.

Respondent

T. Beckerling N.O.

Respondent

Procedural Posture

Review Application / Judgment After Hearing on Review of Arbitration Award

Legal Issues

  1. 1 Did the arbitrators fail to consider the applicant's substantive plea that the agreement was contra bonis mores and unenforceable?
  2. 2 Should paragraph 106 of the arbitration award be set aside due to this failure?
  3. 3 Is it appropriate to refer the specific issue back to the arbitrators rather than setting aside the entire award?

Ratio Decidendi

The court found that the arbitrators failed to consider the applicant's substantive plea that the agreement was contra bonis mores and unenforceable, as pleaded in the arbitration. This omission constituted a gross irregularity, as the arbitrators were obliged to determine all issues placed before them. However, following the approach in Palabora Copper, the court held that only the affected part of the award should be set aside and referred back to the arbitrators, rather than disturbing the entire award. The interests of justice required that the arbitrators hear argument and determine the defence pleaded in paragraph 35.5 of the applicant's plea, with the remainder of the award...

Court Disposition

Paragraph 106 of the arbitration award is set aside and the matter is referred back to the same arbitration panel to determine the defence of unenforceability based on public policy.

Orders

  • Paragraph 106 of the arbitrators' award dated 11 April 2019 is set aside.
  • The matter is referred back to the same arbitration panel to hear argument and determine the defence pleaded in paragraph 35.5 of the applicant's plea and any further issues arising therefrom.