Hesse NO and Others v Hlanganisani Construction CC and Another (8963/2011) [2013] ZAKZPHC 36 (20 June 2013)

Hesse NO and Others v Hlanganisani Construction CC and Another (8963/2011) [2013] ZAKZPHC 36 (20 June 2013)

The court found that the arbitrator exceeded his mandate by deciding on claims for preliminaries, generals, and default interest, which were not part of the scope agreed by the parties. The meeting of 7 July 2011 was conducted in a manner that denied the applicants a fair opportunity to present their case, constituting a gross irregularity. The presence of an additional party and the lack of proper recording tainted the proceedings and undermined procedural fairness. The costs complaint did not warrant setting aside the award, but the cumulative irregularities justified the setting aside of the entire arbitration award. The dispute must be referred for hearing afresh before a newly...

Citation
[2013] ZAKZPHC 36
Parties
Applicant: Glenn Arthur Hesse N.O; Applicant: Guy Morton Shaw Smith N.O; Applicant: Sybrand Johannes Struwig N.O; Respondent: Hlanganisani Construction CC; Respondent: T.W Bryant
Court
Kwazulu-Natal High Court, Pietermaritzburg
Jurisdiction
South Africa
Judgment Date
20 June 2013
Case Number
8963/2011
Procedural Posture
Review Application / Judgment on Application to Set Aside Arbitration Award
Outcome
The arbitration award is set aside and the dispute is referred for hearing afresh before a newly constituted arbitration tribunal.
Judges
Poyo-Dlwati
Legal Topics
Arbitration Review, Gross Irregularity, Exceeding Mandate, Procedural Fairness
Civil Procedure Alternative Dispute Resolution Arbitration Review Gross Irregularity Exceeding Mandate Procedural Fairness

Case Brief

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Parties

Glenn Arthur Hesse N.O

Applicant

Guy Morton Shaw Smith N.O

Applicant

Sybrand Johannes Struwig N.O

Applicant

Hlanganisani Construction CC

Respondent

T.W Bryant

Respondent

Procedural Posture

Review Application / Judgment on Application to Set Aside Arbitration Award

Legal Issues

  1. 1 Whether the arbitrator exceeded his mandate by deciding issues outside the scope agreed by the parties.
  2. 2 Whether the conduct of the arbitration proceedings, specifically the meeting of 7 July 2011, constituted a gross irregularity and denied the applicants a fair hearing.
  3. 3 Whether the arbitrator failed to exercise judicial discretion regarding the costs order.

Ratio Decidendi

The court found that the arbitrator exceeded his mandate by deciding on claims for preliminaries, generals, and default interest, which were not part of the scope agreed by the parties. The meeting of 7 July 2011 was conducted in a manner that denied the applicants a fair opportunity to present their case, constituting a gross irregularity. The presence of an additional party and the lack of proper recording tainted the proceedings and undermined procedural fairness. The costs complaint did not warrant setting aside the award, but the cumulative irregularities justified the setting aside of the entire arbitration award. The dispute must be referred for hearing afresh before a newly...

Court Disposition

The arbitration award is set aside and the dispute is referred for hearing afresh before a newly constituted arbitration tribunal.

Orders

  • The arbitration award made by the Second Respondent between the Applicant and the First Respondent is hereby set aside.
  • The dispute between the Applicant and the First Respondent is referred to hearing afresh before a newly constituted arbitration tribunal, appointed preferably by the President of Kwazulu-Natal Law Society or the Chairperson of the General Council of the Bar in Kwazulu-Natal.