Novare Investments (Pty) Ltd and Another v Des Heuyer CC and Others (4286/2020) [2020] ZAWCHC 37 (15 May 2020)

Novare Investments (Pty) Ltd and Another v Des Heuyer CC and Others (4286/2020) [2020] ZAWCHC 37 (15 May 2020)

The court found that the applicants failed to demonstrate good cause under section 3(2)(c) of the Arbitration Act to stay or terminate the arbitration proceedings. The legality issue regarding FAIS compliance was previously determined in the first arbitration and confirmed by the Appeal Tribunal, rendering it res...

Source-derived case information.

Citation
[2020] ZAWCHC 37
Parties
Applicant: Novare Investments (Pty) Ltd; Applicant: Novare Actuaries and Consultants (Pty) Ltd; Respondent: Des Heuyer CC; Respondent: Financial Sector Conduct Authority; Respondent: Adv C M Eloff SC N.O.
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
15 May 2020
Case Number
4286/2020
Procedural Posture
Urgent Application / Application to Stay Arbitration Proceedings Pending Review and Action Proceedings
Outcome
Application dismissed with costs, except for wasted costs of the 20 March 2020 hearing, which are awarded against the first respondent.
Judges
Wille, J
Legal Topics
Arbitration Agreement Enforcement, Stay of Arbitration, Financial Services Regulation, Fais Compliance, Good Cause Requirement
Civil Procedure Commercial and Corporate Arbitration Agreement Enforcement Stay of Arbitration Financial Services Regulation Fais Compliance Good Cause Requirement

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Summary, issues, holding and outcome

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Parties

Novare Investments (Pty) Ltd

Applicant

Novare Actuaries and Consultants (Pty) Ltd

Applicant

Des Heuyer CC

Respondent

Financial Sector Conduct Authority

Respondent

Adv C M Eloff SC N.O.

Respondent

Procedural Posture

Urgent Application / Application to Stay Arbitration Proceedings Pending Review and Action Proceedings

Legal Issues

  1. 1 Whether the arbitration agreements between the applicants and the first respondent should cease to have effect in relation to disputes arising from the agreements.
  2. 2 Whether good cause exists under section 3(2)(c) of the Arbitration Act to stay or terminate the arbitration proceedings.
  3. 3 Whether the legality issue regarding FAIS compliance is res iudicata or subject to issue estoppel.

Ratio Decidendi

The court found that the applicants failed to demonstrate good cause under section 3(2)(c) of the Arbitration Act to stay or terminate the arbitration proceedings. The legality issue regarding FAIS compliance was previously determined in the first arbitration and confirmed by the Appeal Tribunal, rendering it res iudicata or subject to issue estoppel. The applicants' institution of parallel action proceedings after the commencement of the second arbitration does not entitle them to avoid their contractual obligation to arbitrate. The court emphasized that parties are bound by their arbitration agreements and that the burden of showing good cause to avoid arbitration is high. The...

Court Disposition

Application dismissed with costs, except for wasted costs of the 20 March 2020 hearing, which are awarded against the first respondent.

Orders

  • The application is dismissed.
  • The costs of and incidental to this application, including costs of two counsel, shall be paid by the applicants jointly and severally, the one paying the other to be absolved, on the scale as between party and party, as taxed or agreed.