Poseidon Home of Pegasus Logistics CC v Wescoal Trading (Pty) Ltd and Another (042801/2016) [2017] ZAGPJHC 431 (1 November 2017)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 042801/2016

Not reportable

Not of interest to other judges

Revised.

17/11/2017

In the matter between:

POSEIDON HOME OF PEGASUS LOGISTICS CC Applicant

and

WESCOAL TRADING (PTY) LTD First Respondent

ADVOCATE MUZI SIKHAKHANE SC Second Respondent

J U D G M E N T

MODIBA, J:

[1] This is an application to review and set aside the whole award of the second respondent (the “arbitrator”) dated 21 October 2016 in terms of section 33(1)(a) and (b) of the Arbitration Act.[1] Unless otherwise stated, all references to statutory provisions are to this Act. The applicant also seeks an order remitting the matter to another arbitration tribunal. The first respondent is the only party opposing the application. No relief is sought against the arbitrator.

[2] The parties are ad idem as to the applicable legal principles. For convenience, I reiterate them here. The power of a court to review a consensual arbitration

award is limited to the grounds listed in section 33(1). There are no residual common law grounds on which the court may review an arbitration award made in terms of the Act.[2] To succeed under section 33(1) (a) and (b) ,[3] the applicant ought to show that:

2.1 the arbitrator misconducted himself in relation to his duties as an arbitrator; or

2.2 the arbitrator has committed a gross irregularity in the conduct of the arbitration proceedings; or

2.3 the arbitrator exceeded his powers.

[3] A finding that the arbitrator committed a factual error leading him to a wrong conclusion is insufficient to render the arbitrator’s

award reviewable. Such an error only renders an award reviewable if it results from failure by the arbitrator to act in terms of his mandate.[4] The word “misconduct” does not extend to a bona fide error of fact or law by the arbitrator.[5] It is only where a mistake is so gross or manifest as to evidence misconduct, mala fides or partiality on the part of the arbitrator that it renders the award reviewable.[6]

[4] An agreement concluded between the applicant and the first respondent was at the centre of the arbitration proceedings. The

arbitrator was mandated to interpret clause 9.3 of the agreement. The clause provides that “Wescoal Trading guarantees that the transporter can draw up to a maximum of 48 (forty eighty) loads of long haul deliveries or 1 632 (one thousand six hundred and thirty two) tons per month”.

[5] The only dispute between the applicant and the first respondent at the arbitration was whether clause 9.3, properly interpreted,

guaranteed the applicant 48 loads of long haul deliveries or 1 632 (one thousand six hundred and thirty two) tons per month as contended by the applicant. The first respondent denied this contention. The arbitrator ruled in favour of the first respondent and dismissed the applicant’s claim.

[6] Aggrieved by the interpretation preferred by the arbitrator, the applicant pleads fault with the manner in which the arbitrator

arrived at the preferred interpretation. In an attempt to couch its complaint within the established legal principles, the applicant

alleges that the arbitrator made an incorrect finding contrary to common cause facts and by so doing, committed a gross-irregularity in the conduct of the arbitration or is guilty of misconduct. Alternatively the applicant contends that by making a finding on a common cause fact on which he was not invited to make a finding, the arbitrator committed a gross irregularity in that he exceeded his powers.

[7] The first respondent denies that the arbitrator committed any of the misdemeanours set out in section 33 (1) (a) and (b). It seeks a dismissal of the application with costs.

[8] The applicant alleges that the arbitrator made a finding contrary to the common cause fact that Ms Petrie’s letter contained the final version of the agreement and that comments in her letter of 8 October 2014 related to the final version of clause 9.3. It further alleges that it is this finding that caused the arbitrator to prefer an interpretation that does not support the applicant’s case. This complaint is insufficient to render the arbitration award reviewable. This court does not deem it necessary to find that the arbitrator committed a factual error as alleged by the applicant because even if the arbitrator made a factual error, which is denied by the first respondent, such an error does not bring his conduct within the rubric of section 33 (1) (a) or (b). I say so because if founded, the nature of the applicant’s complaint at best constitutes a bona fide error of fact. It is not accompanied by any evidence of impartiality or mala fides and for that reason, it is insufficient to sustain a finding of misconduct or gross irregularity.

[9] An allegation by the applicant that it was denied the opportunity to make submissions in respect of Ms Petrie’s letter is not reflected in the arbitration record. It does not support a finding that the arbitrator committed a gross irregularity as alleged by the applicant.

[10] The applicant’s contention that the arbitrator exceeded his powers in respect of his findings on Ms Petrie’s letter

also lacks merit. His findings are well within his mandate as articulated in paragraph 4 above. The factual error complained

of, even on the applicant’s version, is insufficient to sustain a finding in that regard. The record reflects that the arbitrator

exercised his powers in accordance with clause 30 of the agreement. This ground of review also stands to be dismissed.

[11] In the premises, the application stands to be dismissed with costs.

I therefore make the following order:

ORDER

The application is dismissed with costs.

________________________________________

MS. L.T. MODIBA

JUDGE OF THE HIGH COURT

APPEARENCES:

Applicant’s Counsel: Mr. Beyleveld SC

Instructed by: Friedman Scheckter

Respondent’s Counsel: Mr. Maleka SC & Ms. BD Lekokotla

Instructed by: Edward Nathan Sonnenbergs

Date heard: 01 November 2017

Date delivered: 20 November 2017

[1] 42 of 1965.

[2] Amalgamated Clothing and Textile Workers Union of South Africa v Veldspun (Pty) Ltd [1993] ZASCA 158; 1994 (1) SA 162 (A); Telcordia Technologies Inc v Telkom SA Ltd [2006] ZASCA 112; [2007] 2 All SA 243 (SCA) (paragraph [51] at 259-260.

[3] Section 33 of the Arbitration Act provides as follows: “(1) Where – (a) any member of an arbitration tribunal has misconducted himself in relation to his duties as arbitrator or umpire; or (b) an arbitration tribunal has committed any gross irregularity in the conduct of the arbitration proceedings or has exceeded its powers; or … the court may, on the application of any party to the reference after due notice to the other party or parties, make an order setting the award aside.”

[3] Section 33 of the Arbitration Act provides as follows:

“(1) Where –

(a) any member of an arbitration tribunal has misconducted himself in relation to his duties as arbitrator or umpire; or

(b) an arbitration tribunal has committed any gross irregularity in the conduct of the arbitration proceedings or has exceeded its powers; or

…

the court may, on the application of any party to the reference after due notice to the other party or parties, make an order setting the award aside.”

[4] Stocks Civil Engineering (Pty) Ltd v Rip NO and Another [2002] 3 BLLR 189 (LAC).

[5] Steeldale Cladding (Pty) Ltd v Parsons NO and Another 2001 (2) SA 663 (D).

[6] Dickenson & Brown v Fisher’s Executors 1915 AD 166 at 174-181, Donner v Ehrlich 1928 WLD 159 at 161, Amalgamated Clothing & Textile Workers Union of SA v Veldspun (Pty) Ltd [1993] ZASCA 158; 1994 (1) SA 162 (A) at 169.