New AFSA International Arbitration Rules set new standard for arbitration in Africa

New AFSA International Arbitration Rules set new standard for arbitration in Africa

On 1 June 2021, the Arbitration Foundation of Southern Africa (AFSA) International Arbitration Rules came into effect (Rules). By providing a set of rules which reflect the latest trends in international arbitration, South Africa's position as a leading arbitration seat in Africa has been consolidated.

The new Rules introduce a number of significant reforms to the existing AFSA regime, designed to improve the efficiency, oversight and transparency of arbitration in South Africa. Among other reforms, the Rules provide for:

  • An expedited arbitration procedure (article 10).
  • Early dismissal of claims or defences without legal merit or outside the jurisdiction of the tribunal (article 12).
  • Establishment of an AFSA Court to supervise the administration of arbitral disputes, together with a secretariat responsible for the court's administration (article 1 and annex 1).

This article will focus on the Rules' position on two features of international arbitration, which have seen significant development in recent years:

  • The joinder of additional parties (article 29).
  • Access to emergency arbitration (article 11).

It also compares the Rules with the recently revised rules of two leading European institutions, the International Court of Arbitration of the ICC (ICC) and the London Court of International Arbitration (LCIA), as well as the AFSA's regional competitor, the Cairo Regional Centre for International Commercial Arbitration (CRCICA).

For more information on arbitration under the ICC and LCIA Rules, see ICC arbitration toolkit and LCIA arbitration toolkit.

Joinder of additional parties

Prior to the constitution of the tribunal, article 29 of the Rules allows a party or non-party to an arbitration to apply for one or more additional parties to be joined in the arbitration by consent or if the additional party is prima facie bound by the arbitration agreement. After the tribunal has been constituted, joinder of an additional party will only be granted where all parties to the arbitration consent, including the additional party to be joined (article 29(8)).

This provision mirrors the position under the 2021 ICC Rules except in one respect. Under the ICC Rules, if a request for joinder is made after the confirmation or appointment of an arbitrator, the tribunal may approve the joinder without the consent of all the parties (subject to the additional party consenting to the constitution of the tribunal and the terms of reference) (article 7, 2021 ICC Rules). For more information, see Practice note, ICC arbitration (2021 Rules): a step-by-step guide: Joinder of additional parties).

This feature is also present in the LCIA Rules 2020, in which the joinder of a third party may be permitted by a tribunal provided the party to be joined and the applying party have both consented (article 22.1(x), LCIA Rules 2020). For more information, see LCIA arbitration (2020 Rules): a step-by-step guide: Multi-party disputes).

With the ICC, LCIA and AFSA all implementing updated rules in the last two years, it is perhaps not surprising that they have adopted similar procedures for the joinder of additional parties. However, the updated AFSA Rules denote a marked evolution from the rules adopted by its regional competitor, the CRCICA. Implemented in March 2011, the CRCICA rules limit the joinder of third parties to only those who are signatory to the arbitration agreement (article 17(6), CRCICA Rules). This difference is significant given the possible cost and time associated with commencing parallel arbitration proceedings, which would be avoided by joining a third party to an existing arbitration. For this reason, this element of the AFSA Rules must be considered more attractive than the equivalent CRCICA provision.  

Appointment of emergency arbitrator

Where urgent relief is required prior to the constitution of the tribunal, article 11 of the updated AFSA rules provides for the appointment of an emergency arbitrator within 48 hours of receipt of the application (article 11(7)). The emergency arbitrator has discretion to conduct the emergency proceedings in a manner of their choosing, but a decision on the application must be rendered within 14 days of their appointment (article 11(11)). Note that parties to arbitration agreements concluded before 1 June 2020 will not have access to an emergency arbitrator unless they have expressly agreed to "opt in" to article 11 (article 11(18)).

The ICC and LCIA Rules contain similar provisions regarding the appointment of an emergency arbitrator. Under the ICC Rules, the emergency arbitrator's decision takes the form of an order and is made within 15 days of any application where the arbitration agreement was concluded on or after 1 January 2012 (article 29 and Appendix V, 2021 ICC Rules). For more information, see Practice note, ICC arbitration (2021 Rules): a step-by-step guide: Interim measures and emergency arbitrator.

Similarly, the LCIA Rules provide that within 14 days of appointment, the emergency arbitrator may make an order or award, but only where the arbitration agreement was concluded on or after 1 October 2014 or by the consent of the parties to the arbitration (article 9B, LCIA Rules 2020). For more information, see Practice note, LCIA arbitration (2020 Rules): a step-by-step guide: Emergency arbitrator.

The regime on the appointment of an emergency arbitrator implemented by the AFSA Rules replicates that adopted by the ICC and LCIA, two leading European arbitral institutions. In stark contrast, the CRCICA Rules contain no provision for the appointment of an emergency arbitrator. As such, a party seeking urgent relief prior to the constitution of the tribunal is in a much stronger position bringing an arbitration with the AFSA than with CRCICA.

Concluding comments

The updated AFSA Rules reflect international best practice for the conduct of arbitration and will likely increase the attractiveness of the AFSA as an arbitral institution for parties looking to resolve disputes by arbitration. Moreover, the features now available to parties using the updated AFSA Rules, such as those examined above, must be viewed favourably compared to the rules of its regional rival counterpart, the CRCICA.

In light of the differences between these two sets of rules, South Africa's role as a regional centre for international arbitration seems set to only grow.

This article was originally published on Practical Law Arbitration on 12 August 2021 and is reproduced with the permission of Thomson Reuters.

 
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