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February 14 2018
The promulgation of the International Arbitration Act in December 2017 gave South Africa's largely outdated and cumbersome arbitration regime a boost in the context of international law. Given the cross-border nature of shipping disputes, the act promises to enhance the attraction of what is already a litigation-friendly jurisdiction.
In essence, the new act gives the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (2006 revision) the force of law in South Africa. Its features include the following:
In the maritime law context, the application of the new act to disputes which are subject to the South Africa Carriage of Goods by Sea Act (COGSA) deserve special mention.
For some time, South African cargo interests with inbound cargo have enjoyed special statutory protection in the form of Section 3(1) of COGSA, which bestowed jurisdiction on any competent court in South Africa for any action:
Notably, the International Arbitration Act preserves this statutory protection in such a way that COGSA has been amended to make specific reference to the fact that the new act is excluded from the operation of Section 3(1). Local claimants of inbound cargo can therefore continue to pursue claims in the South African courts.
On balance, the introduction of the International Arbitration Act should be viewed as a step towards fostering an environment for international dispute resolution in South Africa in a manner consistent with internationals norms and practices. For the local maritime community, the act's preservation of statutory protection under COGSA will also be welcome news.
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