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Thesis (LLM)--Stellenbosch University, 2002 / ENGLISH ABSTRACT: Arbitration is widely regarded as an important alternative to litigation, particularly for international commercial disputes. However, concern currently exists that arbitration is becoming too slow and too expensive, partly through using procedures too similar to those in the courts. Effective arbitration requires suitable legislation, the support of the parties and their lawyers and appropriate initiatives from the arbitral tribunal. The UNCITRAL Model Law on International Commercial Arbitration of 1985 is the internationally accepted standard against which the quality of a nation's legislation for international commercial arbitration must be measured. A crucial aspect regarding suitable legislation is the role of the courts. This thesis is essentially concerned with steps which have been taken or need to be taken in Germany and South Africa to achieve effective arbitration. It commences with a brief overview of the sort of delaying tactics which are often encountered in international arbitration practice, including abuse of the court's powers of supervision and intervention. The reception in Germany and South Africa of the UNCITRAL Model Law is then discussed. In Germany it has been adopted for both domestic and international arbitration. The South African Law Commission has recommended its adoption in South Africa for international arbitration. The Law Commission has however recommended a new separate statute for domestic arbitration because of the perceived need for remedial measures to ensure improved arbitration procedures. The thesis then examines the effect of the court's powers on effective arbitration, particularly prior to the award. The current South African law is discussed as well as the changes proposed by the Law Commission in the context of domestic and international arbitration. The South African position is compared with that in Germany, both before and since the introduction of the UNCITRAL Model Law in 1998. After a general discussion of the powers of the court in the context of arbitration, two aspects are identified for special attention. The first is the power of the tribunal to rule on its own jurisdiction and the interaction between the powers of the court with those of the tribunal in this regard. The second concerns the granting of interim measures in the context of arbitration proceedings, with particular attention to security for costs. In certain circumstances, and depending on the applicable rules and legislation, it may be more appropriate for a party to seek such relief from the tribunal, whereas in slightly different circumstances it may be preferable to seek such relief from the court. Finally, steps are considered, which can usefully be taken by the arbitral tribunal itself to promote effective arbitration by using the flexibility of the process. The extent to which the tribunal is "master of its procedure" and thereby able to counter delaying tactics effectively is subject to the doctrine of party autonomy. Specific techniques for more effective arbitral procedures are suggested, namely a more interventionist approach, the use of preliminary meetings, imposing timetables, improving the hearing, the effective use of documentary evidence and discovery and finally the possibility of documents-only arbitration. / AFRIKAANSE OPSOMMING: Arbitrasie word wyd beskou as 'n belangrike alternatief tot litigasie, veral by internasionale handelsgeskille. Kommer bestaan egter tans dat arbitrasie te stadig en te duur word, gedeeltelik deur die gebruik van prosedures wat te veel met dié van die howe ooreenstem. Doeltreffende arbitrasie vereis geskikte wetgewing, die ondersteuning van die partye en hulle regsverteenwoordigers en toepaslike inisiatiewe deur die arbitrasietribunaal. Die "UNCITRAL Model Law on International Commercial Arbitration" van 1985 is die internasionaal aanvaarde standaard waarteen die gehalte van 'n land se wetgewing vir internasionale kommersiële arbitrasie gemeet moet word. 'n Kritieke oorweging by geskikte wetgewing is die rol van die howe. Hierdie tesis behandel die stappe wat in Duitsland en Suid-Afrika reeds geneem is of wat nog geneem moet word om doeltreffende arbitrasie te bewerkstellig. Dit begin met 'n kort oorsig oor die soort vertragingstaktiek wat dikwels in die internasionale arbitrasiepraktyk raakgeloop word, insluitende misbruik van die hof se bevoegdhede van toesighouding en inmenging. Die ontvangs van die "UNCITRAL Model Law" in Duitsland en Suid-Afrika word bespreek. Die wet is in Duitsland vir sowel binnelandse as internasionale arbitrasie ingevoer. Die Suid-Afrikaanse Regskommissie het sy invoering vir internasionale arbitrasie in Suid-Afrika aanbeveel. Die regskommissie het egter 'n nuwe afsonderlike wet vir binnelandse arbitrasie aanbeveel weens die gewaarde behoefte aan regstellende middele om verbeterde arbitrasieprosedures te verseker. Die tesis ondersoek daarna die uitwerking van die hof se bevoegdhede op doeltreffende arbitrasie, veral voor die arbitrasietoekenning. Die huidige Suid-Afrikaanse reg en die wysigings, wat deur die Regskommissie vir internasionale en binnelandse arbitrasie voorgestel word, word oorweeg. Die Suid-Afrikaanse posisie word met dié van Duitsland, voor en na die invoering van die "UNCITRAL Model Law" in 1998, vergelyk. Na 'n algemene bespreking van die hof se bevoegdhede in die samehang van arbitrasie word twee sake vir besondere aandag gekies. Die eerste is die bevoegdheid van die arbitrasietribunaal om oor sy eie jurisdiksie te beslis en die wisselwerking tussen die hof se bevoegdhede en dié van die arbitrasietribunaal in hierdie verband. Die tweede het betrekking op die toestaan van tussentydse regshulp in die samehang van arbitrasieverrigtinge, met besondere verwysing na sekuriteit vir koste. In besondere omstandighede, met inagneming van toepaslike reëls en wetgewing, behoort 'n party verkieslik sodanige regshulp by die arbitrasietribunaal aan te vra, terwyl in effens ander omstandighede behoort die partyeerder die hof te nader. Ten slotte word stappe oorweeg wat nuttig deur die arbitrasietribunaal self geneem kan word om doeltreffende arbitrasie aan te moedig deur die buigsaamheid van die arbitrasieproses te benut. Die mate waarin die tribunaal meester van sy prosedure is en daardeur vertragingstaktiek doeltreffend kan bekamp, is onderworpe aan die leerstuk van partyoutonomie. Bepaalde tegnieke word voorgestelom meer doeltreffende arbitrasieprosedures te bevorder, naamlik 'n meer intervensionistiese benadering, die gebruik van reëlingsvergaderings, die oplegging van 'n rooster vir die arbitrasie, verbetering van die verhoorproses, die doeltreffende gebruik van skriftelike getuienis en blootlegging en laastens die moontlikheid van arbitrasie slegs op dokumente.

Arbitration is the preferred method of dispute resolution in international trade. Naturally, a set of rules is necessary to govern the conflict&rsquo / s resolution. For cultural, political, economical or other reasons the parties&rsquo / national laws may not serve the individual interests and needs of that particular contract well. If one wants to avoid the application of both parties&rsquo / national laws, one can choose that the contract be governed by an a-national legal standard, e.g. general principles of International Trade Law or the general usages of a particular trade. These internationally accepted principles of law governing contractual relations are called lex mercatoria (law merchant).<br /> <br /> Lex mercatoria already existed in the Middle Ages and can even be dated back to antiquity. Later it disappeared through the nationalization of International Trade Law and was rediscovered in the 1950s, when international traders were again creating their own law and disputes were increasingly resolved outside of the national jurisdictions and applying a-national law. Lex mercatoria is being applied more and more by arbitrators and is therefore becoming increasingly important for dispute resolution in International Trade. Numerous different concepts and theories of lex mercatoria have been developed. Its being an autonomous legal system is questioned by some authors and the doctrine in favour of it called unfounded. The critics also argue that the authority to apply lex mercatoria may be a recipe for amateurism and the substitution of the arbitrator&rsquo / s private preferences for the parties&rsquo / intentions, for itis easy to proclaim common principles on the basis of limited knowledge. The lex mercatoria is said only to exist because scholars talk about it. However, these and other allegations can be refuted by critically analyzing the arguments that are supposed to underline those assumptions. Applying lex mercatoria to solve international trade disputes has many advantages. By choosing lex mercatoria the parties avoid rules which are unfit for international contracts, e.g. peculiar formalities, brief cut-off periods and special difficulties created by domestic laws. In addition to that, neither of the parties has the advantage of having the dispute governed by his own law. Since one of the central rules is the principle of good faith and fair dealing, lex mercatoria neither leads to arbitrary results nor does it favour the rich. Is it possible for the arbitrators to apply lex mercatoria if no law has been chosen by the parties? The failure of the parties to indicate a choice could well mean that they did not wish to have their contract governed by any of their national laws. In some awards arbitrators applied lex mercatoria as they considered the community of international merchants to be autonomous and to exist beyond national legislation. However, it cannot be deduced from the absence of such a choice that the parties have impliedly chosen lex mercatoria to be the law governing the conflict. Lex mercatoria is applicable only as a subsidiary law in cases where no national law has been chosen and seems apt.

Judicial enforcement of arbitral awards is necessary where there is no voluntary compliance by the relevant parties. Courts world-wide may refuse to enforce arbitral awards if such enforcement would be contrary to the public policy of their countries. This is known as ‘the public policy exception to the enforcement of arbitral awards’. It is enshrined in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) and the UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law), which are two of the most prominent international instruments in promoting and regulating international commercial arbitration.The public policy exception is one of the most controversial exceptions to the enforcement of arbitral awards, causing judicial inconsistency and therefore unpredictability in its application. It is often likened to an ‘unruly horse’, which may lead us from sound law. The International Law Association’s Resolution on Public Policy as a Bar to Enforcement of International Arbitral Awards 2002 (ILA Resolution) endorses a narrow approach to the public policy exception – namely, refusal of enforcement under the public policy exception in exceptional circumstances only. The ILA Resolution seeks to facilitate the finality of arbitral awards in accordance with the New York Convention’s primary goal of facilitating the enforcement of arbitral awards. The courts of many countries refer to this as the New York Convention’s ‘pro-enforcement policy’, which demands a narrow approach to the public policy exception.This thesis explores the main controversies and complexities in the judicial application of the public policy exception from an Australian perspective. It is a critical analysis of the prevalent narrow approach to the public policy exception. It examines the extent of the ILA Resolution’s suitability and applicability in Australia, considering past problems experienced by the courts of other countries, the distinctive features of the Australian legal system, and future challenges confronting the Australian judiciary. It examines when and how the Australian judiciary may need to swim against the tide by departing from the narrow approach to the public policy exception. For instance, such departure may be appropriate for ensuring that their application of the public policy exception neither causes nor condones injustice, and thereby preserves the integrity and faith in the system of arbitration. The author’s perspective throughout this thesis is that of an academic lawyer, as she has not had the benefit of practical experience in this area of the law.The recommendations throughout this thesis are tailor-made for the Australian judiciary. They are Australian in perspective yet international in character. They canvass certain issues not addressed in the ILA Resolution, encouraging the Australian judiciary to participate in the ongoing debate and the ultimate resolution of those issues. In doing so, this thesis contributes to refining the judicial application of public policy in determining the enforceability of arbitral awards. The public policy exception to the enforcement of arbitral awards, or its application, need not be an unruly horse in Australia.“This version contains corrections of typographical errors identified in the original version of the thesis submitted for completion of the SJD program”.

Arbitration is the preferred method of dispute resolution in international trade. Naturally, a set of rules is necessary to govern the conflict&rsquo / s resolution. For cultural, political, economical or other reasons the parties&rsquo / national laws may not serve the individual interests and needs of that particular contract well. If one wants to avoid the application of both parties&rsquo / national laws, one can choose that the contract be governed by an a-national legal standard, e.g. general principles of International Trade Law or the general usages of a particular trade. These internationally accepted principles of law governing contractual relations are called lex mercatoria (law merchant).<br /> <br /> Lex mercatoria already existed in the Middle Ages and can even be dated back to antiquity. Later it disappeared through the nationalization of International Trade Law and was rediscovered in the 1950s, when international traders were again creating their own law and disputes were increasingly resolved outside of the national jurisdictions and applying a-national law. Lex mercatoria is being applied more and more by arbitrators and is therefore becoming increasingly important for dispute resolution in International Trade. Numerous different concepts and theories of lex mercatoria have been developed. Its being an autonomous legal system is questioned by some authors and the doctrine in favour of it called unfounded. The critics also argue that the authority to apply lex mercatoria may be a recipe for amateurism and the substitution of the arbitrator&rsquo / s private preferences for the parties&rsquo / intentions, for itis easy to proclaim common principles on the basis of limited knowledge. The lex mercatoria is said only to exist because scholars talk about it. However, these and other allegations can be refuted by critically analyzing the arguments that are supposed to underline those assumptions. Applying lex mercatoria to solve international trade disputes has many advantages. By choosing lex mercatoria the parties avoid rules which are unfit for international contracts, e.g. peculiar formalities, brief cut-off periods and special difficulties created by domestic laws. In addition to that, neither of the parties has the advantage of having the dispute governed by his own law. Since one of the central rules is the principle of good faith and fair dealing, lex mercatoria neither leads to arbitrary results nor does it favour the rich. Is it possible for the arbitrators to apply lex mercatoria if no law has been chosen by the parties? The failure of the parties to indicate a choice could well mean that they did not wish to have their contract governed by any of their national laws. In some awards arbitrators applied lex mercatoria as they considered the community of international merchants to be autonomous and to exist beyond national legislation. However, it cannot be deduced from the absence of such a choice that the parties have impliedly chosen lex mercatoria to be the law governing the conflict. Lex mercatoria is applicable only as a subsidiary law in cases where no national law has been chosen and seems apt.

Judicial enforcement of arbitral awards is necessary where there is no voluntary compliance by the relevant parties. Courts world-wide may refuse to enforce arbitral awards if such enforcement would be contrary to the public policy of their countries. This is known as ‘the public policy exception to the enforcement of arbitral awards’. It is enshrined in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) and the UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law), which are two of the most prominent international instruments in promoting and regulating international commercial arbitration.The public policy exception is one of the most controversial exceptions to the enforcement of arbitral awards, causing judicial inconsistency and therefore unpredictability in its application. It is often likened to an ‘unruly horse’, which may lead us from sound law. The International Law Association’s Resolution on Public Policy as a Bar to Enforcement of International Arbitral Awards 2002 (ILA Resolution) endorses a narrow approach to the public policy exception – namely, refusal of enforcement under the public policy exception in exceptional circumstances only. The ILA Resolution seeks to facilitate the finality of arbitral awards in accordance with the New York Convention’s primary goal of facilitating the enforcement of arbitral awards. The courts of many countries refer to this as the New York Convention’s ‘pro-enforcement policy’, which demands a narrow approach to the public policy exception.This thesis explores the main controversies and complexities in the judicial application of the public policy exception from an Australian perspective. It is a critical analysis of the prevalent narrow approach to the public policy exception. It examines the extent of the ILA Resolution’s suitability and applicability in Australia, considering past problems experienced by the courts of other countries, the distinctive features of the Australian legal system, and future challenges confronting the Australian judiciary. It examines when and how the Australian judiciary may need to swim against the tide by departing from the narrow approach to the public policy exception. For instance, such departure may be appropriate for ensuring that their application of the public policy exception neither causes nor condones injustice, and thereby preserves the integrity and faith in the system of arbitration. The author’s perspective throughout this thesis is that of an academic lawyer, as she has not had the benefit of practical experience in this area of the law.The recommendations throughout this thesis are tailor-made for the Australian judiciary. They are Australian in perspective yet international in character. They canvass certain issues not addressed in the ILA Resolution, encouraging the Australian judiciary to participate in the ongoing debate and the ultimate resolution of those issues. In doing so, this thesis contributes to refining the judicial application of public policy in determining the enforceability of arbitral awards. The public policy exception to the enforcement of arbitral awards, or its application, need not be an unruly horse in Australia.“This version contains corrections of typographical errors identified in the original version of the thesis submitted for completion of the SJD program”.

Die Rechtswissenschaftliche Fakultät der Christian-Albrechts-Universität zu Kiel hat diese Arbeit im Jahre 2006 als Dissertation angenommen. / Includes bibliographical references and index.

published_or_final_version / Real Estate and Construction / Master / Master of Science in Construction Project Management

published_or_final_version / Economics and Finance / Doctoral / Doctor of Philosophy

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