“Arbitration is a process whereby the parties to the dispute enter into a formal agreement than an independent and impartial third party, the arbitrator, chosen directly or indirectly by the parties, will hear both sides of the dispute and make an award which the parties undertake through the agreement to accept as final and binding.” Peter Ramsden, The Law of Arbitration p5
good contract should contain a dispute resolution clause. This clause spells out how disputes will be resolved as and when they arise. Most disputes including commercial disputes are referred to courts of law for adjudication. This is inspite of the fact that arbitration is another mechanism which parties can use to resolve disputes. In Zimbabwe, Section 4 (1) of the Arbitration Act (Chapter 7:15) provides that:
“Subject to this section, any dispute which the parties have agreed to submit to arbitration may be determined by arbitration.”
Section 4 (2) of the aforesaid Act provides that, the following matters shall not be capable of determination by arbitration:
(a) An Agreement that is contrary to public policy; or
(b) A dispute which, in terms of any law, may not be determined by arbitration, or
(c) A criminal case; or
(d) A matrimonial cause or a matter relating to status, unless the High Court gives leave for it to be determined by arbitration, or
(e) A matter affecting the interests of a minor or an individual under a legal disability, unless the High Court gives leave for it to be determined by arbitration, or
(f) A matter concerning a consumer contract as defined in the Consumer Contracts Act (Chapter 8:03) unless the consumer has by separate agreement agreed thereto.
Why you should consider arbitration?
1. Arbitrator / Judge
In Arbitration the parties can choose an Arbitrator of their choice taking into account the nature of the dispute and the expertise of the Arbitrator. This is a huge advantage over litigation where the parties have no right to choose the Magistrate or Judge who will determine the dispute. The Magistrate or Judge is assigned to the case without any input from the parties.
2. Confidentiality
The arbitration process is private whilst litigation takes place in a public courtroom.
3. Time Frames
In litigation the time frames within which the parties must file their documents are set for the parties by the court rules whereas in arbitration the parties can set for themselves the time frames within which documents are to be filed. The parties can with the consent of the Arbitration fix the date when the Arbitration hearing takes place.
4. Formality
Litigation is formal. The parties must strictly follow the Court Rules and Procedure; Arbitration on the other hand is informal.
5. Time
Arbitration generally provides a speedier resolution of disputes then litigation.
6. Hostility
The parties in Arbitration proceedings are not as hostile to each other as are the parties in litigation proceedings.
7. Costs
Unless the parties choose to have the dispute determined by a panel number of Arbitrators, arbitration generally tends to be emotionally and financially cheaper than litigation.
8. Appeal
The appeal process in litigation delays the finality of adjudication. In arbitration, the Arbitrator’s Award is final and binding with a limited right of appeal.
By Davison Kanokanga SC Arbitrator with the Harare Commercial Arbitration Centre
Disclaimer:
While care has been taken to ensure that this publication is accurate, Kanokanga & Partners accepts no liability for any prejudice, loss or, damage of whatsoever nature which may arise from reliance on any of the information published herein. The contents of this publication are for general information purposes only. The purpose of this publication does NOT constitute our legal or professional advice. Readers are advised not to act on the basis of the information contained herein alone. Every situation depends on its own facts and circumstances.