AFSA International's new rules - simply explained
The Arbitration Foundation of Southern Africa’s international arbitration division, AFSA International, has published its new rules, which came into effect on 1 June 2021. These Rules are a welcome move that will help to grow South Africa's reputed position as an international arbitration seat.
The new rules of AFSA International reflect both international best practice and modern trends, with the expectation that the introduction of the Rules will not only further increase AFSA International's current caseload of 92 international arbitrations, but that these Rules will continue to enhance South Africa's reputation as a leading arbitration destination.
This article will provide an overview of the key features of the Rules.
Oversight and administration
Perhaps the most significant change brought about by the Rules is the introduction of the AFSA Court (the Court), together with a Secretariat responsible for the Court’s day-to-day administration.
The function of the Court is to supervise the administration of arbitral disputes by the Arbitral Tribunal (the Tribunal), which function includes the appointment of arbitrators and determining issues of jurisdiction.
Efficiency and speed
To promote the expeditious resolution of disputes, Article 10 of the Rules provides for an expedited arbitration procedure when the quantum of any claim (or counterclaim) does not exceed the amount of USD 500 000. Any parties to a dispute may agree to "opt-in" in respect of this procedure, whatever the amount claimed.
Article 10 empowers the AFSA Secretariat to shorten any time limits under the Rules. It also vests the Tribunal with the power to decide the dispute based on documentary evidence alone, unless the Tribunal deems a hearing appropriate, and further allows for judgment to be given in summary form.
Article 12 of the Rules promotes efficiency by providing for the early dismissal of a claim or defence, if it is either manifestly without legal merit or manifestly outside the jurisdiction of the Tribunal, thereby allowing for an early escape to any litigant trapped in claims or defences that are plainly without merit, before substantial legal costs are incurred and time wasted.
Innovation and pragmatism
Article 11 of the Rules provides for the appointment of an emergency arbitrator when urgent relief is required prior to the constitution of the Tribunal.
Should an application under Article 11(1) for the appointment of an emergency arbitrator be accepted, the Court shall make the appointment within 48 hours of receipt of the application and payment of the relevant fees.
The emergency arbitrator may conduct the emergency proceedings in any manner he/she deems appropriate, and must decide the application as soon as possible, but no later than 14 days after appointment.
Article 29 of the Rules introduces the mechanisms of joinder and intervention to ensure an effective process in which all relevant parties to a dispute are involved in its resolution. Article 29 allows for joinder based either on consent, or if the party to be joined is prima facie bound by the arbitration agreement in casu.
Confidentiality and transparency
Article 36 of the Rules provides for the confidentiality of all awards, all materials created for the purpose of the arbitration and all other documents produced by a party in the proceedings, as well as the deliberations of the Tribunal.
However, in striking a balance between confidentiality and transparency, Article 36(3) permits AFSA to publish all arbitral awards in an anonymised and pseudonymised form, unless a party to the arbitration objects thereto.
The theme of transparency is repeated in Article 27, which deals with third-party funding and the prescription of minimum disclosure requirements.
COVID-19 and virtual hearings
Article 21(6) of the Rules provides that a hearing may take place in person or by any other means (including video or telephone conference) that the Tribunal considers appropriate, taking all relevant circumstances into account.
This is a positive "catch-all" provision that accounts for the global pandemic and any other future unforeseen event which may impede an in-person hearing. When agreeing to the procedural details of a remote hearing, reference should be made to AFSA's "Remote Hearing Protocol" guidance document.
Other noteworthy features of the Rules that are not canvassed in this article include multi-party/multi-contract issues, and the Articles dealing with situations where a party indicates an intention not to participate, or to no longer participate, in an arbitration.
In summary, the Rules promise to bring international arbitrations being conducted under the auspices of AFSA International in line with procedural innovations embraced by other leading international arbitral institutions.
A copy of the Rules can be found here.