Case Law
South Africa / 24 February 2012 / South Africa, Western Cape High Court, Cape Town / Phoenix Shipping Corporation v DHL Global Forwarding SA (Pty) Ltd and Bateman Projects Limited t/a Bateman Engineered Technologies / AC70/2011
| Country | South Africa |
| Court | South Africa, Western Cape High Court, Cape Town |
| Date | 24 February 2012 |
| Parties | Phoenix Shipping Corporation v DHL Global Forwarding SA (Pty) Ltd and Bateman Projects Limited t/a Bateman Engineered Technologies |
| Case number | AC70/2011 |
| Applicable NYC Provisions | V | V(1)(a) | V(1)(c) | V(1)(e) | V(2)(b) |
| Source | 2012 (3) SA 381 (WCC), online: SAFLII http://www.saflii.org |
| Languages | English |
| Summary | Phoenix Shipping Corporation (“Phoenix”) obtained an arbitration award at the London Court of International Arbitration, under the auspices of the London Maritime Arbitrators Association, against DHL Global Forwarding (Pty) Ltd (“DHL”) for US $253,694.00, arising from a contract of carriage. The award further held that Bateman Projects Limited (“Bateman”) was obliged to indemnify DHL in respect of DHL’s liability to Phoenix. Phoenix sought the enforcement of the award against DHL pursuant to section 2 of the Recognition & Enforcement of Foreign Arbitral Awards Act, 40 of 1977 (“the Act”) (which provides for the recognition and enforcement of foreign arbitral awards and for matters connected therewith in South Africa) in the Western Cape High Court of South Africa (“the High Court”). DHL did not resist the relief sought against it by Phoenix, but instead intervened in the application and sought an order for that portion of the award requiring Bateman to indemnify it for the loss suffered. With specific reference to sections 4(1)(a)(ii) and 4(1)(b)(i) of the Act, Bateman opposed enforcement on the basis that: (i) it was not party to any agreement submitting itself to arbitration; (ii) it was not party to any agreement submitting the parties to English Law; (iii) the arbitrator therefore had no jurisdiction to determine that portion of the dispute that related to the indemnity; (iv) the arbitrator therefore had no jurisdiction over Bateman; and (v) the enforcement of the award under those circumstances would be contrary to public policy within the meaning of the Act. The High Court refused to grant enforcement as against Bateman. In disposing of a preliminary argument raised by DHL, it held first, that Bateman was not prevented from challenging the jurisdiction of the arbitrator in the High Court simply because Bateman failed to avail itself of the appeal and review processes contained in the English Arbitration Act, 1996. The High Court arrived at this position after adopting a decision by the English Supreme Court in the matter of Dallah Real Estate & Tourism Holding Company v Government of Pakistan 2010 4 KSC 46, where it was held that neither Article V(1)(c) NYC nor section 103(5) of the English Arbitration Act, 1996 prevent a party from resisting recognition of an award based on a jurisdictional challenge in a country other than where the award was made. Section 4(1)(b)(v) of the Act (incorporating Article V(1)(e) NYC) was interpreted accordingly. The High Court then compared section 4(1)(b)(i) of the Act to Article V(1)(a) NYC and found them to be identical. The High Court interrogated the relationship between the parties and found that DHL had failed to establish a valid agreement with Bateman containing a submission to arbitration. The High Court held that the award was therefore derived from an invalid agreement and under the circumstances, the recognition and enforcement of such an award contravened section 4(1)(b)(i) of the Act (incorporating Article V(1)(a) NYC). It held further that enforcement of the award under those circumstances would also be contrary to public policy pursuant to section 4(1)(a)(ii) of the Act (incorporating Article V(2)(b) NYC). |
Attachment (1)
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