In December 2017, South Africa brought into law its first piece of legislation dedicated to international arbitration, the aptly named International Arbitration Act of 2017 (the New Act).
The New Act
The New Act incorporates the provisions of the UNCITRAL Model Law and further aligns the country’s national law with the New York Convention. The legislation has been welcomed as a necessary step for South Africa to become the continent’s leading arbitral hub. Rather interestingly, in an effort to stimulate the growth of ADR, parties can also now choose to refer their disputes to conciliation using the UNCITRAL Conciliation Rules.
But the New Act does not stop at mere adoption of the UNCITRAL texts and modernisation of the old regime. Ambitious refinements to the Model Law (which is incorporated as Schedule 1 to the New Act), seek to advance certain matters into what many may regard as relatively unchartered waters. One such ambitious development relates to court ordered interim measures.
The last few months have seen significant changes to mining regulations in various African states, giving rise to a concern that a regional trend of resource nationalism may be (re-)emerging. In this context it is important for companies associated with the mining sector to be aware of the protection international investment treaties may provide against the impact of resource nationalism on their assets, and how to maximise that protection before risks materialise. This bulletin briefly considers some of the last few months’ developments, before discussing how companies can use investment treaties to protect themselves against the risks they pose.
South Africa’s draft regulations for investor-state mediation require refinement to work effectively with international arbitration.
Interested parties have until 28 February 2017 to comment on draft Regulations on Mediation Rules (Regulations) published by South Africa’s Department of Trade and Industry (DTI) on 30 December 2016, under the Protection of Investment Act, 2015 (Act).
We are delighted to share with you the latest issue of the publication from Herbert Smith Freehills' Global Arbitration Practice, Inside Arbitration.
In addition to sharing knowledge and insights about the markets and industries in which our clients operate, the publication offers personal perspectives of our international arbitration partners from across the globe.
In this issue:
Sarah Grimmer, the new Secretary General for the Hong Kong International Arbitration Centre shares her insights on, and ambitions for, HKIAC.
Nick Peacock and Dr Mathias Wittinghofer consider whether arbitration is a suitable tool for resolution of derivative disputes, as well as the future of the ISDA arbitration guide.
Jessica Fei, Chinese national and NY lawyer, talks about the unique blend of cultures and legal qualifications that shape her perspective as a practitioner.
Mark Lloyd-Williams, Hamish Macpherson, Craig Shepherd, Emma Kratochvilova and Thomas Weimann give a global perspective on arbitrating construction and infrastructure disputes.
Dominic Roughton and Andrew Cannon consider the impact of territory and maritime boundary disputes on commercial investments and the role of private actors and states in their resolution.
Peter Leon and Ben Winks give their view from Johannesburg on the future of arbitration in South Africa.
Vanessa Naish and Hannah Ambrose take a practical look at the effect of Brexit on dispute resolution choices, both now and in the future.
Andrew Cannon talks about his experience working at the Foreign and Commonwealth Office and how it has shaped his public international law practice.
The full digital edition can be downloaded in PDF by clicking on this link.
We hope that you enjoy reading Issue #2 of Inside Arbitration. We would welcome your feedback.
On 1 November 2013, the South African Department of Trade and Industry (DTI) has released its new “Promotion and Protection of Investment” bill (PPI Bill) for public comment (for a copy of the PPI Bill, see here).
The PPI Bill follows South Africa’s publicised plans to review its bilateral investment treaties (BITs), in particular those entered into right after the end of the apartheid era. The majority of those BITs have been, or are in the process of being, terminated by the South African government. As part of the DTI review, the South African Government has already issued cancellation notices to various European countries, in respect of its BITs with, amongst others, Belgium, Luxembourg and Spain (to see our previous blog post on this, see here), and most recently, Germany and Switzerland. Existing investors are still entitled to rely on the protections found in those BITs that have been terminated and remain able to do so for a period between 10 to 20 years after the BITs termination, depending on the relevant BITs sunset clause.
The PPI Bill, when passed as law, is intended to regulate the protection of all investments in South Africa in place of BITs.
The following key provisions in the PPI Bill and their implications are discussed further below.
- Definition of an “investment”.
- Absence of a fair and equitable treatment (FET) provision.
- Definition of “expropriation” and new principles of compensation for expropriation.
- Dispute resolution mechanism.
On 23 June 2013, South Africa served a notice of termination in respect of its BIT with Spain, thus ensuring that the investment treaty will terminate on 23 December 2013. Pursuant to Article XII of the BIT, the treaty entered into force for a period of 10 years from 23 December 1999, and thereafter for consecutive 2 year periods, unless terminated by 6 months’ notice before the date of expiry.
Investments made or acquired prior to 23 December 2013 will, however, continue to benefit from protection until 23 December 2023, by virtue of the survival clause in the BIT.
Those wishing to invest in South Africa should include contractual investment protection mechanisms, consider carefully how their investment is structured, and keep appraised of developments further to South Africa’s redistributive Black Economic Empowerment policy.