CASE NO.: A227/2008

IN THE HIGH COURT OF NAMIBIA

EPHRAIM KATATU KASUTO				APPLICANT

and

CORAM:							MULLER J
Heard on: 							4 March 2011
Delivered on:							29 March 2011 

JUDGMENT

relief:
"1. Calling upon the first and second respondents to show cause why the Arbitratration proceedings and the Arbitratraton award given by the First Respondent on 30 June 2008 should not be reviewed and corrected or set aside.
2. Cost of this Application, as against the First Respondent only if he opposes this Application then and in that event the First Respondent and the Second Respondent jointly and severally pays the cost the one paying the other to be absolved.
3 Further and/or Alternative relief."

(My emphasis)

[3] Mr Ueitele, who appeared for the applicant in this matter, confines himself to two contentions of which the main one is that there was never a written arbitration agreement as required in terms of the Act. Mr Stolze, appearing for the second respondent, submitted that there was in fact a written agreement in respect of which the first respondent acted as an arbitrator and made an award. Both counsel submitted written heads of arguments.
[4] It is common cause that there was never a written document in which dispute was referred to the first respondent for arbitration. Mr Stolze based his argument thereon that it is not required in terms of the case law that an arbitration agreement should be signed. He further submitted that the matter was preceded by litigation in court and at a court hearing the matter was removed from the roll because the parties had arrived at an agreement to arbitrate the dispute between them. His last contention was that the correspondence between the parties makes it clear that there was in fact an agreement to refer the matter to arbitration before the first respondent, but that the applicant irregularly withdrew from that arbitration because of an irrelevant reason. I shall deal with these contentions hereinafter.

[6] It is evident that the arbitration agreement in this matter was neither in writing, nor signed.

"An arbitration is, of course, a quasi-judicial proceedings: Estate Milne v Donohoe Investments (Pty) Ltd and Others 1967(2) SA 359 (A) at 373H. The precepts which govern the procedure in judicial proceedings apply to an arbitration: Shippel v Morkel and Another 1977 (1) SA 429 (C) at 434 A-E. The authorities are clear that want of jurisdiction in judicial or quasi-judicial proceedings has the effect of nullity without the necessity of a formal order setting the proceedings aside. They are collected in Minister of Agricultural Economics and Marketing v Virginia Cheese and Food Co (1941) (Pty) Ltd 1961 (4) SA 415 (T). See also S v Absalom 1989 (3) SA
154 (A) at 164 E-G. Lack of jurisdiction in arbitration proceedings renders an award invalid: Dickenson & Brown v Fisher's Executors 1915 AD 166 at 175; Fassler, Kamstra & Holmes v Stallion Group of Companies (Pty) Ltd 1992 (3) SA 825 (W) at 829 B-C. The same consequence applies to proceedings in which a summons has not been served (with which, it seems to me, the absence of notice of proceedings can be equated): see the Virginia Cheese case at 423 E-F and Dada v Dada 1977 (2) SA 287 (T) at 288 C-F and the authorities there cited. Absence of proper notice in arbitration proceedings has always been treated as a fatal flaw. See eg Newman v Booty NO (1901) 18 SC 116 (11 CTR 176); Hostshousen v Rademan's Executors and Others 1918 GWLD 19 at 23; Burns & Co v Burne (1922) 43 NLR 461; Sapiero and Another v Lipschitz and Others 1920 CPD 483 at 486; Field v Grahms-town Municipality 1928 EDL 135."

After conferring with his apponent, Mr Stolze requested the court to remove the matter from the roll, which was done. This happened on 3 April 2007. It is common cause that the matter was eventually considered by the first respondent who describe, himself as "arbitrator" and who, in the absence of the applicant, proceeded with the arbitration and made an award, which the applicant now wants to set aside.

[9] It is evident from the record of the court proceedings of 3 April 2007 that the defended action was removed from the roll at the request of the applicant after it was indicated that the parties had come to an agreement to refer the matter to arbitration before the first respondent. That, however, does not constitute a written agreement to arbitrate in terms of the Act. It merely illustrates an intention to refer the matter to arbitration. It might even have been agreed that the matter shall be referred to arbitration, but what is lacking is the required written agreement describing the disputes which have to be arbitrated upon.

"In the present case there is little doubt that, having regard to all the correspondence between the parties, there was an agreement in writing."
However, the application was dismissed on the basis that the learned judge
could not decide the dispute on the papers.

However, before the arbitration commenced a certain event intervened, namely that certain alleged unprofessional conduct of the applicant, who was their lawyer, had apparently been referred by the respondents to the Law Society of Namibia. Although this issue has in my opinion nothing to do with the matter at hand, it apparently led thereto that the applicant was no longer interested in participating in the arbitration process and made his view clear in writing on more than one occasion. Although he refers to a letter, which Mr Stolze also relied, namely that he does not regard himself further bound to the agreement, it does not provide an answer to the issue at hand which is whether there was a written agreement as required in terms Act. Consequently, I cannot decide in favour of the respondents that the correspondence constituted a written agreement in this matter.

[12] In my view, the requirement that there must be a written arbitration agreement is precisely to avoid as situation as what is currently in dispute, namely whether the parties did in fact agree to arbitrate the dispute(s) between them and to define such dispute(s). Once the parties have so agreed, they cannot backtrack. S 28 of the Act provides that unless the arbitration agreement provides otherwise, an award shall be final and binding on all the parties.

[14] To summarise, I am not persuaded by the arguments submitted by Mr Stolze that there was in fact a written agreement as required by the Act on which the first respondent could arbitrate. In the light thereof it is not necessary to deal with any other contentions.

[13]   In the result the following orders are made:

1. The arbitration award made the by first respondent on 30 June 2008 is set aside;
2. The second respondent is ordered to pay the costs of this application.

MULLER, J