Court name
High Court
Case name
Kasuto v Joubert and Another
Media neutral citation
[2011] NAHC 96













7








CASE
NO.: A227/2008






IN
THE HIGH COURT OF NAMIBIA








EPHRAIM
KATATU KASUTO
…...................................................................APPLICANT





and





J
H JOUBERT
…................................................................................1st
RESPONDENT


SIEGFRIED
TJIJAHURA
…...............................................................2nd
RESPONDENT





CORAM:
MULLER J



Heard
on: 4 March 2011



Delivered
on: 29 March 2011









JUDGMENT



MULLER,
J.:
[1
] This is an application by the applicant to obtain the following



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."











[2]
The basis on which the application is brought is that there was no
written
arbitration
agreement between the parties as required by section 1 of the
Arbitration Act, no. 42 of 1965 (the Act) which is applicable to
Namibia. That section contains a definitions clause. An arbitration
agreement is defined as follows"



"arbitration
agreement
means
a
written
agreement

providing
for the reference to arbitration of any existing dispute or any
future dispute relating to a matter specified in the agreement,
whether an arbitrator is named or designated therein or not."















(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.











[5]
Mr Stolze's argument, namely that a signed agreement is not
necessary to provide jurisdiction to the arbitrator to arbitrate the
matter, as long as it is evident that there was an agreement to
arbitrate, is based on what MacArthur J found in the case of
Fassler,
Kamstra & Holmes v Stallion Group of Companies (Pty) Ltd
1992
(3) SA 825 (WLD). In that case MacArthur J had to consider whether
the agreement between the parties was a written arbitration
agreement as required by the Act. With reference to other
legislation where specific requirements are to be found requiring
that the agreement should be in writing
and
signed
by
the parties, the provision in arbitration Act differs to the extent
that it only requires a written agreement. The learned judge came to
a conclusion that it was not necessary in that case for the parties
to sign a written agreement and that it is enough if they have
adopted and acted on it.
(Fassler,
supra,
828H).
I was not referred to, neither could I find an other authority on
this specific point.











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











[7]
Although the issue that was dealt with in
Vidavsky
v Body Corporate of Sunhill Villas
of
2005 (5) SA 200 (SCA) is not the same as the issue to be decided
here, Heher JA, with reference to several other decided cases, dealt
with what an arbitration is and whether the legal consequence of the
absence of jurisdiction makes it a nullity or merely voidable. In
[14] at 207 B-F the learned judge of appeal said the following:



"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."











[8]
In respect of Mr Stolze's reliance on the proceedings in court as
having constituted a written agreement of arbitration, I had regard
to the typed record of what occurred during that hearing. It is
common cause that after the submissions by the counsel for both
parties, the presiding judge removed the matter from the roll. On
the typed version of what happened, it appears that both parties,
who were legally represented, were at
ad
idem
that
the matter should not proceed because the parties had come to an
agreement to postpone it and refer it to arbitration before first
respondent. In this regard Mr Stolze, who also represented the
respondents at that stage said:



"Mr
Stolze

my
Lord, the parties has come to an agreement with regards to this
matter that this matter be postponed and referred to Mr Jan Joubert
for arbitration. Both parties had agreed to the appointment of Mr
Jan Joubert as arbitrator. Mr Jan Joubert has accepted the
appointment as arbitrator."



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.











[10]
The last contention by Mr Stolze why is should be regarded that
there was a written arbitration agreement, is also based on the
Fassler
case,
supra,
namely
where the learned judge relied on the correspondence between the
parties to constitute a written agreement. McArthur J said the
following at 828 I in the
Fassler
case:



"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.











[11]
The type of correspondence between the parties in this case differs
dramatically from the correspondence in the
Fassler
case,
which led the learned judge to conclude that there was in fact a
written agreement. It is clear from the particulars in the
Fassler
case
that despite the correspondence between them, both parties
participated in the arbitration by attending a preliminary hearing
and further mediation. A dispute ensued to the effect that the
matter could not have been resolved the papers, particularly whether
a specific expert should have become involved at that stage. It is
also reported that the arbitration, as well as the payment of the
costs of the arbitration, came to an end on the specific date. Only
when the costs order had to be enforced, one party refused to be
bound by it on the basis that the expert was not afforded the
opportunity to make representations. To sum it up, it appears that
arbitration proceedings commenced with both parties participating
therein. In this matter certain correspondence had been exchanged
between the parties and it appears that they went so far as to agree
on the first respondent to arbitrate the matter.



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









ON
BEHALF OF THE APPLICANT:

MR
UEITELE















INSTRUCTED
BY:
UEITELE
& HANS LEGAL PRACTITIONERS



ON
BEHALF OF THE RESPONDENTS:

MR
STOLZE



INSTRUCTED
BY:
CHRIS
BRANDT ATTORNEYS