CGF ARTICLES, OPINIONS & EDITORIALS
To sue or not to sue, that is the question: Arbitration (2012-08-31)
February 19,
2015 3659 3659 
There are many reasons why organisations across the globe are paying more attention to the practice of arbitration.
Simply put, individuals and organisations foresee the advantages of preserving relationships -- particularly in a down-turned economy -- where disputes are more frequent and consume more management time and organisational resources than ever before. And in troubled economic times, it would appear that people are more inclined to litigate, whilst the converse may hold true that people seem more relaxed when times are good and are forgiving when contractual arrangements are not completely met. Indeed, one only needs to consider the nature of a typical Court Roll to appreciate the volume of commercial cases being presented to the courts on a daily basis to realise just how many businesses approach the courts for relief when disputes arise.
Whilst the volume of these cases also absorbs valuable court time, businesses who implement an up-front arbitration clause in their contracts invariably are able to resolve their disputes privately, and outside of the court system without going to trial. Besides the fact that business relationships have a far better chance of survival after arbitration, the costs incurred to follow an arbitration process is usually far cheaper than the costs attached to litigation, especially if such matters need to be dealt with across international borders. Of course, reputations and productivity on the whole are also largely unaffected when organisations pursue arbitration above litigation as a preferred means to resolving their disputes.
Notably, in larger South African business environments, there appears to be a greater uptake to support alternative means for resolving disputes, instead of approaching the courts as a first means of action. The reason may be largely ascribed to the fact that such an approach to resolving disputes is less hostile and generally produces better results for both parties in dispute with a quicker resolve. Whilst the Companies Act 2008 and the King Report on Governance for South Africa (King III) makes provision for organisations to use Alternative Dispute Resolution (ADR) as a first means of mediation, our Labour Relations Act of 1995 is far more specific, mandating disputing parties to first attempt to conciliate their disputes prior to resorting to arbitration or litigation.
