SA Graan Maart 2015

80 / 124

Maart 2015
78
SACOTA and arbitration’s role in
our grain and oilseed industries
Since the dawn of time, humanity has been buying, selling,
bartering and trading. As there are at least two parties
to every trade, we can assume that ever since the first
trade, disputes arose and a method was needed to settle
these disputes.
During the middle ages, the traditional way of settling disputes
was to fight to the death in the presence of the king, or one of his
senior officials. It was believed that the Lord would assist the party
that had the law on his side. This was clearly shown by the guilty
party being killed in the fight.
Gangsters, such as the legendary Al Capone, still used these old
methods, even in modern times. Luckily for us, such deadly methods
are no longer popular among business people and have been
replaced by more conventional methods of settling disputes.
These methods are, in order of increasing aggression:
Negotiation
Mediation
Arbitration
Litigation
With the increasing cost and complexity of litigation and the long
delays in bringing disputes to court, and thereafter judgments,
appeals and further appeals, mediation and arbitration have become
more popular over the past decades and are generally known as
alternative dispute resolution.
Advantages of alternative dispute
resolution
Disputes involving technical issues as well as those requiring
specific industry knowledge, lend themselves to the arbitral process,
which has some distinct advantages over litigation.
These advantages are:
The disputing parties themselves can nominate a single arbitrator
or arbitral tribunal (usually a panel of three arbitrators).
If the disputing parties cannot agree on an arbitrator, then the
independent arbitral body that was agreed to by the parties will
appoint an arbitrator.
If the defendant does not participate in the process, the
arbitration will continue without them. Any arbitral award will be
enforceable.
The arbitral tribunal will have specific industry knowledge that
will ensure that there is no need to explain industry standards or
practices to the arbitral tribunal.
The appointment of the arbitral tribunal can usually take place
quickly and the dates for the arbitral hearing can be set down
without delay. Thus a quick hearing of the dispute is possible
and subject to the arbitral tribunal, a decision can also be taken
quickly. There is no need to wait for an available court date,
which may be years in the future.
The arbitral procedure is entirely open for the disputing parties
to decide upon. The physical location of the hearing, the
applicable country law, the applicable procedures, whether legal
representation will be allowed or not, whether an appeal will
be allowed or not – these are all open to selection by the
disputing parties.
Arbitrations are usually confidential, whereas court litigation is
almost always public.
Normally there is no appeal against an award by the arbitral
tribunal. This speeds up the whole process.
The arbitration award can quickly be made an order of court and
is accordingly fully enforceable both locally and in many states
overseas.
The courts will normally not interfere in the arbitral process or
the award. It is only in cases where the arbitrator is found to
be incapable or dishonest, that the courts will interfere.
SACOTA and SAGOS
One of the first projects that the South African Cereals and Oilseeds
Traders Association (SACOTA) instigated, was to develop a Standard
Contract, SAGOS 1 (South African grains and oilseeds) for members
and anyone else who would like to use it. From the start, the contract
incorporated a mandatory arbitration clause. No dispute could be
litigated. All disputes would have to be arbitrated.
The SAGOS contract has been revised several times with the current
version being SAGOS 1 Ver. 9. This latest version incorporates a
major change in the arbitration procedure. From the beginning
of 2013 all arbitrations would be administered by the Arbitration
Foundation of South Africa (AFSA) and would use the AFSA
Expedited Rules for arbitrations. More information on AFSA’s role
will be given below and can also be obtained from the AFSA website
( .
Arbitrators
To ensure that there were sufficient grain experienced and arbitra-
tion trained arbitrators available, nine individuals were nominated
by SACOTA, GSA, NCM, and AFMA and underwent an arbitration
course funded by the Maize Trust. Over the past years a number of
them did not continue with arbitration work and the requirements to
become an AFSA approved grain arbitrator have changed.
Currently anyone who wishes to become a grain arbitrator must:
Have had a minimum of ten years commercial experience in the
grain and allied trades.
Have attended and passed the AFSA arbitrators course with an
optional module of international arbitration.
Be a person with a reputation for integrity and ethical behaviour.
Be approved by the AFSA management committee.
ON FARM LEVEL Mediation / Arbitration Money matters and financial services
“
...if you do have a claim to
submit, read the contract
and make sure that you
strictly adhere to the time
limits in the contract...
“
STEVE HOCHFELD, Hochfeld Group