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King IV Report on Corporate Governance Promotes the Arbitration process

Updated: Oct 25, 2022

“The "politically correct" name of modern problems is called "Challenges".

During early 1990, just before, and then more so just after South Africa's democratic liberation, black politicians used the phrase " grass-root level" just about in every public address. Now you don't hear a political speech without the speaker referring to "Challenges" instead of calling a problem a problem..”

The Oxford dictionary defined the word problem as a thing that is difficult to understand or to deal with.

In contrast, the same reference defines the word challenge as a new or difficult task that tests somebody's ability and skill.

So what has all this to do with Arbitration? That is precisely the point that I want to address,

In Arbitration, we address a dispute or a problem between two parties to understand or deal with a problematic situation and reach an understanding between the two or more parties.

In a court of law, two legal entities and their legal advisors challenge each other in a dual of skills;

· Firstly have all the rules of the applicable court been adhered to and followed?

· Then we can only book the court date after all the correct papers and summonses have been delivered by the appropriate and highly overworked sheriff’s office.

· The hearing date is now vulnerable;

o To a court calendar fully booked for months ahead

o to alteration by any of the parties involved,

o due to the availability of a competent judge or magistrate

o due to the respondent requesting a postponement

o due to the pandemic, all court procedures and activities are cancelled

The result, after months, perhaps years of legal actions and paraphernalia, costing all parties more than likely, legal fees, in aces of the disputed amount.

Worst of all, at the end of the procedures, the opposing parties will never speak to each other again, never mind do business again.

The arbitration process, in contrast, is far more user-friendly and less dogmatic;

· The Rules are easy to follow, and the Arbitration institute's Secretariat department is always at arm's length and willing to assist.

· Paperwork is exchanged electronically.

· Hearings can be scheduled within seven days.

· Qualified arbitrators are almost always available at concise notice, albeit sometimes at above-average rates,

· Pandemic rules at a small venue allow the participation of a limited amount of people as long as the procedures are conducted according to the pandemic precautions and regulations.

Firstly, the quick and concise procedures allow the arbitrator to engage the opposing parties in a mediation process to try and reach an amicable resolution and only if not successful will the arbitration procedures commence. Suffice it to say, In 70% of cases, the parties settle the dispute during the mediation process and leave the venue in a satisfied and optimistic state of mind with a better chance of resuming their business relationship.

Hence the above facts the King IV rapport on corporate governance highly recommends the use of Arbitration

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