The Law: Con­tracts - Part 27

The Role of: Ser­vice Level Agree­ments

Tourism Tattler - - EDITORIAL -

Al­ter­na­tive Dis­pute Res­o­lu­tions (Cont’d)

I ended Part 26 (FEB 2017) by stat­ing that ar­bi­tra­tion be­comes the method of re­solv­ing a dis­pute if par­ties to the dis­pute choose that method of prob­lem-solv­ing at the time, or if it is a clause in an agree­ment gov­ern­ing the re­la­tion­ship that gave rise to the dis­pute.

An­other al­ter­na­tive, to be pre­ceded by word­ing to the ef­fect that the MDs or CEOs of the busi­nesses con­cerned will first try and re­solve the mat­ter, is to re­fer to the rules of the AFSA and to al­low for AFSA to ap­point the ar­bi­tra­tor if the par­ties can­not agree.

Ar­bi­tra­tion does of­fer the fol­low­ing advantages:

1. Flex­i­bil­ity: e.g. choice of ar­bi­tra­tor, venue, tim­ing and pro­ce­dure

2. Costs: This may how­ever some­times be a per­ceived ben­e­fit as you still have to em­ploy an at­tor­ney and more of­ten than not coun­sel (ad­vo­cate) as well. This ben­e­fit will only re­ally ma­te­ri­alise if the par­ties max­imise the ben­e­fits of ar­bi­tra­tion e.g. the in­for­mal­ity, the ex­per­tise of a cor­rectly cho­sen ar­bi­tra­tor and lim­it­ing the use of ex­pert wit­nesses.

3. Speed: This is a very real ben­e­fit, espe­cially the par­ties can agree on dead­lines e.g. for the fil­ing of plead­ings (ar­gu­ments) and you have a strong ar­bi­tra­tor. This ben­e­fit can be en­hanced even fur­ther if the par­ties meet be­fore­hand to de­fine the is­sues and ex­change rel­e­vant doc­u­ments (which meet­ing may or may not be presided over by the ar­bi­tra­tor).

4. Con­fi­den­tial­ity: The mat­ter is not heard in an open (public) court (See brand man­age­ment above).

5. Fi­nal­ity: Ar­bi­tra­tor’s find­ing is fi­nal and can only be at­tacked on ba­sis of mis­con­duct or gross ir­reg­u­lar­ity.

6. Eq­uity: Ar­bi­tra­tor can make an award re­ly­ing on eq­uity rather than on the ‘let­ter of the law’.

7. Re­la­tion­ship: The chances are the re­la­tion­ship be­tween the par­ties is less likely to be dam­aged by ar­bi­tra­tion than lit­i­ga­tion.

Ar­bi­tra­tion could, how­ever, be linked to the fol­low­ing dis­ad­van­tages:

1. Costs: this can, in fact, be as high as lit­i­ga­tion if ben­e­fit 1 above (esp. the pro­ce­dure) is not fully max­imised.

2. No ap­peal: i.e. a bad award is not ap­peal­able.

Me­di­a­tion has the same ben­e­fits as ar­bi­tra­tion but not the dis­ad­van­tage of high costs – the lat­ter is ma­te­ri­ally lower and more man­age­able.

There are four main ADR bod­ies in South Africa, de­tails of which can be ob­tained via the In­ter­net i.e.


• The Ar­bi­tra­tion Fo­rum

• The As­so­ci­a­tion of Ar­bi­tra­tors

• The CCMA: The Com­mis­sion for Con­cil­i­a­tion Me­di­a­tion and


I trust the above will give you a bet­ter grasp of ADR, as­sist you in pre­par­ing more ef­fec­tive con­tracts and re­duc­ing your le­gal bills!

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