The new commercial court in Gauteng, if it works as planned, could change the way corporate disputes are managed – to the benefit of all parties
The next big litigation trend in 2019? – No doubt about it, the answer lies with the new commercial court in Gauteng. Its official existence and applicable practice directives were announced by the judge president of the Gauteng divisions of the high court, Dunstan Mlambo, in October 2018, and some cases are already in the pipeline, making their way to settlement or a hearing.
From Mlambo’s initial announcement, it is seen as a dynamic operation, with disputes case-managed by the judge or judges likely to hear the matter when it gets to court. Case-management, already delivering good results in other jurisdictions like Namibia, allows for the resolution of particular matters before trial, to make the actual court hearing quicker and more focused. During meetings with the parties, the judge helps clarify a time-table, witness statements and exchange of documents, with agreed deadlines to keep the pre-trial process moving efficiently towards the hearing.
Mlambo’s vision is of a court offering efficient and faster resolution of commercial matters. Certainly, there is a need for exactly this. As attorney Jac Marais, partner at Adams & Adams, puts it, it is not good enough to tell the CEO of an international company that it will take four or five years for a final decision on whether the company is entitled to certain money. “Because the courts have been perceived as slow, many parties have chosen arbitration instead,” Marais adds. “If the commercial court project takes off – and there is every indication that this is already starting to happen – then this becomes a viable alternative.”
From Mlambo’s initial announcement, it seems the commercial court will tend to go broad in deciding what cases it will accept.
Cases should “have their foundation in a commercial transaction or relationship” and might include import or export of goods; carriage of goods by land, sea, air or pipeline; insurance and reinsurance; banking and financial services; medical scheme matters and commercial issues arising out of business rescue and insolvency cases.
It also seems quite easy for a case to be transferred to the commercial court, simply requiring a letter to the judge president or deputy judge president, explaining why the case is, or should be considered as, a commercial matter, of the sort that would warrant transfer to the commercial court.
The trend for some years has been for difficult cases or matters where time delays are particularly intolerable to go to arbitration. It’s seen as generally cheaper because the parties are committed to getting a quick result. Litigants also tend to prefer it because they have input on who will preside and thus enjoy confidence in the arbitrator.
But that trend has created its own difficulties for courts. As major commercial matters disappear from the courts, so the pool of judges with experience to handle such issues grows smaller. And because arbitration awards are generally confidential precedents are not being created. Generally, commercial law precedents are “stuck in the 1980s”, says Marais. “Many commercial matters are going to arbitration and the resulting judgments remain confidential.”
The new courts could turn these problems around, creating a bigger pool of experienced judges and a new body of precedent-setting judgments. And when that starts to happen and confidence grows in the new system, certain aspects of arbitration could start to lose their appeal. If parties are certain that cases will be heard quickly in court, without unexpected and expensive delays, by experienced judges familiar with a shared set of precedents, then this might be the preferred way for many people to resolve disputes. It could actually end up being less expensive to litigate in court, without arbitrators’ fees, or the cost of hiring a venue.
- Financial Mail, 18 December 2018
Tags: Adams & Adams, arbitration, Commercial court, Gauteng, Jac Marais, Judge President Dunstan Mlambo, SA courts