The aim of this article is to provide the reader with a ready-to-use set of principles to determine, firstly, the grounds upon which an arbitration award may be set aside on review, secondly, the effect of flaws in reasoning, reliance on irrelevant factors and ignoring material factors when an arbitration award is considered on review and, thirdly, the effect of an error or irregularity in the arbitration award when taken on review.
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- The failure of an arbitrator to apply his/her mind to material issues usually amounts to an irregularity.
- Whether or not such irregularity will result in the setting aside of an arbitration award entails a further enquiry, namely, a determination whether such irregularity reveals a misconception of the true enquiry or resulted in an unreasonable action.
- Flaws in reasoning, the failure to apply one’s mind, reliance on irrelevant factors and ignoring material factors are not enough to vitiate an award on review – same must be assessed with reference to, inter alia, the following questions:
- whether or not this resulted in the wrong enquiry being undertaken, or
- whether or not the enquiry was undertaken in the wrong manner, or
- whether or not, as a result of the above, the arbitrator arrived at an unreasonable result
- thus, what is required, is a determination as to whether or not singularly, or cumulatively, the above factors resulted in a decision that no reasonable decision-maker could reach
- In short, what has to be determined is whether or not the aforesaid error or irregularity was material in respect of the result.
- In determining whether or not such materiality in respect of the result exists, the following questions are relevant:
- did it have a distorting effect on the arbitrator’s conception of the enquiry to be undertaken?
- did it have a distorting effect on the delineation of the issues?
- did it have a distorting effect on the ultimate outcome?
- Provided the right question was asked and answered, a wrong answer will not necessarily be unreasonable.
- What is required for an arbitration award to be set aside on review is a determination that the arbitrator has diverted from the correct path in conducting the arbitration and, as a result, failed to address the issues raised for determination.
See:
- Head of Department of Education v Mofokeng and Others (2014) 25 SALLR 82 (LAC)
- Herholdt v Nedbank Ltd (2013) 34 ILJ 2795 (SCA)
- Securitas Specialised Services (Pty) Ltd v CCMA and Others (2021) 42 ILJ 1071 (LAC)
- National Union of Metalworkers of SA and Another v CCMA and Others (2023) 34 SALLR 363 (LC)
