- February 9, 2023
- |Civil Law, Practice, And Procedure, Concise Law Reports (CLR)
Ex-Tempore judgement: Reasons for order
On 17 March 2022, the plaintiff issued summons against the defendant claiming amounts of N$432,752 and N$446,440, respectively. The plaintiff’s claim was premised on a written agreement for the sale and purchase of printing paper which was concluded between the parties duly represented on 13 September 2021 and at Windhoek. The plaintiff’s second claim was premised on damages allegedly suffered by the plaintiff in mitigating its losses.
The defendant filed a special plea of arbitration proceedings which read as follows: The defendant pleads specially that the manner in which the plaintiff sought to resolve the dispute was in violation of the agreement entered into between the parties. It was common cause that the parties agreed to resolve the dispute through an arbitrator rather than through courts. There was no evidence before the Honourable Court that the plaintiff sought to arbitrate the matter before approaching the court. The plaintiff did not testify that it had not seen or read the clause of dispute resolution that dispute should be resolved through an arbitrator. It goes without saying that arbitration is cheap, fast and private and was the best way to have handled this case.’
The plaintiff delivered a replication to the special plea. In essence the replication stated that the clause on dispute resolution in the agreement provided that disputes regarding the agreement will be resolved through mediation, arbitration or through the courts. Thus, the court’s jurisdiction was not excluded by the dispute resolution clause as it stood in the agreement.
The legal issue was whether disputes regarding the agreement could be resolved through mediation, arbitration, or through courts?
SCHIMMING-CHASE J considered the matter and held that:
- Prinsloo J held in Namibia Power Corporation (Pty) Ltd v Congo Namibia Pty Ltd (HC-MD-CIV-ACT- CON-2019/03067) [2021] NAHCMD 210 (5 May 2021) that in terms of the common law, an arbitration defence is raised by way of a dilatory plea (special plea). The purpose thereof is to obtain a stay of the proceedings pending the final determination of the dispute by way of arbitration. However, due to the very nature of the special plea it does not afford a defendant an absolute defence and its purpose is merely to determine the correct forum to which the parties submit themselves.
- It was held in addition that the defendant’s failure to pursue section 6 of the Arbitration Act does not prohibit the defendant from proceeding with a special plea, as it did. However, if the defendant did not so proceed to apply for a stay in terms of the Arbitration Act, he or she cannot rely on its provisions at a later stage.
- It was clear that the parties agreed that any dispute stemming from the agreement will be resolved through ‘mediation, arbitration, or through courts’. The term ‘or’ should be considered. There was a clear choice present in the agreement, and the plaintiff was not precluded from instituting action in this court.
- That according to the agreement, the intention of the arbitration clause is that a dispute can be resolved in three different forums, namely; through mediation, through arbitration, or through the court system. The plaintiff made its election.
The special plea was dismissed without costs.
Ekwakuti Trading CC v Omarichman Printing CC (HC-MD-CIV-ACT-CON-2022-01146) [2023] NAHCMD 42 (9 February 2023)