In South African private M&A transactions, private arbitration reigns as the preferred method of dispute resolution.
Private arbitration offers numerous advantages: It offers a swift process, providing parties with relative speed in resolving disputes. The flexibility in procedures and the ability to select the arbitrator offer more control. Arbitration awards are usually final, reducing the potential for lengthy appeals and reviews, and it maintains a higher degree of privacy. However, the parties can agree to an appeal procedure.
When dealing with offshore parties, the parties may mutually decide on a neutral governing law and venue for the arbitration.
However, it's important to note that private arbitration may not always be the most cost-effective option when compared to litigation in South Africa's High Courts.
Even if arbitration is the chosen path, parties often agree to submit to the jurisdiction of a specific court for urgent relief as an agreement to resolve disputes by arbitration does not oust the inherent jurisdiction of the Courts.
Going to Court on an issue can sometimes involve suspending High Court proceedings while awaiting the outcome of private arbitration on factual disputes.