Leadtrain Assessments (Pty) Ltd v Leadtrain (Pty) Ltd and Others

Various disputes between the appellants and respondents were referred to consensual arbitration under the Arbitration Act 42 of 1965. The arbitrator made an award on the merits (not in issue) and a costs award in which Leadtrain (Pty) Ltd was ordered to pay 80% of arbitration and certain High Court costs, certain costs were included as arbitration costs, and Mr Lilford was held jointly and severally liable for half the costs. The appellants applied to have the award made an order of court under s 31 of the Act. Mr Lilford counter-applied to have paragraphs 4 and 5 of the costs award set aside or remitted to the arbitrator under s 32(2), alleging misdirection by the arbitrator. The High Court granted the counter-application and set aside those paragraphs. The appellants appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The orders of the High Court were set aside. Paragraphs 4 and 5 of the arbitrator’s costs award were made an order of court, the counter-application was dismissed with costs, and the respondents were ordered to pay costs jointly and severally.

The judgment is an important reaffirmation of the principle of finality in consensual arbitration under South African law. It clarifies the limited scope of judicial intervention in arbitration awards, particularly distinguishing remittal under s 32(2) from review under s 33(1), and confirms that mere error or misdirection by an arbitrator is insufficient to justify court interference.