Close-Up Mining (Pty) Ltd and Others v The Arbitrator, Judge Phillip Boruchowitz and Another

The Lutzkie Group of Companies (Pty) Ltd instituted arbitration proceedings against Close-Up Mining (Pty) Ltd, Willem Pieter Tenner, and Close-Up Machinery and Plant Hire (Pty) Ltd arising from two binding term sheet agreements. Retired Judge Phillip Boruchowitz was appointed as arbitrator under an arbitration clause referring disputes to AFSA arbitration. In his award of 18 November 2020, the arbitrator declined to consider Close-Up Mining’s defence that the Lutzkie Group had repudiated the agreements, on the basis that repudiation had not been pleaded and therefore fell outside his jurisdiction. The arbitrator also granted specific performance relief that effectively treated Mr Tenner as a party to one of the transactions. Close-Up Mining sought to review and set aside the award under s 33(1) of the Arbitration Act 42 of 1965, alleging gross irregularity and excess of powers. The High Court dismissed the review, and Close-Up Mining appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel. The second respondent (Lutzkie Group) was ordered to pay the costs associated with volumes 4–12 of the record.

The judgment clarifies South African arbitration law by reaffirming that an arbitrator’s jurisdiction and powers derive solely from the arbitration agreement and applicable arbitral rules, not from inherent judicial powers. It provides authoritative guidance on the limits of an arbitrator’s competence to entertain unpleaded substantive disputes under the AFSA rules and underscores the centrality of pleadings in defining arbitral disputes.