Rabinowitz v Levy and Others

The appellant sold shares in SDK Agencies (Pty) Ltd to the first and second respondents under a sale agreement containing an arbitration clause. Disputes arose regarding payment of the balance of the purchase price, alleged fraudulent misrepresentations, and several counterclaims by the buyers, including claims relating to stock valuation, an irrecoverable Clicks debt, and missing assets. The disputes were referred to private arbitration before the fourth respondent as arbitrator. After evidence and argument, and following a joint email from counsel suggesting that a further hearing might be needed if certain counterclaims succeeded, the arbitrator issued a final award without convening a further hearing. He dismissed the fraud claim, upheld the Clicks claim and part of the stock claim, reduced the purchase price accordingly, dismissed the remaining counterclaims, and ordered the buyers and surety to pay the balance and costs. The buyers sought to review the award under s 33(1)(b) of the Arbitration Act, alleging gross irregularities. The High Court dismissed the review, but the Full Court upheld it and set aside the award, ordering a fresh arbitration. The seller then appealed to the Supreme Court of Appeal.

The appeal was upheld. The order of the Full Court was set aside and replaced with an order dismissing the review and the appeal to the Full Court with costs. The first, second and third respondents were ordered jointly and severally to pay the appellant’s costs of the appeal to the Supreme Court of Appeal.

The case reaffirms the strict and limited scope of judicial intervention in private arbitration under s 33 of the Arbitration Act. It underscores that courts will not interfere with arbitration awards merely because an arbitrator may have erred on the facts or law, and that alleged procedural unfairness must amount to a true denial of a fair hearing. The judgment strengthens party autonomy and finality in consensual arbitration in South African law.