Lufuno Mphaphuli & Associates (Pty) Ltd v Andrews and Another

Lufuno Mphaphuli & Associates (Pty) Ltd was Eskom’s principal contractor on an electrification project and subcontracted certain works to Bopanang Construction CC. Disputes arose regarding execution of the work and payments due. Bopanang instituted action in the High Court and obtained an interim interdict against Eskom paying Lufuno. The parties agreed to resolve the dispute by arbitration under a written arbitration agreement appointing Nigel Andrews as arbitrator, with the award to be final and binding. Andrews conducted inspections and measurements and made an award in August 2004 ordering Lufuno to pay Bopanang approximately R340 000 plus interest. Lufuno failed to pay, alleged errors and bias on the part of the arbitrator, and launched a review application out of time. Bopanang applied for the award to be made an order of court. The High Court dismissed Lufuno’s review, refused condonation, and made the award an order of court with punitive costs. Lufuno appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and the High Court’s orders dismissing the review, refusing condonation, and making the arbitration award an order of court were confirmed.

The case is a leading authority on the finality of private arbitration in South African law and the very limited grounds on which courts may review arbitration awards. It affirms that parties who agree to final and binding arbitration waive the right to have the merits reconsidered, and that judicial intervention is confined to the strict grounds in s 33 of the Arbitration Act. The judgment also clarifies the high threshold for proving bias or misconduct by an arbitrator and discourages abusive review proceedings.