Brompton Court Body Corporate SS119/2006 v Christina Fundiswa Khumalo

The appellant was the body corporate of the Brompton Court sectional title scheme. The respondent owned a sectional title unit in the scheme. Disputes arose between the parties which were referred to arbitration by agreement. The respondent claimed various credits and damages in the arbitration, while the appellant counter-claimed for outstanding levies and other amounts. On 21 December 2012, the arbitrator published an award largely in favour of the appellant for payment of R87,349.48 plus interest and costs. On 26 March 2014, the appellant applied to make the arbitration award an order of court in terms of section 31 of the Arbitration Act 42 of 1965. The respondent opposed the application on the basis that the debt had prescribed in terms of the Prescription Act 68 of 1969. The High Court upheld the defence of prescription and dismissed the application with costs.

• Whether an arbitration award creates a new debt for purposes of the Prescription Act 68 of 1969
• Whether a claim to make an arbitration award an order of court in terms of section 31 of the Arbitration Act 42 of 1965 constitutes a 'debt' in terms of the Prescription Act
• Whether the debt prescribed in terms of section 13(1)(f) of the Prescription Act
• Whether the respondent discharged the onus of proving prescription

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order granting prayers 1, 2 and 3 of the notice of motion (making the arbitration award an order of court), with costs.

1. An arbitration award generally does not create a new debt for purposes of the Prescription Act 68 of 1969. Like a court judgment, it serves to affirm and/or liquidate an existing debt which was disputed. 2. A claim to make an arbitration award an order of court in terms of section 31 of the Arbitration Act 42 of 1965 is not a 'debt' in terms of the Prescription Act, as it does not require the debtor to pay money, deliver goods or render services, but merely employs a statutory remedy. 3. Section 13(1)(f) of the Prescription Act delays the completion of prescription when a debt is subject to arbitration, allowing one year after the award for the creditor to apply to make the award an order of court before the underlying debt prescribes. 4. A party raising prescription bears the onus of proving when each separate debt became due, particularly where a claim encompasses multiple debts that became due on different dates.

The court noted that different considerations apply to arbitrations under the Labour Relations Act 66 of 1995, referencing the Constitutional Court decisions in Myathaza v Johannesburg Metropolitan Bus Service and Mogaila v Coca Cola Fortune, where there was divergence on whether the Prescription Act applies to the LRA. The court also discussed the decision in Blaas v Athanassiou (1991), clarifying that it was based on contractual waiver of prescription rights rather than on application of the 30-year prescription period to arbitration awards. The court expressed the view that the delay mechanism in section 13(1)(f) is intended to enable a creditor to apply to make the arbitration award an order of court before the underlying debt prescribes. The court noted that the judgments in Primavera Construction SA v Government of Northwest Province and Prime Fund Managers (Pty) Ltd v Rowan Angel (Pty) Ltd, which expressed contrary views on these issues, should not be followed.

This judgment provides important clarification on the interaction between arbitration awards and prescription law in South Africa. It authoritatively establishes that arbitration awards generally do not create new debts for prescription purposes but rather affirm existing debts. The judgment also clarifies that an application to make an arbitration award an order of court is not itself a 'debt' that can prescribe. The decision resolves conflicting views that had been expressed in earlier High Court judgments (Primavera Construction and Prime Fund Managers). It provides guidance on the proper interpretation of section 13(1)(f) of the Prescription Act as a delay mechanism rather than a one-year prescription period. The judgment also reinforces the principle that a party raising prescription bears the onus of proving when debts became due, particularly where multiple separate debts are involved.