Total Support Management (Pty) Ltd and Another v Diversified Health Systems (South Africa) (Pty) Ltd and Another

Interpharm Integrated Pharmaceutical Benefit Management (Pty) Ltd and Mr G W Slabbert sold their pharmaceutical benefit management business to Diversified Health Systems (South Africa) (Pty) Ltd (DHS) under a written agreement concluded in October 1995. Payment of the purchase price was structured in stages and subject to specific conditions. Disputes arose regarding DHS’s liability to pay interest on two instalments of R13.5 million each and a further R20 million contingent payment. The dispute was referred to arbitration in terms of the agreement. The arbitrator dismissed both the appellants’ claims and DHS’s counterclaim. The appellants sought to have part of the arbitral award set aside in the High Court under section 33(1) of the Arbitration Act 42 of 1965, alleging misconduct and gross irregularity by the arbitrator. The High Court dismissed the application, and the appellants appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and the arbitral award was not set aside.

The case is a leading authority on the finality of consensual arbitration in South African law and confirms the very limited scope of judicial review of arbitral awards. It clarifies that private arbitration does not constitute administrative action and is therefore not subject to constitutional review under section 33(1). The judgment reinforces the principle that courts will not interfere with arbitral awards merely because of errors of law or fact.