Favish (also known as Shraga) Vidavsky v Body Corporate of Sunhill Villas

The appellant owned a sectional title unit in Bruma, Johannesburg, and declared a dispute with the respondent body corporate concerning its administration of the property. The dispute was referred to arbitration under section 35 of the Sectional Titles Act 95 of 1986, read with the Management Rules. An arbitrator, Mr Louro, was appointed. The appellant served a statement of claim on the chairman of the body corporate, Mr Botha, but no statement of defence was filed. The arbitrator sent notice by registered mail dated 17 March 2003 for a hearing on 27 March 2003 at 10h00. The registered letter was received at Bruma post office on Saturday, 22 March 2003, but was only collected by Mrs Botha on the afternoon of 27 March 2003 after the hearing had already commenced. The arbitrator proceeded in the absence of the respondent that morning, heard evidence from the appellant, and made an award in the appellant's favour on 28 March 2003. The respondent later objected that it had not received timeous notice. The appellant applied under section 31(1) of the Arbitration Act 42 of 1965 to have the award made an order of court.

• Whether an arbitration award made in the absence of a party who did not receive reasonable notice of the hearing as required by section 15(2) of the Arbitration Act 42 of 1965 is void or merely voidable
• Whether such an award can be made an order of court under section 31(1) of the Arbitration Act without being set aside under section 33(1)
• Whether the binding effect of an award under section 28 of the Arbitration Act applies to an award obtained in breach of section 15(2)
• Whether failure to apply to set aside an award within the time limits in section 33(2) bars reliance on the irregularity in opposing an application under section 31

The appeal was dismissed with costs, save that the respondent was ordered to pay the costs of preparing the record on appeal and was not entitled to recover from the appellant any costs in connection with such record (due to the respondent's attorney unreasonably failing to accept a proposal that would have reduced the record from three volumes to approximately twenty pages).

An arbitration award made in breach of section 15(2) of the Arbitration Act 42 of 1965, where a party did not receive reasonable notice of the hearing, is void ab initio and not merely voidable. The requirement in section 15(2) that a party must have received reasonable notice before the arbitrator may proceed in their absence is peremptory and jurisdictional. Lack of jurisdiction in arbitration proceedings renders an award invalid and of no legal force. Such an award cannot be made an order of court under section 31(1) of the Act, and it is not necessary for the prejudiced party to first obtain an order setting aside the award under section 33(1). The binding effect of awards under section 28 is expressly subject to compliance with the provisions of the Act, including section 15(2). An applicant seeking to have an award made an order of court under section 31(1) bears the onus to prove possession of a valid award, regardless of whether the respondent has applied to set it aside.

The Court observed that an arbitration is a quasi-judicial proceeding (citing Estate Milne v Donohoe Investments) and the precepts governing judicial procedure apply to arbitrations (citing Shippel v Morkel). The Court noted that in English practice, insufficiency or want of hearing must be raised by motion to set aside the award and cannot be set up as a bar to enforcement, except where there is want of jurisdiction resulting in voidness. The Court commented that this English rule derives from ancient jurisdictional distinctions between courts of equity and common law courts, and that no such limitation has ever existed in South African practice. The Court also noted that section 37 of the Arbitration Act, which specifies methods of service of notices, does not apply to section 15 since that section does not require 'service' in the technical sense (in contrast to sections 5(3), 10(2) and 12(1)).

This case establishes important principles regarding the enforcement of arbitration awards in South Africa, particularly in the context of sectional title disputes. It confirms that compliance with section 15(2) of the Arbitration Act (requiring reasonable notice to parties) is peremptory and jurisdictional. The judgment clarifies that an award obtained without proper notice is void ab initio rather than merely voidable, and therefore cannot be made an order of court under section 31(1) even if not formally set aside under section 33. The case affirms that in South African law, unlike English practice, a party need not apply to set aside an award on grounds of want of jurisdiction or notice, but may raise such objections defensively when enforcement is sought. The judgment reinforces fundamental principles of natural justice and fair procedure in arbitration proceedings and prevents parties from obtaining enforceable judgments based on procedurally defective arbitrations. It remains an important authority on the distinction between void and voidable arbitration awards and the limits of the finality principle in section 28 of the Arbitration Act.