Lesira Manufacturing (Pty) Ltd v K G Schulz and Others

The first respondent (Schulz) was employed by the applicant (Lesira Manufacturing). A dispute arose regarding monies allegedly due to Schulz, which was referred to the Arbitration Foundation of South Africa (AFSA) for private arbitration under case number AFSA PTA-106/2019. During the arbitration, the applicant failed to comply with directives issued by the arbitrator (Commissioner LM Motsho SC). After refusing the applicant's condonation application, the arbitrator proceeded with the arbitration in default of the applicant and issued an award in favor of Schulz on 23 October 2019. The applicant failed to comply with the arbitration award. Schulz then brought proceedings under J2156/19 to make the arbitration award an order of court. The applicant initially opposed this and brought a counter-application to review the award, but withdrew its opposition and counter-application in February 2020. Subsequently, in March 2021, the applicant instituted new review proceedings under JR409/21, seeking to set aside the arbitration award. The applicant's review application was filed over a year late, requiring condonation.

• Whether the applicant had validly withdrawn its first review/counter application under J2156/19
• Whether condonation should be granted for the late filing of the review application under JR409/21
• Whether the Labour Court has jurisdiction to review private arbitration awards and under what standard
• Whether the arbitrator misconducted herself or committed gross irregularities in accepting the respondent's calculations and evidence
• Whether the arbitrator exceeded her powers by refusing condonation and proceeding in default of the applicant
• Whether the arbitration award was improperly obtained
• Whether the arbitration award should be made an order of court under J2156/19

1. The applicant's Review/Counter Application under case number J2156/19 was archived and declared as lapsed in terms of clause 11.2.7 of the old Labour Court Practice Manual. 2. The applicant's application for condonation for late filing of the review application under case number JR409/21 is dismissed. 3. The arbitration award under case number AFSA PTA-106/2019 issued by LM Montsho SC on 23 October 2019 is made an order of Court. 4. The applicant is ordered to pay the first respondent's costs.

1. Private arbitration awards conducted under the Arbitration Act may only be reviewed by the Labour Court on the narrow grounds set out in section 33 of the Arbitration Act (arbitrator misconduct, gross irregularity, or improper procurement), not on the broader reasonableness standard applicable to CCMA arbitrations under Sidumo. 2. The distinction between private arbitration (consensual and private) and CCMA arbitration (non-consensual and statutory) requires different review standards. 3. Errors of law, misinterpretation of contracts, or incorrect evaluation of evidence by a private arbitrator do not constitute grounds for review - the arbitrator has 'the right to be wrong' on merits. 4. Such errors are made within the scope of the arbitrator's mandate and do not constitute misconduct, gross irregularity, or exceeding powers. 5. A notice of withdrawal properly filed with the Registrar perfects a withdrawal, regardless of which party filed it. 6. An inadequate explanation for delay in bringing a review application, particularly where no urgency was shown and substantial periods remain unexplained, warrants refusal of condonation. 7. Where review grounds lack merit and there are no prospects of success, condonation will be refused even if the Court considers other factors beyond the explanation for delay.

The Court noted that the matter had a protracted history from October 2019 to November 2024 due to numerous delays and interlocutory proceedings. The Court observed that the applicant's failure to participate in the arbitration despite numerous opportunities, followed by an attempt to review the award without merit, justified an award of costs against the applicant, particularly given that the first respondent was an individual litigant who had been out of pocket for this protracted litigation. The Court also commented that the applicant bizarrely sought to base its case on a review application it had acknowledged withdrawing, and attempted to argue positions at the hearing that had not been properly pleaded. The Court observed that delays in obtaining the record in July 2021 (four months after instituting the review) could not explain the delay in bringing the review application itself in March 2021.

This case clarifies important principles regarding the review of private arbitration awards in the South African labour law context. It confirms that the narrow review standard under section 33 of the Arbitration Act applies to private arbitrations, not the broader Sidumo reasonableness standard applicable to CCMA arbitrations. The judgment reinforces the limited scope for judicial intervention in private arbitration awards, emphasizing that arbitrators have 'the right to be wrong' on the merits. It also addresses the procedural requirements for withdrawing review applications and the standards for condonation applications. The case underscores the finality and enforceability of private arbitration awards and the importance of participating in arbitration proceedings, as parties cannot use review proceedings as a second opportunity to contest matters on the merits.