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The European, Middle Eastern and African Arbitration Review 2016

Botswana

Arbitration in Botswana is governed by the Arbitration Act (Cap 06:01) (the Act). The Act is antiquated and long overdue a reform. Arbitration law in Botswana is not currently based on the UNCITRAL Model Law, despite suggestions that it should be adopted for the purpose of international commercial arbitration. The alternative dispute resolution bill, which contains provisions based on the UNCITRAL Model Law, has been placed before parliament but has not yet been passed. The institution for arbitration in Botswana is the Botswana Institute of Arbitrators. The institution publishes its own set of arbitral rules.

Formal requirements for arbitration agreements

Generally, an arbitration clause included in a contract between parties specifies that, in the event of a dispute, it will be resolved by arbitration and not by the courts of Botswana. An arbitration agreement is described in the Act as a written agreement, by the parties, to submit present or future disputes to arbitration.1 The agreement remains valid whether an arbitrator has been named in it or not. Some clauses may specify any law other than domestic law to govern their agreement or contract. Arbitration clauses are generally reviewed by an attorney. If an arbitration clause does not exist, it is still possible for both parties to agree to have their dispute resolved by arbitration.

 There is persuasive authority to the effect that, where there is a document in which the parties have accepted or confirmed (even orally) that any disputes should be referred to arbitration, then that document will be deemed as a valid arbitration agreement.

Enforcement of arbitration awards

The courts in Botswana are pro-arbitration. Courts are greatly involved in arbitral matters, and this can be witnessed throughout the Act where courts are vested with certain powers and roles pertaining to arbitration. For instance, where arbitration proceedings are misconducted or awards are procured in a way that is not in accordance with the Act, courts have been vested with the powers to intervene. Courts also have the discretion to make an order to stay arbitration where a party to an arbitration agreement requests for that to be done. Furthermore, courts may also appoint or remove arbitrators, set aside arbitration awards and award costs.

Section 10 (1) of the Act provides for limitations to the parties to select arbitrators. It states:

where an arbitration agreement submits that the reference shall be to three arbitrators, each party is to appoint an arbitrator each and the third one is appointed by the two elected arbitrators.

Further to this, section 10 (2) provides that, where an arbitration agreement states that reference shall be to three arbitrators to be appointed otherwise than as stated in section 10 (1), the award of any two of the arbitrators shall be binding. Furthermore, the Act provides that in cases where the elected procedure for appointing arbitrators fails, a court of law can appoint an arbitrator for the parties in question. The procedure for this is outlined below:

Any of the parties serves the other party with a written notice to appoint, or concur in appointing an arbitrator, umpire of third arbitrator. If the appointment is not made within seven clear days after the service of the notice, the court may, on application of the party who gave the notice, appoint an arbitrator, umpire or third arbitrator who shall have the same powers to act and make an award as though he had been appointed by the consent of all parties.

Further to this, courts can intervene in the appointment of arbitrators. This is provided for by section 11 of the Act, which grants the court with the power to appoint an arbitrator or umpire in any of the following cases:

  • where a submission provides that the reference shall be to a single arbitrator and all the parties do not, after differences have arisen, concur in the appointment of an arbitrator;
  • if an appointed arbitrator refuses to act, is incapable of acting or dies, and the submission does not show that it was intended that the vacancy should not be supplied and the parties do not supply the vacancy;
  • where the parties or two arbitrators are at liberty to appoint an umpire or third arbitrator and do not appoint him, or where two arbitrators are required to appoint an umpire and do not appoint him; or
  • where an appointed umpire or third arbitrator refuses to act, is incapable of acting or dies, and the submission does not show that it was intended that the vacancy should not be supplied, and the parties or arbitrators do not supply the vacancy, any party may serve the other parties or the arbitrators, as the case may be, with a written notice to appoint or, as the case may be, concur in appointing an arbitrator, umpire or third arbitrator, and if the appointment is not made within seven clear days after the service of the notice, the Court or a judge thereof may, on application by the party who gave the notice, appoint an arbitrator, umpire or third arbitrator who shall have similar powers to act in the case and make an award as if he had been appointed by consent of all parties.

Section 12 of the Act deals with arbitrator independence, neutrality and impartiality. It stipulates that:

An arbitrator must be and continue throughout the proceedings to be disinterested with reference to the matters referred and the parties to the case. He should have no interest (direct or indirect) in the matter referred or the parties to the reference, and he should know of nothing disqualifying him from being impartial and disinterested in the discharge of such duties.

The law regulates the practise of arbitration in all ways possible. In addition to the above-mentioned areas addressed by the law, it further imposes powers and duties on arbitrators as listed below:

  • the authority of an arbitrator or umpire appointed by or by virtue of a submission shall, unless a contrary intention is expressed in the submission, be irrevocable except by leave of the court or a judge thereof;
  • unless a contrary intention is expressed therein, every submission shall, where such a provision is applicable to the reference, be deemed to contain a provision that the arbitrator or umpire may, if he sees fit, make an interim award, and any reference in this part of the Act to an award includes a reference to an interim award;
  • the report or award of any arbitrator on any such reference shall, unless set aside by the court, be equivalent to a finding of fact by the court;
  • the power to administer oaths or to take the affirmations of the parties and witnesses appearing;
  • the power to correct in any award any clerical mistake or error arising from an accidental slip or omission; and
  • the duty, on the application of either party, to appoint a commissioner to take the evidence of a person residing outside of Botswana and forward the same to arbitrators in the same way as if he were a commissioner appointed by the court.

The requirements pertinent to arbitration awards are stipulated in different provisions of the Act as follows:

  • an arbitrator or umpire shall have power to make an award at anytime;
  • section 17 of the Act stipulates that the time limit, if any, for asking an award, whether under this Act or otherwise, may from time to time be extended by order of the court or a judge thereof, whether that time has expired or not;
  • an award or submission may, by leave of the court or a judge thereof, be enforced in the same manner as a judgment may be entered in terms of the award;2 and
  • the award to be made by the arbitrator, arbitrators or umpire shall be in writing and shall, if made in terms of the submission, be final and binding on the parties and the persons claiming under them respectively.3

The Act further provides that fees made payable to any arbitrator or umpire by an award shall be subject to taxation at the expense of the parties requiring taxation by the taxing officer of the court, irrespective of whether such fees may have already been paid by the parties. This is subject to the right of appeal.4

The arbitration procedure

Parties to an arbitration agreement are at liberty to choose an arbitral procedure of their choice – this may be dependent on the kind of agreement the parties have.

Courts are entitled to grant preliminary or interim relief in proceedings pertaining to arbitration. The Act stipulates that:

any party to a submission, or any person claiming through or under such party, may apply to that court to stay the proceedings. If the court is satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement, and that the applicant was, at the time that the proceedings commence, and still remains, ready and willing to do all things necessary for the proper conduct of the arbitration. Only then can the court make an order staying the proceedings subject to such terms and conditions as may be just.5

The rules of evidence that apply to arbitral proceedings are similar to those observed in a court of law in Botswana. The Act provides for the issuing of a subpoena or a summons on, among other persons, a witness.6 This provision states that the procedure to issue a subpoena or summons on a witness to compel his or her attendance or production of evidence or documents before an arbitrator or umpire, officer of the court or official referee, may be procured in the same way and subject to the same conditions as if the matter were an action pending in court. This can be done by:

  • any party to the arbitration agreement, arbitrator or umpire thereunder;
  • by the parties to any reference under any order of court; or
  • by any officer of the court, official or special referee hearing any reference under order of court.

Still on the issue of witnesses and evidence, section 16 of the Act states that any party to a submission may apply for process of the court in order to compel a witness to attend. 

Any party to a submission is entitled, subject to the law relating to procedure of the court, to obtain from the court an order:

  • for the examination of a witness or witnesses before a special examiner in Botswana or elsewhere;
  • for the discovery of documents and interrogatories;
  • for evidence to be given by affidavit in the same circumstances as in litigation;
  • for another party to give security for costs in the same way as a litigant;
  • for the inspection, or the interim preservation, or the sale of goods or property;
  • for an interim injunction or similar relief;
  • for directing an issue by way of interpleader between two parties to a submission for the relief of a third party desiring so to interplead; and
  • for substituted service of notices required by this Act, including service upon an agent in Botswana of a party resident elsewhere.

Further to this, in dealing with false evidence, the Act provides that:

Any person who willfully or corruptly gives false evidence before any such officer, referee, arbitrator or umpire shall be guilty of perjury in the same way as if the evidence had been given in open Court, and may be dealt with, prosecuted and punished accordingly.7

With regard to the issue of subpoena and summoning a witness, the Act stipulates the following:

The issue of a subpoena or summons on a witness to compel his attendance and the production of evidence or documents before an arbitrator, umpire, officer of the Court or official referee, as the case may be, may be procured in the same way and subject to the same conditions as if the matter were an action pending in Court:

(a)  by any party to a submission, or any arbitrator, or umpire thereunder;

(b)  by the parties to the proceedings under any order of the Court; or

(c) by any officer of the Court, official or special referee hearing any reference under order of Court, provided that:

     (i) no person shall be compelled on such subpoena to produce any document or thing the production of which would not be compellable on trial of an action; and

     (ii)  the clerk of the court of any magistrate may issue such subpoena in the name and on behalf of the Registrar of the Court upon payment of the same fees as are chargeable for the issue of a subpoena in the magistrates’ court.8

A court may intervene in matters of disclosure where a party is compelled to present a document that they would not ordinarily be compelled to present during trial of an action in court. Section 16 of the Act states:

Any party to a submission may take out process of the Court for the attendance of witnesses, but no person shall be compelled under any such process to produce any document which he could not be compelled to produce on the trial of any action.

In instances where an arbitrator or umpire has misconducted proceedings or an arbitration award has been improperly procured, section 13 (2) of the Act provides that the court may set the award aside and may award costs against any such arbitrator or umpire personally.

The Act allows for parties who have previously agreed to arbitrate, to elect to litigate when a dispute arises. Section 6 (1) of the Act provides that, if a party to an arbitration agreement (submission) commences legal proceedings in a court of law against any other party to the submission regarding any matter agreed to be referred to arbitration. The other party may, at any time before delivering pleadings or taking any step in the proceedings, apply to the court to stay the proceedings. In instances where the court is satisfied that there is no sufficient reason why the dispute should not be referred to arbitration, it may stay the proceedings. The burden of establishing why the proceedings should not be stayed lies on the party pursuing litigation. This burden arises after a prima facie existence of a submission has been proved. The discretion to stay proceedings lies on the court, thus it may hear the action regardless of proof of an arbitration agreement.

Botswana is party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This convention only applies to the recognition of awards made in the territory of another contracting state. For a foreign arbitration award to be enforced, a party to the arbitration is required to bring an action on the award as is the requirement with foreign judgments. Statutory law in Botswana allows a person in whose favour an award has been made to enforce an award on an arbitration agreement in the same manner as a judgement with leave of court. The Recognition and Enforcement of Foreign Arbitral Awards Act,9 which governs arbitration in Botswana, provides that:

No arbitral award made in any country which is a party to the Convention shall be enforceable in Botswana unless a similar award made in Botswana would be enforceable in such country.

Arbitration awards can be set aside and this is provided for by section 13(2) of the Act. This provision allows for this on the grounds that an arbitrator or umpire has misconducted the proceedings; and an arbitration or award has been improperly procured.

When it comes to appealing an arbitration award, the Act is silent; however, there is case law that stands as authority for the fact that arbitration awards may be reviewed by the High Court if the arbitrator acted in bad faith. Where there was a provision for the appeal of an award in an arbitration agreement, the procedure for this will be determined by the submission or by the rules of the arbitration organisation administering the arbitration.

 In some cases, an arbitrator is permitted to award interim or preliminary relief. The Act provides for this where it states:

Unless a contrary intention is expressed therein, every submission shall, where such a provision is applicable to the reference, be deemed to contain a provision that the arbitrator or umpire may, if he thinks fit, make an interim award, and any reference in this Part of this Act to an award includes a reference to an interim award.10

This does not require any assistance from the court. The approach of the national courts to requests of interim relief by arbitration agreements is dependent on the facts of each individual case. The Act makes provision for this where it states:

An award on a submission may, by leave of the Court or a judge thereof, be enforced in the same manner as a judgment or order to the same effect, and where leave is so given, judgment may be entered in terms of the award.11

There are various matters that are not arbitrable in Botswana. Such matters are found in section 7 of the Act, and are listed below:

  • criminal cases (so far as the prosecution or punishment is concerned);
  • matters relating to status;
  • matrimonial causes; and
  • matters in which minors or other persons under legal disability may be interested.

In Botswana, arbitration is most commonly used in resolution of employment disputes, and this is provided for by the Trade Disputes Act Cap 48:02. Arbitration appears to be receiving more popularity across Botswana lately, with more corporate entities incorporating arbitration clauses in their contracts and not leaving out resolution of possible conflicts to litigation.

Notes

  1. Section 2 of the Arbitration Act.
  2. Section 20.
  3. Regulation 13 of the Act.
  4. Section 14.
  5. Section 6.
  6. Section 28.
  7. Section 32.
  8. Section 28.
  9. Section 3.
  10. Section 18.
  11. Section 20.