CARMEL RICKARD: New Gauteng commercial court could reshape corporate disputes
The new commercial court in Gauteng, if it works as planned, could change the way corporate disputes are managed — to the benefit of all parties
The next big litigation trend in 2019?
There’s no doubt the answer lies with the new commercial court in Gauteng.
The court’s official existence and applicable practice directives were announced in October by Dunstan Mlambo, the judge president of the Gauteng division of the high court.
And some cases are already in the pipeline, making their way to settlement or a hearing.
The court is envisaged as a dynamic operation, with disputes case-managed by the judge or judges likely to hear the matter when it gets to court. Case management, already delivering good results in jurisdictions like Namibia, allows for the resolution of particular matters before trial, making the actual court hearing quicker and more focused.
During meetings with the parties, the judge helps clarify a timetable, witness statements and exchange of documents, with agreed deadlines to keep the pretrial process moving efficiently towards the hearing.
Mlambo’s vision is of a court offering efficient and faster resolution of commercial matters.
Certainly, there is a need for this. As attorney Jac Marais, partner at Adams & Adams, puts it, it is not good enough to tell the CEO of an international company that it will take four or five years for a final decision on whether the company is entitled to certain money.
"Because the courts have been perceived as s low, many parties have chosen arbitration instead," Marais says. "If the commercial court project takes off — and there is every indication that this is already starting to happen — then this becomes a viable alternative."
From Mlambo’s announcement, it seems the commercial court will tend to go broad in deciding what cases to accept.
Cases should "have their foundation in a commercial transaction or relationship" and might include import or export of goods; carriage of goods by land, sea, air or pipeline; insurance and reinsurance; banking and financial services; medical scheme matters; and commercial issues arising out of business rescue and insolvency cases.
It also seems quite easy for a case to be transferred to the commercial court, simply requiring a letter to the judge president or deputy judge president explaining why the case is, or should be considered, a commercial matter of the sort that would warrant transfer.
The trend for some years has been for difficult cases, or matters for which time delays are particularly intolerable, to go to arbitration. This is seen as generally cheaper because the parties are committed to getting a quick result.
Litigants also tend to prefer it because they have input on who will preside and thus enjoy confidence in the arbitrator.
A win-win solution
But that trend has created its own difficulties. As major commercial matters disappear from the courts, so the pool of judges with experience to handle such issues grows smaller.
And because arbitration awards are generally confidential, precedents are not being created.
Generally, commercial law precedents are "stuck in the 1980s", says Marais.
"Many commercial matters are going to arbitration and the resulting judgments remain confidential."
The new court could turn these problems around, creating a bigger pool of experienced judges and a new body of precedent-setting judgments. And when that starts to happen and confidence grows in the new system, certain aspects of arbitration could start to lose their appeal.
If parties are certain that cases will be heard quickly in court, without unexpected and expensive delay s — and that they will be heard by experienced judges familiar with a shared set of precedents — this might become the preferred option for dispute resolution. It could end up being less expensive to litigate in court than to pay arbitrators’ fees and hire a venue.