The Finality Principle in Arbitration: A Theoretical Exploration

Abstract

Arbitration remains a popular means of resolving construction industry disputes. Among its purported advantages is an emphasis on the notion of 'finality'; in order words, that awards made following arbitration proceedings are 'final' and should bring the dispute to a 'conclusive' and 'binding' settlement. However, in most jurisdictions such as in South Africa, the finality principle can be impeached by the courts who are able to vacate awards on the basis of statutory (legislative) or common law provisions (or both). While the finality principle and vacatur are both generally well espoused in arbitration literature, our appreciation of broader theoretical discourse in arbitration is arguably, more limited. With this in mind, framed within the 'Law and society' school of thought, we set out in this paper to elucidate upon existing theories that are regularly relied upon to explain how finality may be generated, dispersed, endorsed, and modified through vacatur. In doing so, we clarify and demonstrate (set within the context of South African domestic commercial arbitration), how the finality principle in general and vacatur in particular are regulated by the state through legislation. An analysis of some specific construction arbitration case examples is also undertaken.

The Finality Principle in Arbitration: A Historical Exploration

“…There is a general acceptance in the literature (Baboolal-Frank, 2022;Ojiako, 2023aOjiako, , 2023bOjiako, , 2023c and domestic case law in South Africa that arbitration represents a favorable alternative…”

“…The finality principle in arbitration: a historical exploration Clothing (1994) [at 9]. Adherence to this principle continues to the present day (Ojiako, 2023a(Ojiako, , 2023b(Ojiako, , 2023c.…”

“…Furthermore, there are questions about whether the Act is able to accommodate constitutional provisions which mandate South African courts to develop the common law and interpret legislation in a manner consistent with international law. This point is particularly pertinent when it is taken into consideration that foreign law does acknowledge a range of non-statutory grounds as viable grounds for impeaching the finality principle (AlRaeesi and Ojiako et al, 2021;Ojiako, 2023aOjiako, , 2023bOjiako, , 2023c). These grounds include (i) 'Violation of essence', (ii) 'Manifest disregard of the law', (iii) 'Illegality', (iv) 'Arbitrary and capriciousness', (v) 'Complete irrationality', and (vi) 'When the award or procedure is contrary to public policy or public order'.…”