OUT-LAW ANALYSIS 2 min. read
South Africa’s arbitration landscape expands as reform looms
31 Mar 2026, 9:39 am
Legislative developments, major legal cases and a surge in renewable energy related disputes were all on the South Africa’s arbitration agenda throughout last year, as calls to harmonise and modernise the country’s dual regime of domestic and international arbitration laws continued to grow.
South Africa continues to operate under two arbitration laws: the International Arbitration Act, 2017 (IAA), governing international arbitration and aligning with the UNCITRAL Model Law; and the Arbitration Act 1965, which applies to domestic arbitration.
While the dual regime remains a point of discussion among arbitration practitioners and calls for reform persist alongside increasing advocacy for harmonisation and modernisation of domestic arbitration law, no legislative amendments were enacted in 2025.
The Arbitration Foundation of Southern Africa (AFSA) made notable strides over the course of the year, including becoming a full member of the International Federation of Commercial Arbitration Institutions (IFCAI). Its rules were also adopted as the model for the Brazil, Russia, India, China and South Africa (BRICS) dispute resolution framework, with ratification expected at the next BRICS Legal Forum.
The year also marked the signing of the Southern Africa Development Community (SADC) arbitration charter. South Africa played a leading role in the AFSA–SADC alliance charter, which now includes 12 of the 16 SADC member states. The charter aims to standardise arbitration laws across the region, fostering legal certainty and investor confidence. A transitional governance council was formed to oversee its implementation.
South Africa’s energy transition has led to a surge in arbitration related to renewable energy projects, such as While Seriti Green’s Ummbila 900 megawatt (MW) Emoyeni wind farm. The project reached financial close on three phases in 2025, but disputes have emerged around wheeling agreements, grid access and ESG obligations.
Arbitration has increasingly become the preferred forum for resolving complex, multi-stakeholder disputes in energy infrastructure. We anticipate a rise in arbitration on climate change and sustainability issues across all sectors, as more regulations come into the market.
The past year has also been one of major judicial decisions impacting the arbitration landscape.
In a landmark decision (20-page / 303KB PDF), the Supreme Court of Appeal (SCA) reaffirmed the binding nature of arbitration clauses in commercial contracts. The case involved a dispute where the High Court had allowed litigation despite a mandatory arbitration clause within the contract of the two parties. The SCA overturned this, emphasising that the use of "shall" in arbitration agreements leaves no room for discretion. The judgment reinforced the applicability of the International Arbitration Act (IAA) 2017 for disputes with foreign seats, such as London, and underscored South Africa's commitment to international arbitration norms.
In another decision (15-page / 192KB PDF), the SCA dismissed an appeal seeking an extension of time under section 8 of the Arbitration Act, with the judgement clarifying procedural requirements in arbitration timelines and reinforcing the finality of awards.
Another decision (17-page / 212KB PDF) related to a challenge of an arbitrator’s award being made an order of court established that arbitral awards are binding on parties and should be set aside by a court only on very limited grounds under s33 of the domestic Arbitration Act.
Finally, a decision (13-page / 2.7MB PDF) where an award issued during an arbitration process was challenged found that the arbitrator had not exceeded their powers by addressing a counterclaim not previously raised in related High Court proceedings. The court based its decision on the arbitration agreement and the conduct of the parties emphasising that the applicant had participated in the arbitration without raising timely objections to jurisdiction and had even sought clarification awards which undermined its later jurisdictional challenge. The challenge failed to demonstrate any gross irregularity or excess of power under s33 of the Arbitration Act, resulting in the review being dismissed and orders of court being granted.
Alongside these decisions, the South African courts have also promoted arbitration and mediation as alternative forums for resolving disputes. A bulletin from the Johannesburg High Court revealed trial dates may extend into 2027, prompting judicial encouragement for arbitration and mediation, with arbitration increasingly seen as a faster and more efficient alternative.
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