AB Company and Bob conclude a settlement Agreement
("the Agreement") and his employment
relationship with AB Company terminates. The Agreement includes an
arbitration clause which provides as follows:
"Any controversy / claim arising in terms of this
Agreement shall be resolved in terms of binding arbitration by a
sole arbitrator in Durban in terms of the Labour Relations
Should any disputes arise in connection with the Agreement, the
parties would be bound in terms of the Agreement to settle the
dispute by way of arbitration. The CCMA would however in this
instance above not have jurisdiction in the matter as it deals with
disputes relating to unfair dismissal and in this case, as there
was a mutual termination of the employment relationship.
The parties would therefore be required to enter into another
Agreement consenting to the jurisdiction of a specific dispute
resolution forum. In the event that the aggrieved party initiating
the arbitration proceedings fails to obtain the consent from
the other party to the Agreement, he would need to make an
application for a declaratory order allocating jurisdiction to a
specific dispute settlement forum to adjudicate the
This does not only lead to unnecessary delays in getting the
matter resolved but is also costly as the aggrieved party will
therefore bear the costs of bringing the application in court for
the allocation of jurisdiction.
Clear arbitration clauses should be incorporated in Agreements
where parties wish to resolve matters arising thereof by way of
arbitration rather than through the court system. Such a clause
should for instance state the arbitration body to adjudicate the
matter, the rules in terms of which the matter will be adjudicated,
the place at which it should be held, manner in which the
arbitration proceedings are to be conducted, the appointment of
arbitrators, the times frames etc.
A badly drafted arbitration clause in any Agreement can prove
fatal. It creates unnecessary costs and delays which could have
been avoided by simply incorporating a clear and precise
arbitration clause in the Agreement which protects the interests of
the parties to the Agreement.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Employees must understand the notice periods stipulated by law. When an employee gives notice of their resignation to an employer, they is advising the employer that they will cease to work for the employer from a certain date.
Nigeria is a federal constitutional republic located on the west coast of Africa. Modern Nigeria has its origins as a British colony through the 19th and 20th century until it achieved independence in 1960.
The jurisprudential basis is pithily expressed as staying in sync with the global position on employment relationship, easily summed up as "International Labour Standard" and "International Best Practice".
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).