What to do when a divorce settlement agreement contains an arbitration clause that clearly states that, if and when a dispute arise between the parties regarding their obligations under the settlement agreement, such dispute will be resolved by way of arbitration.
I recently read an unreported case WJVJ vs EVJ and Capitec Bank, case number A58 of 2022 in the High Court of Bloemfontein and eventually Court of Appeal that was an appeal against a judgement granted in the Maintenance Court, which court found that an arbitration clause in a divorce settlement agreement, ousted the Maintenance Court’s jurisdiction
In this matter it was common cause that the appellant failed to pay maintenance as agreed in the settlement agreement that was made an order of court. The respondent initiated arbitration proceedings in 2018 for the recovery of the arrear maintenance. An arbitrator was appointed.
While the arbitration proceedings were still ongoing the Respondent approached the maintenance court in order to claim payment for arrear maintenance by obtaining and order for the issue of a warrant of execution or alternatively and emoluments attachment order in terms of Sections 27, 28 and 30 of the Maintenance Act 99 of 1998.
The appellant opposed the application that was before the Maintenance Court by raising an objection to jurisdiction of the maintenance court due to the fact that in terms of the settlement agreement made an order of court, the parties have to refer a dispute as referred to above for arbitration. The objection raised was dismissed by the maintenance court and the aggrieved appellant approached the High Court in Bloemfontein on appeal.
The main issue the court had to decide was whether the maintenance court was correct in dismissing the appellant’s point of law that the maintenance court did not have jurisdiction in this matter but had to be decided and were bound to the arbitration proceedings already instituted and excluded from arbitration by Section 2 of the Arbitration Act.
Section 2 of the Act provides :
“A reference to arbitration shall not be permissible in respect of-
- A matrimonial cause or any matter incidental to any such cause,”
In this instance the court referred to the case of Brookstein v Brookstein 2016(5) SA 211 (SCA) where it was held that: “After the divorce court order was granted, there was no longer a matrimonial cause to speak of. Neither was there anything incidental to such cause, as all matrimonial issues were disposed of when the court granted the court order which the settlement agreement was incorporated in. Consequently, there cannot be any issue still outstanding relating to the marriage. The inevitable result of the divorce order is the marriage and all its natural consequences came to and end, AND anything relating thereto, such as proprietary consequences, became res judicata.”
It was the appellant’s view that the arbitrator and not the Maintenance Court must decide the issue of dispute between the parties.
The appeal was upheld with costs and the Maintenance Court’s decision was set aside and replaced with and order in terms whereof the appellant’s point of law relating to arbitration was upheld.
Referral to the kompetenz-kompetenz legal principle can also be of interest in this court case for some extra reading.