For some time, industry role-players and leaders in the South African grain and oilseeds industries have recognised that a cost-effective dispute resolution procedure is needed as an essential element of a free market.  It was also realised that such a procedure should be user-friendly and must be available to all the contracting parties in the grain and oilseeds industries.

In March 2003 the initiative was taken by the South African Grain and Oilseeds Trade Association (SACOTA), to apply to the Maize Trust for funding to inter alia review the Rules of Arbitration for Grain and to implement a dispute resolution procedure.  Mr. Peter Brown, an international grain arbitrator, was retained to draft the Rules of Arbitration.  These Rules have been widely circulated for comment by the industry associations and institutions, which have perused and amended the Rules a number of times until they were satisfied with the principles thereof.

A proposal formulated by SACOTA for the establishment of a grain arbitration service was accepted by the founding associations and tabled at the Maize Forum, as was required by the Maize Trust.  The founding associations are as follows:

Animal Feed Manufacturers’ Association (AFMA)
Grain Silo Industry (Pty) Ltd. (GSI)
Grain South Africa (GSA)
National Chamber of Milling (NCM)
S.A. Grain and Oilseeds Trade Association (SACOTA)

The first formal meeting of these founding associations was held recently and a voluntary association not for gain was established.  It was decided to name it the Southern African Grain Arbitration Service Association (SAGAS).  This Association is to administer the arbitration and dispute resolution system for grain and oilseeds.  As a part of the initial action to establish the required procedures and arbitration system, a panel of interim arbitrators was nominated by role-players in the grain industry, which is to serve until 31 December 2006.  It is hoped that after that date some of the panel members (and others) would have obtained the prescribed training and basic qualification to serve as accredited arbitrators.

It is further being arranged for a small group of senior legal practitioners, experienced in arbitration, to act as mentors and advisers while the panel and others are still gaining experience.

The first Governing Committee nominated by the founding associations is:

John Gordon, SACOTA - Chairperson
Peter Watt, AFMA - Vice-Chairperson
Neels Ferreira, GSA
Piet Louw, GSI
Lambert Botha, NCM

The National Agricultural Marketing Council (NAMC) and the National African Farmers’ Union (NAFU) have both been invited to nominate representatives on the Governing Committee. The secretariat and administration has been outsourced to L & L Agricultural Services.

Arbitrators will charge for their services and SAGAS will recommend guideline fees in this regard from time to time.  SAGAS will only facilitate arbitration and dispute resolutions but will not be responsible for any costs.  The costs are to be borne by the disputing parties and is payable by them directly to the arbitrators.  Arbitrations will be held strictly in terms of the Rules of SAGAS.

The intention is for SAGAS to be self-funding from income derived from arbitration registration fees, if and when required by disputing parties in the agricultural industries.

Issued by
L & L Agricultural Services, Pretoria
Tel: 012-3333429
Fax:012-3333634
e-mail:  l-lagric@mweb.co.za