The impact of arbitration referrals in South Africa’s petroleum industry

Abstract

This paper focuses on how effective referrals of disputes resolved through arbitration in the petroleum industry as provided for in section 12B of the Petroleum Products Act 120 of 1977 (PPA) are, and the impact of the court cases associated with section 12B of the PPA on the regulation of contractual disputes between oil companies and retailers in South Africa’s petroleum industry. Section 12B of the PPA makes provision for the resolution of disputes between oil companies and retailers through arbitration. Most franchise agreements between oil companies and retailers are such that the oil company supplies petroleum products to the retailer and allows the retailer to use its branding to operate a filling station. Disputes often arise when the oil company or retailer have breached any of the clauses in the franchise agreement, leading to a breakdown in the contractual relationship. Disputes still end up in court, and even with the option of resolution through arbitration, parties approach the court before and after the arbitrator has made the award. The main research question investigated in the dissertation is: How effective are arbitration referrals in resolving disputes in South Africa’s petroleum industry by the Controller of Petroleum Products? And can the relevant court judgements assist the Controller of Petroleum Products in making policy changes to improve arbitration laws in the petroleum industry?