To arbitrate or litigate? That is the question

Dealing with a legal dispute is never easy. However, by involving an experienced dispute resolution practitioner at an early stage and choosing the appropriate dispute resolution process, you stand the best chance of the right outcome.
By Paul Russell
20 Jun 2025
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Options to resolve disputes include mediation, litigation (via the courts) and arbitration. Some commercial disputes, such as business and property disputes, are well-suited to arbitration, while others, such as personal injury disputes, are better suited to litigation. In addition, certain disputes, such as divorce and custody disputes and those relating to status (such as sequestration or liquidation proceedings) are typically not suitable for arbitration. In this article, we look at the key differences between (court) litigation and arbitration.

What is court litigation?

Court litigation involves approaching a court of law to settle a dispute between two or more parties where a judicial officer (judge or magistrate) presides over the matter according to predetermined court rules and procedures and issues a judgment after considering the relevant facts, evidence and arguments. Court litigation is usually the default option to resolve disputes where the parties have not entered into an arbitration agreement. Because arbitration requires agreement between the parties to refer the dispute to arbitration, litigation is better suited to “dragging” an unwilling party into court to determine a dispute.

What is arbitration?

Arbitration is a way of resolving a dispute outside of the court system, known as alternative dispute resolution and involves the parties to a dispute agreeing to enter into arbitration and be bound by the arbitrator’s decision. Arbitration necessarily requires agreement between the parties to refer the dispute to arbitration, with the result that an unwilling party cannot be forced to participate in arbitration proceedings.

The Arbitration Act, No. 42 of 1965 (the Arbitration Act) defines an arbitration agreement as “a written agreement providing for the reference to arbitration of any existing dispute or any future dispute relating to a matter specified in the agreement...’. It is now quite common for commercial contracts to include a dispute resolution clause, which provides that any disputes arising from the contract must be resolved by means of arbitration. Courts generally enforce such clauses, provided they are voluntarily agreed to.

What is mediation?

For completeness, we note that mediation involves a process in which a neutral third party, the mediator, facilitates a negotiation between the parties in order to reach a mutually acceptable settlement of their dispute. Mediation is generally less formal than either court litigation or arbitration and does not involve a binding decision.

Key differences

Confidentiality

Unlike court proceedings, which are generally open to the public and court judgments, which are generally accessible by the public, arbitration proceedings are generally (by agreement between the parties) private and confidential and the decision of the arbitrator is ordinarily also kept confidential and not disclosed to the broader public.

Presiding officer and process

In the case of litigation, the court appoints the judicial officer and the parties have no say in this. While it is true that judicial officers undergo a rigorous selection and appointment process to ensure that they exceed minimum standards of competency, diligence and ethics, there is no guarantee that the judicial officer appointed to hear a particular matter will have specialist knowledge or experience in relation to the subject-matter of the dispute. The court proceedings are governed by pre-existing court rules.

In the case of arbitration, the parties may, in the arbitration agreement, decide on the identity of the arbitrator or, if they cannot agree on this, identify which independent body (such as the Law Society of South Africa or the Arbitration Foundation of South Africa) must appoint or nominate the arbitrator and what eligibility criteria, if any, the arbitrator must comply with.

This allows the parties to agree on the appointment of an arbitrator or arbitrators with an appropriate level of expertise and experience to hear their matter. The arbitration agreement may, for example, specify that only a former judge or senior counsel with a minimum level of experience in a particular field is eligible for appointment as an arbitrator.

Flexibility and timeframes

Because the parties are able to regulate the process and timeframes in the arbitration agreement, which results in less formalised procedures, arbitrations proceedings are typically faster than litigation. This can, however, be impacted by the availability of the arbitrator, legal counsel and witnesses. Moreover, although flexibility is usually an advantage, it can lead to frustration.

For example, without strict directions to follow, an arbitrator may decide to allow more time for the parties to prepare, which could potentially delay the process. In general, though, arbitration is known for being considerably faster than court litigation, particularly if the courts are experiencing a backlog in cases, which happens regularly in South Africa. The length of time will depend on the complexity of the case, but it is often possible to reach a final hearing in arbitration well within a year.

Court litigation is usually a longer process, because of the detailed procedural requirements. The hearing of a matter, once ready to be heard in court, depends on the court roll and the availability of the presiding officer. Because of the congested court rolls in South Africa, it is not unusual for parties to receive a date for the hearing of their matter that is several months or even years away.

In fact, in recognition of this issue, the Office of the Judge President of the Gauteng Division of the High Court of South Africa recently (in (in April 2025) issued a directive (the Directive) in which it was noted that civil trial dates in the division are currently being issued as far ahead as 2031 (ie. seven years in the future) and that “[t]his state of affairs is self-evidently unacceptable and intolerable...inimical to effective and timeous access to justice, within the meaning of the Constitution, and must be forthrightly condemned as unconstitutional”.

The Directive also noted that “it is critical that cases that do not reasonably require a Judge to resolve the parties’ dispute, do not clog up the Court roll and consume precious Court time. Currently the majority of cases on the Civil Trial roll are capable of resolution through mediation, settlement, and other dispute resolution means. These are the cases that take up a sizeable portion of the Civil Trial Roll and inevitably cause deserving cases to wait for inordinately long periods for a hearing”.

The Directive goes on to state: “In order to filter the caseload to enable only cases warranting judicial attention to be enrolled, the diversion of cases capable of being resolved/settled after effective mediation by professional mediators is appropriate, to institutionalise in the processes of this Court, a methodology which can ensure that outcome”. The Directive then provides for a mandatory mediation protocol in the context of the civil trial roll.

It is also important to note that, in terms of the Rules of Court, a judicial officer may also implement judicial case management, with the aim of accelerating the litigation process. In exceptional instances, a party may also approach the court on an urgent basis.

Finality and appeals

Arbitration proceedings are not subject to appeal (unless an appeal is provided for in the arbitration agreement), but are, in limited instances, subject to review.

Court litigation caters for an appeal process and judgments in the lower courts may be overturned on appeal.

Costs

Court litigation costs usually involve the fees for attorneys, advocates, the sheriff and any additional disbursements. However, the parties are not responsible for the payment of the judicial officer, the preparation of the judgment or the venue. The judicial officer has the discretion to grant a costs order against the unsuccessful party.

The costs of an arbitration typically involve the arbitrator’s fee, the costs of the legal practitioners, experts, the venue and catering (where applicable). The parties can agree on how the costs of the arbitration proceedings will be apportioned. The arbitrator’s fees are usually agreed between the parties and the arbitrator. The Arbitration Act provides that, unless the arbitration agreement provides otherwise, the award of costs shall be in the discretion of the arbitrator.

Conclusion

In summary, there are a number of significant advantages to arbitration, not least of which are that the process is confidential, can be tailored to suit the particular circumstances of the parties and, provided both parties agree, can be much faster and simpler than court litigation. Arbitration can also help those involved deal with matters with less conflict than protracted litigation and so help to preserve business relationships.

As far as costs are concerned, while it is true that, in the case of arbitration, the parties have to pay the arbitrator’s fee and for the venue (which are costs they would not be exposed to in the case of litigation), the fact that arbitration is usually considerably faster and more streamlined generally keeps expenses lower. It can be expensive in litigation to have a hearing cancelled at the last minute after the legal teams have fully prepared (with the result that they will need to spend time refreshing in the future when a hearing is rescheduled).

However, as noted at the outset, not all disputes are suited to arbitration and there may be particular features of a dispute which may make it better suited to court litigation.

About the author

Paul Russell is a Director at Nortons Inc.

 
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