Arbitration And Insurance In South Africa

It is common to find a condition in South African insurance policies providing that where there is a dispute between the insured and the insurer in respect of the quantum of a claim, the matter must be resolved by way of arbitration.¹

That formulation is a hangover from the previous statutory regime in respect of insurance under the now repealed Insurance Act of 1943, which imposed certain limitations in terms of arbitration in respect of domestic policies of insurance. Under that restriction, the Insurance Act provided that notwithstanding any contrary provision in the policy or in any agreement relating thereto, the owner of a domestic policy was entitled to enforce its rights under the policy against the insurer concerned in any competent South African court according to South African laws.