The writer says parties in dispute easily resort to litigation, as opposed to exploring the possibility of alternative dispute resolution, which has been used for more than 50 years internationally, and for about 30 years in South Africa. Photo: Supplied
The writer says parties in dispute easily resort to litigation, as opposed to exploring the possibility of alternative dispute resolution, which has been used for more than 50 years internationally, and for about 30 years in South Africa. Photo: Supplied

The PIC-AYO Saga: When bulls fight the grass suffers

By Wallace Mgoqi Time of article published Mar 3, 2020

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CAPE TOWN – There is a need for some intervention in the dispute between the Public Investment Corporation (PIC) and AYO Technology Solutions (AYO).

Parties in dispute easily resort to litigation, as opposed to exploring the possibility of alternative dispute resolution (ADR), which has been used for more than 50 years internationally, and for about 30 years in South Africa.

It may be instructive to pinpoint the characteristics of both approaches to dispute resolution.

Here are the typical characteristics of litigation:

  • It is non-voluntary;
  • It is binding, subject to appeal;
  • It is imposed third party neutral decision-maker, usually with specialised subject-matter expertise;
  • Win-lose result based on principles of law;
  • The expectation of reasoned judgment;
  • The process emphasizes attaining substantive consistency and predictability of results. Binding precedents established;
  • Can be protracted and very costly;
  • Public process; lack of privacy of proceedings.

Here are the typical characteristics of alternative dispute resolution, pre-eminently, mediation:

  • Non-binding process;
  • Party-selected outside third-party usually with mediation skills;
  • Usually informal and unstructured;
  • Presentation of evidence and less important than the attitudes and interests of each party; 
  • May include principled argument;
  • The mutually acceptable agreement sought, usually based on interests of the parties;
  • Emphasis on disputants,s relationship, not on adherence to or development of consistent rules;
  • Private process; 
  • Can be carried out expeditiously and cost-effectively.

From the above it becomes clear that mediation has the following advantages, as against litigation:

  • Mediation has flexibility as a process;
  • Mediation has informality, not found in litigation; 
  • Mediation has confidentiality as regards information disclosed within the process;
  • Mediation is non-binding in nature, parties may withdraw any time;
  • Mediation has savings on resources, not found in litigation;
  • Maintenance and often the improvement of the relationship between the parties.

Its positive results include:

  • Helping to identify the true issues of the dispute;
  • Resolving some or all of the issues;
  • An agreement can be reached on all or part of the issues of the dispute;
  • The needs and interests of the parties are met, in part or in full;
  • The parties reach an understanding of the true cause of the dispute;
  • The parties reach an understanding of each others needs and interests;
  • It involves the possibility of preserving the relationship;
  • An improved relationship may result.

Assuming that the report will soon be made available publicly, so as to create a platform of parity of information, where all the parties are fully apprised of the facts and do not have unrealistic perceptions of the strength or weakness of their case. This parity of information is foundational to the success of any alternative dispute resolution intervention- like mediation.

Of course, critical to the success of the intervention of any dispute is understanding the nature of the dispute. This important, because rights disputes lend themselves more to litigation to determine the rights of the respective parties in the dispute; whereas interest disputes, lend themselves more to alternative dispute resolution methods, including a process known as Relationship-Building by Objectives (RBO).

There is no doubt in my mind that the nature of the dispute between the two companies is more of an interest dispute, that impacts not only the relationship between the two, but most importantly, many other parties, investors, pensioners, stakeholders, the government, and the private sector, as well as civil society. This the grass and the ants which are suffering whilst the two elephants are slogging out in the media, in the courts or wherever they choose to launch battle. The markets are negatively affected and there is so much uncertainty such that things have come to a freezing point.

Neither side will triumph by trying to injure the other anymore, it will be a lose-lose outcome.

There is a better way: it is finding a lasting solution through alternative dispute resolution , so that stability can be restored and business can be normalised for the benefit of all – by finding a mutually acceptable way forward. Much as the parties are locked in litigation before the courts at the moment, this does not prevent them from engaging in alternative dispute resolution, as they may reserve their rights, enter into mediation, in the event mediation fails, they can always resort to their rights.

All it will take now, going forward, is for the two parties to agree to explore the benefits of mediation, through an experienced Mediator, and there are many of them, such as initiator of mediation in South Africa, through labour disputes, when he established the Independent Mediation Service of South Africa, many of us cut our teeth there, Charles Nupen and many others.

Once the parties have agreed to a Mediator, he would invite the parties and get the process started, and hopefully help them to find a mutually acceptable solution into the future, and restore broken relationships, so that, going forward they may live and work, on the basis of shared values, and common goals and objectives. In an adversarial confrontation there are no winners. Even a side that may appear to be winning, is actually a loser, where a long-term relationship is destroyed.

The stand-off between the two businesses currently has caused a very toxic environment, that cannot be allowed to continue. It is in the public-interest that intervention takes place, sooner than later. Following any other course, will lead to miseries.

The time to act is now!

Shakespeare is said to have written: “There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and miseries. On such a  full sea are we now afloat. And we must take the current when it serves, or lose our ventures.”

Let reason prevail, and peace be given a chance!

Dr Wallace Mgoqi is AYO Technology Solutions’ non-executive chairperson and former acting judge of the Land Claims Court. He writes in his personal capacity.

BUSINESS REPORT

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