Prescription and Actions under the Insolvency Act
At all events, arbitration is more rational, just, and humane than the resort to the sword. – Richard Cobden
A commonly held view is that arbitration is always open to parties as a means of resolving their disputes, save in instances where the dispute relates to matrimonial matters or matters affecting status, which are precluded by means of the provisions of section 2 of the Arbitration Act 42 of 1965.
However, there are statutes which suggest that relief which is claimable in certain instances can only be granted by a High Court, and not by an arbitration tribunal. The Trade Marks Act 194 of 1993 (“the Trade Marks Act”) is one such Act.
Section 34(3) of the Act states as follows:
“34(3) Where a trademark registered in terms of this Act has been infringed, any High Court having jurisdiction may grant the proprietor the following relief, namely –
(a) an interdict;
(b) an order for removal of the infringing mark from all material and, where the infringing mark is inseparable or incapable of being removed from the material, an order that all such material be delivered up to the proprietor;
(c) damages, including those arising from acts performed after advertisement of the acceptance of an application for registration which, if performed after registration, would amount to infringement of the rights acquired by registration;
(d) in lieu of damages, at the option of the proprietor, a reasonable royalty which would have been payable by a licensee for the use of the trademark concerned, including any use which took place after advertisement of the acceptance of an application for registration and which, if taking place after registration, would amount to infringement of the rights acquired by registration.”
Section 1 of the Act defines a “court” as “… the Transvaal Provincial Division of the Supreme Court of South Africa, but in relation to any claim or counterclaim for removal, amendment or variation of, or other relief affecting any entry in, the register arising from or forming part of proceedings instituted in any other division of the said Supreme Court having jurisdiction in relation to the proceedings, includes that division in respect of such claim or counterclaim.”
The language of the Act is clear and unambiguous. Its ordinary grammatical meaning demonstrates that only a High Court has jurisdiction to entertain an application in terms of section 34 of the Trade Marks Act 194 of 1993 (“the Act”).
In circumstances where the language of the legislative instrument is clear and unambiguous, that language must be given effect to without more ado.
See LAWSA Volume 25(1): Statute Law and Interpretation para 321(d)
Where the language of a statutory provision is clear and unambiguous, it is presumed to be a correct and authentic expression of the intention of the legislature.
See Mayfair South Townships (Pty) Ltd v Ghina 1980 (1) SA 869 (T) at 879H; S v Du Plessis 1981 (3) SA 382 (A) at 403H; S v Henckert 1981 (3) SA 445 (A) at 451 G-H; Odendaalsrus Municipality v Odendaalsrus Gold, General Investment & Extensions Ltd 1959 (1) SA 374 (A) at 382 B-D; Norden v Bhanki 1974 (4) SA 647 (A) at 655 (A)
In a contractual context, it has been held that where a party seeks to establish that a word or phrase is used in a special or technical sense or that a meaning other than its ordinary grammatical meaning must be ascribed to the word, that party bears the onus of demonstrating that that interpretation is appropriate.
See Krige v Wallace 1990 (3) SA 724 (C) at 737 A-C
It is desirable that the interpretation of contracts should keep generally in step with the interpretation of statutes.
See Christie 6th Edition at page 222
For a party to be entitled, by means of arbitration proceedings, to relief under section 34 of the Act, it would mean that the word “court”, as it is used in the Act would have to be interpreted as meaning something which is inclusive of arbitration proceedings. It is submitted, however, that to import such an interpretation would lead to absurd results. This can be demonstrated by means of a perfunctory analysis of numerous other provisions of the Act. By way of example, sections 54 to 59 of the Act provides as follows:
“54 Power to order production of certificate of registration
In addition to any other powers conferred upon it by this Act, the court may in relation to any application or appeal under this Act order any party to deliver to the court or to the registrar the certificate of registration of any trade mark.
55 Notice to registrar of application to court
Before any application is made to the court for an order involving the performance of any act by the registrar or affecting any entry in the register, the applicant shall in the manner prescribed give the registrar at least 14 days’ notice before the hearing of such application: Provided that the registrar may, in his discretion, waive such notice or accept such shorter notice as he may in the circumstances deem sufficient.
56 Registrar’s appearance in proceedings involving rectification of register
(1) In any legal proceeding in which the relief sought includes alteration or rectification of the register, the registrar shall have the right to appear and be heard, and shall appear if so directed by the court.
(2) Unless otherwise directed by the court, the registrar, in lieu of appearing and being heard, may submit to the court a statement in writing signed by him, giving particulars of the proceedings before him in relation to the matters in issue or of the grounds of any decision given by him affecting such matters or of the practice of the trade marks office in like cases or of such other matters relevant to the issues and within his knowledge as registrar, as he thinks fit, and the statement shall be deemed to form part of the evidence in the proceedings.
57 Court’s power to review registrar’s decision
The Transvaal Provincial Division of the Supreme Court shall have power to review any decision or ruling of the registrar made under this Act.
58 Discretion of court in appeals
In any appeal to the court under this Act against a decision of the registrar, the court shall have power to exercise the same discretionary powers as under this Act are conferred upon the registrar.
59 Procedure in cases of option to apply to court or registrar
(1) Where under any provision of this Act an applicant has an option to make an application either to the court or to the registrar-
(a) if proceedings concerning the trade mark in question are pending before the court, the application must be made to the court;
(b) if in any other case the application is made to the registrar, he may, at any stage of the proceedings, refer the application to the court, or he may, after hearing the parties, determine the question between them.
(2) Where proceedings in terms of section 21, 24, 26, 27 or 38 (8) are pending before the registrar, the registrar may in his discretion refer the proceedings to the court, and shall refer the proceedings to the court on written application of all the parties to such proceedings.”
The absurdity which would arise if the various references to the “court” quoted above were to include a reference to arbitration, is self-evident. It would mean that an arbitration tribunal would have the power to adjudicate on actions undertaken by the registrar.
In Wellworths Bazaars Ltd v Chandlers Ltd 1947 (2) SA 37 (A) at page 43 Davis AJA quoted with approval the following passage from the judgment of Knight Bruce LJ in Ditcher v Denison (1857) 14 ER 718 at 723:
“It is … a good general rule in jurisprudence that one who reads a legal document, whether public or private, should not be prompt to ascribe – should not without necessity or some sound reason, impute – to its language tautology or superfluity, and should be rather at the outset inclined to suppose every work intended to have some effect or be of some use.”
It must therefore be assumed that the legislature sought to specifically limit the definition of the word “court”, to that contained in the Act – If the legislature had intended a definition other than that which was expressly included in section 1 of the Act, the provisions of section 1 of the Act would not have been inserted;
Even if one were to apply a purposive approach to the interpretation of the statute, the conclusion that the relief sought under section 34 of the Act is unavailable in arbitration proceedings, would be inevitable. In a case of trademark disputes, one invariably deals with the contents of the trademarks register, which is a public document which exists by virtue of the provisions of section 22 of the Act. Disputes in relation to trademarks invariably affect the contents of the trademarks register and accordingly affects the rights and interests of third parties who are not parties to the arbitration agreement.
It is submitted that it is for, inter alia, this reason, that the power to grant the relief sought under the Act is confined to the High Court (as a court of first instance), to the exclusion of any other forum.
It has been held, in the context of section 34(3) and (4) of the Act, that the term “court” refers to any court having jurisdiction to hear infringement proceedings on common law or other statutory law principles.
See PPI Makelaars and Another v Professional Provident Society of SA 1998 (1) SA 595 (SCA) at 601 C/D-F/G
Based on the aforegoing, it is submitted that a claim for relief under section 34 of the Act, is not justiciable in arbitration proceedings and an arbitrator would not have jurisdiction to determine such a dispute. When considering resolving a dispute by arbitration, parties would be well advised to consider the implications of any statutory provisions which are relevant to the issues in dispute or risk having the ultimate arbitration award declared invalid.