Bike shop fails in bid to remove arbitrator in disputed lease case

Cape Town – A high-end Cape Town bicycle shop that deals in premium bikes, bike parts and accessories has failed in its bid to dislodge an arbitrator it had accused of bias during a lease dispute.

Judge Judith Cloete of the Western Cape High court dismissed an application by Bike Mob, who are touted as “purveyors of fine cycling”, for the review and setting aside of an interim arbitration award, as well as the arbitrator’s removal from office.

The award was made in April last year and provided that the applicants, Bike Mob, company directors Sean Stack and Neville Cragg and Capitalgro Properties, the respondent in the arbitration, would each be liable for 50% of the arbitrator’s fees and charges.

Capitalgro are the managers of the Westlake Lifestyle Centre, where the Bike Mob had leased a shop from 2016 until August 2019 when a dispute arose in relation to the lease.

When in October 2019 the parties to the lease, Bike Mob and Capitalgro, were unable to agree on an arbitrator during the dispute, a person Judge Cloete referred to only as “X” in her ruling, was subsequently appointed by the chairperson of the Cape Bar Council, as stipulated in the lease.

During a pre-arbitration meeting, attended also by the parties’ respective attorneys, no agreement could be reached about X’s fees and charges.

According to Judge Cloete: “X undertook to provide a memorandum setting out his views on the liability of the parties for the payment of his fees during the arbitration prior to making the final award; but X, it would seem, due to a genuine oversight, failed to do so.”

Nevertheless, the arbitration continued without any agreement regarding payment of X’s fees until March 2020, when with the arbitration at an end, X despatched his invoice separately to the parties’ respective attorneys.

It was then that Bike Mobs’ attorney objected on the basis that no agreement had been reached concerning payment of X’s fees during the arbitration, and informed X that the applicants would not be paying any part of his invoice.

X said that fairness required that the parties must each pay half of the arbitration costs, and that a final award would be made, including a decision as to the final liability for costs.

When Capitalgro’s requested X to make an interim award in the matter, X agreed, which led to the case in court where Bike Mob said they wanted X removed as arbitrator for bias in making the interim award.

The judge ruled there was nothing in the arbitration agreement which precluded X from having made an interim award.

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Cape Argus