ENFORCEMENT OF · MDA l CONTRACTS l COMMERCIAL SUPPORT l DISPUTES l TRAINING OPENING REMARKS o The...

ENFORCEMENT OF

ADJUDICATOR’S AWARDS

– APPROACH OF SOUTH

AFRICAN COURTS

THROUGH THE CASES

MDA l CONTRACTS l COMMERCIAL SUPPORT l DISPUTES l TRAINING

OPENING REMARKS

o The legal principles relating to the enforcement of adjudicator’s

awards is founded in contract law;

o The appointment of an adjudicator is by agreement between the

parties. This agreement also provides that a party will be bound

by an adjudication award until its upset by way of the next

agreed step in the proceedings;

o The adjudication is a relatively new concept in South African

Law, however it is quickly gaining traction;

o It has been adopted and is present in the four major standard

term construction contracts.

o At this stage adjudication is still optional


PROPOSED AMENDMENT TO THE CONSTRUCTION

INDUSTRY DEVELOPMENT BOARD ACT, 2000

o The Minister of Public Works published a notice on 29 May 2015

in the Government Gazette, under which the Minister called for

public comment on certain proposed amendments to the CIDB

Regulations;

o Doing away with the “pay when paid” provisions in construction

contracts;

o Every constructions work contract and construction works

related contract must provide for an adjudication procedure,

which adjudications may arise at any time;

o All disputes under such contracts must be referred to

adjudication before arbitration proceedings can be instituted;

o A decision of an adjudicator will be binding on the parties and

must be given effect to even though either party refers such

dispute to arbitration or takes the decision on review;


PROPOSED AMENDMENT TO THE CONSTRUCTION

INDUSTRY DEVELOPMENT BOARD ACT, 2000 .. CONT

o Further the proposed regulations will provide for:

• The appointment of the adjudicator;

• The powers and duties of the adjudicator;

• The rights of the parties to be legally represented;

• The confidentiality of adjudication proceedings;

• The period within which the adjudicator must make a

decision;

• The manner in which the adjudicator must make a decision;

and

• The effect of the adjudicator’s decision.


OVERVIEW OF CASES TO BE DISCUSSED

o Case law discussed:

• Radon Projects v N V Properties & Gary Stephen Myburgh

2013 (6) SA 345 (SCA) / 2013 3 ALL SA 615 (SCA);

• Jonroux Builders & Contractors (Pty) Ltd v PTY Props 16

(Pty) Ltd - PTA High Court, case number: 63394/12

(unreported);

• Basil Read (Pty) Ltd v Regent Devco (Pty) Ltd [2011] JOL

27946 (GSJ)(unreported);

• Esor Africa (Pty) Ltd / Franki Africa (Pty) Ltd JV v Bombela

Civils Joint Venture (Pty) Ltd 2014 JDR 1824

(GJ)(unreported);


OVERVIEW OF CASES TO BE DISCUSSED

• Tubular Holdings (Pty) Ltd v DBT Technologies (Pty) Ltd

2014 (1) SA 244 (GSJ);

• Stefanutti Stocks (Pty) Ltd v S8 Property (Pty) Ltd 2013

JDR 2441 (GSJ) (unreported);

• Sasol Chemical Industries Limited v Odell and Another

[2014] JOL 32529 (FB)(unreported);

• Freeman, August Wilhelm, N.O and Another v ESKOM

Holdings Limited case no 43346/09;

• Thyssenkrupp PDNA Engineering (Pty) Ltd v Flour SA

(Pty) Ltd and Another case no: 04219/2013; and


FREEMAN, AUGUST WILHELM, N.O AND

ANOTHER V ESKOM HOLDINGS LIMITED CASE NO

43346/09

o This is subsequent to adjudication proceedings arising from the

NEC 2.

o Application for summary judgement arising from two decisions

by the adjudicator regarding the release of retention monies

and outstanding payments.

o Application for summary judgment is made where the

defendant has no bona fide defence and is simply trying to

delay the process.




43346/09

o ESKOM alleged, inter alia, that:

o ESKOM was not the Supervisor and the award directing

the issue of a Defects Certificate did extend to ESKOM or

the payment of any monies,

o a notice of dissatisfaction had been issued and that

ESKOM was therefore excused compliance with the

adjudicator’s decisions,

o the adjudicator delivered his decisions outside the final 4-

week period for notifying his decision, and

o ESKOM had launched a counter claim in another

adjudication




43346/09

o The court held that ESKOM’s defences to the first dispute had

no merit. Note ESKOM’s defences went to the enforceability of

the award – alleging it was not the Supervisor and there was

no order to pay the retention.

o The second defence was dismissed as simply being outside

the clear wording of the contract which states that an

adjudicator’s “decision is final and binding unless and until

revised by the tribunal.”

o The third defence of a late order was also dismissed. The

contract did not state that a late award would be invalid, or that

there was a provision making time of the essence in making

the award.




43346/09

o As adjudication was not arbitration, it was not subject to the

Arbitration Act and the time periods therein. The remedy for a

late award is a notice of dissatisfaction, and ESKOM did not

notify the dissatisfaction until after the award was issued.

o The counter claim was also dismissed as the adjudicator had

dismissed it and no notice of dissatisfaction had been issued.

o Summary judgement issued.


RADON PROJECTS V N V PROPERTIES & GARY

STEPHEN MYBURGH 2013 (6) SA 345 (SCA) / 2013 3

ALL SA 615 (SCA)

o Contractor asserted various claims against the employer in

relation to the construction of the East London Convention

Centre;

o The appeal concerned the manner in which disputes are

resolved under the Principal Building Agreement of the Joint

Building Contracts Committee (JBCC) 4th ed March 2004;

o More particularly it concerned certain jurisdictional challenges

to the arbitrator’s power to determine certain disputes;

o In this instance arbitration could only be instituted after

practical completion was obtained; before this disputes had to

be resolved, provisionally, by adjudication (clause 40 of JBCC);



STEPHEN MYBURGH 2013 (6) SA 345 (SCA) / 2013

3 ALL SA 615 (SCA)

o Quotes on adjudication:

• “In Macob Civil Engineering Ltd v Morrison Construction Ltd

adjudication was described, in the context of English Litigation, as

“… a speedy mechanism for settling disputes [under] construction

contracts on a provisional interim basis, and requiring the decision

of adjudicators to be enforced pending the final determination of

disputes by arbitration, litigation or agreement.… But Parliament

has not abolished arbitration and litigation of construction disputes

it is merely introduced an intervening provisional stage in the

dispute resolution process.”

• “The authors of Hudson’s Building and Construction Contracts

observed that under the New Zealand construction legislation

adjudication is regarded as essentially a cash flow measure

implementing what has been colloquially described as a “quick

and dirty” exercise to avoid delays in payment pending definitive

determination of litigation.”




3 ALL SA 615 (SCA)

o This dispute concerned claims by the contractor for revisions to

the date for practical completion (and related provisions) in

consequence of delay. During the course of construction a

number of such claims were submitted to the principal agent

under clause 29 of the building contract.

o After practical completion the contractor submitted to the

principal agent what is called a ‘consolidated claim’ –

consolidation of a number of individual claims for revisions of

the contract on account of delay. According to the contractor’s

work claims made in the course of construction, but revised in

the light of information that subsequently came to hand. The

principal agent failed to respond to the consolidated claim and

a dispute arose that the contractor referred to arbitration.




3 ALL SA 615 (SCA)

o The employer objected to the jurisdiction of the arbitrator

primarily on the contention that the contractor was purporting

to revive claims that were disposed of finally in the course of

construction. The employer went on to allege that even if a

dispute came into existence it is not competent to be submitted

to arbitration, because the dispute arose before practical

completion, and is thus required to be resolved by adjudication.

o The court’s findings:

• “The latter objection can be disposed of at once. I have

already explained at some length that the question whether

a dispute is to be resolved by adjudication, or whether it is

to be resolved by arbitration, depends upon when it is

submitted for resolution, and not upon when the dispute

arises.”




3 ALL SA 615 (SCA)

• “a contractor is not obliged to submit the dispute to

adjudication. He may choose instead to complete the works

and submitted then to arbitration. If the present disputes

can indeed be said to have arisen before practical

completion that would be no bar to the resolution by

arbitration.”

o The court also made some interesting findings regarding the

ability of an arbitrator to determine his jurisdiction to hear a

dispute, however these are not relevant for the purpose of this

discussion.


THYSSENKRUPP PDNA ENGINEERING (PTY) LTD v

FLOUR SA (PTY) LTD 04219/2013

o Application in terms of section 6 of the Arbitration Act for a stay

of proceedings.

o The main application was to interdict the adjudicator from

deciding any matters as there was a dispute on his

appointment: Thyssenkrupp arguing he was not properly

appointed and Flour that he was.

o This does not deal with the appointment of the adjudicator, but

the stay of proceedings in terms of the Arbitration Act as the

dispute fell within the terms of the contract.

o A key consideration in the case it is about whether or not an

arbitrator can enquire into his own jurisdiction.


THYSSENKRUPP PDNA ENGINEERING (PTY) LTD v

FLOUR SA (PTY) LTD 04219/2013

Per Nugent JA in RADON Projects:

“The response of the arbitrator cannot be faulted. When confronted with a

jurisdictional objection an arbitrator is not obliged forthwith to throw up his

hands and withdraw from the matter until a court has clarified his jurisdiction.

While an arbitrator is not competent to determine his own jurisdiction that

means only that he has no power to fix the scope of his jurisdiction. The

scope of his jurisdiction is fixed by his terms of reference and he has no

power to alter its scope by his own decision (in the absence of agreement to

the contrary).”

The dispute was held to be a matter to be referred to arbitration


JONROUX BUILDERS & CONTRACTORS (PTY) LTD

V PTY PROPS 16 (PTY) LTD

o Brief facts of the case:

• The plaintiff issued summons against the defendant founded

on a written agreement whereupon work was done and the

amount of R 1 335 614.29 was claimed;

• The defendant raised a special plea that the action be stayed

pending the invocation and final determination of the disputes

by way of dispute settlement provisions as contained in

clause 40 of the agreement between the parties.

• The plaintiff thereupon did not take any further steps in the

action, but instead referred the matter to adjudication. The

parties filed pleadings and supporting documentation. Both

parties made written submissions and on 21 July 2011 the

adjudicator made an award in favour of the plaintiff in the

amount of R 169 811.20;




o The defendant tendered payment of this amount however the

plaintiff noted its objection to the award and gave notice that it

intended referring the dispute to be finally determined by

arbitration;

o The defendant (employer) objected to the appointment of an

arbitrator (on the basis that no C.V’s were attached when the

Association of Arbitrator’s proposed names for arbitrators), and

complained that the plaintiff (contractor) was in breach of the

agreement in that it prematurely instituted summons against the

defendant, which summons was still pending and should be

withdrawn. The plaintiff replied that the defendant was raising a

unnecessary technical defences and set the matter down for trial;

o Accordingly, the court was faced with the question of whether a

party can litigate in court, instead of arbitration, after the

adjudication process has been instituted and completed.




o The defendant argued that if there was a notice of

dissatisfaction (in respect of the adjudication) then it was to be

finally resolved by the Arbitrator. If there was no notice of

dissatisfaction then the Adjudicator’s decision is final and

binding. As it stands now the Adjudicator’s award is binding

between the parties until an Arbitrator finds on the notice of

dissatisfaction.

o The plaintiff argued that they do not accept the adjudicator’s

decision. They attempted to refer the matter to arbitration but

the defendant objected despite their special plea in which they

requested arbitration.




o The court found:

• The principle of pacta sunt servanda is an entrenched

principle in the law and was found under the the

Constitutional principle of inter alia human dignity;

• The parties agreed that when a dispute as to any matter

arising out of or concerning the agreement arose in the

matter was to be referred to adjudication. The plaintiff has a

right to note its dissatisfaction with the Adjudicator’s award.

The parties agreed that if such notice was delivered by any

of the parties to the Arbitrator they will finally decide the

dispute. This is the route the parties agreed upon and the

plaintiff invoked this process. The plaintiff cannot now make

an about turn and set the matter down for trial.




o Resorting back to the action not only militates against the

contract and the entrenched principle of pacta sunt servanda, but

is bad in law procedurally and substantively. By allowing for the

dispute to be referred to arbitration, after an Adjudicator’s

decision had been issued, effectively gave a party a “right to

appeal” which the plaintiff invoked.

o The jostling between the attorneys as to what issues may be

raised before the Arbitrator and who the Arbitrator must be did not

give the plaintiff the right to resort back to the action. The

Arbitrator will be appointed and the arbitrator will deal with the

issues raised before him. The reason for this is trite: parties

cannot initiate two sets of proceedings based on the same claim

and then alternate between the processes until they receive a

result they like.

o The court upheld stayed the action pending the finalisation of the

dispute resolution process.


ESKOM HOLDINGS LTD v CMC-MAVUNDLA-IMPREGLIO

JOINT VENTURE AND ANOTHER case no 2014/15608

o This case concerns the adjudicator’s appointment.

o The adjudicator’s appointment had run for three years, under

three successive contracts, terminating 31 March 2012, 31

December 212 and 31 December 2013.

o After 31 December 2013, CMC-Mavundla kept referring

disputes the adjudicator and ESKOM kept trying to appoint a

new adjudicator, complaining that CMC-Mavundla was

frustrating this.

o ESKOM sought declaratory orders that the adjudicator’s

appointment had terminated on 31 December 2013 and no

further disputes could be referred to him, and his decisions

after 31 December 2013 were null and void and that ESKOM

was not obliged to renew his appointment. A new adjudicator

was to appointed by the adjudicator nominating body.




o The Contract Data provided for a choice of adjudicators, Brady

of Chapman. Brady was ill and could not accept any

appointment. Only if one or the other could not act, was the

nominating body to be approached.

o Once Chapman was appointed, the proviso regarding the

nominating body fell away.

o The court held that the adjudicator’s contract was collateral to

the main contract. The main contract provided for the

mechanism by which the Employer and contractor could

terminate the adjudicator’s contract.




o If the parties do not agree to terminate the adjudicator’s

appointment, it terminates only when the adjudicator resigns or

is unable to act.

o The renewal of the contracts was held to be consistent with

reviewing the adjudicator's fees which would efflux over the

time of the contract.

o One party does not enjoy the right to unilaterally terminate the

adjudicator's appointment. If there is bias or abuse of the rules

of natural justice, the aggrieved has its remedies, and in the

event of enforcement this can be raised as a defence.

o ESKOM depended on a finding that the main contract was not

the final word on the appointment of the adjudicator, and the

court disagreed.


BASIL READ (PTY) LTD V REGENT DEVCO (PTY) LTD

o The applicant (contractor) sought an order against the

respondent (employer) for the payment of R 29 554 941.97,

predicated upon a payment certificate issued by the

respondent’s principal agent. The parties relationship was

governed by the JBCC contract;

o Brief facts:

• On 25 August 2009 the principal agent issued an interim

payment certificate certifying that the sum of R 29 554

941.97 was due and payable by the respondent to the

applicant by no later than 1 September 2009. The applicant

contends that the respondent is contractually obliged to pay

the sum to be applicant, but has failed to do so;

• Upon the respondent’s failure to make payment the matter

was referred to adjudication and the Adjudicator found in

favour of the applicant;



o The respondent denied liability and alleged that the

adjudicator’s determination based on the payment certificate is

unlawful, unenforceable and void for a number of reasons,

consequently, the amount reflected in the payment certificate

was not due and payable in terms of the contract;

o The decision revolved around an extension of time claim. In the

adjudication the respondent contended that the applicant was

not entitled to an extension of time and payment of expenses

incurred in respect of two claims. The adjudicator found in

favour of the applicant. The respondent alleged that the

adjudicator did not give consideration to the evidence placed

before him by the principal agent, and wrongly accepted

misrepresentations by the applicant which, influenced his

determination, consequently the determination is unlawful,

unenforceable and void. Aggrieved by the determination, the

respondent referred it to arbitration;



o The respondent believed that the applicant cannot seek an

order the consequence whereof, was to give effect to

improperly obtained determination because this subverts the

intention of the contracting parties. Secondly, it was never the

intention of the parties that they would be bound by an

improperly obtained termination;

o The applicant, on the other hand, alleged that the certified sum

of R 29 554 941.97 did not become due and payable upon the

handing down of the adjudicator’s determination but became

due and payable upon the issue of the payment certificate;

o The fact that the respondent disputed the adjudicator’s

determination does not excuse it from complying with its

contractual obligations which include its obligation to pay the

amount certified in the payment certificate;



• Finally, the applicant contended that both the contract and

the Adjudicator’s Rules state that the parties are to act in

accordance with the adjudicator’s determination until such

time as it is set aside by arbitrator. Declaring a dispute in

relation thereto does not relieve the respondent of its

contractual obligations.


• The applicant’s claim is predicated on a payment certificate

which originates from a contract, not as incorrectly submitted

by the respondent, in the adjudicator’s determination;

• The respondent’s principal agent issued an interim payment

certificate at the time when the principal agent knew that the

respondent disputed the adjudicator’s decision. In acting

thus, the principal agent certified that the respondent is

indebted to the applicant in the amount reflected in the

interim payment certificate.



o The alleged irregularities in the adjudicator’s determination do

not absolve the respondent from honouring its obligations in

terms of the contract. The respondent did not contend that the

principal agent proceeded to issue the interim payment

certificate contrary to its authority, scope or mandate.

o The respondent cannot claim that the principal agent exceeded

his mandate because at all material times the latter deferred to

it before issuing the payment certificate;

o The respondent’s remedy lies in clauses 40.4 and 40.5 which

respectively stipulate should either party be dissatisfied with

the decision given by the adjudicator, such party shall give

notice of its dissatisfaction to the other party, and the dispute

will then be resolved by arbitration.



o The respondent had clearly exercised its contractual right by

referring the dispute to arbitration, consequently, the

respondent was locked within the purview of clause 40.3, which

prescribed that the respondent shall be bound by the decision

of the adjudicator and shall give effect there to without delay

unless and until the adjudicator’s decision is set aside by an

arbitrator.

o The respondent cannot set aside a payment certificate validly

issued by the principal agent “in the absence of a contractual

provision to the contrary or on the basis of an agreement or

waiver”, where the principal agent had acted within the

authority and the scope conferred to it by the respondent.

o The respondent was ordered to make payment of the certified

amount.


ESOR AFRICA (PTY) LTD / FRANKI AFRICA (PTY) LTD

JV V BOMBELA CIVILS JOINT VENTURE (PTY) LTD

o Brief facts of the case:

• The applicant sought an enforcement order of a DAB

decision that the respondent pay the applicant the sum of R 8

662 628.09;

• The respondent contended firstly that the DAB decision is not

final and binding because it does not automatically render the

monetary amount due, owing and payable because the

respondent gave notice of the dissatisfaction in respect of the

decision which the respondent contended prevented the

decision from being “final and binding”. In particular the

respondent contended that once a notice of dissatisfaction is

given then the parties are required to engage one another in

attempting to settle the matter amicably failing which the

matter must go to arbitration. Added to this was the

contention that the dispute resolution process had not been

completed and the application to court was premature.




• The second issue raised followed on from the first; the court

should not exercise jurisdiction as the parties agreed to

proceed to arbitration if they were unable to settle the matter

of the delivery of the notice of dissatisfaction with the DAB

decision.

o The court found:

• The DAB dispute resolution process in respect of a particular

issue, including the amount that ought to be certified for an

interim draw, occurs while the contractor continues to

perform the balance of its construction obligations under the

contract. It self-evidently means to ensure that the parties

continue with the contractual relationship in a non-adversarial

manner for the mutual advantage, namely to complete the

contract timeously without the one withholding performance of

its obligations until the dispute is resolved.




• The court highlighted the fact that clause 20.4 of the contract provided

that once the DAB at given its decision “The decision shall be binding on

both parties, shall promptly give effect to it unless and until it shall be

revised in an amicable settlement or an arbitral award as described

below. Unless the Contract has already been repudiated or terminated,

the Contractor shall continue to proceed with the Works in accordance

with the Contract.”

• The DAB provision is clearly intended to provide an expedited process of

dealing with disputes as and when they arise, including the adequacy of

interim payment certificates. The DAB decision is not final but the

obligation to make payment or otherwise perform under it is.

• The key to comprehending the intention and purpose of the DAB process

is that neither payment nor performance can be withheld when the

parties are in dispute. The DAB process ensures that the quid pro quo

for continued performance of the contractor’s obligations even if it is

dissatisfied with a DAB decision…

• The court ultimately enforced the DAB decision.


TUBULAR HOLDINGS (PTY) LTD V DBT

TECHNOLOGIES (PTY) LTD

o Facts of the case:

• The respondent was the main subcontractor on the Eskom Kusile

project. Part of the subcontracted project was in turn

subcontracted by the respondent to the applicant;

• The dispute resolution procedure agreed upon between the parties

was that contained in clause 20 of the Standard FIDIC Conditions

of Contract. It provided for disputes between the parties to first be

referred to a Dispute Adjudication Board (“DAB”) who was to give a

decision. Any party dissatisfied with the decision could give a

notice of dissatisfaction after which it was to be referred to

arbitration;

• In this case, dispute arose between the parties, that was referred to

the DAB, the DAB gave a decision, the respondent gave a notice of

dissatisfaction with this decision (as did the applicant). In the

application to court, the applicant demanded, in the interim,

compliance with the decision as the respondent refused to comply.


TUBULAR HOLDINGS (PTY) LTD V DBT

TECHNOLOGIES (PTY) LTD

o The essence of the dispute revolved around the interpretation of clause

20.4. The applicant submitted that the parties were required to give prompt

effect to the decision by the DAB which was binding unless and until it was

set aside by agreement or arbitration following a notice of dissatisfaction,

whereas the respondent contended that the mere giving of a notice of

dissatisfaction suspended the effect of the decision.


• The court found that the notice of dissatisfaction did not in any way

detract from the obligation of the parties to give prompt effect to the

decision until such time, if at all, it is revised in arbitration. The notice of

dissatisfaction does, for these reasons, not suspend the obligation to

give effect to the decision. The party must give prompt effect to the

decision once it is given;

• In other words, until such time as the decision becomes final (after the

lapse of the 28 day period within which to give a notice of

dissatisfaction) the decision is binding but of an interim nature;

• The court referred to both the local case law (which we have already

dealt with) as well as UK jurisprudence;

• The respondent was ordered to comply with the decision.


STEFANUTTI STOCKS (PTY) LTD V S8 PROPERTY

(PTY) LTD


• This decision also revolved around the enforcement of a

decision handed down by an adjudicator, in terms of clause

40 of the JBCC agreement;

• The applicant, the building contractor, refer to a dispute

between the parties to the adjudicator. The adjudicator

delivered his decision, in favour of the applicant, however the

respondent, the employer, contended that it was not obliged

to give effect to the adjudicator’s decision as it had given

notice of its dissatisfaction therewith pursuant to clauses 40.3

to 40.5 of the JBCC agreement;

o Court’s decision:

• The court gave a brief history of the adjudication process,

starting out in the United Kingdom;

• The court summarised all of the case law relating to

adjudication that we have already discussed;



(PTY) LTD

o The court concluded:

“Having regard to the purpose of the provisions of the

agreement by introducing a speedy settling of disputes in

construction agreements on a provisional, interim basis, I can

find no reason not to follow the judgement in Tubular Holdings,

which is in harmony with the decisions of Spilg J in Bombela and

Mokgoatlheng in Basil Read”



(PTY) LTD

o The case law discussions in this case are very useful and this

case gives a very good summary of the preceding decisions.


SASOL CHEMICAL INDUSTRIES LIMITED V ODELL

AND ANOTHER


• The first respondent, was appointed as an adjudicator in

respect of disputes arising from the contract between the

applicant and the second respondent. The first respondent

took the view that it was not within his power to grant the

applicant an extension of time for each to lodge in

submissions more than four weeks after the referral date;

• The main question the court had to decide was whether the

adjudication decision of the first respondent could be set aside

because the first respondent did not entertain a request by the

applicant for an extension of time;

• In terms of the dispute resolution mechanism agreed upon

between the parties the particular clause provided that further

information was to be provided to the adjudicator within four

weeks of the referral;



AND ANOTHER

o The facts of the case:

• In this case, the referral notice was served on the applicant on

17 December 2013, during the builders’ holiday and the

person dealing with this matter for the applicant was already

on holiday;

• They returned on 13 January 2014. On 14 January 2014 she

requested the second respondent for an extension on the

second respondent was not willing to acceded to such

request. This gave rise to the court application.

• The relief sought was a declaratory order that the first

respondent (the adjudicator) is entitled to consider a request

for an extension of time in which the applicant could file a

response or furnish information to the second respondent’s

referral notice.



AND ANOTHER

o The court’s decision:• “Adjudication is not subject to the common law. Mr Snellenburg referred to an

unreported judgment of the Gauteng South High Court, Freeman and Another v

Eskom Holdings Ltd (Case No 43346/09, 23 April 2010) where the court points out

that adjudication is not arbitration. The Freeman case is referred to in Tubular

Holdings (Pty) Ltd v DRT Technologies (Ptvl Ltd 2014 Cl l SA 244 (GSJ). Both

decisions make it clear that the purpose of adjudication is to arrive at a speedy

resolution of a dispute. The proceedings before the adjudicator are not subject to

the rules of natural justice, save in the plainest cases, as it is put in the dictum of

the United Kingdom Court or Appeal quoted with approval in para [24.4.2] of the

Freeman case. The parties are bound by the decision of the adjudicator and the

tribunal has the power to re-open the dispute.”

• “Adjudication is meant to be a speedy remedy to assist cash flow and not to hold

up the contract. The finding of the adjudicator stands until it is set aside by the

tribunal. The remedy of the applicant is to place its case before the tribunal. Even if

in this case the adjudicator may have made a mistake by not entertaining the

request of the applicant for an extension (and I do not think the adjudicator made a

mistake) the adjudication stands. The strictest timeframes in clause W 1.3(3)

accord with the intention of adjudication as being a speedy remedy, not subject to

the rules of natural justice.”



AND ANOTHER

o This last sentence of the court’s decision:• “The strictest timeframes in clause W 1.3(3) accord with the intention of

adjudication as being a speedy remedy, not subject to the rules of natural justice.”

o This takes the issue perhaps a little too far. A material breach of

the rules of natural justice is unlikely to be countenanced by our

courts. Further, it may be a breach of the adjudicator's contract

itself, which will add further grist to the mill.

o Court also found that, for an interdict to be ordered, there must

be an absence of another remedy. As the contract made provision

for proceeding to the tribunal, the right to an interdict was not

established.


CONCLUSION

o Our courts have adopted a very robust approach to the

enforcement of adjudication awards.

o There are hardly any decisions where adjudication awards

have not been enforced. In most instances this will favour the

contractor as opposed the employer as that’s just the common

chain of events!

o The robust attitude of the courts is of great value to all

participants in the construction industry, and will only be

complimented by the proposed regulations.

o Parties use adjudication to get a decision now, if the courts

were not so robust, this would frustrate the entire point of

adjudication.

THANK YOU

ENFORCEMENT OF · MDA l CONTRACTS l COMMERCIAL SUPPORT l DISPUTES l TRAINING OPENING REMARKS o The...

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