The Supreme Court of Appeal (SCA) recently upheld a High Court’s dismissal of an Employer’s review of an NEC3 adjudication. The SCA found that the Employer’s delay in initiating review proceedings was unreasonable and motivated by an attempt to evade contractual obligations.

A dispute arose regarding the installation of a high-security fence. The adjudicator’s decision was in favour of the Contractor. The SCA considered the Employer’s 20-month delay in instituting review proceedings. The Employer tried to explain the delay by alleging non-compliance with the tender samples (raised for the first time in the review). Interestingly, in the adjudication, the Employer tried to uphold the NEC3 contract it later opposed in review proceedings. The court found that the delay was unreasonable. It upheld the original decision and stressed the need for honouring dispute resolution processes and time periods.

This case confirms that parties must accept the outcome of an adjudication in which they voluntarily participated. It reminds parties in contractual disputes to act swiftly and follow agreed procedures.

At LnP Beyond Legal, we emphasise the importance of proactive and strategic planning to avoid disputes and project delays. We believe that by carefully considering and addressing commercial and contractual objectives from the outset, and ensuring a thorough understanding of dispute resolution procedures, parties can minimise the risk of disputes and expedite resolution processes in a timely manner. During contract negotiation or drafting, we advise against agreeing to time periods and dispute procedures that cannot be practically complied with. We recommend seeking legal advice before concluding a contract and also when disputes arise.

LNP BEYOND LEGAL

Article prepared by Hlumisa Matoti | Mbalenhle Simelane | Nikita Lalla