CONTRACTORS AND EMPLOYERS BEWARE – A SYNOPTICAL GUIDE OF THE DO’S AND DONT’S IN ADJUDICATIONS
Even though adjudication, as an alternative dispute resolution (ADR) process, has been with us in South Africa since 1996 when ESKOM introduced the NEC forms of contract, quickly followed by the 1999 FIDIC suite, there is still today a woeful lack of knowledge on how a case in adjudication ought to be presented to obtain the desired result. In this brief article I shall try and offer some guidance.
In a matter in which I had recently been appointed the Adjudicator by agreement, I received an adjudication submission accompanied by 23 annexures. Some of the annexures were copies of documents exchanged between the parties and others were Excel spreadsheets with, occasionally, multiple pages in each spreadsheet.
The dispute concerned an extension of time (EOT) and associated costs. Both the time and the cost had been evaluated by the Principal Agent and both of those evaluations had been disputed by the Main Contractor. The original value of the contract exceeded R75 m.
A referring party usually has been involved in the works being performed under the contract for a considerable time – sometimes for several years. The contracting parties would necessarily be steeped in the myriad details involved in the administration of the contract and they should know the relevant construction details intimately. On the other hand, the Adjudicator is brought into the matter cold with no background of such details. The Adjudicator necessarily relies entirely on the documentation submitted, although he or she could call for a meeting where this may be required. Generally, the adjudication process lends itself to a ‘documents only approach’. The choice of considering documents only, or otherwise also calling for meetings with the parties, is in the discretion of the Adjudicator. For this reason, and as a precaution, submissions should be drafted in the expectation there will not be the opportunity to further ventilate the respective parties’ positions via a meeting with the Adjudicator.
In the specific adjudication I referred to earlier, this key factor was overlooked. Instead, in so far as the EOT dispute was concerned, the Contractor simply referenced its spreadsheet annexures that supposedly proved its entitlement to the EOT. No narrative was provided to augment and explain what the spreadsheets were intended to convey. No expert report was included from a delay analyst describing the delaying events and explaining what techniques had been applied, i.e., a prospective or retrospective analysis of time events, or whether the principles of the Society of Construction Law’s Delay and Disruption Protocol (SCL Protocol) had been applied. The Contractor clearly anticipated that the Adjudicator would: (a) be capable of interpreting the spreadsheets without further assistance; (b) was capable of reaching the desired conclusion in the absence of clear guidance; (c) appreciate the impact of the alleged delaying events; and (d) be capable not only of interpreting the method of analysis of delays applied to justify the desired conclusion as to duration of EOT claimed, but would also agree with the method.
It is vital to remember that it is not the function of an Adjudicator to make a case for either of the parties. Even where the Adjudicator has been selected because of his or her known expertise, it is essential that the submissions lead the adjudicator by the nose in the clearest possible way!
Yes, of course, an Adjudicator can request further information. He or she can also appoint an expert to assist in interpreting the documentation, but there is no certainty that such an approach would be applied, and – if it was applied – that it would lead to the conclusion which the Contractor desires. It is far better to provide the Adjudicator with a step-by-step analysis in the clearest possible terms, which leads the Adjudicator to the sought after conclusion.
Do not take the Adjudicator’s expertise for granted. By maintaining control of the documentation and guiding the Adjudicator a party or such party’s advisors retain control of the outcome. The documentation also needs to be logically organised and paginated and cross referenced. The Adjudicator should not have to hunt through reams of paper to locate referenced information. A useful technique in an electronic submission is to embed hyperlinks to allow the Adjudicator to jump straight to the referenced document. Photographs need to be similarly cross referenced and a clear narrative describing each photograph and explaining what it is intended to depict.
The outcome is substantially in the hands of the referring party who, after preparing the submission should do two things, viz., first, to ask the question, ‘have I done everything that is necessary in a clear and concise manner so as to persuade the Adjudicator to find in my favour’; and, second, to request someone in the same enterprise, who was not involved in the contract’s execution, to read the submission with the aim of identifying shortcomings in it and advising on whether, from an overall perspective, it is persuasive.
Finally, choose an Adjudicator who knows the process of adjudication well. It is far better to have a person who is experienced and skilled in the process as opposed to an Adjudicator with little experience of the process, but highly knowledgeable about the subject matter. Timelines in adjudication are tight and proper control of the reference is essential if the benefits of adjudication are to be achieved.
Chris D Binnington Pr Eng
Director: Association of Arbitrators (Southern Africa) NPC
Kommetjie
June 2023
