TOOLS OF THE TRADE – JUNE 2024

ADJUDICATORS MUST PAY CAREFUL ATTENTION
WHEN DRAFTING THEIR DETERMINATIONS

Adjudication is the primary dispute resolution process in many standard-form contracts.[1]  Although not regulated by statute in South Africa, adjudication must be the most widely used alternative dispute resolution process in the country.  If an adjudicator’s determinations are not honoured, it makes a mockery of the whole process.  Hence, it is vital that adjudicators publish determinations that are capable of enforcement in unopposed legal proceedings  by a court of law.

Many adjudicators have technical backgrounds and are not trained in legal nomenclature. Although a court may have regard to the fact that an adjudicator is not legally trained, there is no reason why any adjudicator, who  is a Fellow of the Association of Arbitrators or other nominating body, cannot publish determinations that are concise, crisp and leave no room for mistaken interpretation.  But this is not necessarily the case in recent experiences I have had.

I would like to reflect on three of these recent experiences.  It happens that in each case, I acted as claimant’s representative.  In all three matters, the current edition of the JBCC® Adjudication Rules (the Rules) found application.[2] 

Relief Granted where None was Sought

In the first matter, the adjudicator granted relief where none was sought.

The matter in question arose from a JBCC® 2018 Principal Building Agreement.[3]  Sub-clause 30.4 of that agreement provides that:

The notice of adjudication shall clearly define the scope of the dispute and the relief sought by adjudication.
(Own emphasis).

Accordingly, a dispute is required to be carefully defined at the outset, when the notice of adjudication is drafted.  This not only assists the nominating body to select a suitable adjudicator, but it also ring-fences the jurisdiction of the adjudicator.  The dispute defined in the notice of adjudication is the only dispute an adjudicator is empowered to decide and one must be very careful not to stray outside of this mandate.

It therefore goes without saying that the adjudicator must also ensure that the parties keep within these jurisdictional boundaries and – it goes without saying – any counterclaim that is unrelated to the dispute referred ought not to be considered by the adjudicator due to a lack of jurisdiction.

Although no preliminary adjudication meeting is prescribed by the Rules, an adjudicator ought to schedule one so that, among other things, it can pertinently be recorded what the parties’ dispute is that was referred to him or her for resolution and precisely what needs to be decided.  This reduces potential jurisdictional challenges and complications down the line.

By granting relief where none was sought, the adjudicator clearly exceeded his jurisdiction.  Although it might be argued that this order can easily be isolated from the others made, this avenue is not always open. An obstructive respondent who does not want to be in adjudication proceedings and certainly does not want to part with money, will pounce on any escape route they can find.  In this instance, the claimant, apart from having to secure an enforcement order, also had to argue that the relief granted to respondent ought to have been denied – a  point that respondent opposed.  The matter is still pending.

A simple enforcement order by application proceedings became opposed.

Parties Ordered to Agree Something

In the second matter, the adjudicator ordered the parties to meet to agree to a measure in dispute.

It often happens that by the time matters culminate in a dispute, the relationship between the parties has soured.  An adjudicator ought to consider that the reason disputes have been referred to adjudication is because the parties cannot resolve them amicably themselves. 

When an adjudicator is called upon to decide something, like the detailed measurement of an item of work in a Bill of Quantities, the adjudicator must decide exactly that.  The adjudicator must not direct the parties to meet to agree something – unless of course they have never done so.  In the case in point, the parties had already met and could not agree the extent of a certain measurement.  In the determination, the adjudicator directed them to meet to agree measurement of the item.  The adjudicator should rather have considered the evidentiary data at hand and made a firm decision on the extent (i.e., volume or quantity) of the measured item.

Orders Subject to Interpretation

In the third matter, the adjudicator did not properly correlate the relief he granted with the conclusions he reached in the body of his determination.  Both parties interpreted the determination as being in their favour.  Of course, those views where diametrically opposed.  The result is that the matter is incapable of a speedy enforcement by a court of law.

Adjudication is colloquially known as ‘rough and ready justice’, presided over by an inquisitorial practitioner, often with a technical background, acting as an expert and not as an arbitrator.  The time periods that govern the process are extremely short.  Having an opposed enforcement action, totally defeats the benefit of securing a quick decision that is binding. 

The following provisions in the Rules relate to the power and speed of adjudication:

  •       Rule 1.1 provides that: 

Adjudication is an accelerated form of dispute resolution in which a neutral person determines the dispute as an expert (and not as an arbitrator) and whose determination is binding on the parties for immediate compliance …’;

  •        Rule 6.1.3 provides that: 

‘The adjudicator’s written determination of the dispute shall be binding on the parties for immediate compliance …’;

  •        Rule 6.1.4 provides that: 

‘The adjudicator’s written determination of the dispute shall constitute a liquid document.  In the case where the written determination orders the payment of an amount, such amount shall be a liquidated amount.’;

  •        Rule 6.2.2 provides that: 

‘Either party may apply to the High Court for the enforcement of the determination …’.

What has unfortunately become more common in my experience is that, instead of having crisp, unambiguous orders that can easily be enforced by unopposed application proceedings, the wary claimant has to fund an opposed matter with the inherent delays that may give rise to.

Simple orders leaving no room for interpretation are required in order for a winning party to secure an enforcement order, and this is supported by our jurisprudence.

In this respect, I refer to two quite recent cases where adjudicator’s determinations were upheld Ekurhuleni West College v Stanley Harold Segal & Another (1287/2018) [2020] ZASCA 32 (2 April 2020)[4] and Ethekwini Municipality v Coopepativa Muratori & Cementisti – CMC Di Ravenna Societa Cooperativa (Case no 181/2022) [2023] ZASCA 95 (12 June 2023).[5]

In both of these matters, the SCA upheld the enforcement orders granted by the courts a quo.

Possible Reasons for These Issues

I find that technical adjudicators often try to use complicated language and do not keep things brief and to the point.  Adjudicators must provide their reasoning in the body of their determination.  When it comes to the orders, keep them simple but clear.  Always make an order against each of the heads of dispute, and do not leave anything to be calculated.  For example, instead of ordering that: ‘The claimant is granted an extension of time of twenty (20) working days with the appropriate adjustment of time-related Preliminaries, rather order ‘The claimant is granted an extension of time of twenty (20) working days with an adjustment of time-related Preliminaries in the amount of R100 000.00 including VAT’.  This leaves nothing to be interpreted.

Do not use terminology like ‘ought to’. 

I also find that some adjudicators battle with making a decision that is going to be detrimental to one of the parties.  One must not underestimate the power and responsibility that is placed on an adjudicator.  It is a very serious assignment, the outcome of which is no doubt going to have a large impact on the parties.  Having said that, the adjudicator has to come to a decision using a balance of probabilities as the burden of proof.

The adjudicator must not try and find middle ground or act as a facilitator in seeking a settlement between the parties.  Adjudicators need to decide matters to the best of their ability relying on the evidence and argument in front of them, applying their expert skills and experience.  Often adjudicators have to make hard decisions, and they need to stand up and do so.

 

BRADLEY BOERTJE

BORCON (PTY) LTD

E-mail: brad@borcon.co.za


[1]

For example: The JBCC® suite of contracts, the MBSA domestic subcontract agreements, the NEC.

[2]

JBCC Adjudication Rules (January 2020 – Rev 1), as published by the JBCC®.

[3]

The JBCC® Principal Building Agreement, Edition 6.2 – May 2018.

[4]

Also reported at 2020 JDR 0556 (SCA).

[5]

Also reported at 2023 JDR 2053 (SCA).