Adjudication may be defined as an accelerated and cost effective form of dispute resolution that, unlike other means of resolving disputes involving a third party intermediary, the outcome is a decision by a third party which is binding on the parties in dispute and is final unless and until reviewed by either arbitration or litigation.
Adjudication is not arbitration or litigation.
An adjudicator is a third party intermediary appointed to resolve a dispute between the parties in dispute. The decision of the Adjudicator is binding and is final unless and until later reviewed by either arbitration or court proceedings, whichever the parties selected at the time of formalising the contract.
It is intended that adjudication is a condition precedent to proceeding to either arbitration or litigation. Adjudication is a form of dispute resolution that meets a need for a rapid, relatively inexpensive dispute resolving mechanism which provides a decision that can be implemented immediately.
It is anticipated that in certain circumstances the adjudicator will consult others to provide such expertise as the adjudicator does not have, to assist in making the correct decision. This is inevitable in disputes that cover a wide range of technical disciplines and legal issues, as no one person could be expected to possess all the necessary skills. In effect, the adjudicator in these circumstances ‘manages’ resolution of the dispute on behalf of the parties in dispute. The parties pay for the advice the adjudicator obtains as a reimbursable expense in terms of the adjudicator’s contract with the parties.
The rules for adjudication are contained in the GCC 2010, FIDIC or NEC forms of contract and available from www.jbcc.co.za if the JBCC form of contract applies.
The process of Mediation is followed for the purpose of obtaining a proposed solution from a neutral third party for consideration and acceptance by the parties.
The essential elements of mediation are:
- a neutral/independent third party acts for the purpose of providing a solution for consideration and acceptance by the parties;
- the parties are not bound to accept the proposed solution;
- the mediator may use his own expertise to arrive at the proposed solution
- the rules of natural justice does not have to be followed;
- the mediator must use his professional skill and diligence to arrive at his opinion; and
- it is conducted on a “without prejudice” basis.
No hard and fast rules for Mediation exist and the Mediator may be direct which rules will apply.
The process of Arbitration is followed for the purpose of resolving a dispute between the parties in respect of and based on their existing rights.
The essential elements of arbitration are:
- the existence of a dispute is a prerequisite to proceed to arbitration in terms of an arbitration agreement between the parties and to establish the jurisdiction of the arbitrator;
- a neutral/independent third party acts for the purpose of providing an award;
- the parties are bound by the award unless they have specifically provided for an appeal provision in their agreement;
- the rules of natural justice must be observed by the arbitrator in hearing the parties in a judicial manner;
- the arbitrator must base his decision on what the parties tell him and the evidence before him and not on the basis of his own investigations; and
- it is not a process to arrive at a compromise or settlement but requires an award on the balance of probabilities
In the absence of any rules the arbitrator may act in accordance with the Arbitration Act as the applicable “rules”, but it is not advised. The rules may be stated in the contract conditions in that the latest rules of the appointing authority for the arbitrator may apply as the applicable rules for arbitration (see www.arbitrators.co.za)
Our team has also been at the front end of implementing Construction Procurement tenders and Contracts to ensure our Client’s compliance to the CIDB Act of 2000, amongst others, where these Tenders and Contracts are mostly delivered on the basis of the following conditions of contract:
- GCC 2004
- JBCC 2000
- NEC 3
Our Construction Procurement service includes all or any of the following stages:
- Cost estimates
- Bill of Quantities
- Tender Documentation compilation
- Tender Documentation checking and approval
- Tender invitation and Site Clarification Meeting
- Tender evaluation reports and recommendation
This is a key factor in avoiding or minimizing disputes and only a few players in the industry appreciate the value of exploring the preventative route.
Practical measures we offer that prove to be successful are as follows:
- Construction contract drafting and compilation before proceeding to tender
- Construction contract evaluation and auditing before proceeding to tender
- Evaluation of construction tender documentation on behalf of a tenderer to deliver opinions on the apportionment of risks
- Evaluation of contracts and assisting in final negotiations for conclusion of contracts
- Contract Programming in MS Projects
- Evaluation of anticipated disputes to implement preventative measures
- Evaluation and assisting in contractual procedures, correspondence and claims preparation to ensure full entitlement in terms of the contract is explored
- Assist in negotiating claims to settle disputes amicably
- Delivery of ex parte opinions on contracts, claims and disputes
In the unfortunate event that the dispute prevention route was not followed or a matter has been elevated to a claims procedure, we assist Claimants or Respondents in the evaluation and preparation of the statement of claim or defence in ensuring value is added to the dispute resolution process.
Dispute resolution processes requires strict procedures to be followed in terms of the Contract to ensure a claimant or defendant’s rights are protected in terms of the dispute process followed. We therefore act on behalf of claimants or respondents in terms of the Adjudication, Mediation or Arbitration process where applicable.
We hereby list a variety of disputes where we have assisted Claimants or Respondents in preparation and settling disputes in the construction industry:
Type of dispute or claim
Nature of work
|Opinion ex parte on contract conditions||JBCC||Contractor||Air Conditioning|
|Adverse physical conditions||GCC||Contractor||Pump station|
|Failure and collapse of structure||GCC||Client||Gabions|
|Claim for standing time and damages||GCC||Contractor||Earthworks|
|Claim for standing time and damages||GCC||Contractor||Civil Eng. Services|
|Claim for strike actions||GCC||Contractor||Civil Eng. Services|
|Claim for strike actions||JBCC||Contractor||Shopping centre|
|Claim for strike actions||FIDIC||Contractor||Roadworks|
|Extension of time – delays in design||FIDIC||Contractor||Roadworks|
|Adverse physical conditions||GCC||Contractor||Civil Eng. Services|
|Claim for standing time and damages||GCC||Client||Low cost housing|
|Extension of time – change in scope||FIDIC||Contractor||Roadworks|
|Extension of time – flooding of works||GCC||Contractor||Canals|
|Breach of Contract – change of rates||GCC||Contractor||Pipelines|
|Extension of time – change in scope||GCC||Contractor||Pipelines|
|Variation Orders – dispute of rates||GCC||Contractor||Pipelines|
|Breach and Cancellation of Contract||GCC||Contractor||Earthworks & transport|
|Acceleration claim||JBCC||Contractor||Ceilings & Partitioning|
|Breach of Contract – payment||JBCC||Contractor||Housing development|
|Breach of Contract – payment||JBCC||Contractor||Curtain Walling|
|Architect – failure in duties & breach||JBCC||Client||Shopping Centre|
|CPA – failure to certify and pay||GCC||Contractor||Mechanical|
A second opinion may mean the difference in winning or losing.
In assisting our Clients in terms of ex parte opinions on construction claims, we offer a service that will assist our Clients assessing the validity of a construction claim on the basis of an informed and independent opinion.
The solution we hereby offer will also put our Client in a position to assess the likelihood of success if a particular claim is elevated to adjudication, mediation, arbitration or the Court which can become a costly exercise if an informed decision is not made on the merits of the Claimant or Defendant’s case.
Evaluation of appeals on tenders
An appeal may be a right, but is not necessarily justified.
Another unique service we offer to our Clients is that of evaluating professional or construction tenders where a tenderer appealed on the outcome of a tender.
This service allows an independent evaluation and opinion to be obtained where we assist our Client in answering the questions raised in an appeal and whether or not such appeal is justified in terms of the tender rules employed.
Our experience and skills in evaluating tenders and appeals under the Construction Industry Development Board’s standards for procurement has added considerable value to our Clients to ensure an informed decision can be taken on the outcome of an appeal or opposing applications for court interdicts resultant to a tender appeal, if necessary.
We assist our clients as specialist advisors and have instructing attorneys and advocates available to institute legal proceedings for the following:
- Construction claims
- Review Applications
- Right of Access to Information
- Interdicts pertaining to tender processes and awards of construction contracts in general
- Enforcement of payment certificates and adjudication awards