Implication of the ‘time-limitation clause’ for disputing an Adjudicator’s Decision

THE MEC FOR THE DEPARTMENT OF TRANSPORT,KWAZULU-NATAL v RAUBEX (KZN) – 8 JUNE 2021

The recent Judgment delivered on 8 June 2021 by the Honourable Judge AJ Mossop in the application brought by the MEC for the Department of Transport, Kwazulu-Natal against considered the implication of the “timelimitation’ clause when a Referral to Arbitration may be made after an Adjudicator delivered a Decision.

Although a dispute arose in accordance with the General Conditions of Contract for Construction Works, Third Edition, 2015 (“GCC 2015”), after the delivery of the Adjudicator’s Decision, the principles established in this Judgment will similarly apply to the provisions of the JBCC, NEC and FIDIC conditions of contract.

On 24 March 2020 the learned Adjudicator’s Decision was received by the Parties. Upon receipt of a Decision, Clause 10.6.1.2 of the GCC 2015 provides that none of the Parties shall “dispute the validity, or correctness of the whole, or specified part of the decision, before 28 days1 or after 56 days from the receipt of the decision. GCC 2015 therefore effectively allows for a “cooling-off” period for the dissatisfied party to carefully consider whether it is worth the effort and the resources to refer the matter to Arbitration. Clause 10.6.1.2 of the GCC 2015 then also provides that if a disputing party does not comply with the timelimitation and misses the deadline of 56 days, the disputing party “shall have no further right to refer such a dispute to arbitration or court proceedings”.

Similarly, Clause 30.6.4 of the JBCC Principal Building Agreement (Edition 6.2, May 2018) provides a time-limitation of only 10 working days in which a dissatisfied party may dispute the Adjudicator’s Decision and refer a matter to Arbitration. Clause W1.4 (2) of the NEC3 and NEC4 provides a time-limitation of 4 weeks and the FIDIC Red Book (1999) provides a time-limitation of 28 days in which a dissatisfied party may dispute the Adjudicator’s Decision.