THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case No: 177/2020

In the matter between:

ESKOM HOLDINGS LIMITED
APPELLANT

and

THE JOINT VENTURE OF EDISON
JEHANO (PTY) LTD AND
KEC INTERNATIONAL LIMITED                          FIRST  RESPONDENT

SYMBION PNC (PTY) LTD
(IN LIQUIDATION)                                                SECOND RESPONDENT

JOHANNES ZACHARIAS HUMAN
MULLER N O                                                             THIRD RESPONDENT

FRANS LANGFORD N O                                      FOURTH RESPONDENT

HLALELENI WATHLEEN DLEPU N O                 FIFTH RESPONDENT

ELMARIE BOOYSE N O                                           SIXTH RESPONDENT

KEC INTERNATIONAL LIMITED                  SEVENTH RESPONDENT

JUSTICE LTC HARMS N O                                  EIGHTH RESPONDENT

Neutral citation: Eskom Holdings Limited v The Joint Venture of Edison
Jehano (Pty) Ltd and KEC International Limited and Others
(case no 177/2020) [2021] ZASCA 138 (06 October 2021)
Coram:
DAMBUZA, MAKGOKA, NICHOLLS JJA, GORVEN and
EKSTEEN AJJA
Heard:

16 February 2021
Delivered:            This judgment was handed down electronically by circulation
to the parties' representatives by email, publication on the
Supreme Court of Appeal website and release to SAFLII. The
date and time for hand-down is deemed to be 10h00 on 06
October 2021.
Summary: Arbitration – Review of an arbitral award – principle of party
autonomy confirmed – interpretation of ‘gross irregularity’ and ‘exceeding
powers’ under s 133 of the Arbitration Act 42 of 1965 affirmed.

ORDER

On appeal from: Gauteng Division of the High Court, Johannesburg (Nel AJ
sitting as court of first instance):
The appeal is upheld with costs including the costs of two counsel
where so employed;
The order of the high court is set aside and replaced with the following:
‘The application is dismissed with costs’.

JUDGMENT

Dambuza JA (Makgoka, Nicholls JJA, Gorven and Eksteen AJJA
concurring)

Introduction
[1] This is an appeal against the judgment of the Gauteng Division of the high
court, Johannesburg (the high court), per Nel AJ, in terms of which an application
for review of an arbitral award was upheld. In terms of the arbitral award 13
claims that had been made by the first respondent, the Joint Venture of Edison
Jehano (Pty) Ltd and KEC International Limited (the Joint Venture), against the
appellant, Eskom Holdings Limited (Eskom), for payment of moneys had been
dismissed. In setting aside the arbitral award the high court referred six of the
claims for fresh consideration before a new arbitrator. This appeal, against the
order of the high court, is with its leave.

Backround
[2] On 6 May 2011 Eskom and the Joint Venture concluded a written
engineering and construction agreement (the agreement) in terms of which the
Joint Venture would construct a 100 km  Section B of the 765 KV Gamma-Kappa
single circuit transmission line. The agreement incorporated the NEC
Engineering and Construction Contract (second edition, with the main option B,
November 1995) as published by the Institution of Civil Engineers. The project
was to be completed within 547 days i.e. on 10 July 2012, from the date of
conclusion of the agreement. The contract price was R320 404 064.98.

[3] The ‘core clauses’ of the agreement1 stipulated, amongst other things, that
completion of the contract work would be attained when all the work due to be
executed as per the ‘Works Information’, was effected, and the defects that could
prevent Eskom from using the works had been ‘corrected and notified’. The Joint
Venture and Eskom had an obligation to notify each other as soon as they became
aware of any matter that could result in an increase in the total price, or a delay
in the completion of the works, or impairment of performance of the works.

[4] Clause 60.1 of the agreement stipulated a number of compensation events
which would entitle the Joint Venture to extension of time for completion of the
works, together with consequent change in the contract prices. These included
instructions by Eskom, through its Project Manager, changing the works
specifications, and failure by Eskom to give possession of the site or a portion
thereof to the Joint Venture on the date specified in the accepted programme.

[5] Clauses 61.1 to 61.3 regulated notification of claims as follows:

1 As quoted in the Adjudicator’s determination (extracted from the ‘NEC Engineering and Construction Contract
Core Clauses’ portion of the agreement).

‘61.1 For compensation events which arise from the Project Manager or the Supervisor giving
an instruction or changing an earlier decision, the Project Manager notifies the contractor
of the compensation event at the time of the event. He also instructs the Contractor to
submit quotations, unless the event arises from a fault of the Contractor or quotations have
already been submitted. The Contractor puts the instruction or changed decision into
effect.
61.2 The Project Manager may instruct the Contractor to submit quotations for a proposed
instruction or a proposed changed decision. The Contractor does not put a proposed
instruction or a changed decision into effect.
61.3 The Contractor notifies an event which has happened or which he expects to happen to
happen to the Project Manager as a compensation event if
 the Contractor believes that the event is a compensation event,
 it is less than two weeks since he has become aware of the event and
 The Project Manager has not notified the event to the Contractor.’

[6] Disputes arising in relation to the agreement had to be ‘submitted to and
settled’ by an adjudicator within the period specified in an ‘adjudication table’
which formed part of the agreement. Clause 90.1 provided that a notice to submit
a dispute to the adjudicator had to be given ‘not more than four weeks’ or
‘between two and four weeks’ after an event.2 The adjudicator’s decision could
be reviewed by an arbitration tribunal. The adjudicator’s decision was final and
binding on the parties subject to revision by the tribunal. In terms of clause 93.1
if a party was dissatisfied with the decision or non-decision of the adjudicator,
the matter was ‘not referable to the tribunal unless the dissatisfied party notified
his intention within four weeks’ of certain events.3

[7] The Joint Venture failed to complete the works within the stipulated period.
It was afforded an extension until 10 May 2013. However it became apparent that
it would still not be able to complete the works within the agreed extended period.

2 Para 47 of the Arbitral Award at page 48.
3 Ibid Para 46.

In a letter dated 13 March 2013 it requested a further extension from Eskom. In
its recovery plan it listed challenges that it had encountered, including some
which it attributed to Eskom. Attached to that letter was an annexure with ‘early
warning and compensation events’.4 As a result of the delays the cost of the
project escalated to R807 129 083.00, substantially more than double the initial
contract price.

[8] During the period 23 December 2014 to 14 May 2015 the Joint Venture
notified Eskom of 13 claims amounting to R625 079 491.77 which allegedly
emanated from the delays occasioned during the 165 days of the extended period.
The Joint Venture justified its claims by setting out events which it alleged, led
to the delays and disruptions. Eskom denied responsibility for the delays and
raised four special pleas. One of these was a time-bar, in terms of which Eskom
pleaded that the Joint Venture had failed to notify 11 of its 13 claims and the
related compensation events, and to refer disputes emanating therefrom within
the stipulated two to four week period. Eskom pleaded that clauses 61.3 and 93.1
of the agreement were time-bar clauses with which the Joint Venture had failed
to comply in relation to its claims.

[9] Eskom also filed a counterclaim of R36 million in which it sought to
recover from the Joint Venture penalty damages payable in relation to the delays
in the completion of the works. In response thereto the Joint Venture declared a
dispute. The dispute was referred for adjudication.

[10] On 17 March 2017 the adjudicator issued a decision in terms of which he
dismissed all Eskom’s special pleas. He further ruled that: (a) the Joint Venture
be afforded an extension of time to 31 March 2014; and that (b) Eskom pay to the

4 As referred to in the arbitral award.

joint venture R82 449 937.02 together with interest on that amount as additional
compensation for the extended contract period (ending on 31 March 2014). In
relation to the special plea of time bar, the adjudicator found that ‘it [was] clear
from a consideration of the documents produced by the parties that the time
frames governing the notification of compensation events, the determination
required to be made by the project manager pursuant thereto and, where
necessary, the referral of disputes to adjudication were not adhered to’. He,
however, went on to find that nothing in the language of the time-bar clauses
reflected an intention by the parties to preclude any claim for relief not made or
notified within the stipulated period.

[11] Both parties issued notices of dissatisfaction with the ruling of the
adjudicator, and the matter was referred for arbitration. Of relevance to this appeal
is an agreement reached by the parties at the pre-arbitration meeting, that: (1) the
issues referred for arbitration were those set out in their respective notices of
dissatisfaction with the adjudicator’s decision, (2) the pleadings filed by them in
the adjudication proceedings, would serve before the arbitrator, with each party
retaining the right to amend its pleadings, and (3) Eskom’s special pleas would
be heard as initial, separated issues. The arbitrator ruled, accordingly, that there
should be a separate hearing dealing initially with the four special pleas.

[12] At the start of the hearing the arbitrator sought clarity from the parties as
to which of the 13 claims were time barred. This inquiry led to each of the parties
preparing and submitting to the arbitrator a schedule showing the claims that each
contended had not been lodged or notified within the stipulated periods.

[13]  In the arbitral award the arbitrator found that clauses 61.3 and 90.1 were
time bar clauses. He then upheld the time bar special plea in respect of all 13
claims that had been notified by the Joint Venture. His decision in this regard was

premised on, amongst other factors, the schedules prepared for him by the parties
and the adjudicator’s factual finding that the time frames relating to notification
of compensation events and referral of disputes to adjudication had not been
adhered to. The arbitrator then set aside the award of compensation in favour of
the Joint Venture together with the ruling granting the Joint Venture a further
extension of time for completion of the works and the dismissal of Eskom’s
counterclaim for delay damages.

[14] The Joint Venture applied for correction of the arbitral award in terms of
Rule 38 of the Arbitration Rules. It then became common cause that, to the extent
that the arbitrator had, in the arbitral award, granted costs of the adjudication, the
award was incorrect. Eskom’s response to the Joint Venture’s Rule 38 application
gives an indication as to other bases for that application.5 First the Joint Venture
contended that the arbitrator misunderstood his mandate by ‘failing to consider
the impact of clause 61.1 on clause 61.3 of the agreement’. Second it contended
that it was not clear whether the award intended to render clause 90.1 a time-bar
stipulation.

[15] In an Addendum prepared in response to the Rule 38 Application the
arbitrator said:
‘7.
To the extent that it is alleged that the Award is ambiguous or unclear: I found as a
matter of law that clauses 61.3 and 90.1 are, each, time bar provisions.
8.
My factual finding that all the claims are time barred by clause 61.3 and/or 90.1 was
not a clerical mistake or an error arising from an accidental slip or omission. I referred
in the Award to the Adjudicator’s assessment, which was in these terms:
“it is clear from a consideration of the documents produced by the parties that
the time frames governing the notification of compensation events, the
determination required to be made by the project manager pursuant thereto and,
where necessary, the referral of disputes to adjudication were not adhered to.”

5 The Rule 38 Application did not form part of the appeal record.

In addition, at the hearing I requested the parties for a list of claims affected by the
different special pleas. The Contractor’s list in respect of all the claims assumed that I
would accept its interpretation of the time-bar provisions. It did not state or even suggest
that the defence in relation to some of the claims did not fall within my jurisdiction.
10.
The Employer [Eskom] submitted that the claims listed under its column ‘time bar’
would be disposed of if its interpretations were to be upheld. All the claims were so
listed. The contractor [the Joint Venture] did not dispute the correctness of the
conclusion on that assumption, and I accepted it and hence my award. I may have erred
but it was not a clerical mistake or an error arising from an accidental slip or omission.’
(emphasis supplied)

[16] It is the award and the Addendum thereto that was taken on review before
the high court. The basis of the application for review was that the arbitrator: (1)
committed a gross irregularity in failing to apply his findings concerning the
interpretation of clauses 61.3 and 90.1 of the contract, to the factual averments
made by the Joint Venture in its pleadings; (2) exceeded his jurisdiction and/or
committed a gross irregularity by accepting the schedule prepared by Eskom as
‘conclusive proof as to whether which of the JV’s claims were time barred’
without having regard to the pleadings, which set out factual disputes; (3)
committed a gross irregularity  in accepting the assessment of the adjudicator that
the time period relating to the notification of compensation events  and referral
of disputes to adjudication were not adhered to ‘without allowing the JV
opportunity to prove or disprove such assessment’. The arbitrator thus denied the
Joint Venture the opportunity to disprove the adjudicator’s conclusion, especially
because the time-bar special plea was raised only in respect of 11 of the 13 claims,
so it was contended.

[17] Eskom insisted that there was no dispute of fact between the schedule
prepared by it and the factual chronology that had been pleaded by the Joint
Venture, and that it was apparent from both documents that the Joint Venture had

not submitted the compensation events timeously, and had not referred the
dispute for adjudication within the set time period. Although Eskom admitted that
in its pleadings it had not raised the time bar defence in respect of two of the 13
claims (U and V), it insisted that the defence was advanced in its Heads of
Argument in respect of all the claims, and was fully ventilated in argument by
both parties.

[18] The court high court reviewed and set aside the award in respect of six of
the 13 claims. It ordered that the six be considered afresh by another arbitrator.
In doing so the Learned Judge was of the view that the ‘expanded issues’ (ie the
inclusion of the two claims in respect of which the time bar had not been raised
in the pleadings) had not been ‘fully ventilated’ and that the raising thereof ‘by
way of argument [did] not equate to a full hearing’. He also found that the
arbitrator’s consideration of the ‘unpleaded issues’ contained in the Eskom
schedule (the aspects on which dispute of fact was alleged) resulted in an unfair
hearing.6 The Learned Judge found however, that the arbitrator did not exceed his
powers as contended by the Joint Venture because he determined issues that were
set out in the Notices of Dissatisfaction filed by the parties.

On appeal
[19] In the appeal Eskom maintained that the Joint Venture was aware at all
times that all 13 claims were affected by the time bar plea. It had the opportunity
to address that defence, and it did. Counsel for Eskom submitted that the manner
in which the arbitration was conducted was consistent with the less formal, more
robust procedures employed in arbitrations and the principle of party autonomy
accepted by courts in relation to commercial arbitrations.

6 In respect of the six claims: M, N, Q (2), R(3), U, and V.

[20] The Joint Venture contended that it was unfair to hold that it should have
understood that the issues were ‘expanded’ merely because of the submissions
made by Eskom in its Heads of Argument regarding the relevance of the plea of
time bar on the two claims. It was submitted that the issues before the arbitrator
were limited to interpretation of the time bar clauses – the impact thereof on the
individual claims was never canvassed.

The law
[21] Section 33(1) of the Arbitration Act 42 of 1965 regulates review of arbitral
awards as follows:
‘(1)
Where-
(a) any member of the arbitration tribunal has misconducted himself in relation to his
duties as arbitrator or umpire; or
(b) an arbitration tribunal has committed any gross irregularity in the conduct of the
arbitration proceedings or exceeded its powers; or
(c) an award has been improperly obtained,
the court may, on the application of any party to the reference after due notice to the
other party or parties,  make an order setting the award aside.’

[22] Speed, efficiency, flexibility and finality of the arbitration process are the
reasons that parties opt to select their own dispute resolution method. Admission
of evidence which is not strictly necessary or beneficial to resolution of a dispute
detracts from these advantages.7 However, the rules of natural justice remain
applicable. In Telcordia Technologies Inc v Telkom SA Limited8 this Court was
concerned with the interpretation of the terms ‘gross irregularity’ and ‘exceeding
its power’ which justify interference by courts with arbitral awards as provided
in s 33(1)(b). The court reaffirmed the principle of party autonomy – a realisation
of freedom enjoyed by parties to execute arbitration agreements. It defined gross

7 2 Lawsa 3rd Ed at paras 80 and 122.
8 Telcordia Technologies Inc v Telkom SA Limited 2007 (3) SA 266 (SCA).

misconduct as a ‘process standard’9 which is ‘to all intents and purposes identical
to a ground of review available in relation to proceedings in inferior courts’10.
The ultimate test of whether an arbitrator’s conduct constituted gross irregularity
is whether the conduct of the arbitrator or arbitral tribunal prevented a fair trial of
the issues.11 The common law grounds of review are excluded.12

[23]  In Lufuno Mphaphuli and Associates (Pty) Limited v Andrews and Another
2009 (4) SA 529 (CC) the Constitutional Court approved the principle of party
autonomy in arbitration proceedings by holding that s 34 of the Constitution,
which provides for a right to a fair public hearing, did not apply to private
arbitrations. In modern arbitral practice fairness goes beyond strict observation
of the rules of evidence, provided that the procedure adopted is fair to both parties
and conforms to the rules of natural justice.13

[24] With regard to ‘exceeding [arbitrator’s] powers’ this Court in Telcordia
referred to the distinction made by Lord Steyn in Lesotho Highlands Development
Authority v Impregilo SpA and Others14 between a tribunal purporting to exercise
a power or jurisdiction which it does not have and erroneous exercise of power
that it has. Therein the court held that ‘If it is merely a case of erroneous exercise
of power vesting in the tribunal no excess of power under section 68(b) is
involved’.

9 At para 42.
10 At para 53. The court recognised however that this meaning might be affected by the different ‘textual setting
in relation to proceedings of inferior courts’ but for the purposes of the case (which are similar to this case)
judgment relating to review of inferior court proceedings were relevant to the meaning of ‘gross irregularity’
under s 33(1)(b) of the Arbitration Act 42 of 1965.
11 Ellis v Morgan; Ellis v Dessai 1909 TS 576 at 581.
12 At para 51.
13 Dexgroup (Pty) Ltd v Trustco Group International (Pty) Ltd and Others 2013 (6) SA 520 (SCA).
14 Lesotho Highlands Development Authority v Impregilo SpA and Others [2005] UKHL 43 at para 24. The court
was considering the meaning of ‘exceeding its powers’ within s 68(2)(b) of the English Arbitration Act 1996.

[25] The powers given to an arbitration tribunal in each case are determinable
with regard to the Arbitration Act, the arbitration agreement, the pleadings (or
statements of case) and any other document prepared by the parties for that
purpose. As already explained, in this case, the agreement between the parties
was that the pleadings that had served before the Adjudicator would stand in the
arbitration proceedings and that issues to be determined by the tribunal were those
set out in the parties’ Notices of Dissatisfaction. The arbitrator recorded in the
award that both parties duly filed their Notices of Dissatisfaction.

[26] However, the Notice of Dissatisfaction prepared by the Joint Venture did
not form part of the record in this court.  It is therefore not clear what issues were
raised therein. But Eskom’s Notice of Dissatisfaction raised expressly the issue
of failure by the Joint Venture ‘to notify a claim and refer disputes within the time
periods stipulated under the construction agreement concluded between the
parties’. From this stipulation in Eskom’s Notice, there can be no doubt that, apart
from the interpretation issue, determination of whether there was compliance with
the time-bar set in the agreement was placed squarely before the arbitration
tribunal.

[27] In addition, it is clear from the remarks of the arbitrator as referred to in
para 15 above that he did consider the pleadings filed by the parties. It is on
consideration thereof that he formed the view that the Joint Venture had
responded in detail to the time-bar special plea raised by Eskom. In the award he
remarked that:
‘In the pleadings before me the employer [Eskom] once again raised the time bar issue with
reference to clauses 61.3 and 90.1. The contractor [Joint Venture] responded in detail, even
attaching opinions of eminent counsel, on the effect of clauses 61.3 and 90.1. Its contentions
did not touch on clause 61.1. It did not allege that 61.3 was irrelevant because the compensation
claims fell under clause 61.1 and not under 61.3. It did not allege that the PM had failed in his
duties under 61.1, or that absent proof of his prior compliance with 61.1, the time bar clauses

61,3 and 90.1 could not have arisen - a quasi exceptio non adimplenti contractus argument.’
(emphasis supplied)

[28] Not only that, the arbitrator also considered the event notifications as listed
in the schedule filed by the Joint Venture, the contents of which, with regard to
notification of events, must be assumed to have been the same as its pleadings.
From that list he formed the view that the Joint Venture schedule had assumed
that he would accept its interpretation of the time-bar provisions. All this in the
context of Eskom having submitted that the claims listed under its time-bar
column would be disposed of if its interpretations were to be upheld. Again, as
the arbitrator remarked, the Joint Venture never disputed the correctness of that
submission.

[29] Notably, the Adjudicator’s own conclusion that the specified time-frames
had not been adhered to was drawn from the documents filed before him. There
was no suggestion by the Joint Venture that the conclusion could not be drawn
without evidence having been led.

[30] In the high court, instead of filing the pleadings the parties gave evidence
by way of affidavits on the contents of the pleadings. Eskom contended that the
dates set out in an annexure (SOR6) to the statement of reply filed by the Joint
Venture showed that the Joint Venture’s notifications were out of time. The Joint
Venture referred to another annexure (RA1) that had been prepared by Eskom
arguing that Eskom had pleaded different dates in its statement of defence. This
became the basis of the submission on behalf of the Joint Venture that there was
a dispute of fact with regard to the notification dates cited by the parties.

[31] However, it was not in dispute that Eskom’s schedule as filed in the
arbitration proceedings was prepared on the dates that had been pleaded by the

Joint Venture. Although the Joint Venture responded that the contents of Eskom’s
schedule were wrong it did not deny that it had set out the dates as referred to by
Eskom in its schedule. The award was therefore not made on the basis of disputed
of facts. In addition there is no evidence that the factual finding made by the
adjudicator, that the time limits agreed on between the parties for notification of
claims and disputes had not been met, was in contention before the arbitrator.

[32] With regard to the contention that the time bar was pleaded only in relation
to 11 of the claims, the Arbitrator explained that Eskom had submitted that if its
interpretation of the time bar clauses were to be upheld the claims listed in its
schedule would be disposed of. The Joint Venture was therefore alerted to that
argument and never refuted it. In the Notice of Dissatisfaction the time bar was
referred to the Arbitrator in relation to all claims and the matter was argued before
him on the basis that the time bar findings would be applicable to all 13 claims.
His determination thereof on the record before him was consistent with the speed,
efficiency, flexibility, fairness and finality required in arbitration proceedings.

[33] In the result no gross irregularity or exceeding of authority was shown on
the part of the Arbitrator.

[34] Consequently,
The appeal is upheld with costs including the costs of two counsel
where so employed;
The order of the high court is set aside and replaced with the following:
‘The application is dismissed with costs’.

________________________

N DAMBUZA

JUDGE OF APPEAL

Appearances:

For Appellant:

J Babamia SC with Luc Spiller
Instructed by:

Gildenhuys Malatji Inc, Sandton.

Honey Attorneys, Bloemfontein.

For 1st to 7th Respondents:
A Bester SC
Instructed by:

Tiefenhaler Attorneys, Sandton.

Webbers, Bloemfontein.

THE SUPREME COURT OF APPEAL OFSOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED

FROM

The Registrar, Supreme Court of Appeal

DATE

06 October 2021

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form part
of the judgment.

Eskom Holdings Limited v The Joint Venture of Edison Jehamo (Pty) Ltd and
KEC International Limited and Others (case no 177/2020) [2021] ZASCA 138
(06 October 2021)

MEDIA STATEMENT

Today the Supreme Court of Appeal (SCA) upheld an appeal against an order of the
Gauteng Division of the High Court, Johannesburg in terms of which an arbitral award
was set aside. In terms of the arbitral award 13 claims that had been made by the first
respondent, the Joint Venture of Edison Jehano (Pty) Ltd and KEC International
Limited, against the appellant, Eskom Holdings Limited, for payment of moneys had
been dismissed.

Eskom and the Joint Venture concluded a written engineering and construction
agreement in terms of which the Joint Venture would construct a 100 km Section B
765 KV Gamma-Kappa single circuit transmission line. The project was to be
completed within 547 days from the date of conclusion of the agreement. The contract
price was R320 404 064. 98.

The parties had an obligation to notify each other as soon as they became aware of
any matter that could result in an increase in the total price, or a delay in the completion
of the works, or impairment of performance of the works. In the agreement a number
of compensation events were stipulated which would entitle the Joint Venture to
extension of time for completion of the works, together with consequent change in the
contract prices. The agreement further provided that disputes should be submitted to
an adjudicator within two to four weeks after an event.

The Joint Venture failed to complete the works within the stipulated period and could
still not do so despite being granted two extensions. In its recovery plan it listed
challenges that it had encountered, including some which it attributed to Eskom. The
delays resulted in the escalation of the cost of the project.

The Joint Venture notified Eskom of 13 claims which it alleged resulted from delays
and disruptions caused by Eskom. Eskom denied responsibility for the delays and
raised four special pleas. One of these was a time-bar in terms of which Eskom
pleaded that the Joint Venture had failed to notify 11 of its 13 claims and the related
compensation events, and to refer disputes emanating therefrom within the stipulated
period. Eskom also filed a counterclaim to recover from the Joint Venture penalty
damages payable in relation to the delays. The dispute was referred for adjudication
as per the written agreement.

In terms of the adjudicator’s decision, Eskom’s special pleas were all dismissed and it
was ordered to give Joint Venture time extension as well as pay to the Joint Venture
an amount for the extended contract period. Although the adjudicator held that the
time periods were not adhered to, he ultimately found that nothing in the language of
the time-bar clauses reflected an intention by the parties to preclude any claim for relief
not notified within the stipulated period. After being dissatisfied with the adjudicator’s
ruling, both parties referred, by agreement, for arbitration, issues set out in their
dissatisfaction notices.

In the arbitration proceedings Eskom’s special pleas were heard as initial separated
issues. Its time bar special plea was upheld in respect of all 13 claims based on,
amongst other factors, the time schedules prepared by each party in respect of each

claim. The arbitrator also took into account the adjudicator’s factual finding that the
time frames had not been adhered to. The adjudicator’s decision was then set aside.

The Joint Venture launched an application in the high court for a review of the
arbitrator’s findings. It contended that the arbitrator committed gross misconduct and
acted outside the scope of his powers by accepting Eskom’s schedule as conclusive
proof of the facts on the time bar dispute and failing to give the Joint Venture an
opportunity to challenge the adjudicator’s finding relating to the non-adherence to time
frames in respect of each claim. The high court reviewed and set aside the award in
respect of six of the 13 claims, ordering that they be considered afresh by another
arbitrator. It found that the hearing before the arbitrator was unfair in that the two claims
in respect of which the time bar has not been raised in Eskom’s pleadings, but were
only raised in argument, were not fully dealt with. The high court however found that
the adjudicator did not exceed his powers as he dealt with the issues that were set out
in the dissatisfaction notices filed by the parties.

On appeal against the high court order the SCA found that the arbitrator did consider
the pleadings filed by the parties; to that extent even finding that the Joint Venture had
responded in detail to the time-bar special plea raised by Eskom. In addition, the court
found that the factual finding made by the adjudicator, that the time limits agreed on
between the parties for notification of claims and disputes had not been met, was never
in contention before the arbitrator. It further found that in Eskom’s Notice of
Dissatisfaction, which was the only one filed in the appeal record, the time bar plea
was referred to the Arbitrator in relation to all claims. Submissions were made in the
Heads of Argument and the issue was argued before the arbitrator on the basis that
the time bar plea was applicable to all 13 claims. In the result the SCA found that no
gross irregularity or exceeding of authority was shown on the part of the Arbitrator.
.
--- ends --