Framatome v Eskom Holdings SOC Ltd (357/2021) [2021] ZASCA 132; 2022 (2) SA 395 (SCA) (1 October 2021)

Framatome v Eskom Holdings SOC Ltd (357/2021) [2021] ZASCA 132; 2022 (2) SA 395 (SCA) (1 October 2021)

The Supreme Court of Appeal held that the adjudicator's Decision 11 is binding and enforceable until set aside by arbitration. Eskom failed to challenge Decision 7 in time and participated in the adjudication process, waiving jurisdictional objections. The adjudicator acted within his jurisdiction, deciding the dispute as referred by the parties, and the contractor's quotation was properly deemed accepted under the contract. The High Court erred by refusing enforcement and introducing subjective discretion. The purpose of adjudication is to provide a speedy, interim resolution of disputes and maintain cash flow in construction projects. Only arbitration may revise the adjudicator's...

Citation
[2021] ZASCA 132
Parties
Appellant: Framatome; Respondent: Eskom Holdings SOC Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
1 October 2021
Case Number
357/2021
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Johannesburg
Outcome
Appeal upheld; High Court order set aside and replaced with enforcement of the adjudicator's award.
Judges
Mathopo, Molemela, Makgoka, Mbatha, Mothle
Legal Topics
Construction Contracts, Adjudication Enforcement, Compensation Events, Interim Payments
Commercial and Corporate Civil Procedure Construction Contracts Adjudication Enforcement Compensation Events Interim Payments

Case Brief

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Parties

Framatome

Appellant

Eskom Holdings SOC Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Johannesburg

Legal Issues

  1. 1 Whether the adjudicator's Decision 11 should be enforced against Eskom.
  2. 2 Whether Decision 11 is invalid because it is predicated on Decision 7, which Eskom alleges was outside the adjudicator's jurisdiction.
  3. 3 Whether the adjudicator exceeded his jurisdiction in making findings on disputes not properly notified or referred under the contract.

Ratio Decidendi

The Supreme Court of Appeal held that the adjudicator's Decision 11 is binding and enforceable until set aside by arbitration. Eskom failed to challenge Decision 7 in time and participated in the adjudication process, waiving jurisdictional objections. The adjudicator acted within his jurisdiction, deciding the dispute as referred by the parties, and the contractor's quotation was properly deemed accepted under the contract. The High Court erred by refusing enforcement and introducing subjective discretion. The purpose of adjudication is to provide a speedy, interim resolution of disputes and maintain cash flow in construction projects. Only arbitration may revise the adjudicator's...

Court Disposition

Appeal upheld; High Court order set aside and replaced with enforcement of the adjudicator's award.

Orders

  • The appeal is upheld with costs, including costs of two counsel.
  • The order of the High Court is set aside and replaced with a declaration that Eskom is in breach of the contract.