Matatiele Local Municipality v Lubbe Construction (Pty) Limited (24667/2020) [2021] ZAGPJHC 763 (2 December 2021)
The court held that an arbitration award does not create a new debt but merely affirms or liquidates the existing debt. The prescription period applicable is that of the underlying debt, which is three years under the Prescription Act. The review application to set aside the arbitrator's award does not delay the...
Source-derived case information.
- Citation
- [2021] ZAGPJHC 763
- Parties
- Applicant: Matatiele Local Municipality; Respondent: Lubbe Construction (Pty) Limited
- Court
- South Gauteng High Court, Johannesburg
- Jurisdiction
- South Africa
- Case Number
- 24667/2020
- Procedural Posture
- Urgent Application / Opposed Motion to Make Arbitration Award an Order of Court
- Outcome
- Application dismissed with costs.
- Judges
- Adams
- Legal Topics
- Arbitration Award Enforcement, Prescription Act, Judgment Debt, Section 31 Arbitration Act
Source-derived case record
Summary, issues, holding and outcome
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Parties
Matatiele Local Municipality
Applicant
Lubbe Construction (Pty) Limited
Respondent
Procedural Posture
Urgent Application / Opposed Motion to Make Arbitration Award an Order of Court
Legal Issues
- 1 Does an arbitration award create a new debt or merely affirm an existing debt for purposes of prescription?
- 2 Is the applicant's claim to enforce the arbitration award prescribed under the Prescription Act?
- 3 Does a review application to set aside the arbitrator's award delay the completion of the prescription period?
Ratio Decidendi
The court held that an arbitration award does not create a new debt but merely affirms or liquidates the existing debt. The prescription period applicable is that of the underlying debt, which is three years under the Prescription Act. The review application to set aside the arbitrator's award does not delay the running of prescription. As the applicant's claim to enforce the arbitration award was brought after the expiration of the prescription period, the claim had prescribed. Accordingly, the application to make the arbitration award an order of court was dismissed with costs.
Court Disposition
Application dismissed with costs.
Orders
- The applicant’s application in terms of section 31(1) of the Arbitration Act, Act 42 of 1965, is dismissed with costs.
Full Case Text
Judgment text and source record
29 paragraphs
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
CASE NO: 24667/2020
REPORTABLE: NO
OF INTEREST TO OTHER JUDGES: NO
REVISED:
DATE: 2nd December 2021
In the matter between:
MATATIELE LOCAL MUNICIPALITY
Applicant
and
LUBBE CONSTRUCTION (PTY) LIMITED
Respondent
Heard: 23 November 2021 - The ‘virtual hearing’ of the Opposed
Application was conducted as a videoconference on Microsoft Teams.
Delivered: 02 December 2021 – This judgment was handed down electronically by circulation to the parties' representatives by email, by being uploaded to CaseLines and by release to SAFLII. The date and time for hand-down is deemed to be 12:00 on 02 December 2021.
Summary: Arbitration – award - whether it creates new debt – right to make award order of court – whether ‘judgment
debt’ or ‘debt’ in Prescription Act – an arbitration award does not create a new debt: it merely affirms
and/or liquidates the existing debt that was in dispute – applicable period of prescription based on ‘debt’ underlying the arbitration award (three years) – arbitration delays completion of period of prescription in terms of s 13(1) – review application to set aside Arbitrator’s award does not delay completion of period of prescription – section 13(1) of the Prescription Act – applicant’s claim prescribed – therefore dismissed.
ORDER
(1) The applicant’s application in terms of section 31(1) of the Arbitration Act, Act 42 of 1965, be and is hereby dismissed with costs.
JUDGMENT
Adams J:
[1]. In terms of its notice of motion dated 10 September 2020, the applicant (Matatiele Local Municipality or the Municipality) seeks an order to have an arbitration award of 3 October 2017 made an order of Court. The application was served on 9 October 2020 on the respondent (Lubbe Construction or Lubbe), who reacted thereto in its answering affidavit, which is dated 6 November 2020. The main complaint of Lubbe Construction is that the award ordering it to pay to the Matatiele Local Municipality an amount of R22 173 329.31, with interest and costs, is a debt, which has become prescribed in terms of the Prescription Act 68 of 1969 (the Prescription Act).
[1] Brompton Court Body Corporate v Khumalo 2018 (3) SA 347 (SCA).
[2] Eskom v Soweto City Council 1992 (2) SA 703 (W)
[3] SA Transport & Allied Workers Union on behalf of Hani v Fidelity Cash Management Services (Pty) Ltd (2012) 33 ILJ 2452 (LC).
[4] Myathaza v Johannesburg Metropolitan Bus Service SOC Ltd t/a MetroBus 2016 (3) SA 74 (LAC).