MIS Maintanance CC t/a NM Construction v Africon Infrastructure Projects (Pty) Ltd and Another (11555/2008) [2008] ZAWCHC 304 (24 November 2008)

MIS Maintanance CC t/a NM Construction v Africon Infrastructure Projects (Pty) Ltd and Another (11555/2008) [2008] ZAWCHC 304 (24 November 2008)

The court held that the construction guarantee is autonomous and must be interpreted according to its own terms, not by reference to the building contract. The guarantee allows payment upon notice of cancellation without requiring prior quantification or certification of losses. The arbitral award did not constrain the first respondent's right to call up the guarantee, and the applicant failed to establish a prima facie right to the interim interdict. The applicant withdrew opposition to the cross-application, and by consent, the arbitral award was made an order of court. The applicant's conduct did not warrant a punitive costs order for the main application, but the application for...

Citation
[2008] ZAWCHC 304
Parties
Applicant: MIS Maintanance CC t/a N M Construction; Respondent: Africon Infrastructure Projects (Pty) Ltd; Respondent: ABSA Bank Limited
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
24 November 2008
Case Number
11555/2008
Procedural Posture
Urgent Application / Extended Return Day of Interim Interdict; Cross Application for Arbitral Award to Be Made Order of Court
Outcome
Application dismissed; interim interdict discharged; cross-application upheld; costs awarded as specified.
Judges
Gauntlett
Legal Topics
Construction Guarantee, Arbitration Award Enforcement, Interim Interdict, Contract Cancellation
Commercial and Corporate Civil Procedure Construction Guarantee Arbitration Award Enforcement Interim Interdict Contract Cancellation

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 2 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

MIS Maintanance CC t/a N M Construction

Applicant

Africon Infrastructure Projects (Pty) Ltd

Respondent

ABSA Bank Limited

Respondent

Procedural Posture

Urgent Application / Extended Return Day of Interim Interdict; Cross Application for Arbitral Award to Be Made Order of Court

Legal Issues

  1. 1 Whether the construction guarantee must be interpreted together with the building contract.
  2. 2 Whether the guarantee requires quantification and certification of losses before payment can be called up.
  3. 3 Whether the arbitral award obliges the employer to quantify and certify losses before invoking the guarantee.

Ratio Decidendi

The court held that the construction guarantee is autonomous and must be interpreted according to its own terms, not by reference to the building contract. The guarantee allows payment upon notice of cancellation without requiring prior quantification or certification of losses. The arbitral award did not constrain the first respondent's right to call up the guarantee, and the applicant failed to establish a prima facie right to the interim interdict. The applicant withdrew opposition to the cross-application, and by consent, the arbitral award was made an order of court. The applicant's conduct did not warrant a punitive costs order for the main application, but the application for...

Court Disposition

Application dismissed; interim interdict discharged; cross-application upheld; costs awarded as specified.

Orders

  • The Rule Nisi is discharged and the application is dismissed, including the costs of two counsel.
  • The cross application is upheld, with costs, including the costs of two counsel.