Jean-Paul Rudd | Partner | Adams and Adams | mail me |
Construction adjudication often receives treatment as interim. Arbitration or litigation then waits as the final forum. In a judgment delivered by the Eastern Cape Division in Makhanda on 30 April 2026, Krüger AJ issued a clear warning. He stressed that this assumption only holds if the contract supports it.
Adjudication is as provisional, revisable, or arbitral as the agreement provides. Where public-sector substitutions alter a standard form, courts enforce the signed text. They do not reconstruct dispute-resolution machinery that parties have deleted. The force of the Joint Building Contracts Committee (JBCC), therefore, depends entirely on the contract wording.
Facts of the case
The dispute arose from a public-sector construction contract. The work concerned the Uitenhage Museum. NLG Construction and Plant Hire CC and the Eastern Cape Department of Public Works concluded the Principal Building Agreement. They signed it on 29 April 2021. The contract value stood at R16,591,731.85. The parties used the JBCC 2000 Principal Building Agreement, edition 4.1 of 2005. This version substitutes certain clauses when an organ of state is involved.
Those substitutions proved decisive. Standard clause 40 would normally provide adjudication under the JBCC Rules. It would also include a binding adjudicator’s decision and a notice of dissatisfaction. It would further allow final arbitration. However, clause 41 replaced clause 40.2.1 and clauses 40.3 to 40.6 with “No clause”. It also allowed litigation where the schedule provided for it. This shift significantly weakened the force of JBCC in this contract structure.
The schedule appeared to point in two directions. However, it ultimately favoured the Department less. Clause 42.7.1 recorded adjudication as the default method. The word “adjudication” appeared in handwritten form in the relevant block. The subclauses on appointment, arbitration and mediation were cancelled. They were marked “not applicable”.
After cancellation, NLG referred a dispute to adjudication on 3 July 2024. The adjudicator dismissed the Department’s in limine points. On 12 December 2024, the adjudicator ordered the Department to pay R7,945,975.54. This determination triggered enforcement proceedings.
NLG sought to convert the award into a court order. It also claimed the Department’s half-share of the adjudicator’s fee. The Department opposed the application. It also filed a conditional counterapplication to review and set aside the determination. The dispute again highlighted the force of JBCC in modified public-sector contracts.
Legal framework
The court relied on orthodox principles of contractual interpretation. In University of Johannesburg vs Auckland Park Theological Seminary 2021 (6) SA 1 (CC), the Constitutional Court confirmed a unitary approach. Interpretation must consider text, context and purpose from the outset.
The parol evidence rule still applies in South African law. Extrinsic evidence may assist with context and purpose. However, it may not contradict or vary the written agreement.
The Department also raised issues around implied and tacit terms. In South African Forestry Company Ltd vs York Timbers Ltd 2005 (3) SA 323 (SCA), the court confirmed a key principle. Implied terms arise by law and not by fairness alone.
Trade usage also requires strict proof. Golden Cape Fruits (Pty) Ltd vs Fotoplate (Pty) Ltd 1973 (2) SA 642 (C) confirms this requirement. Tacit terms depend on inferred common intention, as set out in Alfred McAlpine & Son (Pty) Ltd vs Transvaal Provincial Administration 1974 (3) SA 506 (A). However, none of these doctrines assisted the Department.
Kelvinator Group Services of SA (Pty) Ltd vs McCulloch 1999 (4) SA 840 (W) confirms a limitation. Tacit terms cannot contradict express provisions. SA Mutual Aid Society v Cape Town Chamber of Commerce 1962 (1) SA 598 (A) confirms the same principle. Once the contract excluded JBCC Rules and arbitration, the court could not reintroduce them. This exclusion further diluted the force of JBCC in the dispute-resolution structure.
On review, the court distinguished merits from process. In Ekurhuleni West College vs Segal (1287/2018) [2020] ZASCA 32, the court confirmed a narrow review scope. Courts assess fairness and procedure, not the correctness of the outcome.
Public policy arguments relied on Ethekwini Municipality vs Cooperativa Muratori & Cementisti – CMC di Ravenna Societa Cooperativa 2023 (6) SA 384 (SCA). The court required factual proof, not broad assertions of unfairness.
The court’s analysis
The Department first argued reincorporation of JBCC adjudication and arbitration clauses. The court rejected this argument. The clause 40.2.1 reference appeared printed and italicised. It also appeared in square brackets. The schedule identified it as a user aid and not a binding term. The court found no basis to restore the full force of JBCC.
The Department next relied on the usual understanding of adjudication. It argued that adjudication is interim by nature. The court rejected this. It described the argument as “a bridge too far”. The court also confirmed that no universal trade usage supported automatic arbitration review.
The tacit-term argument also failed. NLG’s later references to clause 40.2.1 and JBCC Rules could not override express exclusions. The court held that parties cannot reinsert deleted terms through inference. The agreement, therefore, did not support arbitral revision.
The court also examined agreed procedural deviations. It found that Rule 1.2 allowed such deviations. It also relied on Freeman NO vs Eskom Holdings Limited (43346/09) [2010] ZAGPJHC 137. Delay only invalidates adjudication if parties expressly agree to that consequence.
A further complaint alleged procedural unfairness. However, the court treated it as a merits attack. The Department challenged how the adjudicator evaluated evidence. This did not constitute a review ground.
The Department also relied on the cancellation and absence of a final account. The court rejected this argument. Clause 40.10 preserved dispute resolution after cancellation. The contract also did not require a final account before adjudication. Public funding concerns did not alter contractual obligations.
The third ground concerned profit and fee rates in the Bill of Quantities. The court treated this as a merits issue. It found no procedural irregularity.
In conclusion
Throughout its reasoning, the court reaffirmed that the force of JBCC depends on the contract as written, not on assumed industry expectations. The judgment confirms a critical principle. Courts will not read standard-form construction contracts by habit.
Public-sector substitutions, deletions, and handwritten amendments materially alter dispute-resolution structures. Courts will enforce what parties sign. They will not reconstruct what parties removed. The force of JBCC, therefore, exists only within the limits of the adopted contract text.
Adjudication does not automatically lead to arbitration. Parties must preserve that pathway clearly. A cross-reference alone will not revive deleted clauses. The judgment also reinforces that a review is not an appeal. Public policy objections must rest on evidence. Courts will not accept vague allegations of unfairness or inconvenience.
Finally, the court made the adjudicator’s determination an order of the court. It ordered payment of R7,945,975.54 and adjudicator fees of R71,045.28. It dismissed the counterapplication and awarded costs on scale C, including two counsel.
For practitioners, the lesson is direct. The force of JBCC operates only where the contract allows it. The route out of adjudication lies in drafting, not assumption.
