Imagine this: an adjudicator has just ordered you, the employer, to pay your contractor a very large sum of money. You are convinced the decision is wrong. You issue your notice of dissatisfaction the same week and refer the dispute to arbitration.
So – can you hold on to your money until the arbitrator decides?
No! You must pay now and argue later.
That, in five words, is the position under the standard-form construction contracts commonly used in South Africa, and it has been confirmed by a consistent line of South African case law¹. In this post, we look at why the courts enforce an adjudicator’s decision immediately – even one under attack – and what that means for employers and contractors alike.
In Framatome v Eskom Holdings SOC Ltd2 the Supreme Court of Appeal referred to the often-stated purpose of adjudication, as follows: “It is plain that the purpose of adjudication was to introduce a speedy mechanism for settling disputes in construction contracts on a provisional interim basis and requiring the decisions of adjudicators to be enforced pending the final determination of disputes by arbitration.”
(our emphasis)
In Esor Africa (Pty) Ltd/Franki Africa (Pty) Ltd JV v Bombela Civils JV (Pty) Ltd3 where the dispute arose under the FIDIC Red Book 19994, Spilg J put it as follows: “in my view the issues are resolved by a proper interpretation of the dispute resolution clauses dealing with the effect of a [Dispute Adjudication Board] decision.”
(our emphasis)
Spilg J’s judgment was criticised by opposing counsel in Tubular Holdings (Pty) Ltd v DBT Technologies (Pty) Ltd5 on the basis that the court did not refer to any authority in the judgment. However, Du Plessis AJ agreed with Spilg J and held that “the Court [in Esor] had regard to the relevant authorities applicable to the construction of contracts and then looked at the wording of the contract and concluded, quite correctly, that such wording is clear. That was the correct approach.”
Below are short extracts from the adjudication provisions of standard construction contracts:
| Contract | Clause | Conditions |
| FIDIC Red Book 20176 | 21.4.3 paragraph 4 | The decision [of the Dispute Avoidance and Adjudication Board, “DAAB”] shall be binding on both parties, who shall promptly comply with it whether or not a party gives a [Notice of Dissatisfaction] with respect to such decision under this Sub-Clause. |
| NEC 4 ECC 20177 | W1.3 (10) | The adjudicator’s decision is binding on the parties unless and until revised by the tribunal and is enforceable as a matter of contractual obligation between the parties and not as an arbitral award. |
| JBCC PBA 20248 | 30.6.3 | A determination given by the adjudicator shall be immediately binding upon and implemented by the parties notwithstanding that either party may give notice to refer the dispute to arbitration. |
| SAICE GCC 20259 | 10.5.4 | The parties shall implement the decision of the Adjudication Board whether or not the dispute is to be referred to arbitration or court proceedings. |
From the above, it is abundantly clear that the parties must promptly give effect to the adjudicator’s decision; a dissatisfied party’s remedy (discussed below) is to challenge the decision afterwards, not to withhold compliance in the meantime.
Although the older editions of these standard contracts are not always as clearly worded as the latest ones, the cases we consulted all dealt with those older versions. The courts are consistent: in South Africa, as in England and other common law jurisdictions, dissatisfied parties must promptly give effect to an adjudicator’s decision, even where they have delivered a notice of dissatisfaction. Even errors of procedure, fact or law by the adjudicator do not constitute defences to the enforcement of the adjudicator’s decision.
From the contractual provisions above, you will see that the adjudicator’s decision is immediately binding: the parties must give effect to it.
The decision only becomes final when it can no longer be challenged by any legal means. This happens if:
(a) neither party delivers a notice of dissatisfaction within the time specified in the contract; or
(b) the decision is confirmed by agreement between the parties, by an arbitrator, or by a court.
Whether arbitration or litigation is the correct avenue depends on the dispute resolution clauses of the applicable contract. A court will not interfere with an adjudicator’s decision where the contract requires a disputed adjudication decision to be referred to arbitration.
The aggrieved party retains a future remedy: the adjudicator’s decision may later be revised through arbitration, litigation or agreement, as applicable. That further dispute resolution process does not, however, affect the interim binding nature of the decision. In Esor, Spilg J found that the key to understanding the purpose of adjudication is that “neither payment nor performance can be withheld when the parties are in dispute”.
If you find yourself on the wrong end of an adjudicator’s decision, the position is clear: comply promptly, deliver your notice of dissatisfaction within the contractual time limit to preserve your rights, and pursue the merits in arbitration or litigation, as your contract requires. Withholding payment or performance in the meantime is not an option the courts will entertain. In short: pay now, argue later.
[1] See the following judgments: Basil Read (Pty) Ltd v Regent Devco (Pty) Ltd (41108/09) [2010] ZAGPJHC 75 (9 March 2010); Freeman NO and Another v Eskom Holdings Ltd (43346/09) [2010] ZAGPJHC 137; [2010] JOL 25357 (GSJ) (April 2010); Esor Africa (Pty) Ltd/Franki Africa (Pty) Ltd JV v Bombela Civils JV (Pty) Ltd (12/7442) [2013] ZAGPJHC 407 (12 February 2013); Tubular Holdings (Pty) Ltd v DBT Technologies (Pty) Ltd (06757/2013) [2013] ZAGPJHC 155; 2014 (1) SA 244 (GSJ) (3 May 2013); Stefanutti Stocks (Pty) Ltd v S8 Property (Pty) Ltd (20088/2013) [2013] ZAGPJHC 388 (23 October 2013); Sasol South Africa (Pty) Ltd v Murray & Roberts Ltd (425/2020) [2021] ZASCA 94 (28 June 2021); and Framatome v Eskom Holdings SOC Ltd (357/2021) [2021] ZASCA 132; 2022 (2) SA 395 (SCA) (1 October 2021), amongst others.
[2] 2022 (2) SA 395 (SCA) (1 October 2021).
[3] (12/7442) [2013] ZAGPJHC 407 (12 February 2013).
[4] FIDIC Conditions of Contract for Construction for Building and Engineering Works designed by the Employer, First Edition 1999.
[5] (06757/2013) [2013] ZAGPJHC 155.
[6] FIDIC Conditions of Contract for Construction, Second Edition 2017.
[7[ NEC4 Engineering and Construction Contract, June 2017.
[8] JBCC Principal Building Agreement, Edition 6.3 June 2024.
[9] SAICE General Conditions of Contract for Construction Works, Fourth Edition 2025.
