Worldwide: Construction Law Update: Important Procedural Developments

Last Updated: 7 December 2015
Article by Alon Meyerov and Rob Scott

There are three important developments that are taking place in the field of dispute resolution. These developments will be of substantial interest to all involved in the construction industry.

These developments are :

  1. The introduction into law in 2016 of mandatory Adjudication and Prompt Payment Regulations, for all construction works contracts
  2. The submission to Parliament in 2016, of an International Arbitration Bill
  3. The establishment of the China/Africa Joint Arbitration Centre (CAJAC) in Johannesburg and Shanghai

Adjudication Procedure and Prompt Payment Provisions

The Minister of Public Works has proposed an amendment to the Construction Industry Development Regulations.

The draft amendments to the regulations have been published for public comment and are expected to come into law during 2016.

The amended regulations will apply to all construction works contracts or construction works related contracts, whether written or oral and in both the private and public sectors (excluding home building contracts). The definition of such contracts is very broad. The main import of the regulations will be the following :

  • A prompt payment provision which will provide the following:
    • That a contract may not contain any provision which makes payment to a contractor, service provider or supplier conditional upon the payer receiving payment from a third party. This will be of particular importance to sub-contractors who are entitled to payment from the principal contractor.
    • That a party to a contract may not withhold payment or part payment unless that party has given notice of intention to withhold payment and has given reasonable grounds, in terms of the contract, for doing so. Where a party is not satisfied with those reasons they may declare a dispute and refer the dispute to adjudication in terms of the regulations.
  • A provision for mandatory Adjudication, which will provide that:
    • every construction works contract or construction works related contract must provide for an adjudication procedure for the determination of any dispute;
    • where a party is not satisfied with the adjudicator's decision, that party may refer that dispute to arbitration in terms of the Arbitration Act or take the decision on review in terms of the Promotion of Administrative Justice Act;
    • the decision of the adjudicator is binding and the parties must give effect to that decision, within ten days from delivery of the adjudicators decision, even though a party may intend to refer that dispute to arbitration or to take that decision on review; and
    • any party to a dispute, may be assisted by or represented at the adjudication by a representative or advisors, including the legal representation.

Parties to a construction works contract or construction works related contract will not be able to contract out of these regulations. The purpose of the regulations is to introduce mandatory adjudication as a fast track mechanism for resolving disputes and increasing cash flow in the construction industry. The regulations are set to have a profound effect on the industry and industry participants need to get to grips with the regulations themselves and the impact that they will have.

The regulations in their existing draft form have been severely criticized and are likely to be subject to a number of amendments and further publication for public comment before they are signed into law.

International Arbitration

A draft International Arbitration bill is presently with the Department of Justice, for review, having been approved by the Law Development Commission. The bill, it is understood, is based on the UNCITRAL Model Law for International Arbitrations (that having been the Law Commission's proposal in 1997). The bill will be submitted to Parliament for approval next year.

It is a matter of speculation as to what extent the Model Law will be adjusted or tampered with – what is known is that the Law Commission had, in putting its proposal to the Department of Justice (as long ago as 1997), stressed the need promote two main threads, these being:

  • the liberalisation of International Arbitration by limiting the role of domestic courts; and
  • the emphasizing of party autonomy by allowing parties the freedom to choose how disputes should be determined

Our existing Arbitration Act of 1965 allows parties recourse to our courts in the course of arbitration proceedings on a large number of procedural matters. This of course detracts from the essence of arbitration proceedings and so the new bill is eagerly awaited.

In addition to the fact that the Department of Justice is currently reviewing the draft bill, there have in the last four or five years been a number of decisions of our courts which reveal an appreciation of the role of arbitration in modern society. These decisions have supported the sanctity of arbitration agreements and proceedings, and have limited in those respective matters, intervention by the court in arbitration proceedings, as also the review of arbitral awards. Our courts have gone so far as to say :

"The South African courts not only have a legal, but a socio-economic and political duty to encourage the selection of South Africa as a venue for international arbitrations. International arbitrations in South Africa will not only foster our comity among the nations of the world, as well as international trade but will also bring about the influx of foreign spending to our country (Zhongi Development Construction Engineering Company Limited vs Kamoto Copper Company SARL (2014) 4 ALL SA 614(SCA))"

These developments should be of interest to all involved in cross border disputes, from the points of view of predictability in the resolution of disputes, ease of enforcement of arbitral awards, and curtailment of judicial review of arbitral awards.

The China/Africa Joint Arbitration Centre (CAJAC)

CAJAC Johannesburg and Shanghai were launched last week as arbitration centres. The intention is to establish a number of further centres in China and Africa.

The Centre will provide dispute resolution services to facilitate and strengthen business, trade and investment between China and Africa.

Parties will subject the administration and arbitration of their dispute to CAJAC, by the signing of a model clause.

The publication of the applicable procedural rules is imminent. There will be two sets of rules, one of application in South Africa, and the other in China. Johannesburg and Shanghai will have access to a shared panel of arbitrators.

This development is of course unproven but it is understood that a number of disputes have already been referred to the Centre.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions