JVE Civil Engineers Inc v Blue Bantry Investments 235 (Pty) Ltd and Another

JVE Civil Engineers Inc provided engineering services to Blue Bantry Investments 235 (Pty) Ltd for a residential property development at Groot Phesantekraal. After a longstanding informal relationship, the parties concluded a written agreement in May 2008 (the JVE1 agreement) governing Phase 3 of the development, including a fee structure for external services linked to recovery of Bulk Infrastructure Contribution Levies (BICL). Disputes arose regarding JVE’s entitlement to an additional 20% fee under clause 6 of the agreement and a 1.25 multiplication factor under the ECSA tariff. Litigation in the High Court was referred to arbitration. JVE was unsuccessful in both the arbitration and an internal appeal arbitration, after which it sought to review the appeal arbitration award under s 33(1)(b) of the Arbitration Act 42 of 1965.

The appeal was dismissed with costs, including the costs of two counsel.

The case reinforces South African principles governing the limited scope of judicial review of arbitration awards under s 33 of the Arbitration Act. It confirms that courts will not readily interfere with arbitration outcomes, even where an arbitrator errs or exceeds powers in part, unless a gross irregularity resulting in unfairness is established. It also clarifies that a proved compromise can constitute a complete defence notwithstanding technical pleading deficiencies.