Radon Projects (Pty) Ltd v N V Properties (Pty) Ltd and Another

Radon Projects (Pty) Ltd (the contractor) and N V Properties (Pty) Ltd (the employer) concluded a construction contract for the East London Convention Centre based on the JBCC Principal Building Agreement (4th ed, March 2004). During construction, the contractor submitted claims for extensions of time due to delays, some of which were granted, extending the practical completion date to 9 March 2009. Practical completion was only achieved on 14 December 2009, resulting in penalties exceeding R6 million. After completion, the contractor submitted a consolidated claim revising earlier delay claims based on further information. The principal agent failed to decide the claim, and a dispute was referred to arbitration. The employer approached the Eastern Cape High Court contending that the arbitrator lacked jurisdiction because the claims had been finally determined earlier or should have been adjudicated before practical completion. The High Court upheld the jurisdictional objection. The contractor appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the Eastern Cape High Court was set aside and replaced with an order dismissing the employer’s application with costs, including the costs of two counsel.

The case is significant for South African construction and arbitration law as it clarifies the dispute resolution regime under the JBCC Principal Building Agreement, particularly the relationship between adjudication and arbitration. It confirms that the timing of referral, not the timing of the dispute’s origin, determines the appropriate forum. The judgment also reinforces the principle that jurisdiction is distinct from the merits of a claim and provides authoritative guidance on how arbitrators should deal with jurisdictional objections.