Litigation / Adjudication / Arbitration – What has been noted during the Covid-19 lockdown periods on how to deal with your litigious and/or other dispute matters and what to consider for the future should such circumstances repeat

After the announcement by President Ramaphosa of the nationwide lockdown on the eve of 23 March 2020, necessary guidelines, procedures, and directives were issued to guide various practices and other entities on how business could continue or not continue during the lockdown period.

On 25 March 2020, the Judge President for the Gauteng division of the High Court of South Africa issued directives (with effective period from midnight Thursday, 26 March 2020 until 09h00 on Monday, 20 April 2020), setting out special arrangements for how the litigation matters had to be dealt with in the Pretoria and Johannesburg High Courts. The directives inter alia provided that (not limited hereto):

• the Courts are only open for hearing urgent matters in the Urgent Court;
• the hearings could be conducted via teleconferencing and/or videoconferencing, and/or any other electronic means – however if this was not possible, the circumstances and reasons why not, must be good and valid to consider other arrangements;
• the parties to the matter must upload their respective papers onto CaseLines. If this could not be done, it was allowed to submit same by email to an address as directed by the Urgent Court Judge;
• any Order granted/issued gets communicated by email to the parties and/or could be uploaded onto CaseLines; and
• service of papers could be transmitted by email between the parties and the date of transmission of the email shall be regarded as the date of issuing of the process. Same could then be emailed to a provided email address of the Courts and serve as proof of service.

Supplementary directives followed on 2 April 2020, addressing dies non concerns from litigants and members of the profession with regards to their obligations in terms of the rules of Court and/or any statute regarding the filing of Court processes and/or delivering of documents within stipulated periods if those periods fell within the lockdown period. Meaning, could the lockdown periods (the dates falling inside those periods be considered as dies non).

The directives accordingly clarified and inter alia provided that:

• litigants who are obliged by any provision in a statute or by a rule of Court to serve and file Court process and/or deliver any document by a certain/specified date that falls within the lockdown period, should comply with the obligations, as stipulated in the directive;
• the service and filing of the process and/or document may be transmitted by email to the relevant counter parties, who may not withhold their email addresses unreasonably;
• such email transmission shall be deemed to be effective service on such party provided that proof of transmission and/or delivery must be filed with the Courts.

The 16 April 2020 directive, encouraged that the legal representatives of the parties were to conduct their business and act in the spirit of cooperation, to communicate with each other in order reach certain agreements and further to agree on suitable alternative dates for hearing and or trial if dates for hearing and / or trial were allocated in the lockdown periods. The Registrar would then be informed on what has been agreed accordingly.

Considering the aforesaid, what would be to position regarding other dispute resolution procedures, for example the procedures provided under construction contracts (i.e adjudication and arbitration). If the Courts can operate and function in a specific prescribed manner, why should an adjudication or an arbitration process be any different. Does a pandemic like Covid-19, which has moved various countries and Governments to enforce a regulated lockdown, stop an adjudication and/or an arbitration?

Although the author could not source whether such request and/or question has been dealt with in our South African Courts at the date of writing this article, there was however a matter dealt with in the UK and by their Technology and Construction Court on 2 April 2020. The case of Millchris Developments Ltd v Waters, which is believed was the first case dealing with the effect of Covid-19.

In not dealing in detail with all the facts in this matter, but briefly summarised, an initial timetable was proposed by the Adjudicator. Millchris (the contractor) claimed that he could not meet the proposed date to file its response as a result of the Covid-19 lockdown and requested that the adjudication rather be postponed until after relaxation of the lockdown measures. This was not agreed to and the Adjudicator proposed a two-week extension for the contractor to file its response. As a result, the contractor rejected the proposal and approached the court with a request to suspend the adjudication process. They argued for an order based on the grounds of ‘natural justice’ due to the fact that they faced certain difficulties caused by the Covid-19 lockdown. The difficulties raised by the contractor was that:

• they did not have enough time to prepare as a result of Covid-19 and that they were not continuing with business during the lockdown period; and
• their legal representative was self-isolating at its home, which caused difficulties to obtain relevant information/evidence from the people who had knowledge of the dispute; and
• limitations on presenting at a site visit.

The Judge (Mrs Justice Jefford), stated that it was uncommon to grant an order that prevents adjudication. In order to be successful in such circumstances, the contractor must proof that it will be in breach of natural justice, if the adjudication would continue to be conducted, which could further result in the inevitable consequence that it would be unenforceable.

However, the Judge was not totally convinced and rejected the contractor’s request for the order it sought. The Judge was of the view that they failed to meet the necessary threshold for such an order and was led by some of the following factors:

• the contractor failed to justify why the papers could not be delivered to a replacement legal representative, or to be scanned and emailed to the legal representative that was self-isolating;
• the Adjudicator had already afforded them an additional two weeks to file its response papers. As a result, this would have allowed them to contact the relevant person who had knowledge on the dispute for evidence; and
• they failed to show that an attempt was made to contact their former project manager to assist

In considering the Millchris case, it seems that the facts that was put forward by the contractor was not enough and did not convince the court. However, as with many cases dealt with by the Courts, the author believes that the nature and facts of each matter will be considered and be dealt with differently. Not all circumstances are the same. Had the contractor possibly ticked alternative and relevant boxes to convince the court, it might have succeeded.

Again, this comes back to the parties to consider and act promptly and in the spirit of cooperation. In event of such a sudden lockdown caused by a pandemic (or anything else of such nature), it would be advised that the relevant parties rather communicate from the outset. Be honest and open with each other. This might help to reach certain agreements and revise what was previously agreed.

In light of the factors considered by the Court in the Millchris case, we should be careful and not ignore the current times in which we operate and conduct our businesses. With technological advancements and the resources to our disposal, allowing for scanning of documents, video and/or teleconferencing communication software, correspondence by email and other telecommunication apparatuses, it becomes difficult to voice any difficulty which prevented a person from taking and/or proceeding with certain actions to ensure it complies with prescribed timelines and other obligations.

In this day and age, the majority of all Corporations and Companies in the World (including its workforce), have access to these technological resources. However, exceptional circumstances will always remain, which will exclude a limited few. For others, it can be business as usual.

Author: Barry Herholdt, Senior Associate