+27 11 648 9500   +27 31 764 0811
 

SASOL Chemical Industries Ltd v Peter Odell & E-Hel Civil Services (Pty) Ltd Case no 401/2014, Free State Division. Not yet reported.

1 April 2015

Facts

  • SASOL and E-Hel entered into a NEC 3 contract with Main Option W1 as the dispute resolution mechanism.
  • A dispute arose between SASOL and E-Hel and E-Hel referred the dispute to the adjudicator, Odell.
  • E-Hel submitted its information to the adjudicator on 17 December 2013 and the four-week period for further information to be submitted expired on 16 January 2014.
  • On 14 January 2014 SASOL requested a postponement from E-Hel and E-Hel refused the request.
  • On 30 January 2014 SASOL launched an urgent application to prevent the adjudicator from making his decision. The matter was set down on 10 February 2014 but the adjudicator issued his decision on 3 February 2014 thus destroying the purpose for the application.
  • The adjudicator found in favour of E-Hel and ordered SASOL to pay certain monies.
  • Undeterred, SASOL amended its notice of motion to set the award aside, alternatively restrain E-Hel from enforcing the award pending final determination in arbitration.
  • SASOL kept its third prayer forcing the adjudicator to consider its application for an extension of time.
  • SASOL was allowed in urgency grounds, with the urgency permitting the amendment of SASOL’s notice of motion.

Arguments

  • SASOL argued that:
    • That clause W1.3(3) states that the period may be extended if the adjudicator and parties agree does not exclude other ways of getting an extension. That clause W1.3(2) contains a time bar and the parties could not have intended to shut the door on a party who has not applied for an extension of time as this would amount to an abandonment of the adjudication process.
    • Without an extension the adjudicator takes a decision without all the information. The adjudicator is the master of the process and must ensure he has all the information required to come to a fair decision. It is because it is the adjudicator’s responsibility to ensure he has all the information that he must ensure he has SASOL’s version. If he refuses to consider a request for additional time by SASOL he abdicates his responsibility to come to a fair decision.
    • The adjudicator has a legal duty to ensure SASOL has an opportunity to place its case before him. If he does not do so, he violates the rules of natural justice because the proceedings are quasi-judicial and the audi alteram partem rule applies.
  • Odell stated that he had no power to extend the proceedings because E-Hel did not agree to the extension.
  • Odell stated in his award that although he did not have SASOL’s version, he closed his eyes to that and found on E-Hel’s submission.
  • E-Hel stated simply that SASOL has a remedy in clause W1.4(4) to refer the matter to the tribunal. As the tribunal is not limited to the information put before the adjudicator SASOL could place its full case before the tribunal.

Judgment

  • The judge found that adjudication is not subject to the common law. Even if the adjudicator made a mistake in not allowing the extension of time (which the judge did not think was a mistake) the adjudication still stands.
  • The judge held further that the strict time frames of clause W1 meant that the speed of the adjudication process meant the rules of natural justice did not apply.
  • SASOL needed to show a clear right to succeed in interdict proceedings, which it failed to do. It failed to show Odell had to consider its request.

Commentary

  • This case is interesting as it is one of the first direct cases which deals with resisting enforcement (previous adjudication cases have dealt with the holder of an adjudicator’s decision approaching the court to enforce a decision and those cases have dealt primarily with the nature of such decision).
  • The judge’s finding that the rules of natural justice do not apply at all is perhaps taking it a bit far. It is submitted a proper analysis would be that the violation must not be material to the dispute.
  • Importantly, because of the existence of the tribunal proceedings and that the parties are not limited to the information placed before the adjudicator, it meant that SASOL could not show it had or will suffer irreparable harm or the absence of another remedy if its interdict was denied.
  • An interesting question that was not really explored was the duty of the adjudicator to pursue information and not simply remain passive.