Construction Industry Development Board Act, 2000 (Act No. 38 of 2000)

The procedure whereby disputes are settled by arbitration or court proceedings is both costly and time consuming. These procedures are not necessarily in the interests of the parties, or appropriate. The delayed resolution of disputes impacts negatively on project outcomes for all participants.

Most standard forms of contract make provision for the settlement of disputes by a number of means including expert determination, mediation, conciliation and adjudication. Each of these has its place in the course of dispute resolution.

Adjudication

Adjudication has become the preferred international procedure for dispute resolution. This rapid and relatively inexpensive procedure, which is conducted by a third party intermediary within the contract period, results in a decision that is binding on the parties in dispute. The decision is final, unless and until it is reviewed by either arbitration or court proceedings.

The strength of adjudication lies in the contractual commitment by the parties to engage a specific, named (independent) person or persons who will become and remain acquainted with the project and are therefore enabled to make an expeditious finding. Furthermore, the terms and procedures for the process of adjudication are agreed and detailed in the contract itself. This results in an informed, transparent, relatively speedy decision.

Several international forms of contract in South Africa make use of adjudication and there is a need for the South African construction industry to embrace this form of dispute resolution in its local forms of contract.