The sanctity of the arbitration process

The sanctity of the arbitration process in terms of an NEC3 agreement. The courts respect the provisions of arbitration agreements.

NEC contracts are standard form contracts publish commercially in the United Kingdom and is an acronym for New Engineering Contract. The standard contract provides for various options to include in their contract, including dispute options. For example W1 is a dispute resolution procedure including the appointment of an adjudicator and an arbitration process in the event of a party being dissatisfied with the decision of the adjudicator. Option W1 comprises part of part C1-agreement and contract data form.

It sometimes happens, that a dispute arises concerning the dispute resolution procedure itself. The question is how these disputes should be resolved. In Transnet SOC Ltd versus Group 5 Construction Pty Ltd, Transnet approached the High Court effectively requiring the dispute in question be determined by the court. The respondent argued on the authority of Zhongi development construction engineering Co Ltd versus Kamoto copper C SARL 2015 (1) SA 345 (SCA) that the applicant was not entitled to bypass the arbitration process to which it had agreed to in the contract. The court held that where the parties have expressly agreed to an arbitration process, the course will generally not entitled to determine issues that fall within the province of an arbitrator in terms of that process unless an order has been granted in terms of section 3(2) (b) of the arbitration act number 42 of 1965. This section refers to the powers that the court has good cause shown to order that any particular dispute referred to arbitration shall not be referred to arbitration.

In the Transnet matter, the court upheld the principle established in Zhongi.