Introduction
The NEC3, Engineering and Construction Contract as well as the Professional Services Contract contain unique time barring provisions in their dispute resolution clauses. They make provision therein (Option W1 in South Africa) that the contractor must notify a dispute to the adjudicator within a specific time period depending on the nature of a dispute, failing which the contractor loses his entitlement to refer it to adjudication or arbitration (the tribunal).

Set out in the adjudication table are the time periods within which a dispute may be referred to the adjudicator and the consequences of such failure are stipulated in sub-clause W1.3(2). Either party may refer a dispute to the adjudicator but this must be done between two and four weeks after notification of the dispute to the other party and the project manager. It is interesting to note that a referral prior to the two weeks will be premature and of no effect and after the four week period will be out of time and time barred.

Contracts where no adjudicator is appointed
The NEC3 envisages that an adjudicator will be named under the contract. If that is not done, or the adjudicator resigns or otherwise declines to act, the parties can either agree on the identity of a new adjudicator or either party may ask an adjudicator nominating body(the ANB) to appoint one . The reason for the nomination of an adjudicator in the contract data is for the swift finalisation of disputes as and when they arise.

In an article published by Ben Beaumont , he had the following to say where no adjudicator was chosen at the start of the contract:

“Where the parties have not chosen an adjudicator, either party may invite the ANB to choose one. There is no time limit specified for the invitation to the ANB to make its choice. However, once one party has decided that there is a dispute and that party realises that an adjudicator is not identified within the contract data then it is incumbent on that party to make the invitation, forthwith. The dispute cannot be notified until an adjudicator is in existence.” (Our emphasis).

From Beaumont’s abovequoted article the following principles may be deduced which are of utmost importance:

➢ Firstly, if no adjudicator is chosen in the contract data and a party decides that there is a dispute then it will have to immediately approach the nominating body to appoint such. This is contrary to common practice under other contract forms; most contracts make provision that the parties, as a first step, attempt to agree on the identity of an adjudicator, usually couched in such terms as:

“The Adjudicator is (to be agreed).”

➢ Secondly, - a dispute cannot be notified until the adjudicator is in existence.

Conclusion
This interpretation expressed above has not been well received. We are of the view that this interpretation is correct but there is no case law in South Africa to support this. The views expressed by these leading authors (referred to above) may serve as a guideline to interpret the contract but are not binding on our judiciary. It is of utmost importance that, despite the view expressed above, parties timeously notify their disputes to adjudicators within the time period in the NEC3. Should the contract not provide for an adjudicator the party referring the dispute should contact the ANB and notify them of the dispute. Lastly, it is also advisable , we would suggest, that the parties to an NEC contract remove this time bar provision form the NEC3 as an amendment to the contract.

Notes:
¹ J. Glover ‘Adjudication under the NEC3’, Fenwick Elliott, ARBRIX, 6 October 2007

² Dispute Resolution under NEC3, User Unfriendly? Alternative Dispute Resolution, Engineering and Construction Contract, Construction Law Journal, p591.

Written by Niel Coertse, Associate at MDA Consulting