Construction adjudication is designed to be a fast, interim dispute resolution mechanism – a “pay now, argue later” tool to keep cash flowing on site while the parties reserve their right to litigate or arbitrate the underlying merits in due course. Its effectiveness depends on speed and enforceability.

But what happens when a contractor, in the submissions that follow its notice of adjudication, introduces claims that were never raised in that notice at all? Is the resulting determination binding? And can a responding party that missed its deadline to respond still challenge the adjudicator’s jurisdiction?

These questions were answered by the Western Cape Division of the High Court in a recent appeal that will be of direct importance to every adjudicator, and to every representative of a party in construction adjudication, in South Africa.

The City of Cape Town v Pro Khaya Construction CC (Case No. A39/2026, Western Cape Division, Cape Town, 5 August 2026)

The City of Cape Town and Pro Khaya Construction CC contracted on 12 November 2018 for construction of an electrical depot at Hout Bay, under the Joint Building Contracts Committee (JBCC) Principal Building Agreement, Edition 6.1 (March 2014), as amended. Ebesa architects was the principal agent.

Pro Khaya fell substantially behind schedule. A first adjudicator dismissed its claims for extension of time and found it in material breach. The principal agent instructed suspension of construction. Pro Khaya treated the suspension as repudiation, purported to cancel the contract, and vacated site in October 2020. A second adjudicator held the cancellation invalid and directed Pro Khaya to proceed. Pro Khaya gave a notice of dissatisfaction but never litigated the cancellation dispute. The principal agent never issued a final account under clause 26.10.

The referrals to adjudication

Pro Khaya then delivered a notice of disagreement on 13 February 2022 about the termination, the failure to issue a final account, and the City’s non-return of the construction guarantee. This was followed by a notice of adjudication on 4 March 2022 seeking a final account in Pro Khaya’s own stated terms and payment of R8,654,313.43. A second notice of adjudication on 18 November 2022 was confined to two specific extension-of-time claims (claims 19 and 20).

A third adjudicator, Adv J G Wasserman SC, was appointed. However, in its referral submission on 6 February 2023, Pro Khaya introduced for the first time three further extension-of-time claims (16, 17 and 18) that had never appeared in any notice of adjudication, plus four further final-account items never previously raised (COVID-19 costs, a riot-damage insurance shortfall, post-termination preliminary and general costs, and a reversal of penalties).

The City’s response was due 20 February 2023 but was delivered 17 days late. Under Rule 5.2 of the JBCC Adjudication Rules, a late response obliges the adjudicator to assume the responding party does not dispute the details submitted. The adjudicator accordingly handed down his determination on a default basis on 10 March 2023, allowing a single, unapportioned 130-day extension of time expressed to “encompass claims 16 to 20,” and a resulting final account of R8,095,536.22.

High Court Ruling

Pro Khaya applied to the High Court to enforce the determination. The City opposed and counter-applied to have it set aside, arguing the adjudicator lacked jurisdiction because he decided matters never referred to him. The court a quo found for Pro Khaya, holding the City had “acquiesced” to the adjudicator’s jurisdiction by not objecting during the adjudication.

Jurisdiction as a creature of contract

On appeal, the full bench (Francis J, Holderness J and Yake AJ) reversed the ruling.

The Court held that an adjudicator under the JBCC is “a creature of the contract” with only the powers the contract gives him. If he lacked jurisdiction, his determination is neither binding nor enforceable, citing Framatome v Eskom Holdings SOC Ltd 2022 (2) SA 395 (SCA). His mandate, the Court held (following the English case Edmund Nuttall Ltd v R G Carter Ltd [2002] EWHC 400 (TCC)), “derives from the Notice of Adjudication.”

Distinction between the notice and the submission

Critically, the Court drew a clear distinction between the notice required under the JBCC’s dispute resolution process and the submission. Clause 30.4 requires the notice of adjudication to define the scope of the dispute and the relief sought. Rule 5.1 of the JBCC Adjudication Rules requires the referral submission to furnish full details of that dispute. The Court held these “do different work” - the notice fixes the boundary of the adjudicator’s jurisdiction, and the submission fills in what lies within that boundary. To treat the referral submission as capable of moving the boundary “would denude clause 30.4 of content, and would leave a respondent unable to know, when the notice arrives, what case it must meet.”

Identifying the dispute referred

On the characterisation of the “dispute referred,” the Court adopted a purposive, non-legalistic approach (following Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC)): a court should not be over-legalistic; it must determine in broad terms what the disputed claim is; the ambit of the reference may be widened by defences the responding party raises, but not by new claims the referring party introduces. However, the Court stressed limits: “The enquiry is broad in characterising a dispute that was referred. It cannot supply a reference that was never made.”

The ‘pay now, argue later’ policy

Pro Khaya argued that adjudication’s “pay now, argue later” policy meant courts should not allow technical objections to resist payment. The Court accepted this in principle but held it “operates within the parties’ bargain and not above it.” The clause which makes a determination immediately binding is the same clause which fixes what may be determined. To enforce a determination upon a claim that was never referred “is not to give effect to the parties’ choice of a swift remedy. It is to give the referring party a remedy for which it did not bargain, and to give the other side no opportunity to meet a case of which it was never told.”

Application to the facts

On the facts, extension-of-time claims 16, 17 and 18, and three of the four disputed final-account items, had never appeared in any notice of adjudication – they surfaced for the first time in the referral submission. This was not mere elaboration but “an enlargement of the dispute,” over which the adjudicator had no jurisdiction.

No acquiescence or waiver

The Court rejected the a quo’s finding that the City had “acquiesced” to the adjudicator’s jurisdiction. A party’s inaction cannot confer jurisdiction the adjudicator never had. The City’s response was simply late. Under Rule 5.2 the adjudicator was contractually bound to disregard it. Conduct the adjudicator was bound to disregard cannot be the vehicle by which a party is said to have agreed to enlarge his mandate.

Severance: why the whole award was set aside

On severance, the Court held that because the adjudicator granted one unapportioned 130-day extension “to encompass claims 16 to 20” without apportioning it among individual claims – and the underlying delay analysis attributed 72 days to claim 18 alone (one of the improperly referred claims) – the properly and improperly referred components could not be reliably separated. The entire determination was declared not binding and unenforceable.

The appeal was upheld with costs.

COMMENT

This judgment is of practical importance for adjudicators and for the representatives of parties in construction adjudication.

Guidance for adjudicators

For adjudicators, they will need to carefully consider at the outset of every reference, that everything placed before him or her in the referral submission was actually raised in the notice of adjudication. Where a referral submission introduces new claims or new heads that were never the subject of an earlier notice, the adjudicator should decline jurisdiction over those items, even if nobody objects, because a party’s silence or default cannot confer jurisdiction that was never conferred by the contract.

Ideally an adjudicator should structure any determination so that if any component is later found to exceed jurisdiction, the properly referred components can be clearly apportioned and severed. Lumping different claims into a single undifferentiated figure, as happened with the unapportioned 130 days here, risks affecting the entire determination even where only part of it was defective.

Guidance for party representatives

For legal representatives, the key is to be precise when drafting a notice of adjudication about every claim and every head of relief being referred. Avoid referring to a claim for a “final account in a stated sum” as it may not be read as impliedly incorporating every constituent extension-of-time claim or cost item that makes up that sum. Each distinct entitlement should be separately and expressly notified. It is also critical to meet deadlines rigorously – a late response can result in a default determination. A failure to respond timeously though does not waive a true jurisdictional objection. An objection can still be raised later, in answer to an enforcement application, and does not need to go through the notice of dissatisfaction route.

The position under other forms of contract

Despite differences in terminology, structure and the identity of the tribunal, the General Conditions of Contract for Construction Works (GCC), Fédération Internationale des Ingénieurs-Conseils (International Federation of Consulting Engineers) (FIDIC) and New Engineering Contract (NEC) regimes share the same underlying structure as the JBCC. Dispute resolution mechanisms of this kind are creatures of contract, their jurisdiction is fixed by whatever the contract requires to be notified, and a party cannot expand that jurisdiction unilaterally by introducing new matters in later submissions. The core jurisdictional principle established in this judgment reflects an internationally consistent approach, not a peculiarity of the JBCC form and is therefore likely to hold true in other forms of construction contracts.

Given the sums typically at stake in construction disputes, and the speed with which adjudication moves, practitioners should ensure they treat the notice of adjudication as they would a summons or a statement of claim – with precision, completeness, and an awareness that what is not in the notice may never be decided at all.

Written by Richard Hoal, Partner, Cox Yeats