When negotiating agreements, too often parties agree to dispute resolution clauses without first understanding the implications of those clauses when a dispute arises. Increasingly, agreements contain boilerplate dispute resolution clauses which require parties to mediate disputes before engaging in arbitration or litigation. 

In fact, in April 2025, the Gauteng Division of the High Court of South Africa introduced mandatory mediation, which requires that parties attempt to resolve their disputes through mediation prior to being able to apply for a trial date. 

Mediation is an alternative, voluntary dispute resolution mechanism in which parties attempt to resolve disputes through negotiation facilitated by a mediator. Unlike a judge or an arbitrator, a mediator does not adjudicate the dispute between the parties and does not have the power to make a binding determination. The mediator's role is limited to facilitating discussions and negotiations between the parties, with the intended result being the parties reaching a settlement. 

In the recent case of Superway Construction (Pty) Ltd v Cape Metal Windows Servicing CC and Another, a full bench of the Western Cape Division of the High Court of South Africa was required to determine whether mediation was a jurisdictional requirement of the adjudication process.

Superway Construction (Pty) Ltd ("Superway") appointed Cape Metal Windows Servicing CC ("Cape Metal") as a subcontractor to supply and install aluminium windows, doors and shopfronts. One of the clauses in the agreement between the two parties stated that "dispute resolution is to be by means of mediation". 

Following a dispute which arose between Superway and Cape Metal regarding alleged outstanding payments, the Association of Arbitrators appointed an adjudicator to adjudicate the dispute. Superway contended that the adjudicator did not have jurisdiction until such time as both parties had engaged in mediation as required by their agreement. Despite this, the adjudicator directed that the adjudication proceed without further delay. The adjudication went ahead but Superway did not participate. 

When the adjudicator delivered his determination, he upheld Cape Metal's claims but Superway refused to comply with the determination. Cape Metal consequently applied to the High Court to enforce the determination. The court of first instance found in favour of Cape Metal and held that Superway was required to comply with the determination. Superway in turn noted an appeal to a full bench of the High Court.

In considering the matter, the High Court considered the provisions of the draft Mediation Bill which provides, amongst other things, that parties are not compelled to submit to mediation if a court determines that participation is not in the best interests of the parties. The High Court also considered various sections of the Constitution of the Republic of South Africa, including section 34 of the Constitution, which provides that everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or where appropriate, another independent and impartial tribunal or forum. Ultimately, the High Court decided the matter by considering the wording of the dispute resolution clause in the Agreement.

The High Court found that the source of the adjudicator’s jurisdiction was the agreement between Superway and Cape Metal and that mediation was an "indispensable jurisdictional gateway" that the parties were required to comply with prior to engaging in the adjudication process. The High Court therefore upheld Superway's appeal against the decision of the court of first instance.

The key takeaway from the Superway case is that parties, when negotiating agreements, must understand what they are agreeing to in the event of a dispute arising. All too often, parties insert boilerplate dispute resolution clauses as an afterthought, without ensuring that they are fit for purpose. Whilst mediation is potentially an effective dispute resolution method, it is not always appropriate, particularly where there is a lack of good faith between the parties. 

In these circumstances, mediation becomes a time-consuming and expensive box-ticking exercise. Parties must carefully consider the types of disputes that are likely to arise in the context of their agreement and tailor their dispute resolution clauses accordingly. A dispute resolution clause deserves as much attention and consideration as the operative provisions of an agreement.

Written by Jones Antunes, Director and Tshegofatso Matlou, Associate at Werksmans Attorneys