MDA Law
Murray & Roberts Ltd v Alstom S&E Africa (Pty) Ltd
The Applicant, Murray & Roberts (“M&R”) sought to enforce the decision of an adjudicator. The Respondent, Alstom S&E Africa (Pty) Ltd (“Alstom”) resisted the enforcement on the basis that the decision was impossible to perform.
A dispute had arisen between the parties in respect of the materials supplied by Alstom to M&R for the erection of absorbers. Each of the steel plates supplied was to have a marking corresponding to a material certificate specifying the composition of the steel so as to establish that the steel complied with the required specifications. Certain of the steel plates did not have the required markings and/or were not accompanied by material certificates. M&R contended that absent the certificates, it was not obliged to proceed with the erection.
The dispute was referred to an adjudicator. He decided that:
- where the materials cannot be identified with a material certificate and/or there is no legible marking on the materials, then Alstom was to subject such materials to appropriate testing to identify the materials and was to provide M&R with the testing records;
- M&R was not obliged to continue where no material certificate was available or if the material could not be positively identified with the test record.
An adjudicator’s decision is binding and shall promptly be given effect to unless and until the decision is revised by amicable settlement or arbitral award.
Alstom failed to carry out the adjudicator’s decision and accordingly, M&R applied to the High Court to enforce the decision.
M&R contended that the adjudicator’s decision is binding and must be complied with and that it is possible to perform.
It is well settled in our law that courts enjoy a general equitable discretion to refuse an order for specific performance upon consideration of all the relevant facts, one being impossibility of performance. However, in the scenario where the performance being requested is enforcement of an adjudicator’s decision, the considerations relevant to the exercise of the court’s discretion are different. For example, usually a refusal to order specific performance simply required the wronged party to seek damages or some other appropriate remedy. In the case of enforcement of an adjudicator’s decision however, the adjudicator has already decided the appropriate remedy and the decision of the court is binary – to enforce or not to enforce. If the decision is not enforced, M&R secures nothing from the decision and enjoys no alternative remedy; a harsh outcome.
Alstom’s claims of impossibility must be considered. It was Alstom’s position that the obligations prescribed by the adjudicator could not be performed and thus they could not be enforced. Alstom submitted that no testing method would positively identify the particular grade of steel and that only the original manufacturer could issue the certificates and it could only do so when the material was under its control.
M&R submitted that what was required in respect of testing was to determine whether the specifications had been complied with. This is a lesser burden than what Alstom submitted, namely, determining the grade of steel. M&R’s interpretation of the testing required was possible to perform. Accordingly, the court held that Alstom must have the materials subjected to such testing.
M&R submitted that what was required in respect of certification was testing records in compliance with the EN certification and that such need not be done by the original manufacturer. This is a lesser burden that what Alstom submitted, namely that the EN certificates themselves must be provided. M&R’s interpretation of the certification was possible to perform. Accordingly, the court held that Alstom must carry out such certification.
On a side, the court reiterated that its role is supervisory and that it must be careful not to act as a court of appeal by determining the correctness of an adjudicator’s decision.
The court concluded that Alstom should have raised the issue of impossibility before the adjudicator but that in any event, the impossibility rested on an interpretation of the decision that was not necessary and was unwarranted. The effect of Alstom’s interpretation and contentions would have left M&R without any remedy which is not equitable. Furthermore, the benefit of the decision is important as it allows M&R to prove that its performance conformed with the specifications.
Accordingly, the court issued an order to enforce the adjudicator’s decision.
