R201m NEC3 adjudication award enforced — pay now, argue later holds firm

China Coal, a contractor on an NEC3 engineering and construction contract, sought to enforce an adjudicator's decision awarding approximately R201 million (R71.8 million for compensation events and R129 million for repayment of low-performance damages) against the employer, Bakubung Minerals. The employer resisted enforcement and counter-applied for a stay pending a contemplated — but not yet instituted — review, arguing that the contractor was a shell company unable to repay and that funds should be directed into a trust account.

The court held: The court enforced the adjudication award in full, ordering forthwith and immediate payment. It held that errors of procedure, fact, or law by the adjudicator do not constitute defences to enforcement. The mere risk that the contractor might not be able to repay does not relieve the employer of its payment obligation. Directing payment into a trust account would undermine the purpose of interim adjudication. A contemplated but un-instituted review does not justify a stay, and review should generally only be entertained where necessary to prevent grave injustice. The court awarded punitive attorney-and-client costs against the employer for its obstructive conduct.

Legal impact: Consolidates the SCA line of authority (Framatome, Segal/Ekurhuleni West College, Radon Projects) on robust enforcement of NEC3 adjudication awards. Practically, it closes off three tactical defences employers have attempted: alleging the contractor is a shell company, seeking payment into trust, and seeking a stay on an un-instituted review. The punitive costs order raises the stakes for employers contemplating resistance to adjudication enforcement.