IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case numb er: 2023 -099445
2023 -94229
Date of hearing: 29 April 2025
Date delivered: 26 May 2025
(1) REPORTABLE: YES/NO
(2) OF INTEREST TO OTHERS JUDGES: YES/NO
(3) REVISED
DATE
SIGNATURE
In the application between :
MAGALIES WATER Applicant
and
MAGOLOLA MOKOKA AND ASSOCIATES First Respondent
CONSULTING ENGINEERS CC
STUART RIDDLE N.O. Second Respondent
__________________________________________________________
JUDGMENT
SWANEPOEL J:
Introduction
[1] This matter features two linked applications. Firstly, the applicant seeks to
review and set aside an interim award published on 23 February 2022 and a final
award published on 20 May 2023 , by the second respondent in his capacity as
arbitrator. Secondly, the first respondent seeks an order making the award of 20 May
2023 an order of court. It is common cause that if the review application is
unsuccessful, then the award must be made an order of court. (I refer to Magalies
Water as the applicant, as it is in case number 2023 -099445, the review application,
and to Mogolola Mokoena & Associates as the first respondent). The second
respondent abides the outcome of the matter. Where I refer to “the parties” I refer to
the applicant and the first respondent.
[2] The dispute between the applicant and the first respondent was initially
referred to adjudication, but due to the complexity of the issues, it was later referred
to arbitration to be conducted by the second respondent. A brief summary of the
dispute (the disputes are not strictly relevant to these proceedings) is as follows:
[2.1] On 28 November 2013 the applicant appointed the first respondent
as consulting engineer for the upgrade of the Brits water treatment plant. The
relationship was governed by a Service Level Agreement (“SLA”) and an
addendum thereto in which the scope of work was outlined.
[2.2] The project was substantially delayed, and was plagued by non -
payment by the applicant. On 10 February 2021 the applicant gave notice to
the first respondent that it had breached the SLA. Nine days later, the
applicant terminated the agreement, notwithstanding that the SLA required 30
days’ notice of breach. The first respondent then sought payment of its unpaid
invoices in the sum of R 7 596 297.03. The applicant counter -sued, alleging
that there had been overpayment to the first respondent
[2.3] It was not disputed that the applicant had not complied with the
breach clause. It was therefore required of the applicant to show that the first
respondent had committed a material breach of the SLA that justified the
cancellation of the agreement.
[2.4] It was agreed by the parties to separate the issues and to have them
considered in two parts. Firstly, the second respondent was called upon to
consider whether the termination of the SLA by the applicant was lawful. Once
it had been decided that the termination of the SLA was not lawful (the first
award), the matter continued on to the question of quantum on the first
respondent’s claim for payment, and on the applicant’s counter -claim for
alleged overpayment, which culminated in the second award.
[3] Section 33 of t he Arbitration Act, 42 of 1965 (“the Act”) provides for the setting
aside of arbitration awards. The relevant passage therein reads as follows:
“33 Setting aside of award
(1) Where –
(a) any member of an arbitration tribunal has misconducted
himself in relation to his duties as arbitrator or umpire; or
(b) an arbitration tribunal has committed any gross irregularity in
the conduct of the arbitration proceedings or has exceeded its
powers; or
(c) an award has been improperly obtained.
The court may, on the application of any party to the reference
after due notice to the other party or parties, make an order
setting the award aside.
(2) An application pursuant to this section shall be made within six
weeks after the publication of the award to the parties: ….”
Condonation
[4] The applicant launched this application on 2 October 2023, some four months
and 13 days after the second award was published. It was common cause between
the parties that the application ought to have been launched by no later than 1 July
2023.
[5] Section 38 of the Act permits a court to extend any period fixed under the Act
on good cause shown. In Van Wyk v Unitas Hospital and Another (Open Democratic
Advice Centreas Amicus Curiae)1 the Court held that the interests of justice are at
the core of a condonation application, and that what is just depends on the facts and
circumstances of each case. Importantly, the Court held that:
“[22] An application for condonation must give a full explanation for the
delay. In addition, the explanation must cover the entire period of delay. And
what is more, the explanation given must be reasonable.”
[6] The applicant’s main explanation for the delay is that disciplinary steps were
taken against some of its employees, and that the matter is important. The applicant
says that it instructed its attorneys to obtain a transcript of the proceedings. It does
not say when the instruction was given. The transcript was only received on 31 July
2023. There is no explanation for the delay, and the applicant does not say what
steps it took to expedite the preparation of the transcript.
[7] The applicant says that the matter is complex. It says that the delay “ was
resultant from the internal engagements that culminated in a decision to institute
review proceedings, as well as consultative processes between the accounting
authority and the attorneys.” The applicant says that following the “ necessary internal
engagements” an instruction was given to launch these proceedings. It does not say
when the instruction was given.
[8] The applicant does not say who was involved in its internal discussions, what
processes were followed to come to the decision, when meetings were held, when
instructions were given to its attorneys, or when counsel was briefed. The applicant
relies instead on vague averments that essentially amount to no explanation
whatsoever. It is not sufficient for a party seeking condonation to rely on bromides . It
has to specifically provide facts relating to the delay, and as is spelled out in Van
Wyk (supra) , the entire period of the delay must be explained. Even if I accept that
the applicant could only start considering its options once the transcript was received
(which I do not believe), there is no explanation for the more than two months’ delay
thereafter, save that the applicant was thinking about reviewing a complex matter.
The applicant says that this is an important case for the public purse. I agree, and for
that reason the applicant should have made haste in launching the application. It did
not do so. The applicant has , in my view, failed dismally to make any case for
condonation.
Merits
[9] However, if I am wrong in this finding, I shall deal with the applicant’s
complaints regarding the arbitrator’s conduct. The applicant says that the arbitrator
committed various gross irregularities. It seeks a setting aside of the awards under
section 33 (1) (b). The complaints can be summarized as follows:
[9.1] That the arbitrator totally disregarded the evidence tendered in a
forensic investigation and in cross -examination;
[9.2] That the arbitrator assisted the first respondent to prove its case,
both on the lawfulness of the termination, and on quantum.
[9.3] That the arbitrator ignored evidence supporting the applicant’s case;
[9.4] That the evidence of one Mr. Tshongo and of an attorney, Ms
Mathopo, on behalf of the applicant, was disregarded;
[9.5] That the arbitrator failed to realize the materiality of Ms Mathopo’s
evidence.
[10] The applicant also complains that, at the outset, the arbitrator placed on
record that he was not bound by the strict rules of evidence. Why that statement is
incorrect is not clear, and how it affected the applicant’s presentation of its case is
also not spelled out. The arbitrator specifically dealt with the rules that were
applicable to the proceedings in the first award. Those rules applied to all equally,
and there is no indication that the applicant made any objection during the first
proceedings before the arbitrator. I cannot find any fault with the arbitrator’s view on
the rules to be applied.
[11] When a party agrees to arbitration, it limits its remedies to have the award set
aside. In Telcordia Technologies Inc v Telkom SA Ltd2 the court said3:
“[50] By agreeing to arbitration parties to a dispute necessarily agree that
the fairness of the hearing will be determined by the provisions of the Act and
nothing else. Typically they agree to waive the right of appeal. Which in
context means that they waive the right to have the merits of their dispute re -
litigated or reconsidered. They may, obviously, agree otherwise by appointing
an arbitral appeal panel, something that did not happen in this case.
[51] Last, by agreeing to arbitration the parties limit interference by courts
to the grounds of procedural irregularities set out in s 33 (1) of the Act. By
necessary implication they waive the right to rely on any further ground of
review, ‘common law’ or otherwise.”
[12] The question is what gross irregularity is alleged here. The applicant’s main
complaint is that the arbitrator ‘disregarded’ the evidence of its witness, Ms. Mathopo
and of Mr Tshongo . A simple reading of the first award shows that there is no
substance to this averment. The arbitrator wrote the following:
“[42] In a similar vein, the Claimant pointed out that the Respondent’s
witness, Ms Mathopo, was not involved in the project at the time of
cancellation of the SLA and that she testified to the findings of an investigation
by an independent engineer whereas the said engineer did not himself testify.
[43] Further, that the same witness was not qualified academically or
experience wise to give expert evidence on engineering and project
management matters.
[44] For the above reasons, the Claimant avers that the testimony of this
witness should be deemed hearsay , inadmissible, and therefore disregarded.
[45] However, it was revealed in evidence that the witness was party to
the drafting of the report, and I elected to allow her testimony as a result
thereof.
[46] Having regard for the discussion relating to evidence above, it was
my decision to allow the witnesses to present their evidence and to deal with
the weight and materiality thereof accordingly.”
[13] Having heard Ms Mathopo’s evidence , and in considering what weight to
place thereon, the arbitrator said:
“[84] The respondent’s witness who gave evidence as to the contents of
the DMS reort, Ms Mathopo, confirmed on a number of occasions during
cross -examination that she was not a qualified engineer or project manager,
but a qualified attorney.
[85] This was evidenced by the fact that her testimony, when referring to
engineering principles and processes on construction sites, reflected a lack of
understanding thereof by virtue of her qualifications and experience not being
in this field.
[86] For this reason, her evidence cannot be deemed to be that of an
expert and any opinions offered during testimony will be considered in this
light.”
[14] It is clear, from this extract from the first award, that the arbitrator did not
disregard Ms Mathopo’s evidence. He simply placed the appropriate weight (in his
view) on it given her lack of expertise in the relevant field. In my view the arbitrator
approached her evidence appropriately.
[15] The same allegation is made regarding the evidence of Mr. Tshongo, a
witness for the applicant in the first leg of the proceedings. It is alleged that the
arbitrator had a ‘total disregard” for his evidence regarding the measurements that
he made on the site. That contention is also incorrect. During the first leg of the
proceedings th e witness testified that the applicant had appointed him to measure
the works on the project and to prepare a report as to his findings. He found that
there was work that had been paid for that had not been completed.
[16] The arbitrator made the following finding with regard to Ms Tshongo’s
evidence and his report:
“d. Considering the above, it is important to take cognizance of the fact
that the preparation of the report produced by the expert witness in this
regard was severely hampered by the specific exclusion of input from
and denial of access to information from the claimant, as well as the
fact that the project had commenced some seven years before his
investigation began. The aforesaid situation resulted in 10 variation
orders being simply omitted from the calculations. These actions cause
one to question the accuracy of the report.”
[17] The arbitrator, therefore, fully considered Mr Tshongo’s evidence, but decided
that it was not convincing. That does not mean that he disregarded the evidence.
The applicant contends that by not accepting the evidence of Ms Mathop o and Ms
Tshongo, the arbitrator misconceived the nature of the enquiry. There is no basis for
such a conclusion. The arbitrator understood that his function was to hear and weigh
up the evidence, and then to come to a finding. He did just that.
[18] In my respectful view, the best explanation for what constitutes a gross
irregularity is to be found in Rabinowitz v Levy and Others4:
“The ‘gross irregularity’ required by s 33 (1) (b) must relate to the conduct of
the proceedings, and not the result or outcome of the proceedings. Thus, if an
arbitrator is guilty of conducting an arbitration in some form of high -handed or
arbitrary manner, or dishonestly, he or she would be guilty of a gross
irregularity. But a bona fide mistake in the merits, no matter how gross, will not
suffice. It is furthermore not every irregularity in the conduct of the
proceedings that will afford grounds for review; the irregularity must have
been of such a serious nature that it resulted in the aggrieved party not having
his case fully and fairly determined.”
[19] Thus, gross misconduct is misconduct that goes to the manner in which the
proceedings are conducted , which results in the aggrieved party not having its case
fairly determined.5
[20] The applicant’s contention in this case is really that the arbitrator erred in not
accepting the applicant’s evidence. That is not a gross irregularity. As the Court said
in Telcordia6:
“The fact that the arbitrator may have either misinterpreted the agreement,
failed to apply South African law correctly, or had regard to inadmissible
evidence does not mean that he misconceived the nature of the enquiry or his
duties in connection therewith. It only means that he erred in the performance
of his duties. An arbitrator ‘has the right to be wrong’ on the merits of the
case, and it is a perversion of language and logic to label mistakes of this kind
as a misconception of the nature of the enqui ry.”
[21] There is no evidence that the arbitrator preferred one party above the other,
or that he assisted the first respondent in any manner. For the reasons set out
above, the application to review the awards must fail, and the awards must be made
an order of court.
[22] I make the following order:
[22.1] The application to review the arbitration awards dated 23
February 2022 and 20 May 2023 under case number 2023 -099445 is
dismissed.
[22.2] In case number 2023 -94229 the award 20 May 2023 is made an
order of court.
[22.3] The respondent in case number 2023 -94229 (the applicant in
case number 2023 -099445) shall pay the costs of both applications on
Scale C.
SWANEPOEL J
JUDGE OF THE HIGH COURT
GAUTENG DIVISION PRETORIA
Counsel for the applicant: Adv. O Mudimeli
Instructed by: Raphela Inc.
Counsel for the respondent: Adv. H de Wet SC
Instructed by: DC Robertson Inc.
Heard on: 29 April 2025
Judgment on: 26 May 2025
1 Van Wyk v Unitas Hospital and Another (Open Democratic Advice Centre as Amicus Curiae 2008
(2) SA 472 (CC)
2 Telcordia Technologies Inc v Telkom SA Ltd 2007 (3) SA 266 (SCA); [2007] 2 ALL SA 243 (SCA)
3 At paras [50] to [51]
4 Rabinowitz v Levy and Others 2024 JDR 0220 (SCA); [2024] ZASCA 8 (26 January 2024), at para
[15]
5 Bester v Easigas (Pty) Ltd and Another 1993 (1) SA 30 (C) at 42 G to D
6 Supra at para [ 85]