Where parties voluntarily agree a dispute resolution procedure and its rules by way of contract, they will have great difficulty in successfully alleging that those rules are unconstitutional.

Our Constitutional Court has already held that as a matter of principle private arbitration is not unconstitutional and in that regard the “courts should be respectful of the intention of the parties in relation to procedure”. An arbitration or other dispute resolution agreement, like any other agreement, will be upheld provided its provision are not against public policy and the agreed process is consensual and fair.

In this judgment the terms of a building contract concluded between the parties provided for dispute resolution by way of settlement, adjudication, arbitration and mediation.

A determination of the adjudicator would be immediately binding upon and implemented by the parties.  A dissatisfied party could challenge that determination by way of arbitration but the determination, said the rules, would remain in force and continue to be implemented until overturned by an arbitration award.

Following a dispute which had arisen, a determination was made in favour of the contractor. The government department involved was dissatisfied and referred the matter to arbitration and did not pay in terms of the determination.

The contractor sought an order enforcing payment of the determination pending the outcome of the arbitration.

The department argued that the “pay now and fight later” rule in respect of the determination was contrary to the right to a public fair hearing in terms of the access to justice provisions of section 34 of the Constitution. And conflicted with the rule that a judgment is usually suspended pending an appeal or a review.

The Department also argued that the adjudication process did not adhere to the principles of natural justice in various respects.

The court said that the relevant process was a consensual and private dispute resolution with the feature that the parties ordinarily agree on the identity of the arbitrator or adjudicator, which removes it from the direct application of section 34.

The court also held that the impugned provisions are not contrary to public policy as informed by constitutional values.

The impugned provision did not deny a party in the position of the department as the employer, a fair hearing.  The immediate binding nature of the adjudicator’s decision is not in conflict of section 34 of the Constitution. It does not prevent an aggrieved party from proceeding to arbitration where they will be afforded a fair hearing.

The provision and enforceability of the adjudicator’s decision is similar to the enforceability of a high court judgment pending an appeal as provided for in terms of section 18(3) of the Superior Court’s Act.

In the particular case, the lack of entitlement to legal representation in the adjudication process particularly when it was intended to be a “fast and cost-effective resolution of disputes” did not in itself exclude procedural fairness which was embodied in the relevant agreed adjudication rules.