Construction Disputes: Adjudication, Arbitration, Litigation Routes

Construction disputes are common. The route you take to resolve them — adjudication, arbitration, court, or mediation — determines speed, cost, finality, and risk. Choosing well matters at least as much as winning.

Statutory adjudication

The default South African construction dispute mechanism. Available to either party under the Construction Industry Development Board (CIDB) Act.

• 28 days from referral to decision (extendable by 14 days with agreement)
• Adjudicator decides on submissions
• Decision binding pending court/arbitration
• Typical cost R160,000–R800,000
• Fast cash-flow resolution

Arbitration

Private dispute resolution under Arbitration Act 1996. Used where contract specifies or parties agree.

• Procedure flexible, set by parties
• Typically 6–18 months
• Confidential
• Award final, limited appeal
• Cost R500,000–R10,000,000+

Court litigation

Technology and Construction Court (TCC) or High Court for major disputes; County Court for smaller.

• 9–18 months typical for TCC matter
• Public proceedings
• Appeal route via Court of Appeal
• Cost R600,000–R20m+

Mediation

Voluntary, confidential, non-binding. Skilled mediator helps parties reach settlement.

• 1–3 days typically
• Cost R50,000–R300,000
• ~70% settle on the day or shortly after
• Recommended before formal proceedings on most disputes

Choosing the route

Adjudication when

• Cash flow urgent
• Clear contractual entitlement
• Dispute is interim payment or notice-related

Arbitration when

• Contract requires it
• Confidentiality needed
• Industry-specific expertise needed in tribunal

Court when

• Multiple parties
• Test of contractual interpretation
• Permanent injunction or declaratory relief needed
• Counter-claim involving third parties

Mediation always

Before any of the above. Usually saves time and money even when partly successful.

Recovery of costs

• Adjudication: each side usually bears own costs (some exceptions)
• Arbitration and court: "costs follow event" — loser pays winner's costs (subject to assessment)

MCFAR provides expert structural evidence for construction disputes.

Frequently Asked Questions