Court saves gov’t P110m in Charleshill-Ncojane road dispute
Mpho Mokwape | Monday April 20, 2026 06:00
In a recent judgment, the apex court upheld an appeal by the government and dismissed the lower court’s decision that ordered the government to pay Zac Construction for numerous claims reportedly resulting from delays during the construction phase of the road.
“The delays were largely due to the contractor, which had failed to act after its earlier Notice of Dissatisfaction in 2020,” read the judgment.
The dispute stems from a 2015 contract between the government and a contractor for the design and construction of about 109 kilometres of road.
The project, valued at over P436 million, later gave rise to several claims by the contractor for additional payment and extensions of time.
One of the claims, known as Claim 4, was initially rejected in 2020 by a Dispute Adjudication Board (DAB). Although the contractor issued a Notice of Dissatisfaction, it did not proceed to arbitration at that stage. Instead, the claim was later resubmitted and eventually brought again before a DAB, which in November 2024 ruled in favour of the contractor and awarded P109, 967,218.90.
The decision required payment within 30 days, and the government challenged this outcome, issuing its own Notice of Dissatisfaction and referring the matter to arbitration in January 2025 under the International Chamber of Commerce rules.
Despite the pending arbitration, the contractor approached the High Court in February 2025 seeking enforcement of the DAB decision.
The government then opposed the application and filed for a stay of the court proceedings under section 6 of the Arbitration Act, arguing that the dispute should be resolved through arbitration as agreed in the contract.
In April 2025, the High Court dismissed the government’s application for a stay, ruling that it was invalid because the government had also filed an answering affidavit addressing the merits of the case.
The court found that this amounted to taking a further step in the proceedings, effectively waiving the right to seek a stay. It also ruled that “exceptional circumstances” existed and enforced the DAB decision as a court order.
The government appealed the decision. In its judgment, the CoA Judge president, Tebogo Tau, justices Isaac Lesetedi and Lot Moroka disagreed with the High Court on both key issues.
On the question of the stay, the justices held that filing an answering affidavit alongside an application for a stay did not necessarily amount to waiving the right to arbitration.
They found that the government had filed the affidavit to protect its position while still insisting that the dispute be referred to arbitration. The court stated that “there were no compelling reasons for the Court to dismiss the application for stay under section 6 of the Arbitration Act.”
The judges emphasised that arbitration agreements should generally be respected and that courts should only refuse a stay where strong reasons exist. On the enforcement of the DAB decision, the CoA found that the contractor had failed to prove the existence of “exceptional circumstances” required to justify court intervention while arbitration was ongoing.
The judges also noted that although DAB decisions are binding and meant to ensure prompt payment, they are usually interim in nature and subject to final determination through arbitration. It ruled that the contractor did not clearly present any exceptional circumstances in its founding affidavit.
“There is completely nothing in the founding affidavit to prove that exceptional circumstances do exist,” the judgment stated. The CoA also rejected the High Court’s finding that there had been an inordinate delay on the part of the government. Instead, it found that delays were largely attributable to the contractor, which had failed to act after its earlier Notice of Dissatisfaction in 2020.
In contrast, the court noted that the government acted promptly after the 2024 DAB decision by initiating arbitration proceedings and taking steps to appoint an arbitrator. “There was therefore no inordinate delay, which warrants intervention,” the judges said.
As a result, the apex court upheld the government’s appeal, set aside the High Court ruling, and replaced it with an order dismissing the contractor’s application with costs. “The appeal is upheld with costs and the decision is to reinforce the principle that disputes subject to arbitration agreements should generally be resolved through arbitration, and that courts will only intervene in limited and clearly justified circumstances,” concluded the judges.