Just few years ago, the idea that disruptions and work stoppages could be orchestrated by the now-infamous construction mafia in South Africa were unforeseeable. The already beleaguered construction sector is trying to proactively avoid these situations, according to Aadila Mahomed, an associate at MDA Construction & Technology Attorneys.
“We have acted for our clients on an increasing number of cases involving the construction mafia as they disrupt the ability of contractors to complete the works within the specified time frame, which in turn, has cost implications. We are working to ensure that these types of disruptions are considered during the initial contracting stage, as well as suggesting practical steps they can take during the construction phase,” she explains.
The so-called construction mafia is made up of local community and representatives of various business or community forums who threaten violence and cause disruptions on sites, demanding that certain contractors are appointed. Generally, they are not parties to contracts, adding to the difficulty of effectively dealing with the consequences of their actions.
Recently, the Supreme Court of Appeal cast doubt on aspects of a high court ruling in a claim against Sanral involving force majeure, which also covers strikes. Simply put, South African law is not clear on whether contractors can successfully claim additional time and costs on the basis of force majeure provisions.
Mahomed explains: “Standard-form contracts such as those of FIDIC and JBCC include strikes in their definitions of force majeure. They entitle a contractor to additional time to complete the work and FIDIC has a clause which provides for payment to cover costs incurred in a force majeure event if this is beyond the contractor’s control, unforeseen before the conclusion of the contract and unable to be reasonably avoided.”
A recent matter considered by the high court held that the contractor (in this case, a joint venture) was solely responsible for the safety of the project site and that a prudent contractor would have foreseen the demand for jobs by the local community. The actions and consequences were not beyond the contractor’s control and therefore the community’s actions did not constitute force majeure. On the other hand, the Supreme Court of Appeal, was of the view that certain aspects of the high court’s reasoning were “somewhat illogical”.