South African Court: Mediation Clause Must Be Respected Despite Adjudication Bid

• Construction contracts often include a multi-tiered dispute resolution process starting with mediation.
• Bypassing this first tier and proceeding directly to adjudication can lead to jurisdictional challenges.
• Ignoring a mediation clause can delay enforcement of payment claims and damage relationships between parties.

In such cases, the court may intervene to determine whether the mediation clause has been breached or if the parties have agreed to waive their right to mediation.

In a common scenario, construction contracts outline a multi-tiered dispute resolution process. This typically starts with mediation or negotiation, followed by more formal processes like adjudication, arbitration, or litigation if the initial step fails. However, some parties may choose to bypass this first tier and proceed directly to adjudication, assuming that the adjudicator will determine their own jurisdiction and move forward. But what happens when one party objects to this approach and insists on mediation?

In South Africa, contracts often include a mediation clause as a first step in resolving disputes. This clause is intended to facilitate a peaceful resolution between parties before escalating the matter further. However, when one party attempts to bypass this clause and proceed directly to adjudication, it can lead to jurisdictional challenges. The other party may object, refusing to participate in an adjudication that was never properly triggered. In such cases, the court may intervene to determine whether the mediation clause has been breached or if the parties have agreed to waive their right to mediation. Notably, a directive on mandatory mediation for civil trial matters in the Gauteng Division of the High Court came into effect on April 22, 2025 (revised June 9, 2025), making mediation a precondition to obtaining or retaining a civil trial date in that jurisdiction. This directive applies to construction claims under standard-form contracts.

For lawyers advising clients in construction disputes, it is essential to be aware of the potential consequences of attempting to bypass a mediation clause. If a party proceeds directly to adjudication without proper jurisdiction, they may face delays and challenges in enforcing their payment claims. This can have significant financial implications for contractors and sub-contractors who rely on timely payments to complete projects. Furthermore, ignoring a mediation clause can also damage relationships between parties and undermine the effectiveness of dispute resolution processes. Recent jurisprudence, such as a Western Cape Division judgment in August 2026, reinforces the binding nature of tiered dispute resolution clauses and limits an adjudicator's power to assume jurisdiction where a contractual precondition like mediation has not been met.

Lawyers advising clients in construction disputes should be aware that attempting to bypass a mediation clause and proceed directly to adjudication may lead to jurisdictional challenges, potentially delaying enforcement of payment claims.

Source: Original reporting via [Source]