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57 (1) Outbreak of war and armed hostilities
(2) State of emergency
(3) Removal of Plant on cancellation
(4) Increased Costs arising from war or state of emergency
(5) Payment if Contract is cancelled
(6) Over-riding provisions
58 (1) Cancellation of the Contract by the Employer
(2) Employers rights
(3) Certification of amounts due
(4) Termination Account
(5) Details of Termination Account
(6) Time of payment
(7) Notices to trustee/liquidator
59 (1) Cancellation of Contract by Contractor
(2) Removal of materials, etc. and payment to Contractor
(3) Other rights of Contractor
(4) Notices to trustee/liquidator
60 (1) Notice of disagreement
(2) Engineer to rule on disagreements
61 (1) Settlement of disputes
(2) Mediation
(3) Arbitration
(4) Reference to Court
(5) Common provisions
(6) Special disputes
(7) Continuing validity of Clause 61
57.(1) Outbreak of war or armed hostilities
If during the currency of the Contract there shall, in any part of the
world, be an
outbreak of war (whether war be declared or not) or of armed hostilities, or
the imposition of economic sanctions between governments or any other action of alike kind and
if any such event shall materially affect the execution or cost of the Works, the Contractor
shall, unless and until the Contract is cancelled in terms of this Clause, use his best endeavour to
complete the execution of the Works;
Provided that the Employer shall be entitled, at any time after such event, to
cancel the Contract by giving notice in writing to the Contractor and, upon such notice being
given, the Contract shall (save as to the rights of the parties under this Clause) terminate forthwith
but without prejudice to the rights of either party in respect of any antecedent breach thereof.
If a state of emergency shall be declared by the Government or if riot, commotion, politically motivated sabotage, acts of terrorism or disorder shall occur and if any such event beyond the control of the Contractor shall materially affect the execution of the Works or the supply of labour or materials or materially interfere with access to the Site or constitute a material risk to persons or property associated with the Contract, the Contractor shall unless and until the Contract is cancelled in terms of this Clause, use his best endeavour to complete the execution of the Works;
Provided that
(a) either the Employer or the Contractor shall if such state of affairs continues for a period of at least 20 consecutive normal working days or for two or more periods aggregating not less than 40 normal working days in any period of six months, be entitled to cancel the Contract by notice in writing to the other party and, upon such notice being given, the Contract shall (save as to the rights of the parties under this Clause) terminate forthwith but without prejudice to the rights of either party in respect of any antecedent breach thereof; or
(b) if the Employer shall undertake to bear any resultant additional Costs involved in continuing the Works, the Contractor shall not exercise his right to cancel the Contract.
If the Contract shall be cancelled under the provisions of this Clause, the Contractor shall with all reasonable dispatch remove from the Site all Constructional Plant and Temporary Works.
In the circumstances referred to in Sub-C1auses (1) or (2) and whether or not the Contract is cancelled under the provisions of this Clause, the Contractor shall be entitled to payment of any increased Cost of or incidental to the execution of the Works which is specifically attributable to or consequent upon the circumstances defined in Sub-Clauses (1) or (2);
Provided that the Contractor shall, as soon as any such increase in Cost shall come to his knowledge, forthwith notify the Engineer thereof in writing and the provisions of Clause 51 shall apply mutatis mutandis.
If the Contract shall be cancelled on any account in terms of this Clause, the Contractor shall be paid by the Employer (in so far as such amounts or items have not already been covered by payments on account made to the Contractor) for all measured work executed prior to the date of cancellation the amount (without retention) payable in terms of the Contract and, in addition,
(a) the amounts payable in respect of any Preliminary and General items so far as the work or service comprised therein has been carried out or performed and a proper proportion as certified by the Engineer of any such items, the work or servicing of which has been partially carried out or performed
(b) the Cost of materials or goods reasonably ordered for the Works which shall have been delivered to the Contractor or of which the Contractor is legally liable to accept delivery (such materials or goods becoming the property of the Employer upon such payment being made by him)
(c) a sum to be certified by the Engineer as being the amount of any expenditure reasonably incurred by the Contractor in the expectation of completing the whole of the Works, in so far as such expenditure shall not have been covered by the payments previously referred to in this Sub-Clause,
d) the expense of removal from the Site of Constructional Plant and Temporary Works as are on the Site at the date of cancellation, and
(e) any additional sum payable under the provisions of Sub-C1ause (4).
The provisions of this Clause shall, in the circumstances described in Sub-Clauses (1) and (2), apply notwithstanding anything to the contrary contained elsewhere in the Contract.
If
(a) (i) the estate of the Contractor shall be sequestrated (provisionally or finally), or
(ii) the Contractor shall publish a notice of surrender of his estate as insolvent, or
(iii) the Contractor, being a company or a close corporation, shall go into liquidation (provisionally or finally), or
(iv) the Contractor shall assign the Contract without the consent in writing of the Employer having first been obtained, or
(v) the Contractor shall enter into a compromise with the general body of his creditors, or
(vi) the Contractor shall have an execution levied on his goods, or(b) the Engineer shall certify in writing to the Employer and to the Contractor, with specific reference to this Clause, that in his opinion the Contractor
(i) has abandoned or repudiated the Contract, or
(ii) has, without reasonable excuse, failed to commence the Works in terms of Clause 12, or
(iii) has suspended the progress of the Works without due cause, or
(iv) has failed to proceed with the Works with due diligence, or
(v) has failed to remove materials from the Site or to pull down and replace work, which materials or work have been condemned and rejected by the Engineer, or
(vi) is not executing the Works in accordance with the Contract, or
(vii) has, without the Engineers approval, subcontracted any part of the Contract or has failed to expel any subcontractor after having been instructed to do so in terms of Clause 8, or
(viii) has failed to provide the Suretyship in terms of Clause 10 within the time stipulated in the Appendix,and has, for 14 days after receiving a written notice from the Engineer, referring specifically to the default concerned and to this Clause, failed to remedy the default,the Employer may, by written notice to the Contractor, cancel the Contract.
(2) Employers rights
Upon such cancellation,
(a) all the provisions of the Contract, including this Clause, shall continue to apply for the purpose of
(i) resolving any dispute, and
(ii) determining the amounts payable by either the Employer or the Contractor to the other of them;(b) the Employer shall be entitled to take possession and occupation of the Site, the Works, the materials which have in terms of Clause 32 become the property of the Employer and the Contractors Constructional Plant;
(c) the Contractor and his subcontractors and all their employees and agents shall, within seven days, leave the Site and the Works;
(d) the Employer may have the Works completed in whole or in part by himself, the Surety or any contractors and they may, for such purpose, use any of the materials and Constructional Plant referred to in paragraph (b) and any of the Temporary Works;(e) the Employer may sell any of such materials or Temporary Works;
(f) the Contractor shall not be entitled to receive any payment in respect of the Contract until payment, if any, is due to him in terms of the account (hereinafter called the "Termination Account") to be issued by the Engineer in terms of Sub-Clauses (3), (4), (5) and (6).
The Engineer shall, as soon as practicable after such cancellation, determine and certify in writing to the Employer and the Contractor
(a) what amount, if any, has not yet been paid to the Contractor in respect of work actually done by him up to the time of cancellation, including the Contract Price Adjustment on such work, and
(b) the value of any materials which have, in terms of Clause 32, become the property of the Employer and for which the Contractor has not been paid.
(4) Termination Account
The Engineer shall prepare, certify as correct, and deliver to the Employer and the Contractor the Termination Account as soon as practicable after the earliest of the following dates, namely, the date of
(a) the completion of the whole of the Works and the expiry of a period thereafter equal to the Defects Liability Period specified in the Contract,
(b) the election by the Employer, by written notice to the Contractor, not to complete the Works or any part thereof specified in the notice, and the expiration, in respect of any part of the Works actually completed, of a period thereafter equal to the Defects Liability Period specified in the Contract, or
(c) the expiration of a reasonable time, in the opinion of the Engineer, for the completion of the Works and the running of the said Defects Liability Period.
The Termination Account shall be drawn by the Engineer on the basis of his own opinion, assessments and estimates and shall
(a) reflect to the credit of the Contractor
(i) the amount and value referred to in Sub-Clauses (3)(a) and (b),
(ii) such amount as would have been due to the Contractor, additional to the amounts referred to in sub-paragraph (i) if he had completed the Works, taking into account all relevant circumstances including the probable time of such completion and the resultant accrual of any penalties, and(iii) the price obtained by the Employer on the sale of any Temporary Works sold in terms of Sub-Clause (2)(e) and the reasonable value of any of the same not sold
(b) reflect to the credit of the Employer the costs of the completion of the Works and the correction of defects therein from the date of the cancellation of the Contract, including all costs properly incurred by the Employer in procuring such completion and enforcing his rights in terms of this Clause, and the excess of any potential penalties over the credits stated in sub-paragraph (a)(ii);
Provided that, if any part of the Works be not actually completed, there shall be substituted for the costs concerned an estimate of the damages suffered by the Employer through the exclusion of the work concerned; and
(c) specify the amount, in terms of the Termination Account, by which the credits due to either the Contractor or the Employer exceed the credits due to the other of them, which excess shall be payable to the holder thereof by the other party.
(6) Time of payment
Any amount payable by either party in terms of Sub-C1ause (5)(c) shall be paid to the other party within 21 days after the issue of the Termination Account.
If the provisions of Sub-Clauses (1)(a)(i), (ii) or (iii) apply, any notice referred to in this Clause shall be delivered to the trustee or the liquidator and the rights and obligations vesting in or binding on the Contractor shall vest in or be binding on the estate under sequestration or liquidation.
In the event of the Employer
(a) (i) repudiating the Contract, or
(ii) failing to pay the Contractor the amount due in terms of any payment certificate issued by the Engineer within the time of payment provided in the Contract, or
(iii) interfering with or obstructing the issue of any certificate,
and persisting in such default for 14 days after receipt of written notice from the Contractor (with specific reference to this Clause) to remedy the default, or(b) having his estate sequestrated (provisionally or finally) or, being a company or close corporation, going into liquidation (provisionally or finally), or
(c) assigning the Contract without the consent in writing of the Contractor,
the Contractor may, by written notice to the Employer, cancel the Contract.
Upon such cancellation,
(a) all the provisions of the Contract, including this Clause, shall continue to apply for the purpose of
(i) resolving any dispute, and
(ii) determining the amounts payable by either the Employer or the Contractor to the other of them;
(b) the ownership of unused materials, brought upon the Site by the Contractor and for which the Employer has not made any payment, shall revest in the Contractor and he shall with all reasonable dispatch remove from the Site such materials and all Constructional Plant and Temporary Works, without prejudice to his lien on the Employers property;
(c) the Employer shall be under the same obligations to the Contractor with regard to payment as if the Contract had been cancel led under the provisions of Clause 57 but, in addition to the payment specified in Clause 57(5), the Employer shall pay to the Contractor the amount of any additional loss or damage to the Contractor arising out of or in connection with or in consequence of such cancellation.
Nothing in this Clause contained shall prejudice the right of the Contractor to exercise either in lieu of or in addition to the rights and remedies specified in this Clause any other rights or remedies to which the Contractor may be entitled under the Contract or common law.
(4) Notices to trustee/liquidator
If the estate of the Employer shall have been sequestrated (provisionally or finally) or if the Employer, being a company or close corporation, shall be placed in liquidation(provisionally or finally), any notice referred to in this Clause shall be delivered to the trustee or provisional trustee or the liquidator or provisional liquidator and all rights vesting in or binding on the Employer shall vest in or be binding on the estate under sequestration or liquidation.
60.(1) Notice of disagreement
In respect of any matter not required to be dealt with in terms of Clauses 51 or 61(6), the Contractor shall have the right by written notice to the Engineer to require him to consider any disagreement which he raises with the Engineer provided that the said written notice shall be given within 21 days after the cause of disagreement has arisen.
The Engineer shall give a ruling on the disagreement in writing to the Employer and the Contractor, referring specifically to this Clause, which ruling he may give at any time after his receipt of the written notice referred to in Sub-Clause (1), but he shall do so by not later than 14 days after his receipt of a written request from the Contractor requiring him to do so, failing which he shall be deemed to have given a ruling dismissing all the Contractors contentions.
61.(1) Settlement of disputes
(a) The Contractor shall have the right to dispute any ruling given or deemed to have been given by the Engineer in terms of Clause 51 or Clause 60;
Provided that, unless the Contractor shall, within 42 days after his receipt of a ruling or after a ruling shall have been deemed to have been given, give written notice (hereinafter referred to as a "Dispute Notice") to the Engineer, referring to this Clause, disputing the validity or correctness of the whole or a specified part of the ruling, he shall have no further right to dispute that ruling or the part thereof not disputed in the said notice.
(b) All further references herein to a ruling shall relate to the ruling, or part thereof, specified in the Dispute Notice, as varied or added to by agreement between the Contractor and the Engineer or by the Engineers decision in terms of paragraph (c) or by the Mediators opinion to the extent that it has become binding in terms of Sub Clause (2)(f).
(c) The Engineer(i) shall, before giving his decision on the dispute, consult the Employer thereon and give the Contractor a reasonable opportunity to present written or oral submissions thereon;
(ii) shall deliver his decision in writing to the Employer and to the Contractor;(iii) may give his decision at any time after his receipt of the Dispute Notice but shall do so by not later than 42 days after his receipt of a further written notice from the Contractor requiring him to do so, failing which, he shall be deemed to have given a decision affirming, without amendment, the ruling concerned.
(d) Unless either the Employer or the Contractor, hereinafter referred to as "the parties", shall, within 28 days after his receipt of notice of the decision in terms of paragraph (c)(ii) or after the decision is deemed to have been given in terms of paragraph (c)(iii), have given notice in writing to the Engineer, with a copy to the other party, disputing the Engineers decision or a specific part thereof, he shall have no further right to dispute any part of the ruling not specified in his said notice.
(e) If either party shall have given notice in compliance with paragraph (d), the dispute shall be referred immediately to mediation in terms of Sub-Clause (2).
(f) Notwithstanding that the Contractor may, in respect of a ruling, have given a Dispute Notice, the ruling shall be of full force and carried into effect unless and until otherwise agreed by both parties in terms of Sub-Clause (2) (f) or as determined in an arbitration award or a court judgement.
(2) Mediation
(a) The mediation referred to in Sub-Clause (1)(e) shall be conducted by a Mediator selected by agreement between the parties or, failing such agreement within 7 days after a written request by either party for such agreement, nominated on the application of either party by the President for the time being of the South African Institution of Civil Engineers.
(b) Neither party shall be entitled to be represented at any hearing before or at any meeting or in any discussion with the Mediator except by(i) the party himself, if a natural person,
(ii) a partner in the case of a partnership,
(iii) an executive director in the case of a company,
(iv) a member in the case of a close corporation,(v) the Engineer,
(vi) a bona fide employee of the party concerned,(vii) a professional engineer appointed for the purpose by the party concerned.
Such limitation shall not be construed as preventing any person from giving evidence as a witness.(c) The Mediator shall, as he deems fit, follow formal or informal procedure and receive evidence or submissions orally or in writing, sworn or unsworn, at joint meetings with the parties or separately or from any person whom he considers can assist in the formulation of his opinion;
Provided that
(i) each party shall be given reasonable opportunities of presenting evidence or submissions and of responding to evidence or submissions of the other party, and
(ii) each party shall be given full details of any evidence or submissions received by the Mediator from the other party or any other person otherwise than at a meeting where both parties are present or represented.(d) The Mediator shall have the power to propose to the parties compromise settlements of or agreements in disposal of the whole or portion of the dispute.
(e) The Mediator shall as soon as reasonably practical, give to each of the parties his written opinion on the dispute, setting out the facts and the provisions of the Contract on which the opinion is based and recording the details of any agreement reached between the parties during the mediation.
(f) The Mediators opinion shall become binding on the parties only to the extent correctly recorded as being agreed by the parties in the Mediators written opinion or otherwise as recorded in writing by both parties subsequent to the receipt of the Mediators opinion.
(g) The dispute on any matter still unresolved after the application of the provisions of paragraph (f) shall be resolved by arbitration or court proceedings, whichever is applicable in terms of the Contract.
(h) Save for reference to any portion of the Mediators opinion which has become binding in terms of paragraph (f), no reference shall be made by or on behalf of either party, in any proceedings subsequent to mediation, to the Mediators opinion, or to the fact that any particular evidence was given, or to any submission, statement or admission made in the course of the mediation.
(i) Irrespective of the nature of the Mediators opinion,(i) each party shall bear his own costs arising from the mediation, and
(ii) the parties shall in equal shares pay the Mediator the amount of his expenses and the amount of his fee based on a scale of fees as agreed between the Mediator and the parties before the commencement of the mediation.
(3) Arbitration
If the Contract provides for determination of disputes by arbitration and if a dispute is still unresolved as provided in Sub-Clause (2)(g) or the dispute is one to which Sub-Clause (6) refers,
(a) the matter shall be referred to a single Arbitrator to be agreed on between the parties or, failing such agreement within 28 days after delivery to the parties of the Mediators opinion, nominated on the application of either party by the President for the time being of the South African Institution of Civil Engineers, and any such reference shall be deemed to be a submission to the arbitration of a single arbitrator in terms of the Arbitration Act (Act No 42 of 1965, as amended), or any legislation passed in substitution therefor;
(b) in the absence of any other agreed procedure, the arbitration shall take place in accordance with the Rules for the Conduct of Arbitrations issued by the Association of Arbitrators which are current at the time of the arbitration;
(c) the Arbitrator shall, in his award, set out the facts and the provisions of the Contract on which his award is based.
(4) Reference to Court
If the Contract does not provide for the determination of disputes by arbitration and if a dispute is still unresolved as provided in Sub-Clause (2)(g) or the dispute is one described in Sub-Clause (6), the dispute shall be determined by Court proceedings.
(a) Nothing herein contained shall deprive the Contractor of the right to institute immediate Court proceedings in respect of failure by the Employer to pay the amount of a payment certificate on its due date or to refund any amount of retention money on its due date for refund.
(b) No ruling or decision given by the Engineer in accordance with the provisions of the Contract shall disqualify him from being called as a witness and giving evidence before the Arbitrator or the Court on any matter whatsoever relevant to the dispute concerned.
(c) The Arbitrator and the Court shall have full power to open up, review and revise any ruling, decision, order, instruction, certificate or valuation of the Engineer relevant to the matter in dispute and neither party shall be limited in such proceedings before such Arbitrator or Court to the evidence or arguments put before the Engineer for the purpose of obtaining his decision as referred to in Sub-Clause (1).
(d) The following provisions shall apply in respect of the appointment of a mediator or arbitrator in terms of this Clause:(i) if, for any reason, the person appointed fails to assume or to continue in the office concerned, the provisions of this Clause shall apply mutatis mutandis in the appointment of a successor, and
(ii) in making his nomination in terms of Sub-Clause (2)(a) or Sub-Clause (3)(a), the President for the time being of the South African Institution of Civil Engineers shall, at his own discretion, act in consultation with the Presidents for the time being of the South African Association of Consulting Engineers and the South African Federation of Civil Engineering Contractors, and
(iii) if the President required to make a nomination in terms of this Clause shall have a direct or indirect interest in the subject matter of the dispute, the nomination shall be made by the next senior officer of the body concerned who has no such interest.
(6) Special disputes
Notwithstanding anything elsewhere provided in this Clause, any dispute between the Contractor and the Employer
(a) not relating to a ruling, decision, order, instruction or certificate by the Engineer (other than the one issued in terms of Clause 58(1)), or
(b) relating to a certificate issued by the Engineer in terms of Clause 58(1), or
(c) arising after the completion of the Contract or, if a Defects Liability Period is provided, after the termination of that period, or
(d) relating to a Suretyship or guarantee to be provided or any insurance to be effected by the Contractor or an indemnity given or to be given by either party to the other,
shall be determined, without the application of the provisions of Sub-Clauses (1) and (2), by arbitration or Court proceedings, whichever is applicable in terms of the Contract, and which may be initiated by either party, in which event the provisions of Sub-Clauses (3), (4) and (5) shall apply mutatis mutandis.
(7) Continuing validity of Clause 61
This Clause is a separate, divisible agreement from the rest of the Contract and shall remain valid and applicable notwithstanding that the Works may have been completed or that the rest of the Contract may be void or voidable or may have been cancelled for any reason.
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