Featured answer (one-minute read)

The High Court partly stayed a DAB process at Kusile: the merits of the “claims dispute” were paused pending arbitration of a preliminary time-bar issue, but the Court refused to stay adjudication (including a “termination dispute”) merely because of the SIU corruption investigation. Each party bore its own costs.^[1]

Background and Parties Involved

Parties and Project. The case involves Eskom Holdings SOC Ltd (“Eskom”), South Africa’s state-owned power utility, and TSSA (Pty) Ltd (the contractor; referred to in parts of the record as TMMSA (Pty) Ltd). The dispute arises from a design-build contract package at the Kusile Power Station (terrace materials handling, limestone and stockyard works) entered in November 2010 and based on the FIDIC Conditions of Contract for Plant and Design-Build, 1st Ed. 1999 (Yellow Book). The standard DAB→arbitration dispute path and claims/termination clauses applied, and because Eskom is a state entity, the project sat under public-procurement oversight.

Public Investigation Context. In 2018, allegations of corruption and maladministration at Eskom led to Special Investigating Unit (SIU) proclamations into Kusile-related contracts. The SIU’s mandate empowered civil proceedings to recover losses and referrals for prosecution. Media and company statements indicate that Tenova/TMMSA flagged certain “concerning” payments in its Eskom dealings, and contractors had previously downed tools at Kusile amid disputes.^[2][3][4]

Procedural posture & issues framed

By agreement, a preliminary time-bar question was to be arbitrated first (in Yellow 1999, time-bar notices sit under Sub-Clause 20.1). Meanwhile, two tracks were live before the DAB:

• Claims dispute (EOT/additional costs), which the DAB indicated should proceed unless interdicted by a court; and
• Termination dispute (employer termination issues).

Eskom sought an interim interdict to stay (i) the claims dispute and (ii) the termination dispute, pending (a) arbitration of the time-bar and (b) finalisation of the SIU investigation.

Decision (what the Court ordered)

• Stay granted (narrow): The merits aspect of the claims dispute before the DAB was stayed, but only pending the outcome of the time-bar arbitration.
• Stays refused: The Court declined to stay DAB proceedings (including the termination dispute) merely because an SIU investigation was ongoing; that context alone did not justify freezing contractual adjudication.^[1]
• Costs: Each party to pay its own costs.^[1]

Why (reasoning cues)

• Contractual sequencing mattered. The parties had carved out time-bar first, making it a threshold issue. Letting the DAB run the merits in parallel risked duplication or prejudice; a limited pause kept the contractual intent intact.
• Public-law probes aren’t an automatic brake. SIU inquiries (important as they are) do not, by themselves, displace private-law dispute resolution agreed in FIDIC. Without concrete prejudice, a blanket stay would undermine the speedy “pay now, argue later” ethos of adjudication.^[1][2]

FIDIC takeaways you can apply tomorrow

Mini checklists

Seeking a stay of a DAB

• Show a contractually sequenced gateway issue (e.g., time-bar) already referred to arbitration.
• Define the narrow scope of the stay (which aspects, which dispute stream, how long).
• Demonstrate specific prejudice if DAB proceeds in parallel.

Resisting a stay

• Lean on adjudication’s pay-now policy and speed.
• Argue that public-law investigations don’t trump the contract’s dispute path without hard prejudice.
• Offer process undertakings (e.g., cooperate on fast-track arbitration of the gateway issue).

Further reading on your site

Disclaimer: Informational only, not legal advice.

1) The Claims Dispute (time-bar first, then merits)

Background. In early 2019, TSSA submitted a series of claims for additional payment and extensions of time (EOT), alleging Eskom’s breaches caused delay and extra costs. Eskom’s Engineer disallowed the claims, so TSSA referred them to a Dispute Adjudication Board (DAB) under the contract.

Bifurcation. The claims dispute was split into: (a) a time-bar issue under FIDIC 1999 Sub-Clause 20.1 (strict notice deadlines), and (b) merits/quantum. The DAB issued a decision in April 2021 partly in TSSA’s favour on time-bar (i.e., some claims not time-barred). Both parties served notices of dissatisfaction, sending the time-bar question to arbitration.

Process clash. TSSA pressed the DAB to proceed with the merits; Eskom said merits should wait for the time-bar award. The DAB indicated it would continue with the merits unless a court interdict restrained it. Eskom then approached the High Court seeking to halt the DAB merits pending (i) the time-bar arbitration and (ii) the SIU investigation into alleged corruption at Kusile.

2) The Termination Dispute (Clause 15.2(f))

Termination notices. In December 2021, Eskom issued a notice purporting to terminate under FIDIC 15.2(f) (fraud/corruption). The letter cited evidence of bribery and corruption and referenced SIU-linked expert findings. TSSA disputed Eskom’s entitlement, treated the notice as repudiation, rejected it, and issued its own termination for alleged employer breach. Both sides claimed to have lawfully terminated; performance security calls followed, with major financial consequences depending on who prevails.

Termination DAB impasse. The parties appointed a second DAB for termination issues, but failed to agree a precise referral: Eskom wanted a narrow “right to terminate” question; TSSA wanted termination and financial consequences. The Termination DAB declined jurisdiction for want of a defined dispute. TSSA then referred termination directly to arbitration (consistent with FIDIC when a DAB is not in place/functional). Eskom nonetheless asked the High Court to interdict “any” termination DAB process pending the SIU outcome—TSSA objected that there was no live DAB to interdict.

Summary of Relief Sought & What the Court Did

• Interdict the Claims DAB merits until (i) time-bar arbitration done and (ii) SIU concluded → Partly granted: merits stayed only pending the time-bar arbitration; SIU-based stay refused.
• Interdict termination DAB/track until SIU concluded → Refused.
• Costs → each party to pay its own costs.

Further reading on your site

• The Working of the Dispute Adjudication Board (DAB)
• FIDIC 1999–2017 Claims & EOT (20.1/20.2) — Practical Guide
• Delay Analysis Methodologies: Techniques & Tips

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Featured conclusion

Split outcome: the Court stayed only the merits of the claims DAB pending the prior time-bar arbitration, but refused to freeze proceedings on the back of the SIU investigation and found there was no live termination DAB to interdict. Each party bore its own costs.

Court’s key findings

1) Stay of Claims (Merits) Adjudication

The Court granted an order to stay the DAB proceedings on the merits of the claims dispute until the arbitration on the time-bar issue is resolved. Practically, the DAB may not consider TSSA’s claim merits now; those will only be adjudicated (by a DAB or otherwise) after arbitrators decide whether any claims were time-barred. Notably, by the hearing TSSA had conceded to this stay—so it was made an order by consent. The rationale: deciding merits while a gateway time-bar is pending would risk duplication and wasted effort.

2) Relief related to the SIU investigation

The Court refused any stay tied to the ongoing SIU probe. Eskom’s bid to stay proceedings “pending finalisation of the SIU investigation” was held incompetent and contradictory—once a stay was granted pending arbitration, a second, open-ended SIU-based stay would be inconsistent. Moreover, an investigation without a fixed end date or clear legal bearing on the contract claims is not a valid basis to halt the agreed dispute path.

3) Termination DAB interdict

TSSA’s point in limine succeeded: there was no live termination DAB to interdict. The Termination DAB had already declined jurisdiction due to the parties’ failure to define the referral; the termination dispute was on its way to arbitration. Eskom’s request to interdict a non-existent DAB process was thus “unsustainable and incompetent”.

4) Costs

Given the mixed success, the Court did not award punitive costs against TSSA. Although Eskom argued TSSA unreasonably resisted pausing the DAB, the Court noted three senior adjudicators considered it acceptable to proceed pending arbitration—so TSSA’s stance was not egregious. Order: each party to pay its own costs.

Orders at a glance

These findings turn on FIDIC Yellow 1999 process: DAB → Notices of Dissatisfaction → Arbitration; the 28-day time-bar (1999 20.1) acted as a gateway question.

Interim Interdict Requirements (applied in substance)

Test in South African law. While the judgment does not recite the classic elements, its reasoning tracks the familiar interim interdict framework: a prima facie right, irreparable harm (or absence of satisfactory alternative remedy), and the balance of convenience.^[A]

Why the SIU-based stay failed

No “double stay”. Having secured a stay pending arbitration, Eskom could not also seek an open-ended stay pending the SIU probe on the same process—an inconsistent “approbate and reprobate” position. Courts avoid hypothetical, indefinite stays absent concrete prejudice or a legal bar to proceeding.^[C][D]

Jurisdiction & “no dispute” (mootness)

With the Termination DAB having declined jurisdiction (no properly defined referral), there was no live adjudication to interdict. Courts do not issue orders in a vacuum; the termination track proceeds to arbitration unhindered.^[C]

Repudiation & termination (left to arbitration)

The Court did not decide who validly terminated. Eskom invoked 15.2(f) (fraud/corruption); TSSA treated Eskom’s act as repudiation and elected to terminate on its own grounds. Those commercial-law issues are for the arbitrators, not interim interdict proceedings.

Principles at a glance

For students: compare with 2017 Books where time-bar sits in 20.2 (1999: 20.1), but the multi-tier logic (Adjudication → Arbitration) remains.

Further reading on your site

• The Working of the Dispute Adjudication Board (DAB)
• FIDIC 1999–2017 Claims & EOT (20.1/20.2) — Practical Guide
• Delay Analysis Methodologies: Techniques & Tips

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Use of FIDIC Yellow Book Framework

Standard form applied. The project used FIDIC Yellow Book 1999, so the parties’ rights and disputes turned on the contract’s procedures—DAB decisions followed by arbitration if a notice of dissatisfaction (NoD) is served (1999 cl. 20.4–20.7). The Court’s orders respected that sequence: once arbitration was seized of the time-bar gateway, the merits before the DAB were paused narrowly.

Dispute Adjudication Board (DAB)

Two boards, two lessons. A “Claims DAB” and a “Termination DAB” were convened. The latter declined jurisdiction because the parties failed to define the precise questions to decide—underscoring that a DAB’s jurisdiction arises from the referral and the terms of appointment. Always draft a clear Terms of Reference (issues, relief sought, documents, timetable) or risk derailment.

Claims Procedure & Time-Bar (1999 cl. 20.1)

Under Yellow 1999, the contractor must give notice within 28 days of becoming aware of the event or risk losing entitlement. Here, the time-bar issue went first to the DAB (April 2021, partial success for TSSA) and then to arbitration via NoDs. The practical lesson is unforgiving: keep a notice log, diarise 28-day cut-offs, and track employer-caused prevention events. Employers should likewise maintain records to assert the time-bar where justified.

Termination for Corruption — Clause 15.2(f)

Sub-clause 15.2(f) allows immediate termination if a contractor (or its personnel/agents) gives or offers an inducement (bribe, gift, reward) related to the contract. Eskom’s letter invoked 15.2(f). Public owners often rely on this clause alongside statutory remedies. The level of proof and factual matrix (self-reporting, subcontractor acts, causation) are usually tested in arbitration; meanwhile, performance security calls and recovery claims may follow.

Public Procurement Oversight

Eskom’s contracts sat within the SIU mandate under Presidential Proclamations R11 of 2018 (as amended) and R3 of 2020 to investigate maladministration and corruption at Eskom. The High Court treated the ongoing SIU probe as background—it refused to halt contractual dispute resolution merely because an investigation was pending. Unless a court sets aside the contract or orders a moratorium, DAB/arbitration should proceed in parallel with public-law processes.

NEC Contract Comparison (quick correction)

Not “X8”. Under NEC4, corrupt acts are dealt with in clause 18 (definitions at 11.2(5)), and termination for a contractor’s corrupt act is a reason 91.8 in the termination table (cl. 90/91). Dispute sequencing (Adjudicator → tribunal) and strict notification culture (compensation events) mirror FIDIC’s emphasis on early notices and defined pathways.

Commercial Law Tension — Continuity vs Termination

Public-sector duty to root out corruption can collide with project continuity. Eskom opted to terminate under 15.2(f), while TSSA countered with repudiation/cancellation allegations. These merits are left for arbitration, but the takeaway is operational: be ready for two tracks—contractual dispute resolution advancing while SIU/AFU actions unfold.

What went wrong / Do this instead

Further reading on your site

• The Working of the Dispute Adjudication Board (DAB)
• FIDIC 1999–2017 Claims & EOT (20.1/20.2) — Practical Guide
• Delay Analysis Methodologies: Techniques & Tips

Links open in a new tab and do not self-link to this article.