NMBM, arbitrator dispute row in court

NELSON Mandela Bay Municipality wants the Grahamstown High Court to void the appointment of an arbitrator tasked with resolving disputes between the municipality and a contractor appointed to build 500 subsidised houses in Motherwell at a cost of some R39million.

According to court papers Marla Builders CC sought arbitration after it claimed disputes had arisen with the municipality over who was responsible for long delays in the project which was initiated in 2012.Marla maintains that it suffered losses due to delays it says were caused by the municipality’s ongoing design and scope changes to the project.

It wanted to be compensated for these losses. It also wanted an arbitrator to decide who was liable for vandalism of some units after NMBM allegedly instructed the contractor to vacate a building site.

Another issue Marla wanted to be subjected to arbitration was whether or not it was in breach of contract as claimed by the municipality.

According to court papers, Marla in June 2016 applied to the Association of Arbitrators of Southern Africa to appoint an arbitrator. Michael Winstanley from East London was duly appointed in July. NMBM says all of this happened without Marla ever issuing the municipality a notice of arbitration.

According to the acting municipal manager, Johann Mettler, to confuse matters more, the association and the arbitrator had throughout communicated with the human settlements department instead of Mettler as required by the contract.

At a preliminary hearing in August, Marla had admitted it could not produce the notice of arbitration. Despite this, says Mettler, Winstanley found that the arbitration should continue. In September the municipality warned in a letter that an arbitration had not been correctly initiated and asked Winstanley to stay proceedings pending an application to have the proceedings declared void.

Advocate Ben Ford, SC, argued that the arbitration be declared void and of no force and effect, that the appointment of Winstanley be set aside and that he should not be entitled to payment for work done. He said Winstanley had also shown a clear bias against the municipality.

Advocate John Knott, denied Winstanley had done anything to indicate bias. He asked Acting Judge Yolanda Renqe to dismiss the application and to award punitive legal costs against the municipality.