Aveng says it will respond to Sanral's statements following Supreme Court decision

20th November 2020

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

Font size: - +

JSE-listed Aveng says it has taken note of the South African National Roads Agency Limited's (Sanral's) statement on November 18 that the Supreme Court of Appeals (SCA) had dismissed an appeal to prevent the agency from claiming guarantees from the Aveng-Strabag Joint Venture (JV) in relation to the Mtentu river bridge project.

Aveng points out that the ASJV has, over the past 18 months, been engaged in two separate litigious matters against Sanral, emerging from the termination of the contract for the construction of the Mtentu river bridge.

This followed disruption to the works by local communities, resulting in a dispute between Sanral and the ASJV as to whether the ASJV or Sanral had validly terminated the contract.

“The ASJV remains confident that its decision to terminate the contract was both contractually valid and also the right thing to do in the circumstances faced at Mtentu, particularly in light of the well-publicised and persistent indications (including in the reissued request for tenders for the bridge works) that the underlying issues that brought about the unrest, as well as the communities’ resolve in relation to their grievances, had not abated at the time of termination,” Aveng says.

It highlights that Sanral's statement does not mention that, in dismissing the ASJV's interdict application, the SCA “overruled the factual findings that were erroneously and improperly made by Makhuvele J, sitting as the court of first instance (which incorrectly held that the nature of the disruptions on site did not constitute force majeure within the meaning of that term under the contract and that the ASJV had repudiated the contract)".

Moreover, Aveng says it does not mention that, in dismissing the ASJV's interdict application, the SCA "confirmed a vital aspect of the contract, namely, that Sanral has assumed the absolute risk, through a comprehensive indemnification of the ASJV, for the validity and correctness of any demand that it may make".

"The SCA judgment is clear that although there is no contractual bar requiring Sanral to establish its entitlement before making a call, Sanral will be liable to the ASJV for the full extent of any damages, losses or expenses that it suffers as a result of the wrongful demand,” Aveng states

It adds that any demand made by Sanral is made at the risk that the roads agency may have to repay it to the ASJV with interest and all associated costs and damages.

"We look forward to challenging [Sanral's] statements in due course in the appropriate legal forum,” Aveng said.

For completeness, Aveng also noted  that, on September 1, a unanimous full bench of the Mthatha High Court upheld the ASJV’s appeal against an order obtained by Sanral in 2019 against the ASJV, whereby Sanral had attempted to prevent the removal of plant and equipment from the construction site by the ASJV and other contractors.

“Ultimately, the ASJV was vindicated on appeal, with the full bench of the Mthatha High Court finding that in light of the uncontested evidence presented by the ASJV, the order that Sanral had sought against the ASJV was not appropriate,” Aveng said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION