On 23 March 2020 South African president Cyril Ramaphosa announced a nationwide lockdown in an attempt to decelerate the spread of the Covid-19 virus in our Country. All construction workers were forced to down tools for the duration of the lockdown and it is still unclear when construction operations will be fully operational. The obligations set out in construction contracts concluded before the lockdown continue to be valid and enforceable during the lockdown period. However, during the lockdown it is impossible for parties to the to perform in terms of their contractual obligations. The question is whether a subcontractor will be entitled, in terms of the JBCC NSSA, to an extension of time (“EOT”) due to the lockdown and whether the claim will include a revision of the date of interim completion and an adjustment of the n/s subcontract value.
FORCE MAJEURE (VIS MAJOR)
Force majeure is governed by the common law in South Africa. The common law position is as follows, “force majeure is an unforeseen or unforeseeable act of God or man which creates an objective impossibility in the performance of the contracting party’s obligation to the contract”. In instances where a contract contains a force majeure clause, the provisions of the contract between the parties relating to force majeure events and the agreed consequences thereof, will take precedence over the common law position.
In terms of the JBCC NSSA ed.6 force majeure is defined as “an exceptional event or circumstance that (a) could not have been reasonably foreseen (b) is beyond the control of the parties, and (c) could not reasonably have been avoided or overcome”. The definition sets out three requirements, of which all three have to be fulfilled by the relevant circumstance in order for that circumstance to be classified as a force majeure event. The COVID-19 lockdown period fulfils all three of the requirements and will therefore fall under the JBCC (ed.6) definition of force majeure.
EOT CLAIM IN TERMS OF JBCC NSSA ED 6
Even though the national lockdown imposed by the government meets the definition of force majeure clause 23.1.5 is the appropriate clause to claim an extension of time, due to the method of which the lockdown was imposed. On 15 March 2020, the spread of COVID-19 was declared a national disaster in South Africa, in terms of the Disaster Management Act 57 of 2002. The regulations prescribing what the public may and may not do during the lockdown period were issued in terms of section 27(2) of the same act. The lockdown therefore falls into the category of the “exercise of a statutory power by a body of state, and it quite clearly directly affects the execution of the works” due to the fact that the lockdown has made it impossible for construction to continue. The subcontractor will therefore in terms of clause 23.1.5 of the JBCC NSSA Ed 6.2 be entitled to claim for a revision of the date for interim completion without an adjustment of the subcontract value due to stoppages occasioned by the COVID-19 lockdown.
From the date when the subcontractor became aware of the delay, possibly 25 March 2020 when the regulations were published, the subcontractor will have 15 working days within which to notify the contractor of his intention to submit a claim, failing which the subcontractor will forfeit its right to claim for a revision of the date of interim completion. The subcontractor will then have a further 20 working days from when he is able to quantify the delay in terms of the subcontract programme, within which to submit his claim to the Contractor.
EOT CLAIM IN TERMS OF JBCC NSSA ED 5
Force majeure is not a defined term in the JBCC NSSA ed 5 and is not contained as a listed circumstance for a claim for the revision for the date of interim Completion. Subcontractors must therefore submit their claims for an extension of time in terms of the “catch-all-phrase” contained in clause 29.3 of the agreement. The subcontractor is entitled to claim for a revision of the date for interim completion, without an adjustment of the n/s contract value due to the fact that the delay occasioned by the COVID-19 lockdown is not attributable to the default of the Employer.
EOT CLAIM IN TERMS OF JBCC NSSA ED 4
Clause 29.1.4 of the JBCC NSSA ed 4 refers to “vis major”, which is another legal term for force majeure. The subcontractor must therefore refer to clause 29.1.4 in its claim for a revision of the date for interim completion without an adjustment of the n/s contract value, due to stoppages occasioned by the COVID-19 lockdown.
CONCLUSION
The JBCC NSSA ed 4, 5 and 6 do not expressly state that the obligations of the parties in terms of the agreement are suspended during the period of the force majeure (or vis major). The JBCC NSSA ed 4,5 and 6 do, however contain a clause stating that the parties shall comply with the law, and the Lockdown has been imposed by law.
The subcontractor will be entitled to claim for a revision of the date for interim completion (regardless of the edition of the JBCC NSSA) without an adjustment of the n/s subcontract contract value due to stoppages occasioned by the COVID-19 lockdown. However, the clause on which the subcontractor will rely upon, in order to claim an extension of time, will be dependent on the edition of the JBCC NSSA entered into.
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