Community Support organization disputes R1,8m Arbitration Award for its refusal to pay the last tranche of a Training Contract dated June 2004.

Training Contract Arbitration process takes 5 years and is still not resolved.
• Legal costs of parties exceed half-a-million rand.
• Judgement from the Pretoria High Court hearing of the Review of the Arbitration Award is made thirteen months after hearing the matter.
• Filing of Appeal documents takes 8 months.

In June 2004, a Community Support organization contracted with an established Training Provider to train 75 unemployed youth from its community in Hospitality and Travel qualifications.

The Training Provider established a satellite campus at Student Village in Bramley, Johannesburg where the students were accommodated and trained in Travel and Hospitality. The students attended classroom theory training and were accommodated by sectoral Employers for their practical training.

A comfortable working relationship was established between the Community Support organization, the Training Provider and the students. Unforeseen issues around catering services, an alarming pregnancy ratio amongst students and student conduct issues such as bus boycotts and theft from Host Employers, were all amicably and successfully resolved.

The Training Provider was, therefore, astounded when the Community Support organization refused – after the conclusion of the Training Contract – to pay the last tranche of the Contract fee. The CS organization had previously paid three instalments in accordance with the Training Contract. Furthermore, it had never queried or complained that it was unhappy with any aspect of the services provided by the Training Provider. In fact, it had complimented the Training Provider on many of the aspects it had managed.

The Training Provider endeavoured to resolve the dispute amicably. These efforts were ignored, as too were interventions recommended by a SETA. The matter was not resolved, and the Training Provider declared a dispute against the Community Support organization (CSO) in September 2005.

The dispute remained unresolved and the Training Provider invoked the Arbitration clause of the Training Contract.

After a protracted Arbitration process over some 12-months, the Arbitrator’s Award was published in February 2007. The Community Support organization was ordered to pay the Training Provider the last Training Contract instalment fee plus a Project Management fee for unforeseen expenses. The Arbitrator also awarded the Training Provider costs plus interest on the amounts payable by the Community Support organization (CSO) to the Training Provider.

Unhappy with the Award, the CSO applied to the Pretoria High Court for a Review of the Arbitration Award. The matter was heard over 2 days in August 2008, and Judgement was eventually handed down in October 2009, some 13-months after the matter was heard. This was only achieved after the Training Provider had involved the Judge President to expedite the delayed handing down of the Judgement.

The Arbitration Review Judgement, which was eventually handed down in October 2009, dismissed the CSO’s Application with costs.

The Training Provider immediately sought to have the Arbitration Award made an Order of Court. Its previous Application for a Court Order had been opposed by the CSO subject to the outcome of the Review. The earliest Court date for the Training Providers’ Order of Court Application to be heard was 22 February 2010.

After notifying the CSO of the set down date for the Order of Court, the Training Provider was advised by the CSO on 29 October 2009, that it intended to appeal the original Arbitration Award dated 02 February 2007.

The CSO argued that since the Arbitration Agreement between the CSO and the Training Provider allowed for an Appeal, it had this right notwithstanding that it elected to apply for a Review of the Arbitration Award during mid 2007. The CSO had originally indicated that it would appeal the original Arbitration Award, but later decided to apply for a Review of the Award. The CSO then pursued the Review and made no reference to a possible appeal until after it had lost its Review Application.

The Training Provider is of the view that the CSO waived its right to an Appeal of the Arbitration Award by electing to apply for a Review in preference to applying for an Appeal. Alternatively, it argues that the CSO forfeited its right to an Appeal because an unreasonable amount of time had passed during which it should have applied for an Appeal.

The Training Provider is also of the view that, based on the Arbitration Award and the Review Judgement, the CSO has little chance of succeeding in an Appeal.

The Training Provider also believes that it has been seriously prejudiced by the unreasonable delays occasioned, it argues, by the CSO’s apparent obstructive, tactical and vexatious approach to the matter.

Frustrated with the lengthy process – ongoing since August 2005 – the Training Provider questions whether the many delays in finalizing this matter have been necessary and reasonable.

The Training Provider believes that it has been unjustly prejudiced by a legal system which has failed to reasonably protect its best interests. However, the Training Provider remains resolute in its determination to seek fair redress for the services it provided to the Community Support organization and is determined to ensure that justice prevails.

The Training Provider has incurred legal costs of some R500 000 over a five-year period to enforce its rights. It won the Arbitration and the Review, yet is still faced with having to defend an Appeal against the original Arbitration Award made more than 3 years ago.

So, where is the justice ????

We would be interested to hear other examples of where Training Providers feel that they have been unfairly prejudiced ……………

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