About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2014
>>
[2014] ZAGPJHC 354
|
|
Morpho South Africa (Pty) Ltd v Muvoni Technology Group (2014/01407) [2014] ZAGPJHC 354 (24 November 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
CASE
NO: 2014/01407
DATE:
24 NOVEMBER 2014
In the matter
between:
MORPHO SOUTH
AFRICA (PTY) LTD
.................................
Applicant
And
MUVONI TECHNOLOGY
GROUP
(Formerly IDECO
GROUP LIMITED)
..................................
Respondent
J U
D G M E N T
LAMONT, J:
[1] The applicant
has brought an application against the respondent to have three
arbitration awards made orders of court under
and in terms of section
31 of the Arbitration Act No 42 of 1965 (the Act).
[2] The respondent
opposed the application and brought a counter-application. The
respondent’s counter-application has been
withdrawn by the
respondent on the basis that the costs of the counter-application be
costs in the cause of the applicant’s
application. The
applicant has agreed to this and nothing more need to be said about
the counter-application save that the costs
are to be costs in the
cause of the application.
[3] During December
2007 the applicant and the respondent concluded a written maintenance
agreement in terms whereof the respondent
became obliged to pay
certain monies to the applicant. The respondent failed to make
payment of the agreed amount and the payment
of the liability was
rescheduled by way of a letter agreement dated February 2010. The
applicant later sought to recover the amount
due to it in the
International Chamber of Commerce, as the applicant and the
respondent had agreed that to be the forum.
[4] Subsequently the
applicant and the respondent entered into a private arbitration
agreement replacing the referral to the International
Chamber of
Commerce and consenting to a private arbitration of their disputes
including the right of the arbitration tribunal to
determine
jurisdiction.
[5] The arbitration
agreement provided as follows:
“The parties
hereby agree that the reference in the [maintenance agreement] to the
ICC be replaced by private arbitration
… The arbitral tribunal
shall have such jurisdiction as the ICC has or would have had but for
this arbitration agreement
including the authority to determine the
jurisdictional challenge.”
[6] It was a further
term of the arbitration agreement that the decision of the tribunal
would be final and would not be subject
to any appeal.
[7] The matter came
before the arbitration tribunal.
[8] The
jurisdictional issue was identified as being whether or not the
tribunal had jurisdiction if as the respondent hoped to
prove, the
applicant’s true cause of action was the actio pro socio. The
evidence would be:
8.1 The applicant, a
number of other entities and the respondent had entered into a
partnership.
8.2 The maintenance
agreement (pursuant to which the amount due to the applicant became
due) was part of the establishment and conducting
of the business of
the partnership.
[9] The other
defences of the respondent are irrelevant to the present proceedings.
[10] The tribunal
separated the issue of jurisdiction and on 10 July 2012 handed down a
reasoned interim award.
[11] The tribunal
held that it had jurisdiction and the proceedings commenced. Although
the respondent cross-examined on the issue
of whether or not its
defence of the alleged partnership existed at the end of the
applicant’s case it closed its case without
calling evidence to
establish the factual basis concerning the partnership. In due
course the tribunal published an award in favour
of the applicant.
[12] The
respondent’s contention both at the arbitral tribunal and
before me was that the applicant had no claim against an
individual
partner of a partnership until such time as there had been
dissolution of the partnership. The claim of the applicant
so it was
submitted, was that of a partner against the respondent who similarly
was a partner together with other partners hence
as there had been no
dissolution of the partnership the applicant could not succeed and
the forum had no jurisdiction.
[13] When the
jurisdiction issue came before the tribunal the respondent sought an
opportunity to lead evidence to establish the
existence of the
partnership and the state of affairs which would entitle it to raise
the aforegoing defence. The tribunal held
that the respondent had
no right to lead such evidence during the proceedings by reason of
the parol evidence rule.
[14] The only
evidence before the tribunal at the time of the hearing of the
jurisdictional issue was that contained in the writing
namely that
the respondent was indebted to the applicant in the amount claimed.
[15] The first
submission by the respondent was that the tribunal had ruled on the
admissibility of the evidence or the partnership
issue both for the
jurisdictional and the merits hearing. Hence the respondent had no
right to lead evidence to establish the partnership
it claimed
existed.
[16] The second
submission was that the question of the partnership was integrally
bound up with both the jurisdictional issue and
the merits issue.
[17] The
Arbitration
Act 42 of 1965
deals with awards in
s 33.
“Where-
(a) any member of an
arbitration tribunal has misconducted himself in relation to his
duties as arbitrator or umpire; or
(b) an arbitration
tribunal has committed any gross irregularity in the conduct of the
arbitration proceedings or has exceeded its
powers; or
(c) an award has
been improperly obtained, the court may, on the application of any
party to the reference after due notice to the
other party or
parties, make an order setting the award aside”.
[18] The tribunal
correctly heard the jurisdictional issue separately. See Makhanya v
University of Zululand
2010 (1) SA 62
(SCA) para [29].
[19] The test to be
applied to the question of whether or not the award should be made an
order of court is set out in:
Peninsula Eye Clinic
(Pty) Ltd v Newlands Surgical Clinic and Others
2014 (1) SA 381
(WCC)
“A party to an
arbitration which makes application in terms of
s 31(1)
for an award
in its favour by the arbitrator to be made an order of court,
'accepts an onus to prove that [it] is in possession
of an award that
can properly form the subject of an order of court' (Vidavsky v Body
Corporate of Sunhill Villas
2005 (5) SA 200
(SCA), in para 17 2).
Thus, if it were to be apparent ex facie the award, or the reasons
given for it, that it could not properly
form the subject of an order
of court, the application would be refused. A respondent in an
application in terms of the subsection
is entitled to oppose the
application on the ground that the award is not amenable to properly
being made an order of court; it
is not obliged to be proactive and
take steps, in terms of
s 33
of the
Arbitration Act, to
have the
award set aside.
This does not imply,
however, that an unsuccessful party in arbitration proceedings may
legitimately use its right to oppose an
application by the successful
party in terms of s 31(1) of the Act as a surrogate means to obtain
an appeal to or review by a court.
Save in cases in which evidence
dehors the award might, as in Vidavsky, 3 demonstrate a fundamental
failure of the arbitration
process, the court's enquiry in a s 31(1)
application will be limited to the award and any reasons given for it
by the arbitrator
if those reasons are furnished as part of the
award. If the unsuccessful party should allege that what on its face
might appear
to be an unexceptionable award was obtained irregularly
or improperly, then it would be incumbent on it, should it wish to
avoid
the effect, to make application in terms of s 33 of the Act for
the setting-aside of the award.
In considering an
application in terms of
s 31(1)
of the
Arbitration Act a
court will
not concern itself with possible errors of fact or law by the
arbitrator in making the award, but only with the propriety
of
lending the award the force of an order of the court. This approach
reflects the policy of the courts, not only in this country,
but also
internationally, to strike the balance between party autonomy and
judicial control (or curial intervention) in a way that
attaches
considerable weight to party autonomy (see Telcordia Technologies Inc
v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA)
(2007 (5) BCLR 503
;
[2007] 2
All SA 243)
, in para 4 — in the context of international
commercial arbitrations; and cf Lufuno Mphaphuli & Associates
(Pty) Ltd
v Andrews and Another
2009 (4) SA 529
(CC)
(2009 (6) BCLR
527
;
[2009] ZACC 6)
in paras 28 and 73; and Road Accident Fund v
Cloete NO and Others
2010 (6) SA 120
(SCA) in E para 36 — in
the context of domestic arbitrations)”.
[20] The question of
jurisdiction is bound up with issue of whether or not the tribunal
had the right to hear and determine the
dispute. That issue is an
issue completely separate and distinct from the issue of whether or
not the applicant can succeed on
the merits by reason of having sued
the correct party, the correct number of parties or any other matter
concerning the merits.
[21] In Makhanya v
University of Zululand
2010 (1) SA 62
(SCA) it was held:
“I have
pointed out that the term 'jurisdiction', as it has been used in this
case, and in the related cases that I have mentioned,
describes the
power of a court to consider and to either uphold or dismiss a claim.
And I have also pointed out that it is sometimes
overlooked that to
dismiss a claim (other than for lack of jurisdiction) calls for the
exercise of judicial power as much as it
does to uphold the claim.
The submission that
was advanced by counsel invites the question how a court would be
capable of upholding the defence (and thus
dismissing the claim) if
it had no power in the matter at all. Counsel could provide no answer
- because there is none.
There is no answer
because the submission offends an immutable rule of logic, which is
that the power of a court to answer a question
(the question whether
a claim is good or bad) cannot be dependent upon the answer to the
question. To express it another way, its
power to consider a claim
cannot be dependent upon whether the claim is a good claim or a bad
claim. The Chief Justice, writing
for the minority in Chirwa,
expressed it as follows: 29
'It seems to me
axiomatic that the substantive merits of a claim cannot determine
whether a court has jurisdiction to hear it.”
[22] The issue
raised by the respondent concerns the merits. It concerns the issue
of whether or not the applicant has a cause
of action against the
respondent whether alone or together with others.
[23] The above issue
is irrelevant to the issue of jurisdiction. The respondent was
correctly precluded from leading evidence on
an irrelevant issue. The
finding of the tribunal that the respondent was not entitled to lead
evidence to establish the partnership
on the basis that such evidence
was inadmissible.
[24] The finding
that the parol evidence precluded evidence being led is a ruling only
in the proceedings concerning jurisdiction.
That ruling in no way
infringes upon the rights of the respondent to have led evidence
during the course of the hearing on the
merits to establish its
defence. The respondent voluntarily closed its case and led no
evidence.
[25] The tribunal
decided the issues before it in term of the rulings it made and
evidence before it.
[26] It accordingly
follows that the respondent’s opposition in the present
application should fail.
[27] I accordingly
make the following order.
1 The awards granted
on 10 July 2012, 13 November 2013 and 27 November 2013 are made an
order of court.
2 The respondent is
ordered to pay the costs of the application including the costs of
the counter application and costs consequent
upon the employ of
Senior and Junior counsel.
LAMONT J
JUDGE OF THE
SOUTH GAUTENG
HIGH COURT
JOHANNESBUERG
COUNSEL FOR THE
APPLICANT: Adv. Graves SC
Adv. Partington
APPLICANT’S
ATTORNEYS: Bowman Gilfillan Inc
COUNSEL FOR THE
RESPONDENT: Adv. Coetzee SC
Adv. Kruger
RESPONDENT/S
ATTORNEYS: Viljoen French & Chester Inc
DATE OF HEARING:
17 November 2014
DATE OF JUDGMENT:
24 November 2014