Eskom Holdings Soc Limited v Khum MK Investments & Bie Joint Venture (Pty) Ltd and Others (18627/2014) [2015] ZAGPJHC 98; [2015] 3 All SA 439 (GJ) (4 June 2015)

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[2015] ZAGPJHC 98
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Eskom Holdings Soc Limited v Khum MK Investments & Bie Joint Venture (Pty) Ltd and Others (18627/2014) [2015] ZAGPJHC 98; [2015] 3 All SA 439 (GJ) (4 June 2015)

REPUBLIC
OF
SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 18627/2014
In
the matter between:
ESKOM
HOLDINGS SOC
LIMITED
Applicant
and
KHUM
MK INVESTMENTS & BIE
JOINT
VENTURE (PTY) LTD
First
Respondent
KHUM
MK INVESTMENTS CC AND BIE
INTERNATIONAL
ENGINEERS (PTY) LTD
JOINT
VENTURE
Second
Respondent
JUDGE
L I
GOLDBLATT
Third
Respondent
SUMMARY
Arbitration –
arbitration award – review based on gross irregularity,
misconduct, bias, alleged incompetence on part
of Arbitrator –
sec 33(1) of
Arbitration Act 42 of 1965
– and remittal to new
arbitration tribunal in terms of
sec 33(4)
of Act – estoppel –
employer estopped from denying tender contract with company –
formally joint venture –
tender contract – procurement
policy and procedure – illegality of contract – estoppel
by conduct – requirements
for representation acts and
correspondence – contracting party – alteration of legal
status by joint venture partnership
tenderer into incorporated
company.
J
U D G M E N T
MOSHIDI,
J
:
[1]
This application cannot succeed in neither its original relief
claimed nor in the form of the remaining prayer 2.  It is
an
application in terms of sec 33(1) of the Arbitration Act 42 of 1965
(“
the
Arbitration Act
&rdquo
;),
to review and set aside a partial award (“
the
award
”) made by the Arbitrator in
respect of separated issues in the arbitration.
THE
RELIEF SOUGHT
[2] In the notice of
motion dated 22 May 2014, the applicant set out the relief claimed in
the following terms:
“
1.
Setting aside the award of the
third respondent dated the 14
th
April 2014 which is annexure ‘FA10’ to the founding
affidavit.
2.
Referring
all the disputes between the applicant and the first respondent to a
new tribunal to be constituted in the manner directed
by the court.
”
There
was also a prayer relating to costs and further and/or alternative
relief. The order for costs against the second respondent
and the
Arbitrator was sought only in the event of opposition to the
application.
THE
PARTIES
[3]
The applicant is Eskom Holdings Society Limited, a public company
duly registered in terms of the company laws of the country

(“
Eskom
”).
The first respondent is also a company duly incorporated in terms of
the laws of the country, with registration
number 2009/01705/07.
The second respondent is a joint venture. The first and the second
respondents are, respectively, the
first and the second claimants in
the arbitration.  In the context of the matter, and for the sake
of ease of reference, the
first and the second respondents will be
referred to as “
the company
”
and “
the joint venture
”,
respectively, and collectively as “
the
claimants
”.  The third
respondent is retired Judge L I Goldblatt of this High Court. He is
the appointed Arbitrator in the arbitration
proceedings between the
applicant (Eskom) and the claimants.  I shall henceforth refer
to the learned judge as “
the
Arbitrator
”.
THE
BACKGROUNDS FACTS
[4]
The facts which gave rise to present proceedings have been fully set
out variously in the heads of argument.  These may
be summarised
as follows:  On 16 April 2009, Eskom and the joint venture
concluded a written agreement, called a Professional
Service Contract
(“
the agreement
”).
In terms of the agreement, the joint venture was to render to Eskom,
safety, health environmental and quality inspection
services (“
SHEQ
services
”).  The services
had to be rendered to Eskom on an
ad hoc
basis, as and when Eskom required such services.  Eskom required
that the services be provided on construction and installation
sites,
at mainly generation and/or transmission projects, and also on power
generation, transmission and/or distribution equipment
in and around
South Africa.
[5]
For what may later become relevant, the joint venture (the second
respondent) had to render services in terms of task orders
(“
task
orders
”), given under the
agreement.  A task order was described as essentially, an
instruction by Eskom to the joint venture
to render required SHEQ
services on particular terms after a proposal by the joint venture to
render such services and accepted
by Eskom.  The task order
would typically set out, matters such as, the nature of the services
required by Eskom, the number
and types of resources required, the
budget for the task order, and its duration.  Eskom contended
that it issued approximately
57 task orders to the joint venture
whilst the agreement was running and in force.  The claimants
contended that some services
were, however, rendered without task
orders at the instance of certain officials of Eskom.  In the
end, not much turned on
this difference on how the task orders were
issued.  It was also not in dispute that the joint venture was
not the only consultant
that rendered SHEQ services to Eskom. It was
equally not in dispute that when the agreement was concluded, Eskom
was represented
by Mr Sipho Tjabadi (“
Tjabadi
”),
whilst the joint venture was represented by Mr Byron Jansen van
Rensburg (“
Van Rensburg
”).
[6]
The contract continued but was terminated by Eskom on 14 November
2013.  By the time of such termination, Eskom had paid
more than
R1 billion under the contract.  In this regard, Eskom claimed
that the payment was made to the initial consultant
i.e., the joint
venture.  However, this was hotly disputed by the claimants who
alleged that it was the company, as opposed
to the joint venture, and
that it is the company that rendered the services under the contract
with Eskom from 7 May 2010, until
the contract was terminated for a
reason not mentioned in the contract.  Indeed, the latter
dispute formed the main controversy
later before the Arbitrator, as
well as in the present proceedings.
[7]
It was also not in dispute that pursuant to the termination of the
agreement by Eskom, and during September 2013, Tjabadi was
suspended
by Eskom.  He faced disciplinary proceedings arising out of his
conduct as Eskom’s agent in the contract.
Criminal
charges of fraud were laid against Tjabadi and another Eskom
employee, Mr Themba Tibane (“
Tibane
”),
if this becomes necessary or relevant.  It was not in dispute
that the company’s name was changed from XTLS
Trading 109 (Pty)
Ltd to Khum MK International and BIE Joint Venture (Pty) Ltd on 10
February 2010.  A few months later, on
30 August 2010, a meeting
was held at the company’s new offices (“
the
30
th
August 2010 meeting
”).  What
transpired at this meeting was of significant importance in this
matter.
FURTHER
DEVELOPMENTS
[8]
There were further developments. On 21 October 2013, the company
launched an urgent application in this court (“
the
court application
”).  In the
court application, the company sought as against Eskom urgent payment
of the sum of R12 100 797,28 (“
the
R12 million
”), it alleged was due
to it in terms of the contract. Three days later, i.e. on 24 October
2014, the day that the application
was to be heard, Eskom and the
company settled the matter at court. The basis of the settlement was
that Eskom would pay the company
R96 737 506,92 (“
the
R96 million
”).  At the same
time, Eskom and the company also concluded an arbitration agreement
in terms of which, among others,
all disputes between them would be
referred to urgent arbitration under the Arbitration Foundation of
South Africa (“
AFSA
”).
On 25 October 2013, Eskom paid the R96 million to the company.
[9]
On 4 November 2013 AFSA duly appointed the Arbitrator to preside over
the disputes that had arisen between Eskom and the company
in terms
of the arbitration agreement.  It is convenient, at the outset
to refer to the arbitration agreement.  The important
classes of
the arbitration agreement, for present purposes, are clauses 2, 4, 5,
6, 7 and 8.   Clause 2 provides as follows:
“…
The
parties shall agree on the identity of the arbitrator on or before
the 30
th
October 2013.  If the parties cannot agree, AFSA should appoint
the arbitrator on or before 2
nd
November 2013.
”
Clause
4 provides:
“
The
respondent may have certain claims against the applicant, including
claims relating to invoices already submitted and paid,
and these
disputes shall form part of the arbitration.
”
Clause 5 provides that:
“
The
arbitrator shall determine the procedure of the arbitration.
”
Clause
6 provides that:-
“
The
arbitrator shall have the power to make urgent interlocutory orders.
In this regard the applicant specifically records
that one of the
disputes that will require determination is the respondent’s
refusal to sign off certain time sheets that
has the effect that the
applicant cannot invoice the respondent.
”
Clause
7 provides that:
“
The
respondent shall pay all approved invoices except where the
respondent is entitled in terms of the provisions of the agreement
to
withhold payment, and only to the extent of the disputed amount.
”
Finally,
clause 8 of the arbitration agreement provides that:
“
All
disputes arising after 30 October 2013 shall also form part of the
arbitration.
”
It
is to be recalled that Eskom is the respondent referred to the in the
arbitration agreement.
THE
FIRST URGENT APPLICATION
[10]
In the middle of November 2013, the company launched an urgent
application before the Arbitrator which was set down for 18
November
2013 (“
the first urgent
application
”).  In the
urgent application, the company sought urgent ‘
interlocutory
relief
’ in respect of three
monetary claims, all amounting to more than R161 million.  Eskom
filed an answering affidavit in
which it disputed the company’s
claims.  It was common cause that during the first application,
Eskom for the first
time raised the defence that the company was not
the consultant it contracted with initially and that therefore, the
company was
not entitled to any payments on invoices submitted to it
(“
the contracting party
defence
”).
In essence, Eskom contended for the first time that it was not aware
of the fact that the company had substituted
itself as the
contracting party in the place of the joint venture.  The reason
for this late discovery advanced by Eskom was
that the contracting
defence was discovered by its external legal representatives shortly
before the hearing of the first urgent
application.  As a
consequence, Eskom terminated the mandate of its first legal team.
However, the claimants disputed
Eskom’s version on this aspect,
and countered that up to that stage, everyone at Eskom, including its
previous legal team,
had accepted that the company was in fact the
party who rendered the services in terms of the contract, and who was
entitled to
payment. This dispute between the parties remained
unresolved.
[11]
The first urgent application was, however, not argued on the
scheduled day of 18 November 2013.  The reason for this was
that
the parties, once more, settled the application. The basis of the
settlement was that Eskom would pay an amount of R45 727
173,83 plus
VAT (“
the R45 million
”),
in respect of the company’s September 2013 invoice.  The
payment was made under protest with the reservation
of Eskom’s
right to reclaim this amount if the contracting party defence was
later upheld.  On 29 November 2013, Eskom
paid the R45 million
to the company.  In December 2013 a similar urgent application
was launched by the company before the
Arbitrator (“
the
second urgent application
”).
In the second urgent application, the company sought payment of an
amount in excess of R106 million, based on alleged
balances owing and
invoices submitted to Eskom up to October 2013.  Eskom filed
opposing papers.  The application was
argued before the
Arbitrator. However, the application was dismissed for lack of
urgency on 11 December 2013.
THE
ARBITRATION PROCEEDINGS
[12]
The arbitration proper commenced on 26 March 2014.  At the
hearing, and by agreement between the parties, two preliminary
issues
had to be separated and heard first before the determination of any
of the claimants’ 15 claims for payment.
The two
issues were a special plea by Eskom to the effect that the second
claimant (the joint venture) was not a party to the arbitration

agreement, and therefore had no right to join in the arbitration.
The second preliminary issue was Eskom’s contracting
party
defence.
[13]
The last-mentioned defence on the pleadings before the Arbitrator
came to this:  Eskom denied that it concluded any contract
with
the first claimant (company), and/or that the first claimant is not
the contracting party and/or that the first claimant has
no claim
against Eskom under, in terms of or in connection with the contract.
On the other hand, the claimants pleaded that
Eskom had accepted
and/or ratified the first claimant as the contracting party,
substituting the second claimant (joint venture)
at the 30 August
2012 meeting. Further that, the second claimant altered its legal
status to that of the first claimant with the
full knowledge and
consent, including written consent, of Eskom and on or about 27 May
2012 and/or 30 August 2010, and at various
occasions thereafter.
The claimants further alleged that written consent, among others,
consisted of Eskom making payments
of the various approved invoices
in the name of the first claimant, requesting and accepting the
company documents of the first
claimant and annexure “O”
to the claimants’ further particulars, being a letter of Eskom
dated 11 June 2013.
[14] In the alternative,
the first claimant pleaded that Eskom is estopped from relying on the
fact that the contract remained with
the second claimant in that it
had represented to the claimants, orally and in writing through its
employees and agents and by
its conduct that it had accepted the
first claimant as the contracting party since 30 August 2010. In this
regard, it was contended
that Eskom represented to the claimants that
it had accepted the first claimant as the contracting party by its
conduct in that
Eskom:
14.1
accepted
invoices from the first claimant;
14.2
made
payments of the above invoices to the first claimant;
14.3
sent
written communication to the first claimant regarding the execution
of the contract;
14.4
accepted
the first claimant as the contracting party at the 30 August 2010
meeting and/or ratified the position from then on;
14.5
the
first claimant relied, to its prejudice, on Eskom’s mentioned
representations which, if the facts in Eskom’s special
plea are
accepted, were misrepresentations. The first claimant’s
prejudice includes that it continued with the contract,
and incurred
obligations, made payment to employees and consultants as if it were
the party that had contracted with Eskom.
In the end, the first
claimant pleaded that Eskom is accordingly estopped from denying that
the first claimant is the entity entitled
to institute the claims
against Eskom, and denied that the first claimant has no claim
against Eskom at all.
THE
ARBITRATOR’S AWARD
[15]
Based on the above, as well as the evidence led before him, the
Arbitrator, after some four days of evidence and one day of
argument,
delivered his award on 14 April 2014.  In terms of the award,
the Arbitrator found that, the second claimant (joint
venture) was
not a party to the arbitration; that Eskom is estopped from denying
that in respect of the claims in the arbitration,
the first claimant
was the consultant in terms of the contract.  He ordered Eskom
to pay the first claimant’s (company’s)
costs, including
the costs of two counsel arising out of the disputes before him, and
postponed the hearing of the matter to a
date to be agreed between
the parties, and failing such agreement, a date to be fixed by him.
[16]
In the course of the judgment, the Arbitrator, with reference to
Eskom’s contracting party defence, said:
“
I
do not intend analysing or repeating all the correspondence that
passed between the parties over a period of four years; save
to say
that in no letter did the respondent explicitly agree or consent to
the substitution which had taken place. Accordingly
I cannot find and
do not find that ‘written consent’ was given as required
in either clauses Z8 or Z11 of the contract.
”
[17]
In regard to Eskom’s contracting party defence and the alleged
illegality of the contract since the second claimant altered
its
status to that of the first claimant, the Arbitrator made the
following finding:
“
Finally
Eskom replicated that if the estoppel pleaded by the company was
successful, this would validate an act prohibited by law
viz section
217 of the Constitution, the
Preferential Procurement Policy
Framework Act 5 of 2000
and the Public Finance Management Act 1 of
1991 and the procurement provisions of the relevant Treasury
Regulations.
In
my opinion, the defence is without merit as I have not found that
Eskom breached any of the above provisions but have merely
found that
as between it and the company, it is estopped from denying that it
contracted with the company.  I am not legalising
(which I
cannot do).  If Eskom has acted unlawfully, it must be punished
and not the company which was entirely ignorant of
the internal
workings of Eskom.  For these reasons I am not making any
finding as to the legality or otherwise of Eskom’s
actions.
”
[18]
The Arbitrator went further to state that:
“
Further
this matter seems to me to be a classic example of the principles
laid down in Jajbhay v Cassim
1937 AD 537
discussed in The Law of
Contract (2
nd
Edition) by R.H. Christie at pages 474 to 475 which I quote
hereunder:
‘
Having
thus made clear what our law is not, the Appellate Division turned
its attention to laying down what our law is.  The
law not being
well settled, Strafford CJ went back to the first principles and said
at 542:
“
The
two legal maxims which embody the principles which we must apply came
from the Roman law of Justinian. The moral principle which
inspired
the enunciation of those two maxims is obvious and has often been
expounded.  It is to discourage illegality and
immorality and
advance public policy.  So much is trite and certain, and our
pronouncement of law on the matter before us
must be in conformity
with that principle.
”’”
The
Arbitrator went on to say that:
“
Taking
account of the fact that in many cases a plaintiff in seeking to
escape from an illegal contract will base his claim on unjust

enrichment, Stratford CJ laid down at 544 that, ‘public policy
should properly take into account the doing of simple justice
between
the man and the man
’
,
and that,
‘
the
rule expressed in the maxim in pari delicto potior condition
defendtis is not one that can or ought to be applied in all cases

that it is subject to exceptions which in each case must be found to
exist only by regard to the principle of public policy.
”
The
Arbitrator then dealt with the conclusions reached by Stratford CJ on
the two
maxims
.
I shall at a later stage revert to the topic of illegality or
invalidity in contract in the circumstances of the present matter.
ESKOM’S
CASE
[19]
In the replying papers before me, Eskom alleged that the respondents
have fundamentally misunderstood its case. Eskom denied
that the
present application was “
an appeal
disguised as a review
”.  It
is not Eskom’s case that the Arbitrator simply misapplied the
law or erred in relation to the relevant legal
principles. It was
also not Eskom’s case that the Arbitrator misdirected himself
in respect of certain factual findings.
The replying papers,
read with the founding papers, further asserted that Eskom was
compelled to bring this review because it was
confronted with or by
an Arbitrator possessed of a misguided sense of justice that
precluded him from bringing an objective mind
to bear on the evidence
and law presented on Eskom’s behalf in respect of what it
called issues on which the entire case
turned.  As a
consequence, so the allegations continued, the Arbitrator
misconducted himself in relation to his duties as
an Arbitrator, and
in the process, committed a gross irregularity in the conduct of the
proceedings, thus preventing fair trial
on the issues.
[20]
The allegations of misconduct levelled against the Arbitrator were
premised, briefly, on the following:  he ignored the
formidable
body of evidence of the representations that proved that Eskom did
not recognise the company as the contracting party
but still
considered itself to be contractually bound to the joint venture; he
disregarded virtually every legal impediment that
stood in the way of
the company succeeding on the estoppel defence, thus giving an award
that was contrary to public policy in
that it forced Eskom to perform
in terms of an illegal contract;  he questioned Eskom’s
witnesses with a view to establishing
facts in the company’s
favour; in upholding the estoppel, the Arbitrator relied on
representations the company’s sole
witness admitted it did not
rely on; he went far beyond simply deciding the matter incorrectly;
and he misconstrued the nature
of the inquiry that he requested. The
illegality argument presented by Eskom was unassailable.  In
other words, the contract
concluded pursuant to the substitution of
the joint venture by the company was illegal.  The Arbitrator’s
finding that
he had refrained from deciding the illegality argument
showed a fundamental misunderstanding of the inquiry which the case
required;
and finally, Eskom contended that the only reasonable
inference that could be drawn from the above, is that the Arbitrator
misconducted
himself within the meaning of
sec 33(1)
of the
Arbitration Act.
THE
ARBITRATION TRANSCRIPT
[21]
The transcript of the arbitration proceedings, excluding the
addresses, runs into some 543 pages, whilst the addresses in closing

argument make up additional 169 pages.  The annexures and heads
of argument in this court are excluded. I mention this in
order to
demonstrate the prolix nature of paperwork in this matter.  It
was, however, necessary to have regard to all the
documentation in
order to properly assess the veracity or otherwise of the rather
serious allegations made against the Arbitrator.
THE
EVIDENCE
[22]
I deal with the evidence led before the Arbitrator on the disputed
issues.  The first claimant (Khum MK Investments CC
and BIE
International Engineers (Pty) Ltd Joint Venture, called one witness.
He was Van Rensburg.  His evidence on the
transcript extend to
some 165 pages.  I deal only with the crucial and salient
aspects of his evidence.  This was mainly
on the formation of
the company, and what transpired thereafter and the ensuing
litigation.
[23]
He was the Managing Director of the company from inception in June
1998 up to the time of his evidence.  His company is
consulting
engineers in the field of quality management, specifically for
mining, power generation and petrol chemical.
[24]
Prior to April 2009, Van Rensburg met with Mr MK Mohlala (“
MK
”),
the sole member of Khum MK Investments close corporation.  The
two formed a joint venture and concluded a joint venture
agreement
for purposes of submitting a tender to Eskom.  The joint venture
written agreement had, as partners Khum MK Investments
CC, a close
corporation duly registered and incorporated, and BIE International
Engineers (Pty) Ltd, a private company, also duly
registered and
incorporated.  The sharing of profits in regard to the tender
was 50% each.  On 16 April 2009, the joint
venture and Eskom
entered into the written agreement (“
the
contract
”) under discussion, and
in terms of which the mentioned services had to be rendered to Eskom.
[25]
Van Rensburg came into contact with various personnel at Eskom during
the existence of the contract.  These included Ms
Rulendree
Govender, Mr John Masango and Ms Zukiswa  Sikani (“
Sikani
”)
and later, Mr Tjabadi. On his staff, he had Ms Bianca Griessel, an
administrative manageress and Ms Christine Traub, who
looked after
the projects and deployment of personnel at Eskom.  She also
submitted the proposals, negotiated start dates
and revision of the
various task orders.  Ms Shenaz Moosa was the manageress.
[26]
Van Rensburg testified that the professional services contract, as
depicted in the trial bundle, was entered into between Eskom
Holdings
Limited (the employer) and Khum MK Investments CC and BIE
International Engineers (Pty) Ltd Joint Venture (the consultants).

The agreement was signed by Mr Tjabadi on behalf of Eskom whilst Van
Rensburg signed as Managing Director on behalf of BIE International

and MK on behalf of Khum MK Investments Joint Venture as director.
[27]
Van Rensburg testified about the CM 29 when the company was formed
and the name amended on 19 March 2010 by the Company’s

Intellectual Property Registration Office (“
CIPRO
”).
In essence, Van Rensburg and MK bought a shelf-company and changed
the name to Khum Investments and BIE Joint
Venture.  They were
the only two directors.  Van Rensburg testified that the
amendment was at the suggestion of Tjabadi,
the General Manager at
Eskom, who wanted a formal company. In his own words Van Resburg said
‘
that
they were required to become a formal legal entity;  that would
then be able to tender into the wider market place and
to other
tenders for Eskom and we took that on board and we then decided to
buy the shelf company and change the name
’.
[1]
This was on 9 March 2010, an important date in the context of this
matter. The company’s trading name was Khum MK Investments
and
BIE Joint Venture.
[28]
Van Rensburg testified about the company’s registration as
Value-Added Tax (VAT) taxpayer with SARS which was effective
from 1
February 2010 with registration number 4660255417.  He explained
why this registration certificate only contained part
of the company
name, i.e. Khum MK Investments and BIE Joint, instead of Khum MK
Investments and BIE Joint Venture (Pty) Ltd.
Once the company
was incorporated from a joint venture, the bank account number
remained the same.  Nothing else changed in
terms of the
shareholding between him and MK.  This was accepted by the
bank.
[2]
[29]
Invoices and time sheets were submitted to Eskom in May 2010 under
the name of Khum MK Investments and BIE Joint Venture or
Joint
Venture (Pty) Ltd, the name of the company. Task orders were also
generated by Eskom in writing or orally for work to be
performed by
the company from time to time.  Initially, it was a small
quantity of tasks orders at the end of 2009, but increased
in 2010.
[30]
Van Rensburg testified about the first and the important meeting
between his company and Eskom’s representatives held
on 30
August 2010 (again “
the
30
th
August 2010 meeting
”).
The meeting was held at his company’s premises at Weltevreden
Park). At this meeting, Eskom was represented by Tjabadi,
Ms Phunda
Dondashe, Ms Suzette Mathe and Andrew Botes. Van Rensburg and his
co-director, Mr MK, and other staff members also attended
the
meeting. The agenda of the meeting and the minutes thereof appear on
pages 79 to 82 of the trial bundle.  The minutes
reflected an
important aspect having a bearing on this matter. This was that,
under the heading ‘
Purpose
of Meeting
”,
the second bulletproof point read: ‘
Contractual
and Legal Documentation to be Communicated through Andrew (in terms
of signing a new contract as the
JV
is now a (Pty) Ltd
)’
(underlining
added). Van Rensburg testified that under this subject, his company
intended to let Eskom know that he and his company
had now acceded to
Eskom’s request for them to become a (Pty) Limited company.
Further, that the company wanted to
give feedback that the company
had since been registered with the relevant inspection authorities,
as requested by Eskom.
[3]
However, no new contract was ever presented by Eskom.  On the
contrary, the company had continued to perform under the
contract,
and Eskom continued to receive and accepted invoices and time sheets
in the name of the company and paid in terms thereof
from 2010.
At the same meeting, the company also made to Eskom a power point
presentation.
[4]
The
presentation was headed, ‘
MK
Investments CC’
with bold capital letters, ‘
BIE
Khum JV (Pty) Ltd
’.
[31]
According to Van Rensburg, and as reflected on the presentation, it
also covered the breakdown of the different roles of personnel;

that the JV was incorporated and operated in accordance with
corporate governance requirements;  that shareholder agreement

was signed; the company had received BBBEE rating; and the company
was up-to-date with its taxes.  In as far as internal
development is concerned, the presentation showed that the company
had achieved 50% affirmative action-appointments of staff.
The
minutes of the meeting also recorded certain positive comments made
by Eskom’s Tjabadi which read that he:
“
Congratulated
the JV for the effort the company was making in terms of services
offered …  Tjabadi was impressed to
see that the company
was focussed on the work at hand, happy with the ‘JV marriage’
and that the company was proudly
South African – that we are
local, empowered and what Eskom is looking for in a company …
”
Van
Rensburg testified that since the meeting, that was how his company
conducted business with Eskom. Further, that until November
2013, no
one at Eskom ever raised with him any difficulty with the fact that
Eskom was now dealing with a company.  I must
mention at this
stage that the meeting of 30 August 2010 also minuted that, ‘
a
company profile for the JV is being compiled together with the
development of a “trading/s name” (shorter version)
and
logo’
.  He said that the
shelf-company was XTLS Trading 109 (Pty) Ltd, and which on 10
February 2010, became Khum MK Investments
and BIE Joint Venture (Pty)
Ltd.
[32]
He gave evidence on a letter dated 27 May 2011, which he received
from Eskom. The letter was written by Tjabadi, the General
Manager:
Quality Department, and addressed to Khum MK Investments CC and BIE
International Engineering (Pty) Ltd JV.
[5]
The letter requested a meeting at the premises of the company. The
letter stated that the key focus of the proposed meeting
would be on
the progress made to date relating to the contractual clauses Z8 and
Z9 (i.e. BEE compliance and Skills Transfer).
In this regard,
Van Rensburg said in-chief that essentially, Eskom was asking whether
the company had changed its BEE status by
taking a black partner on,
or increasing the black empowerment in shareholding or in management,
and if so, a report back was needed.
However, in his evidence, Van
Rensburg said nothing had changed at that stage. The shareholders in
the company, namely MK Mohlala’s
close corporation and BIE
Engineering (Pty) Ltd were the 50% to 50% shareholders in the
company.  The individuals involved
were the same, the employees
were the same, and the infrastructure of the company was the same.
All that had changed in the interim,
as described above, was that
whereas the initial consultant was a partnership as a joint venture,
it was now a company, a legal
entity.  The latter change was at
the behest of Eskom and had been complied with.
[33]
Van Rensburg testified about the several task orders issued by Eskom
subsequently. On 10 June 2011, Eskom issued a task order
addressed to
the consultant, BIE International for the attention of the Managing
Director, Van Rensburg.  It was accepted
by the consultant on 14
June 2011.  On 7 September 2011, Eskom issued another task
order, i.e. BIE 0011, addressed to the
consultant, this time, Khum
BIE JV
.  This
task order was accepted by the consultant.
[34]
Van Rensburg testified about a SARS issued tax clearance certificate
(good standing) in favour of Khum Investments and BIE
Joint Venture
(the trading name), and legal entity, Khum MK Investments and BIE
Joint Venture (Pty) Ltd, on 13 April 2012.
The certificate was
valid until 13 April 2013.  The tax clearance certificates were
submitted on behalf of the company to
Eskom on an annual basis.
On 29 September 2011, Eskom issued a further task order, i.e. No.
0017, to the consultant, BIE
International. It was accepted by the
company.  And so too, a further task order, No 0018 issued on 1
October 2011.
It appeared that the task orders were issued
retrospectively since they were accepted by the company before the
date of issue.
Be that as it may, the task orders were issued
by authorized Eskom representatives, accepted by the consultant, task
orders were
carried out, invoices sent, and paid for by Eskom.
Regular updates at meetings took place, as well presentations on the
status
of the contracting parties.  Regular exchange of emails
also occurred between the parties, as testified by Van Rensburg.

All Eskom’s requirements regarding the contract were met, until
about late 2013. At this stage, the contract had been running
since
April 2009 and formally terminated by Eskom on 14 November 2013. The
contracting party defence was only raised by Eskom in
the arbitration
proceedings in November 2013.
[35]
In October 2013, the company (first claimant) gave instructions to
its attorneys of record, Breytenbach Mostert Skosana Attorneys
Inc
(“
Breytenbach Mostert
”) to query with Eskom the
non-payment of invoices submitted from 30 August 2013, and amounting
to some R120 million. This
was done on 10 October 2013.  On 14
October 2013, Van Rensburg also addressed a similar letter to Eskom,
urging that the matter
be attended to urgently.  On 15 October
2013 Eskom replied that the matter had been referred to the legal
department for attention.
In short, the impasse that had
developed between the company and Eskom in regard to the non-payment
of issued invoices, terminated
in urgent court proceedings, partial
payments in settlement were made, and finally the proceedings before
the Arbitrator.
[36]
Van Rensburg was cross-examined closely and extensively.  The
cross-examination extends over some 170 pages.  The
joint
venture which initially contracted with Eskom became a legal entity
with the express consent of Eskom and by Eskom’s
conduct.
This was, despite the provisions of clause Z3 of the contract. When
Eskom required the joint venture to register
a company, Van Rensburg
approached his auditors who offered one of their shelf-companies
which was registered for the purposes
of Eskom’s requirements.
It was in September 2009.  The tax clearance certificate issued
by SARS on 13 April 2012
in respect of the company was not the only
one.
[37]
He testified in regard to the meeting of 30 August 2010. Van Rensburg
said Eskom actually planned the fact that the joint venture
was
incorporating into a company and described it as wonderful and that
the company had become proudly South African, enhancing
BEE in the
country. The meeting was attended by the General Manager of Eskom,
Tjabadi.  The contract documents were to be
given to Mr Andrew
Botes of Eskom to finalise but he was thereafter moved from the
contracts’ department.  Mr Tjabadi
was clear that the
newly formed company would thenceforth continue to render the
services under the contract. Van Rensburg thought
so, more so that
there were no changes in the directors, the shareholding and the bank
account.  A company registration was
available as well as a tax
clearance certificate of the company and the company had obtained a
BEE certificate registration.
[38]
Van Rensburg denied that the words, ‘
Khum
MK Investments and BIE Joint Venture (Pty) Ltd
’
and ‘
Khum
MK Investments CC and BIE International Engineers (Pty) Ltd Joint
Venture
’
were intentionally selected to be deceptive, which led to terminology
inconsistence.
[6]
In this
regard Van Rensburg said that the ultimate responsibility lay with
Eskom, to produce a new contract, as agreed.
His company was
solely concerned with the rendering of services. He conceded readily
that pursuant to the registration of the company,
proposals to Eskom
were not made in the name of the company, but that of the joint
venture.
[39]
Although Van Rensburg conceded that when he changed the joint venture
to a company, he had to follow a formal process in Eskom,
he remained
emphatic that the said changes were, however, accepted by Eskom who
was happy therewith, as instructions were carried
out by making the
joint venture a legal entity.  It was too much of a risk not to
have complied with Eskom’s request
which would have prevented
the company from being paid for services rendered, or having the
contract suspended. On being questioned
by the Arbitrator, Van
Rensburg said he had preferred to remain with the status of a joint
venture rather than being compelled
to form a company.
[40]
Van Rensburg made a number of concessions regarding his knowledge of
the tender procurement process at Eskom.  For example,
he was
aware that when the joint venture tendered for the contract under
consideration, there was a multi-faceted evaluation process,

including a BEE or BBBEE evaluation, and that the purpose of such
evaluation was for Eskom to satisfy itself that the entity which
is
awarded the tender has the necessary technical ability, financial
ability and BBBEE credentials etc.
[41]
Mr Van Rensburg was cross-examined about the meeting requested by
Eskom held on 6 November 2012.  It was at the venue
of the
company (consultant).  The key focus of the meeting related to
the progress made to the contractual clauses Z8 and
Z9, i.e. BEE
Compliance and Skills Transfer. The request for a meeting emanated
from an email Eskom had sent. When asked by the
Arbitrator as to the
meaning of the words in the email, which read as follows:
‘
How the BEE
partner or newly formed BEE entity’s capacity is growing and
has grown as a result of the implementation of clauses
Z8 and Z9 e.g.
acquisition of the companies, mergers with others, new partnerships
secured …,
’
and
‘
resultant
extent of localization realized or envisaged, and indication of any
other business beyond Eskom that the BEE partner or
BEE entity has
successfully got or working towards,’
[7]
Van
Rensburg had the following to say:
“
Well, to my
mind it is very clear. It is the joint venture company that was
formed and what it is looking to establish here was
Khum, as a
company being benefitted and what benefits were accruing to the black
component of the joint venture company.
”
[42]
When cross-examined about an email addressed by Eskom to him at Khum
MK Investments CC and BIE Joint Venture (Pty) Ltd t/a
MOJA Quality on
11 June 2013,
[8]
and whether he
ever noticed that Eskom (per Tjabadi and signed by Masango),
addressed the email to the company and not the joint
venture, Mr Van
Rensburg replied:
‘
You would have
noticed that Eskom refers to the company and the joint venture and in
a very, very muddled way. In this particular
case, now I am referring
to the company trading as MOJA Quality and of course I would have
taken note of that …
’
He,
however, conceded that he may in fact not have noticed the name of
the addressee.  In his view, the email did not mislead
him since
Eskom had already accepted the company as the contracting party since
2010 and the email or letter was merely confirmation
of this fact.
When put to Van Rensburg that Mr Tjabadi would deny that he
instructed Van Rensburg to rather form a company,
Van Rensburg said
it was not true.  He advanced two reasons why Tjabadi wanted to
deal with a formal company rather than a
joint venture.
[9]
It was not true that he formed a company on his own accord and of his
own initiative, as was suggested in cross-examination.
He
agreed, however, with the version put to him that, consequent to the
30 August 2010 meeting, where the company made a presentation
to
Eskom, he did not take any formal steps to have the company becoming
the contracting party.  He also agreed with the version
that
thereafter, i.e. the meeting last-mentioned, the documents, all the
correspondence between the parties, the task orders etc
displayed
inconsistent conduct on the part of Eskom showing that the company
was in fact accepted as the contracting party.
In
re-examination, Van Rensburg testified on Eskom’s document
styled ‘
Procurement
And Supply Chain Management Practice Note 06 of 2006
’.
[10]
The document also deals with Eskom’s process of evaluation of
BEE status for joint ventures.  Of further significance
in the
instant matter, is the definition and types of joint ventures
contained in the document.  In this regard, the document

provides as follows:
“
There are
typically 3 (three) forms of joint ventures:
(1)
A limited liability
company whose share capital is held by the joint venture parties (an
incorporated joint venture);
(2)
An unincorporated
association of persons having the legal status of a partnership (no
limited liability); and
(3)
An unincorporated
association of persons, specifically excluding the effects of a
partnership, through written agreement (no limited
liability)
.”
[43]
Van Rensburg testified that when he commenced with a memorandum of
understanding, the joint venture fell within the second
type.
When he, however, incorporated the same the joint venture, it fell
into the first category. The partners of the initial
joint ventures
were Khum MK Investments CC and BIE International and Engineers (Pty)
Ltd.  These very same entities became
50% shareholders in the
company.  There was no change in the initial personnel. When Ms
Vishala Panday (“
Panday
”) of Eskom testified, she
confirmed that the Procurement and Supply And Chain Management
Practice Note 06 of 2006, was still
in force in April 2009 when the
contract forming the subject matter of these proceedings was
concluded.
[44]
It is significant to note that, at the end of the re-examination of
Mr Van Rensburg, the transcript reveals the exchange between
Eskom’s
legal counsel, Mr Gautschi SC and the Arbitrator as follows:
“
ARBITRATOR
:
I think Mr Gautschi that some of this is a new matter.  If you
wish to?
MR
GAUTSCHI
:  Yes, I
have got no questions, Mr Arbitrator.
”
THE
EVIDENCE OF ESKOM
[45]
Four witnesses testified on behalf of Eskom. They were Ms Helena
Theresa C D Nobrega (“
Nobrega
”).  She was a
director of a company called XL Travel By Arrangement (Pty) Ltd.
She testified briefly only, and
was not cross-examined. Nothing
further need to be said about Nobrega’s evidence.  The
other witnesses were Panday;
Mr J S Masango (“
Masango
”);
and Mr Godfrey Quickfall (“
Quickfall
”).
[46]
Panday, with an LLB degree and BCom Financial Management
qualification, was still employed by Eskom in middle management.

Her functions included the development of commercial policies,
procedures, procurement control, and management of the commercial

regulatory universe.  In regard to matters pertinent to the
present case, and specifically regarding the change of the legal

status of a contracting party pursuant to the granting of a tender,
she testified that the only procedure for such change would
be a
‘
modification
’.  In general, the successful
tenderer would write to Eskom and notify it of the change. The
notification of the change
would require the approval of Eskom’s
Tender Committee.  However, there are several suppliers of Eskom
who change their
legal status, and Eskom would normally approve such
change of a contracting party, depending on the objective of the
change, such
as transformation and sustainability, and long term, of
the entity.
[47]
In cross-examination, Panday conceded readily that Eskom contracted
with different categories of joint ventures.  According
to her,
it is immaterial how the joint venture is constituted, i.e. whether
the bidding joint venture is an incorporated one, or
whether it is a
partnership or an association which is a partnership.  In this
regard, her actual expression was, “
that
is correct, we do not put a restriction on that
”.
[11]
The same question was put to Panday later, and the reply remained the
same.
[48]
When confronted with certain of the contents of Eskom’s
Procurement And Supply Chain Management Practice Note, she confirmed

that she drafted the document.  It was still valid in 2009.
Panda was then questioned about the contents of the document,
at para
4, which reads as follows:
“
For
the purposes of BEE evaluation, preference for incorporated JV’s
will no longer apply, unless the nature and the length
of the project
reasonably require incorporation in order to minimize commercial
risk.
”
[12]
She
was then asked if prior to 2006, Eskom had a preference for
incorporated joint ventures for BEE evaluation purposes.  Her

reply was significantly startling.  She replied:
“
At
that point in time, I think there was a misunderstanding within Eskom
that joint ventures had to be incorporated then somehow
their may
have been inconsistent practices of some people accepting only
incorporated JV’s and the intention of this practice
was to
rectify and remedy how we were going to treat joint ventures from a
standardized point of view.
”
[13]
The
further exchange between Panday and the Arbitrator proceeded as
follows:
“
ARBITRATOR
:
So, there was a, you say, misunderstanding?
MS
PANDAY
: Ja, I would not
say it was some sort of mandate or imperative of policy that all JV’s
had to be incorporated.  I think
that there was some
misunderstanding in practice and we were trying to rectify that.
ARBITRATOR
:
And you were trying to rectify that.
MS
PANDAY
:  Yes.
”
[49]
Ms Panday was then questioned about the contents of clause Z8 of the
contract, which reads as follows:
“
The employer
requires all non-BEE compliant consultants to become BEE compliant.
The employer requires that any arrangements
(e.g. JV, shareholding,
etc) shall ensure that at least 40% of the contract value is
earmarked for Black South African owned and
registered BEE companies.
The consultant shall be given a period of 6 (six) months from
contract award date to provide the employer
with documentary proof of
such arrangements (e.g. a signed legally binding Joint Venture
agreement with the BEE company (ies),
a shareholder’s
certificate/agreement indicating shareholding percentage by BEE
company(ies), etc …
”
She
was asked if, based on this provision, what the contract specifically
recognizes is that it may be awarded to an entity, a company,
joint
venture or partnership, or whatever, that has no BEE credentials.
She confirmed this.  Panday was further asked
where the clause,
states that when it has achieved a BEE partner or shareholding, a
consultant then has to go through the tender
process again. She
confirmed that there was no such requirement.  The modification
process pertaining to the change of status
of an entity contracted
with Eskom, was an internal Eskom procedure.  She conceded that,
that being the case, a party outside
Eskom, contracting with Eskom,
will be completely oblivious to such internal process.  Panday
also conceded that the change
of a contracting party’s status,
was not a compensation event.  However, her rather emphatic
evidence on the existence
of the modification process, seemed to be
contradictory to that of Quickfall, as seen below.
[50]
Panday was also driven to concede that, if a contract file contains
only the documentation, SARS documentation, the BEE verification,
the
contracting company’s documentation, and nothing else of a
partnership, as in this case, the only probable inference
to be made
therefrom was that those are the documents of the contracting party.
[51]
In regard to Eskom’s procurement system (SAP), which
facilitates the monetary and time-related control of contracts,
and
used to monitor and effectively manage usage-draw-downs against
contracts,
[14]
Panday conceded
that the system is computerized and covers documents from the first
one to the last one of a contract.  The
SAP requires that all
contracts and/or orders must be loaded thereon.  In
re-examination, Panday testified that the employer’s
agent does
not have the authority to change the contracting party. She had no
control over the compliance of Eskom’s internal
policies in all
other transactions.
MASANGO’S
EVIDENCE
[52]
Masango testified that he had been employed by Eskom since 1998. His
evidence extends over 110 pages of the transcript.
At the time
of his evidence he was the Manager:  Contracts, in the Program
Management Office (“
PMO
”) or (“
EPMO
”)
since about 2008. In the middle of 2012, he took over from a
colleague, Mr Kenny Nkwana (“
Nkwana
”), the
contract under discussion. Sikani was under his supervision.
Sikani is dedicated to the SHERQ panel, and reported
directly to Ms
Govender.
[53]
Masango’s main functions included overseeing the execution of
the instant contract to ensure that there was proper compliance

therewith. The process of task orders in terms of the contract, would
typically entail, the rendering of services, and when required
by
Eskom from the consultant.  This, after discussions and
consensus was reached with the latter.  His team had to ensure

that all the requirements of the task orders, some internal, such as
budgets in place, were addressed.  His team also had
to ensure
that Eskom’s requesting manager had the appropriate authority
to do so.  In short, there had to be assurance
that the task
orders were properly placed with the correct signatures appended
thereto.
[54]
However, the actual payments to the consultants regarding the
execution of task orders, were not done by Masango or his
department.
This function was carried out by Eskom’s
Accounts Paid For Services (“
APS
”).  Soon
into his evidence, the Arbitrator suggested to his counsel to lead Mr
Masango in giving evidence. He testified
about the email of Sikani on
12 July 2012, querying the change of logo by the consultant. The
email was copied to internal colleagues,
including Masango, Mr Jerry
Chosa, Ms Busi Mthungwa, Mr Leighton Itholeng and Mr Percy
Mohlabane.  Masango caused the change
of the logo to be
investigated by his team.  However, he himself did not do so.
There were several other emails
exchanged between Sikani and
other Eskom employees in the commercial department about the change
of the logo of the consultant,
notably 16 July 2012 and 17 July
2012.  This culminated in a meeting of all the parties involved
on 24 July 2012. The meeting
was at the instance of Sikani.
Masango testified that he attended the meeting.  It is
significant that pursuant to that
meeting, and on 11 August 2012,
Sikani sent an email to all Eskom’s employees involved,
including Masango, and the consultant,
Van Rensburg, in the following
terms:
“
Reference is
made to the meeting held on the 24 July 2012.  The supplier has
confirmed that there is nothing changed in Khum
BIE Contract rather
than the new trading name, MOJA QUALITY.  The account no
registration no, shareholding and directors is
still the same.
Therefore based on this information, commercial has confirmed that
the new logo is accepted.
”
Masango
testified that the contents of the last-mentioned email were
factually correct.  This is so, despite his evidence that
it was
important to Eskom that the contracting party remained the same.
[55]
Masango testified about the meeting held on 6 November 2012 where the
consultant made a presentation.  He too, attended
the meeting.
This is the same meeting about which Van Rensburg testified.  He
did not observe that the name, Khum MK Investments
CC and BIE
International Engineers (Pty) Ltd JV was the new name of the
consultant joint venture.  In regard to the letter
from Eskom
written by the employer’s agent (Tjabadi), dated 11 June 2013,
and addressed to Van Rensburg at ‘
Khum MK Investments CC BIE
Joint Venture (Pty) Ltd t/a MOJA Quality
’, Masango
testified, once more, that he did not notice the change in the name
of the consultant.  Neither did he observe
the changed name in
the body of the letter.  He, however, signed the letter on
behalf of Tjabadi. When questioned by his counsel
as to why in his
letter of 9 July 2013 addressed to MK and Van Rensburg in the
following manner:
‘
Managing
Directors, Khum MK Investments CC and BIE International Engineers
(Pty) Ltd Joint Venture (Khum BIE),’
[15]
Masango
said,
inter alia
, he did not take into account matters like
the addresses and the telephone numbers.  Eskom was not working
on the Khum BIE
contract only.  There were several other
consultants with contracts. Although he signed the letter, he said
the addressee
was inserted by Ms Govender of Eskom.
[56]
Masango testified that he started authorizing and signing task orders
from November 2012, as well as several others subsequently.

This was done together with Eskom’s employees in the Business
Unit, after verification by the contract manager. Once more,
in so
doing, he did not notice the change of name in the contracting
party.  No one within Eskom alerted him to the change.
Had
he known of the change, he would have followed Eskom’s
applicable formal process to ensure that the change of name was

acceptable, through the commercial department, and possibly, the
legal route.  This evidence, as will be seen below, was in

direct contrast to the evidence of Quickfall who testified that he
knew of no such formal process.
[16]
He said that at the time, he had regular and frequent interaction
with both Van Rensburg and MK of the consultant. On the
question of
him having had regular interaction being repeated by his counsel, the
Arbitrator simply interjected that the question
had already been
answered.
[57]
The cross-examination of Masango swiftly and undoubtedly cast some
doubt on his credibility.  He was an electrical engineer
by
qualification. He knew the difference between a company and a
partnership well. He became involved in the SHERQ panel towards
end
of 2011 or beginning of 2012.  When put to him that already by
May 2010 there was issued to Eskom an invoice or time sheet
in the
name of the company, he said it was before his time.
[17]
The requesting managers dealt with time sheets and they would
concentrate, not on the changed status of a joint venture,
but rather
on the correctness of the hours captured. It was put to Masango that
the only reason why the change on the status of
the joint venture was
not noticed, was that Eskom, in fact consented thereto.  It was
also put to Masango that he knew that
although the time sheets and
invoices emanated from the company, the initial contract was
concluded with a partnership. When there
was no response from
Masango, the Arbitrator asked him whether he wanted to answer the
questions.  Masango then proceeded
that the version put to him
was a possible explanation.  He, however, attempted to qualify
the concession by saying that he
did not pick up the change.
[58]
Masango was confronted with the contents of an email from Sikani to
MK and Van Rensburg on 15 March 2012.  In the email,
Sikani
enclosed certain documents which could ‘
be
used as guidelines for BEE requirements
.
Khum
BIE presentation has been assessed …
’
[18]
Masango confirmed that the assessment was in the name of the company,
and not the joint venture.
[59]
It was further put to Masango that the item or slide on the
presentation by the company which read:
‘
Since we
commenced with business we have incorporated the JV and it operates
in accordance with corporate governance requirements,
’
and
‘
Shareholders
agreement is signed
’,
[19]
that
this made clear reference to a company that was initially a joint
venture as a partnership, but now a company, Masango conceded.
[20]
When questioned further on this aspect, Masango tended to answer
questions by questions.
[60]
Masango was also confronted with the contents of several emails which
emanated from Sikani.  One such email was dated
15 March 2012,
referred to above.  He conceded that Sikani did not question the
change of the name as at that date.
One other email from Sikani
was dated 12 July 2012.  It was copied to Eskom’s Ms R
Govender and Ingrid Mahlane, as well
as Masango himself.  The
email read:
‘
Khum BIE is one
of the companies in the SHEQ panel, having a contract with Eskom.
The concern is that they have changed their
logo into a new logo,
please kindly advise whether this is acceptable as per commercial
process.
’
In
this regard, Masango conceded that this email, as well as an earlier
one from MK of the joint venture dated 6 February 2012,
made clear
reference to a company.
[21]
The same applied to an email from Ms Christine Traub (the PA to Van
Rensburg) of the company addressed to Eskom’s Sikani
and Ms
Govender on 3 February 2012.  The bottom of the email shows that
it came from Khum MK Investments and BIE Joint Venture
(Pty) Ltd t/a
MOJA Quality.  Indeed, there were other similar emails, namely
the one sent by Ms Govender to Ms Bianca Griessel
and copied to
Sikani, in which reference was made to the company, Khum MK
Investments and BIE Joint Venture (Pty) Ltd. Masango
conceded this in
cross-examination. This, based on the fact that, the account number,
the registration number, the shareholding,
and directors remained the
same.
[61]
In the process of making the above concessions, Masango, however,
attempted to qualify his answers. The Arbitrator intervened
and
reminded Masango that he had agreed to the concession in his
evidence-in-chief, namely that nothing had changed.  Part
of the
exchange unfolded as follows:
“
ARBITRATOR
:
That the words, the account number, the registration number and the
shareholding and directors are still the same?
MASANGO
:
They are still the same.
ARBITRATOR
:
That is what you were told at the meeting?
MASANGO
:
Yes.
”
[22]
Thereafter,
Masango rendered a long but somewhat convoluted explanation,
extending over two pages.  The answer, really came
to this:
‘
He
did not know the precise reason why the change of name was accepted,
and not challenged by Eskom previously. The Khum BIE contract
was
placed some time in April 2009, and at that point it is possible that
at the conclusion of the contract a change had taken
place in the
KHUM BIE entity into the company …  Eskom could have
accepted documents of the company and people who
executed the
commercial process, might not have picked up specifically if there
had been a change in the identities of the people.
Due to the
lapse of time between October 2008 and April 2009, the identity of
the joint venture could have changed and it could
not have been
picked up, and right from the word go, we could have received
documents from a company and when you make reference
to them now, you
are quite right that you say to think that as far as we were
concerned, we accepted as a company but now Eskom
during its
commercial process might never have intended to contract with the
company …
’
[23]
[62]
The Arbitrator intervened and said to Masango, “…
all
I am putting to you really is very simple.  You knew at this
stage July 2012 that you were dealing with a company.
Forget
about what happened …
”
[63]
Mr Gautschi SC, on behalf of Eskom, objected.  In the end,
Masango gave two answers which were irreconcilable. The first
was
that, he personally, was not aware that Eskom was dealing with a
company but clearly a joint venture.  The other answer
was that
it is possible that right from the word go the company name crept in,
I cannot say with or without Eskom’s knowledge
because I was
not part of it but I can clearly see that from the beginning from
April 2009, there is a distinct possibility that
from there on the
company actually was the contracting party although the commercial
process that had an intention to contract
with the JV.
[64]
The re-examination of Masango did not in any way tipp the scales in
favour of Eskom on the crucial issue of the contracting
party.
The same applied to the inferences to be drawn from the numerous
correspondence exchanged between the parties, the
interchangeable use
of the words ‘
company
’ and ‘
joint
venture
’ in the correspondence, and the supine conduct of
Eskom’s officials involved in managing the contract. In fact,
certain
parts of the re-examination, when closely scrutinized,
bordered on cross-examination.
THE
EVIDENCE OF QUICKFALL
[65]
For the sake of completeness, Quickfall was the final witness who
testified on behalf of Eskom. He was employed by Eskom as
a senior
manager, business enablement in the sustainability division, with
some 24 years of service. He testified mainly on Eskom’s

sustainability policy, which includes climate change, safety, health,
environment quality management, renewables, research and
development
in matters such as presently under discussion.  He did not have
any close and significant involvement or details
of the management of
the contract prior to September 2013.  There were, however,
certain significant aspects of his evidence
which largely militated
against Eskom’s cause in these proceedings.
[66]
For starters, he testified about an email from Eskom’s Dr Steve
Lennon to himself and others on 4 September 2013. The
email conveyed
the suspension of Tjabadi of Eskom pending the outcome of an
investigation and/or disciplinary process.  The
investigation
related to Tjabadi’s involvement in the contract and
irregularities connected with the SHERQ panel of contractors,

including the inflation of quotations form Khum BIE. He said that
Tjabadi declined to testify in the arbitration proceedings,
apparently since he was aware of the fact that he was solely
accountable for what went wrong in the contract in this matter.

He was fully conversant with Eskom’s procurement policies and
procedures. However, he was wholly certain about the implications

where a joint venture consultant changes its legal status to a
company. He too, was oblivious to the change of the status of the

joint venture, until alerted thereto by Eskom’s second set of
legal representatives.
[67]
The record reveals that the questions put by the Arbitrator to
Quickfall during evidence-in-chief were really in search of
clarity,
and were helpful and relevant to the issues in dispute, in my view.
For example, at pp 488 to 489 of the transcript,
the Arbitrator said
to Quickfall:
“
I am going to
put to you the actual facts here because what happened here, as far
as I know, the two members of the consortium formed
a company and the
shareholders of that company were the two members of the consortium.
So there was nothing to stop the,
call it the black member of the
consortium trading separately as a separate, that company continued
to exist and would have similarly
required the knowledge and
expertise that it would have if they had been a joint venture rather
than a company. It still exists
independently.  It was merely a
shareholder in this company.
”
Mr
Gautschi SC did not object to the question but rather drew to the
attention of the witness the fact that the Arbitrator was merely

seeking his views on the proposition.  The response of Quickfall
was,
inter alia
, as follows:
“
That obviously
it makes sense, Mr Arbitrator …  I personally think that
I can agree with you but it should have been
tested from a BEE point
of view …
”
[68]
In cross-examination, Quickfall, like Masango, gave the assurance
that he knew the difference between a partnership and a company.

He conceded the various definitions of a ‘
joint
venture
’
as defined in Eskom’s Practice Note 06 of 2006.  He also
conceded that the fact that a joint venture as a company
does not
change its status as a joint venture.  A joint venture can be in
the form of a company or a partnership.  He
also conceded that
clause Z8 of the contract, and based on the specialized nature of the
SHERQ panels, and its importance, the
clause was inserted in order to
allow a consultant (like a joint venture) six months from the award
of the contract to provide
Eskom with documentary proof that it has
achieved BEE partners.  The clause in fact envisages that a
joint venture can either
be a partnership or a company.
[24]
[69]
Quickfall was also questioned about the import of clause Z11 of the
contract. The clause provides that:
“
If the
consultant constitutes a joint venture, consortium or other
unincorporated grouping of two or more persons:  these persons

are deemed to be jointly and severally liable to the employer for the
performance of the contract;  these persons notify the
employer
of their leader who has authority to bind the consultant and each of
these persons; and the consultant does not alter
its composition or
legal status without the written consent of the employer.
”
Significantly,
Quickfall conceded to the proposition put to him on behalf of the
claimants (respondents) that a joint venture, whether
a company or a
partnership may alter its composition.
[70]
Quickfall asserted that the development that the contracting party
became a company was never brought to his attention until
much
later.  He only became involved in the contract during September
2013.  It was put to him that that was unlikely
based on,
inter
alia
, the following:  In his email to Sikani on 17 July
2012, Eskom’s Mr Jerry Chosa wrote that Eskom had no objection
to
the joint venture changing its logo to MOJA Quality (a company)
provided that the ownership remained the same;  Ms K Pather’s

answering affidavit in the first urgent application, to which
Quickfall signed a confirmatory affidavit on 18 November 2013 in

which reference was made to a partnership and Eskom was told of the
difference between a partnership and a company; the urgent

application was settled, resulting in Eskom paying the company some
R96 million; and that Eskom was fully aware of the change of
the
contracting party.
[71]
Quickfall’s ignorance of vital correspondence exchanged between
the contracting parties, and his failure to investigate
several
matters of vital importance, remained worrisome.  For example,
he could not explain fully or satisfactorily why a
new joint venture
such as Letshabile Quality Strategy and Bureau Veritas International
SA Joint Venture, changed status to a company.
There were other
instances where Eskom either contracted with companies from the
outset, or where joint ventures changed status
to companies.
[72]
In my view, the most significant revelation during the
cross-examination of Quickfall was the following:  he was driven

to concede that he had no idea what Eskom’s formal process is
when, in terms of clause Z11 above, a joint venture wants to
change
its status. In this regard, more specifically, he said:
“
Mr Arbitrator,
I do not know the process.  I cannot point you to a process in
Eskom …  What I can say is that there
is no doubt that we
should have followed a process that is authorized by the adjudicating
authority or some formal process, supply
management process in
Eskom.
”
This
evidence, it will be recalled, was in direct contrast with the
evidence of Masango about the existence of a formal process
within
Eskom on the change of status of a joint venture after the award of a
contract.
THE
PROVISIONS OF SECTION 33(1)
ARBITRATION ACT
[73
]
Section 33(1)
of the
Arbitration Act provides
that:
“
Where –
(a)
any member of an
arbitration tribunal has misconducted himself in relation to his
duties as an arbitrator or empire; 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 aside the award.
(2)
[Not
applicable]
(3)
[Not
applicable]
(4)
If the award was set aside the dispute shall, at the request of
either party, be submitted to
a new arbitration tribunal constituted
in the manner directed by the court.
”
THE
RELIEF CLAIMED
[74]
In closing argument, I gained the distinct impression that, Mr
Gautschi SC for Eskom, abandoned the relief in respect of prayer
1 of
the notice of motion.  This relief relates to the setting aside
of the award. If this is indeed so, the only relief to
be considered
is that remaining in prayer 2 of the notice of motion.  The
latter relief seeks an order ‘
referring
all the disputes between the applicant and the first respondent to a
new arbitration tribunal to be constituted in the
manner directed by
the court
’.
However, in my view, the consideration of the two prayers is
inextricable in properly assessing the merits of the
matter
in
toto
.
The allegations levelled against the Arbitrator, as sketched above,
particularly that of being ‘
possessed
of a misguided sense of justice that precluded him bringing an
objective mind to bear on the evidence and law, and of
misconduct,
and gross irregularity, were of a rather serious nature
’.
[25]
THE
APPROACH OF THE COURTS
[75]
The approach of the courts in matters reviewing and setting aside
awards made in arbitration proceedings, has for long and
consistently
been that an irregularity in proceedings does not amount to an
incorrect judgment, it is rather a question of the
manner of the
proceedings. As far back as 1909, in
Ellis
v Morgan;  Ellis v Dessai,
[26]
the Court said:
“
But
an irregularity in proceedings does not mean an incorrect judgment;
it refers not to the result, but to the methods of a trial,
such as,
for example, some high-handed or mistaken action which has prevented
the aggrieved party from having his case fully and
fairly
determined.
”
[27]
In
Dickenson
and Brown v Fisher’s Executors,
[28]
the
Court had to deal with allegations of misconduct levelled against an
umpire or arbitrator, in the context of the Arbitration
Act 24 of
1898 (Natal).  In finally dismissing the appeal, the Court (per
Solomon JA),
[29]
said:
“
Now I do not
propose to attempts to give any definition of the word ‘misconduct’,
for it is a word which explains itself.
And, if it is used, in its
ordinary sense, I fail to see how there can be any misconduct unless
there has been some wrongful or
improper conduct on the part of the
person whose behaviour is in question.  The same word occurs in
par .13 of the Act, where
it is provided that:
‘
the
Court may upon motion remove any arbitrator or umpire who has
misconducted himself in connection with the matters referred to

arbitration,…’
Now
if the word misconduct is to be construed in its ordinary sense it
seems to me impossible to hold that a bona fide mistake either
of law
or of fact made by an arbitrator can be characterized as misconduct,
anymore than a Judge can be said to have misconducted
himself if he
has given an erroneous decision on a point of law.  Nor can I
conceive of a Court removing an arbitrator for
misconduct merely
because he has made a mistake whether of law or facts …
But in the ordinary circumstances where
an arbitrator has given fair
consideration to the matter which has been submitted to him for
decision, I think it would be impossible
to hold that he had been
guilty of misconduct merely because he had made bona fide mistake of
law or of fact.
”
See
also
Clark
v
African Guarantee and Indemnity,
[30]
at
77, where the same principle of guarded interference by courts in
arbitration matters was stated as (and I mention it briefly
only) as
follows:
“
The Court will
always be most reluctant to interfere with the award of an
arbitrator. The parties have chosen to go to arbitration
instead of
resorting to the Courts of the land, …  It is true that
the arbitrators must carry out their duties in a
judicial manner.
I do not mean that they must necessarily observe the precision and
forms of a court of law, they must proceed
in such manner as to
ensure a fair administration of justice between the parties.
If, therefore, an arbitrator has misconducted
himself, has been
corrupt, has heard one party and refused to hear the other, the Court
will interfere and will set aside his award.
”
[76]
In
Herholdt
v Nedbank,
[31]
and in the context of a CCMA arbitration review brought in terms of
sec 145(2)(a)
of the
Labour Relations Act 66 of 1995
, the Court, in
restating the grounds of review in arbitration matters, declined to
interfere.  At para [25] of the judgment,
the Court said:
“…
For a
defect in the conduct of the proceedings to amount to a gross
irregularity as contemplated by
s 145(2)(a)(ii)
, the arbitrator must
have misconceived the nature of the inquiry or arrived at an
unreasonable result.  A result will only
be unreasonable if it
is one that a reasonable arbitrator could not reach on all the
material that was placed before the arbitrator.
Material errors
of fact, as well as the weight and the relevance to be attached to
particular facts, are not in and of themselves
sufficient for an
award to be set aside, but are only of any consequence if their
effect is to render the outcome unreasonable.
”
See
also
Telcordia
Technologies Inc v Telkom SA Limited,
[32]
and
Lufuno
Mphaphuli and Associates (Pty) Ltd
v
Andrews
,
[33]
and
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others.
[34]
[77]
In the context of the present matter, I found the article penned by
the learned Judge Brand JA, and styled,
Judicial
Review of Arbitrations Awards
,
[35]
rather instructive.  The article ‘
provides
an overview of the role of the courts in the review of awards made as
a result of domestic arbitration undertaken voluntarily
’.
Part of the summary of the article at 263, makes the following
observation:
“
South African
legislation governing the review of arbitration awards has been
underpinned and applied so as to provide only narrow
grounds for
review and these have in turn been restrictively interpreted. In the
result, while the courts have demonstrated a willingness
to assist
parties deprived of a fair hearing by procedural wrongs, they have
limited their reviews to these alone and have refused
jurisdiction in
cases that requested their reviews of the arbitrator’s
legitimate exercise of discretion. .The courts have
therefore
maintained their lack of jurisdiction to enquire into the correctness
of the conclusion arrived at by arbitrators on
the evidence before
them.  In the result, the integrity of the arbitration process
is preserved save for in cases where the
arbitrator himself has
discredited it through mala fides, gross irregularity or the exercise
of powers not conferred upon him …
”
Significantly,
the article reviewed most of the case law cited in this judgment, as
well as others.  In my view, the summary
is an apt and accurate
reflection of our law on this subject.
[78]
I chose deliberately to defer the application of the above principles
to the facts of the instant matter. This is so since
the issues in
dispute, as well as the evidence led thereon, overlap extensively.
THE
ARBITRATOR’S FINDING ON ESTOPPEL
[79]
I deal with the Arbitrator’s finding on estoppel.  Part of
the complaint in this regard was that the Arbitrator,
‘
disregarded
virtually every legal impediment that stood in the way of the company
succeeding on the estoppel thus giving an award
that was contrary to
public policy in that it forced Eskom to perform in terms of an
illegal contract
’, and ‘
that in upholding the
estoppel, he relied on representations the company’s sole
witness admitted it did not rely on
’.
[80]
The trite essentials of estoppel are the following:
[36]
(a)
A representation by words
or conduct of a certain factual position;
(b)
That the party acted on
the correctness of the facts as represented;
(c)
That the party so acted or
failed to act, to her or his detriment;
(d)
That the representation
was made negligently.  The requirement of negligence is not
always an essential element; and
(e)
That the person who made
the representation could bind the defendant by means of a
representation.
In
Hauptfleisch
v Caledon Divisional Council
:
[37]
“
The following
statement of the doctrine of estoppel by Spencer Bower Estoppel by
Representation para .15, was cited, apparently
with approval, by
Watermeyer, JA (as he then was) in Union Government v Vianni
Ferro-Concrete Pipes (Pty) Ltd, supra at p 49:
‘
Where
one person (the representor) has made a representation to another
person (the respresentee) in words, or by acts and conduct,
or (being
under a duty to the representee to speak, or act) by silence or
inaction, with the intention (actual or presumptive)
and with the
result, of inducing the representatee on the faith of such
representation to alter his position to his detriment,
the
representor, in any litigation which may afterwards take place
between him and the representee, is estopped, as against the

representee, from making, or attempting to establish by evidence, any
averment substantially at variance with his former representation,
if
the representee at the proper time and in the proper manner objects
thereto.’
”
The
doctrine of estoppel is an equitable one and developed in the public
interest – see
Trustbank
van Afrika Bpk v Eksteen.
[38]
In
Concor
Holdings (Pty) Ltd t/a Concor Technicret v Potgieter,
[39]
the
Court upheld the respondent’s counterclaim of estoppel and
found that the appellant was negligent.  As to the test
in
regard to a representation made by conduct, the Court said, that it
is whether the representor should reasonably have expected
that the
representee might be misled by his conduct, and if in addition the
representee acted reasonably in construing the representation
in the
sense in which the representee did so.
APPLICATION
OF LEGAL PRINCIPLES ON ESTOPPEL
[81]
In applying the above principles to the facts of the present matter,
both in respect of the review and the Arbitrator’s
finding on
estoppel, the application must fail for a number of reasons.
Such a finding must, of necessity, affect the applicant’s

relief that all the disputes be referred to a new arbitration
tribunal, as dealt with later below.
[82]
For starters, the serious allegations, including that of misconduct,
gross irregularity and bias, not understanding his mandate,
ignoring
Eskom’s evidence, and treating Eskom’s witnesses
unfairly, are truly not borne out by the transcript of the

proceedings, from which I have quoted extensively above.  On the
contrary, the Arbitrator was fair to all witnesses.
He
questioned all witnesses in a balanced manner, mostly seeking
clarification, clearly since he was appraised sufficiently of
the
issues in dispute before him.  He indulged the parties whenever
necessary, by for example, allowing the matter to either
stand down
or adjourned at the request of either of the parties.  In the
case of Eskom, in particular, he allowed its counsel
to lead Eskom’s
witness, Masango. In this regard, and in my view, the only slight
dent regarding the Arbitrator’s conduct
during the proceedings,
was on the occasion when he asked Masango a question by “
putting
it to him
”.  However, this must be seen in proper
context. The Arbitrator was stating to Masango what the previous
evidence before
him was.  Indeed, when Mr Gautschi SC objected,
the Arbitrator promptly changed the manner of seeking clarity by
saying to
Masango that he was asking the question.  In any
event, Masango subsequently answered the question by agreeing to what
the
Arbitrator had initially “
put to him
”.
In my view, nothing really ought to be made of this aspect.  It
begged the question if Eskom’s witnesses,
and there were really
only two relevant ones, had been unfairly treated, why was there no
sustained objection, or even an application
for the recusal of the
Arbitrator, at the time.  Masango was, in any event, a largely
unimpressive witness.  He only
became involved in the contract
much later, on his own version.  The other relevant witnesses,
i.e. Panday and Quickfall,
were not helpful on crucial aspects of the
case since they were not closely involved in managing the contract.
However, the evidence
of Panday, as described earlier above, that
there was some confusion in Eskom’s policy regarding the
requirement of incorporated
joint ventures during April 2009, was
contrary to Eskom’s cause.  So too, was the evidence of
Quickfall to the effect
that there was no known formal process in
Eskom in the conversion of a joint venture to a company. It is for
these reasons that
the evidence of Masango to the contrary, was not
credible.
The
complaints levelled against the Arbitrator during the proceedings,
were largely procedural in nature.  The complaints overlooked

the fact that arbitration proceedings are not synonymous to court
proceedings.  In
Lufuno Mphaphuli
,
supra
, O’Regan
J said:
“…
There
is nothing in the Arbitration Act which excludes investigative
proceedings, as I have reasoned above, and judges would be
cautious
not to interpret s 33(1) of the Act so as to require arbitrators to
proceed as if they were courts of law.  Such
an interpretation
would undermine the purposes of arbitration which are to provide
flexible and affordable alternatives to judicial
restitution.
”
[40]
Previously,
in the same judgment, the learned Judge had said:
“…
,
it seems to me that the values of our Constitution will not
necessarily best be served by interpreting s 133(1) in a manner that

enhances the power of the courts to set aside private arbitration
awards.  Indeed the contrary seems to be the case. The
international and comparative law considered in this judgment
suggests that courts should be careful not to undermine the
achievement
of the goals of private arbitration by enlarging their
powers of scrutiny imprudently …  The Constitution would
require
a court to construe these grounds reasonably strictly in
relation to provide arbitration.
”
[41]
See
also more recently,
Cool Ideas v Hubbard
2014 (4) SA 474
(CC)
at para [56].
[83]
For all the above reasons, I conclude that the rather strongly worded
allegations of misconduct, and in particular that, ‘
an
arbitrator possessed of a misguided sense of justice …
’
were exceedingly exaggerated and unfortunate in the extreme.
Quite clearly, the somewhat robust exchanges between
the Arbitrator
and Eskom’s witnesses (limited to Masango), and on the odd
occasion with Eskom’s counsel, cannot constitute
sufficient
grounds for intervention.
The
allegations plainly had no merit at all. The Arbitrator in question
is a retired Judge. However, this fact alone, should not
make his
decisions and conduct perfect all the time. The allegations,
collectively viewed, do not justify interference by this
Court in
that part of the award.  The same applied to the Arbitrator’s
finding of estoppel based on the principles set
out above, earlier in
this judgment.  I deal with this aspect immediately below.
THE
FINDING ON ESTOPPEL
[84]
In my view, the Arbitrator correctly applied the principles relevant
to estoppel.  I have set out in great detail the
evidence
showing Eskom’s or its various employees’ conduct in
managing the contract from April 2009.  Tjabadi,
as stated
earlier, was Eskom’s agent in the contract.  His authority
is to carry out all the actions of Eskom with the
exception of
payment and indemnity and insurance.  The evidence showed that
from about May 2010, the company rendered invoices
for services
rendered to Eskom under the contract.  Prior to May 2010, the
time sheets submitted, reflected the full name
of the company, not
the joint venture.  In addition, the company’s VAT
registration number appeared in all these invoices.
This is
significant as Eskom’s financial department, or accounts
department would reasonably have been expected to amend
their records
in order to reflect the company’s VAT registration number in
their reportedly efficient and reliable SAP system.
This did
not happen. The evidence sketched above, also show that the company
submitted its statutory documentation, i.e. BBBEE
certificates and
tax clearance certificates, as testified by Van Rensburg, were
submitted annually without a murmur, from Eskom.
It was not in
dispute that the company rendered the services under the contract to
Eskom and that Eskom paid the company, and not
the joint venture, for
such services until the dispute arose much later along the way.
[85]
In my view, one of the strongest factors exposed by the evidence, and
militating rather strongly against Eskom’s cause
in this
matter, was the meeting of the 30
th
August 2010, pursuant
to Tjabadi’s request that the joint venture partnership had to
be incorporated.  This request,
as stated before, was in
accordance with Eskom’s policy as contained in Option Z8 of the
contract.  At that meeting,
attended by Eskom’s
representatives, including Eskom’s authorized agent, Tjabadi,
Eskom was informed unequivocally
that the initial joint venture was
now a company. Khum MK Investments CC and BIE Engineers (Pty) Ltd
were equal shareholders in
the company, with nothing else having
changed. The Arbitrator dealt fully with the numerous correspondence
and emails exchanged
thereafter between the parties which showed or
suggested strongly that Eskom had accepted the company as the
contracting party.
Eskom also thereafter did not assign a
vendor number to the joint venture partnership, but instead assigned
the vendor number to
BIE International Engineers (Pty) Ltd (the
company).  It was not in dispute that this vendor number was
used for the duration
of the contract for the joint venture
partnership and the company.
[86]
The concession made by Van Rensburg in evidence that the
representations made by Eskom were not relied on, must also be seen

in proper context.  This is so since Eskom made rather heavy
weather of this aspect.  Van Rensburg made the concession
under
cross-examination (pp 256 to 257) that in terms of the contract, the
contracting party may not change its legal status without
the written
consent of Eskom.  At the same time, it was put to Van Rensburg
that Tjabadi would deny that he instructed that
the joint venture
should become a company.
[87]
The concession did not advance Eskom’s cause in any significant
way, for a number of reasons. The evidence of Van Rensburg
that they
told Eskom at the presentation meeting of the 30
th
August
2010, that the company was already formed, stood.  He was
waiting for Eskom to produce new contract documents.
An
internal process he did not know and/or process which is plainly not
only controversial, but also contradictory on the evidence.

This, bearing in mind the evidence of Panday, Quickfall and Masango.
In addition, although numerous employees of Eskom were
mentioned in
evidence as having dealt with the contract, notably, Sikani,
Govender, the bs department personnel, and Eskom’s

representatives who attended the presentation, including Tjabadi, all
these staff members were not called to testify.
No reason
was advanced for this omission.  In the end, Van Rensburg’s
evidence on this aspect was not contradicted.
It is also not
unreasonable to assume that the reported refusal of Tjabadi to
testify for his employer, as well as his subsequent
suspension and
disciplinary proceedings, had something to do with what appears to be
Eskom’s indifferent, inertial and supine
conduct in managing
the contract. Furthermore, Eskom paid to the company huge amounts
under the contract when taken to court during
October 2013.
[88]
As stated earlier in this judgment, it was only in the arbitration
proceedings that Eskom pleaded the contracting party defence,
in that
the company could not rely on estoppel since it would validate an
otherwise illegal act (“
the illegal defence
”).
I shall deal with the latter defence below.  The argument on
behalf of the company that in the absence of any
evidence from the
persons who authorize payments to the company, the only inference is
that Eskom was fully aware of the change
of status to a company,
accepted it, and benefitted therefrom, had considerable merit.
The numerous emails exchanged between
the parties recalled by the
evidence referred to the company as the contracting party. This was
fortified by the acceptance of
the invoices, and their payment by
Eskom.  The further submission by the company that the
contracting party defence is clearly
an afterthought on Eskom’s
part in an attempt to evade its legal obligations also has merit, in
my view.  It is also
my view that, the conduct of Eskom falls
squarely within the legal principles on estoppel, in particular in
Hauptfleisch v Caledon Divisional Council supra,
at 56H, and
the test enunciated in
Concor Holdings (Pty) Ltd t/a Concor
Technicret v Potgieter, supra
.
[89]
In the result, the finding made by the Arbitrator in the award, that
as a result of the various correspondence, and various
other actions
by it, Eskom is estopped from denying the truth of such
representations, which were believed by the company and acted
upon by
the company to its prejudice, was in my view, correct and properly
arrived at.  It cannot be faulted in any way.
THE
ILLEGALITY DEFENCE
[90]
I deal with the illegality defence. In the course of his judgment,
the Arbitrator made some interesting comments regarding
this defence,
as set out before.  In closing argument, I was urged rather
strongly, and surprisingly by both counsel, to nevertheless
make a
finding on this defence since the Arbitrator declined to do so. It
was a viciously tempting invitation.  I decline
the invitation
for the reasons that follow.
[91]
The real issue in regard to this subject is whether, based on the
totality of the credible evidence, there was any illegality
or
unlawfulness on the part of either Eskom or the joint venture and/or
the company in respect of the contract.  Regard must
be had to
the applicable legal principles. The contentions of Eskom, that, in
the event it is found that it accepted the substitution
of the
company for the joint venture, such substitution and acceptance was
illegal and/or invalid.  It is unenforceable because
it occurred
in contravention of sec 217 of the Constitution Act 108 of 1996 (“
the
Constitution
”), the Preferential Procurement Policy
Framework Act 5 of 2000 (“
the PPPFA
”), the
procurement provisions of the relevant Treasury Regulations (“
the
treasury regulations
”), and Eskom’s own procurement
policies and procedures.
THE
COURTS’ APPROACH TO LEGALITY IN CONTRACT
[92]
The principle regarding the approach of the courts to plainly illegal
contracts, has been trite for a long time and consistent.
In
the
Jajbhay
matter,
[42]
referred to in the
Arbitrator’s award, at 550, the Court said:
“
The principle
underlying the general rule is that the Courts will discourage
illegal transactions, but the exceptions show that
where it is
necessary to prevent injustice or to promote public policy, it will
not rigidly enforce the general rule.  Later
on at p 552, the
Court said:
‘
And
so, accordingly, the modern doctrine is established.  Relief is
not granted where both parties are truly in pari delicto,
unless in
cases where public policy would thereby be promoted.
’”
In
Cool
Ideas v Hubbard,
[43]
Jafta
J, writing separately, but concurring in the main judgment said:
“
The general
principle of our law is that an act performed contrary to statutory
prohibition is invalid and has no legal effect.
In explaining
the principle in Schierhout Innes CJ said:
‘
[W]
hat
is done contrary to the prohibition of the law is not only of no
effect, but must be disregarded as never having been done –
and
that whether the lawgiver has expressly so decreed or not, the mere
prohibition operates to nullify the act.
’”
[44]
[93]
That matter concerned a contract concluded between Cool Ideas (the
builder) and a consumer (Ms Hubbard).  In terms of
the contract,
Cool Ideas undertook to build a house for the consumer. However, Cool
Ideas was not registered as a homebuilder under
the Housing Consumers
Protection Measures Act 95 of 1998 (“
the Housing Protection
Act
”).  Section 10(1)(b) of the Housing Protection Act
provides that only registered builders were entitled to remuneration.

There arose problems between Cool Ideas and Ms Hubbard, including the
non-registration as a builder by Cool Ideas.  Ms Hubbard

instituted arbitration proceedings. The Arbitrator found in favour of
Cool Ideas but Ms Hubbard refused to comply with the award.
Cool
Ideas’ court action for an order enforcing the award was
opposed by Ms Hubbard on the ground that Cool Ideas was not

registered as a builder, and therefore barred from receiving
payment.  The high court granted the order, but Ms Hubbard
appeal
to the Supreme Court of Appeal and her appeal was upheld.
Cool Ideas thereafter appealed to the Constitutional Court.
In
considering whether the Arbitrator’s award ought to be made an
order of court, and in the end dismissing the appeal, the
Court said:
“
What
we are seized with here is therefore not the correctness or otherwise
of the arbitral award, but with the question whether
the award ought
to be made an order of court if the court order would be contrary to
a plain statutory prohibition.  What
is more, as stated at the
outset, there is no challenge to the section’s constitutional
validity.  It cannot be expected
of a court of law in such
circumstances to disregard a clear statutory prohibition – that
would be inimical to the principle
of legality and the rule of law.
To do so would amount to undermining the purpose of the
legislation.
”
[45]
However,
immediately thereafter the Constitutional Court, at para [56], went
on in the majority judgment to say:
“
That
is not to say
that a court can never enforce an
arbitral award that is at odds with a statutory provision
.
The reason is that the constitutional values require courts to ‘be
careful not to undermine the achievement of the
goals of private
arbitration by enlarging their powers imprudently … So it will
often be contrary to public policy for a
court to enforce an arbitral
award that is at odds with a statutory provision. But it will not
always be so.  The force of
the prohibition must be weighed
against the important goals of private arbitration that this court
has recognized
’.”
[underlining added]
The
footnotes omitted, refer to
Lufuno
Mphaphuli supra
,
the facts of which the Court found to be distinguishable from the
facts in
Cool
Ideas
.
[46]
Indeed, the most instructive principle emphasized by the Court in the
latter case, is that courts are themselves subject
to the fundamental
principle of legality as they are bound to uphold the Constitution.
This is based on sec 1(c) of the Constitution
which provides, that
our country is,
inter
alia
,
a democratic state founded on the values of the ‘
supremacy
of the Constitution and the rule of law’,
and
sec 165(2), which provides that, ‘
courts
are independent and subject only to the Constitution and the law,
which must be applied impartially, and without fear, favour
or
prejudice
’.
[94]
Although there are numerous other case law confirming the above
principles for example,
Dexgroup
(Pty) Ltd v Trustco Group International (Pty) Ltd and Others
,
[47]
Millennium
Waste Management (Pty) Ltd v Chairperson of the Tender Board:
Limpopo Province and Others
,
[48]
(also relied on by Eskom),
North
East Finance (Pty) Ltd v Standard of South Africa Ltd,
[49]
and
Mogale
City Municipality v Fidelity Security Services (Pty) Ltd and
Others.
[50]
It is indeed unnecessary for present purposes and in the light of the
view I take in the matter, to traverse all the case
law. However, I
must deal with two other case law relied upon by Eskom, which I do
immediately hereunder.
SOME
OF THE CASE LAW  RELIED UPON BY ESKOM
[95]
The cases are,
Premier,
Free State, and Others v Firechem Free State (Pty) Ltd
[51]
and
Municipal
Manager:  Qaukeni Local Municipality and Another v FV General
Trading,
[52]
respectively.  In the latter case, the facts were briefly as
follows:  during November 2005, the respondent submitted
a
tender for a contract offered by the second appellant (the
municipality), to collect refuse.  Its tender was accepted and

gave rise to the conclusion of an oral agreement under which the
respondent provided the required services during the period November

2005 to June 2006.  The validity of the agreement was not
challenged then.  When the oral agreement was nearing its end,

the municipal manager (the first appellant) contacted the respondent,
and requested certain information.  Without inviting
any other
persons to tender for such a contract, the municipal council resolved
to re-appoint the respondent as the second appellant’s
refuse
collector, and tasked the manager to draw up a written agreement for
the respondent to sign.  He did so, and presented
it to the
respondent for its approval.  The respondent accepted the terms
offered, and a contract was duly signed by both
parties.  The
respondent duly proceeded to render the services and was paid the
agreed fee. However, later the respondent
was informed that the
municipal council had resolved that its services (the respondent’s)
were no longer required beyond
June 2007, and that, although the
respondent would be at liberty to tender afresh when the second
appellant called for tenders,
the necessary statutory procedures
would be strictly adhered to in future.  In a subsequent high
court application, the respondent
contended that the written contract
was indeed valid and of full force and effect. On the other hand, the
appellants, in both the
high court (which found in favour of the
respondent), and on appeal, argued that as the agreement had been
concluded in breach
of various prescribed statutory requirements, it
had been void
ab
initio
,
and was thus incapable of being invalidly extended.
[96]
In finally upholding the appeal, and at para [11], and onwards, the
Court said:
“
In
considering the validity or otherwise of the written contract …,
it is necessary to recall that
section 217(1
)
of the Constitution, couched in peremptory terms, provides, inter
alia that an organ of state in the local sphere (such as a
municipality) which contracts for goods and services ‘must do
so in accordance with a system which is fair, equitable, competitive

and cost-effective’
.
This
constitutional imperative is echoed in both the Systems Act
(Municipal Systems Act 32 of 2000 – Ed, and the Municipal

Finance Management Act 56 of 2003 (‘the Financial Management
Act’) as will become apparent from what is set out below.
”
[note
emphasis]
I
must hasten to observe that, in my view, the facts in both the
Municipal Manager:  Qaukeni Local Municipality,
and
Premier, Free State, and Others, supra,
are clearly
distinguishable from the facts in the present matter, and that, for
obvious reasons sketched below. Eskom relied heavily
on the contents
of para [36] of the judgment in the latter case, which correctly and
consistently held that:
“…
The
delivery contract has to be ignored because to give effect to it
would be to countenance unlawfulness.  The province was
under a
duty not to submit itself to an unlawful contract and entitled,
indeed obliged, to ignore the delivery contract and to
resist
Firechem’s attempts at enforcement.  Its acts in doing so
did not amount to an unlawful repudiation.  Nor,
for the reasons
already given, could matters be saved by severance
.”
THE
DISTINGUISHABLE FACTS
[97]
I mention the above legal principles merely to demonstrate that the
facts in the last-mentioned cases were vastly different
to the facts
in the present matter for such principles to apply.  In
Municipal Manager: Qaukeni Local Municipality,
although the
respondent had properly tendered and awarded an oral agreement, on
the renewal of his contract upon expiry, he was
re-appointed by the
appellants clearly without following proper procedure.  Whilst
in the
Premier, Free State, and Others,
although the tender
was properly awarded to Firechem, the ancillary contract contradicted
the main tender contract. There was therefore,
unambiguous evidence
of flouting the applicable procurement procedures.
[98]
The present matter presented an entirely different set of facts. In
the heads of argument, Eskom argued that, it was common
cause during
the arbitration that, to the extent that the company purported to
substitute itself as the contracting party, and
render services in
terms of the contract, it did so without having submitted itself to
any procurement process whatsoever
[underlining added].  On this basis, so the argument proceeded,
once this was established as a fact, the contract was automatically
a
nullity.  The argument, in my view, had no merit.
[99]
The evidence showed that the joint venture partnership tendered, and
was awarded the contract. The very same joint venture
partnership
shortly thereafter incorporated itself into a company, nothing had
changed except the company name.  The directors
of the company
remained the same, i.e. MK and Van Rensburg, and are equal
shareholders in the company.  There was no change
in personnel.
The company rendered services and invoices to Eskom from May 2010,
the company’s VAT number appeared on all
the invoices. The
incorporation of the joint venture was at the request of Eskom’s
agent, Tjabadi, and in compliance with
Eskom’s policy as
contained in clause Option Z8.  In terms of the contract,
Tjabadi has the authority to carry out all
the actions of Eskom in
the contract.
[100]
Furthermore, before May 2010, the time sheets reflected the full name
of the company.  At the 30
th
August meeting, Eskom’s
representatives, including Tjabadi, were informed that the joint
venture was now a company.
The company submitted its statutory
documentation to Eskom and complied with all the instructions of
Eskom pertaining to the contract.
It was common cause that the
company rendered the required services to Eskom and that Eskom paid
the company for those services
until the dispute arose much later in
the span of the contract.
[101]
In addition, neither Panday nor Quickfall had any personal knowledge
of the contract.  Both were unable to point to any
formal
process in Eskom when the consultant becomes BEE compliant or changes
its legal status. In fact, whilst Quickfall testified
that he was not
aware of any such formal process in Eskom, Panday alluded to some
confusion in Eskom in this regard at the time.
The numerous
employees of Eskom (in excess of 12, I counted),
[53]
involved in the contract, in one way or the other, including Tjabadi,
were not called to testify as mentioned before. The Arbitrator,
in
these circumstances, obviously accepted as credible and more probable
the evidence of Van Rensburg on this crucial issue.
Masango
came into the picture much later after the conclusion of the
contract. In any event, he made a rather telling concession
against
Eskom, in particular, that it was probable that right from the
beginning, Eskom contracted with the company.
[102]
As argued by the company, and quite correctly so in my view, there is
nothing in the contract that requires compliance with
an unspecified
procurement process when there are name changes in the joint
venture.  The terms of the contract were not varied
or changed
at all.  It is only the status of one contracting party that
changed, most probably with the knowledge of Eskom.
It was in any
event, a mere change from a partnership to a company.  As stated
earlier, certain joint ventures contracting
with Eskom had changed
their legal status, as revealed more fully in the evidence of
Quickfall.
[103]
In the book,
The
Law of Government Procurement In South Africa,
Professor
Phoebe Bolton,
[54]
deals with
some instructive principles in regard to the scope of variation after
the conclusion of a contract. She says:
“…
After
negotiations, the preferred tenderer must remain the best tenderer in
accordance with the criteria specified, and the contract
must not be
significantly different from the specified criteria. The question
then arises whether the same is true after the conclusion
of the
contract.  In short, must amendments to and re-negotiations of
the concluded contract also be in compliance with the
specifications
that were laid down in the call for tenderers?
First of all it should
be noted that, in practice, variations to existing contracts will be
difficult to challenge.  Those
who participated in the tender
process may not be aware of changes made to the contract during its
operation and even if they are,
it may be very difficult to prove
loss in order to claim damages.  This does not, however, deter
from the fact that, in light
of the principles of fairness,
competitiveness and transparency, an organ of state and the preferred
tenderer are not, and cannot
be, at liberty to vary the terms of a
contract awarded by way of a tender process. As is the case in the
context of negotiations
after the award decision, however, case law
provides little clarity with regard to the extent to which an organ
of sate and the
preferred tenderer may vary or change the terms of
the contract after the conclusion of the contract.
…
consensual
variations should be allowed.  Variations should, however, be
minor and not so radical as to constitute an unfair
obligation on the
part of the contractor. Thus, variations should not give rise to a
contract that is substantially or materially
different from the
contract initially advertised. In other words,
the
‘new’ contract must not be significantly different from
the contract contemplated by the competitive tendering process
.
If this is the case, the whole rationale behind a competitive
tendering process would be undermined.  There would be

non-compliance with, in particular, the principles of fairness,
transparency and competitiveness.  The interests of consumers,

ratepayers, voters and those who participated in the tender process
(unsuccessful tenderers) may also be prejudiced.
”
[emphasis added]
These
principles, in their importance, are not only pertinently applicable
to the facts of the present matter, but also throw some
light in what
actually could have occurred here.  In the first place, room is
made for the concession made by Masango of Eskom
that it was possible
that right from the beginning, Eskom contracted with the company.
He said that it is possible that from
the word “
go
”,
the company could have “
crept in
” to as the
contracting party. The second emphasis made by the principles above,
is that the variations after conclusion of
the award of the tender
should not be significantly different from the contract contemplated
by the competitive tender process.
This is exactly what
happened in the instant matter. Besides the change in name of the
joint venture, nothing else changed.
The terms of the contract
are clear and constitute part of the procurement process. To now
suggest that the company ought to have
subjected itself to the tender
procurement afresh when the name changed, would be unjust and unfair
in the circumstances.
[104]
The Arbitrator expressed the opinion that Eskom’s contention
that there was no compliance with the statutory provisions
mentioned
above, had no merit.  Although he found that Eskom did not
breach any of the mentioned provisions, but as between
Eskom and the
company, Eskom is estopped from denying that it contracted with the
company. The Arbitrator proceeded to make no
finding as to the
legality or otherwise of Eskom’s actions.  In my view, the
Arbitrator was correct for a number of
good reasons. There was no
evidence at all to show that Eskom contravened any of the statutory
provisions applicable.  A crucial
witness, Tjabadi, did not
testify for reasons advanced by Quickfall.  He was suspended and
facing disciplinary proceedings.
His suspension is linked to
his alleged conduct in the instant contract.  It might be that
the envisaged disciplinary proceedings
may throw some better light on
what exactly transpired.  However, all this is speculation.
Although the principles discussed
above make it clear that an illegal
contract is unenforceable and that a court may raise the question of
illegality
mero
motu
if such illegality appears
ex
facie
the transaction, it was for Eskom to plead clearly the illegality,
and prove sufficient facts to enable the court to come to its

assistance since justice and public policy so demand.  See in
this regard
Yannakou
v Apollo Club.
[55]
In
addition, in the present matter, there was equally no evidence of
wrongdoing on the part of the company.  On the evidence

presented, it can hardly be contended that the substitution of the
joint venture partnership by the company took place on any illegal

basis.  Nor can it be said that Eskom did not receive a fair
trial on this aspect or any other aspects in the arbitration

proceedings.  Eskom’s representatives, who had the
authority to manage the contract, in my view, were clearly negligent,

and/or indifferent, or displayed conduct of a supine or inertia
nature.  For these reasons, my declination to make a finding
on
the illegality defence, as did the Arbitrator, remained fortified.
The application must fail on this ground too.
ESKOM’S
ALTERNATIVE RELIEF OF REMITTAL
[105]
In the light of the finding above, and that there was no gross
irregularity or misconduct or bias or misconstruing on the
part of
the Arbitrator, it remains for me to deal with Eskom’s prayer
2, i.e. referring all the disputes between the applicant
and the
first respondent to a new arbitration tribunal.  The prayer is
premised on sec 33(4) of the Arbitration Act, which,
as stated
before, provides that if the award is set aside, the dispute shall at
the request of either party, be submitted to a
new arbitration
tribunal to be constituted in the manner ordered by the court.
The prayer for remittal is plainly not in
terms of sec 32(2) of the
Arbitration Act.  However, in my view, the principles in
considering relief under these two sections
are largely similar.
[106]
At the commencement of this judgment, I alluded to the fact that
Eskom’s prayer for remittal is closely linked to the
prayer for
setting aside the award. It follows that the reasons already accepted
by the court for refusing to set aside the award
will apply with
equal force to the present remittal request.  In the founding
papers,
[56]
it was merely
stated that if the ‘
court
finds that the award should be set aside Eskom will, in terms of
section 33(4) of the Arbitration Act, request that the further

disputes between the parties be submitted to a new arbitration
tribunal …
’.
No other grounds were advanced.
[107]
In these circumstances, it appears to me that Eskom, in order to
succeed, was obliged to allege and prove good cause for the

remittal.  At the risk of attracting criticism for excessive
reliance on Brand JA’s article,
supra
,
I feel obliged to state what is mentioned there under the heading
‘
Remittal
to Arbitrator
’,
[57]
although in the context of a remittal under sec 32(2) of the Act:
“…
In the
past when the courts have found themselves in a position to choose
between setting aside an award or remitting it to the
arbitrator,
they have regarded the type of situation referred to in section 33(1)
as precluding a remittal.  Most recently,
in Leadtrain
Assessments v Leadtrain, the Supreme Court held that:
‘
The
guiding principle of consensual arbitration is finality – right
or wrong … it would be extraordinary if the conduct
of an
arbitrator that falls short of the strict constraints of s 33(1) were
nonetheless to be capable of being set aside and committed
for
reconsideration under s 32(2).  As was pointed out in Benjamin
Sobac South African Building and Construction (Pty) Ltd,
correctly,
the effect of so holding would be to emasculate the provisions of s
33(1).  However one approaches the question
of what is ‘good
cause’ it seems to us that it inexorably requires something
other than mere error on the part of the
arbitrator.’
”
[footnotes omitted]
[108]
In
Leadtrain
Assessments (Pty) Ltd and Others
,
supra
,
[58]
the appeal was about the costs order made by the Arbitrator.
The essential issue was whether the Arbitrator committed a
misdirection in the exercise of his discretion, and whether the part
of his award was to be set aside and remitted for reconsideration
by
the Arbitrator.  At para [14] of the judgment, the Court said:
“
We have already
said the review grounds in s 33(1) have been disavowed in this case.
The submission was instead that misdirection
on the part of the
arbitrator provided in ‘good cause’ for the matter to be
remitted under s 32(2).  It is true
that the term has a wide
meaning – as this court said in South African Forestry Co Ltd v
York Timbers – but the term
falls nonetheless to be applied in
the context in which it is used.  That context in this case is
the Arbitration Act, which
is directed at the finality of arbitration
awards.
”
At
para [16] of the judgment, the Court went on to state that:
“
In this appeal
the case that is made out amounts to alleged error on the part of the
arbitrator without more.  As Brand J observed
in Kolber and
Another v Sourcecom Solutions (Pty) Ltd and Others;  Sourcecom
Technology Solutions (Pty) Ltd v Kolber and Another,
‘a party
to arbitration proceedings should not be allowed to take the
arbitrator on appeal under the guise of remittal in
terms of s
32(2)’.  It seems to us that that is precisely what is
sought to be done in this case and the counter-application
ought to
have failed.
”
[109]
Whilst recognizing readily that the above cases dealt with remittal
under sec 32(2) of the Arbitration Act, and not under
sec 33(4), as
in the present matter, the principles expounded therein should be of
equal application in the present matter, and
in my view.
[110]
In applying the above principles to the facts of the instant matter,
the conclusion must be inevitable.  That is that,
Eskom has not
succeeded at all to make out a case for remittal.  This is so
whether on the basis of good cause or any other
consideration.
It is clearly not a remittal to the same arbitrator.  That
arbitration has clearly not failed to deal
with the issues before
him.  He has done so, as indicated before.  If the matter
is remitted as now requested by Eskom,
the arbitration proceedings
will have to commence
de novo
.  This will plainly be
contrary to the noble principle of finality in arbitration
proceedings, which this Court cannot countenance.
If that had
to happen, the inconvenience, prejudice, delay, and costs
implications for the company, or the claimants, will be severe,

undoubtedly.  The respondents and/or the claimants are clearly
entitled to have closure in this matter, especially since Eskom
has
cancelled the contract for reasons outside the contract.  In
addition, the relief to set aside the award has already been

refused.  On these grounds too, I conclude that the remittal of
the matter, as prayed for, ought to fail.
COSTS
[111]
I deal briefly with the issue of costs, which is a discretionary
matter.  There was no credible reason advanced why the
costs
should not follow the result.  In the heads of argument, the
respondents (claimants) contended for costs to be awarded
on the
scale as between attorney and client. This, on the basis that the
application had no merit at all since it was premised
on the basis
that the Arbitrator’s conduct was ‘
wrongful and
improper
’, or ‘
dishonest
’, or ‘
mala
fide
’, or ‘
partial
’, or and due to
‘
moral turpitude
’.  The respondents further
argued that there was no basis for such allegations coupled with the
fact that Eskom persisted
in pursuing such allegations.  I
agree.  This was a lengthy special motion case, characterized by
the prolixity of papers
and annexures, as stated earlier in the
judgment.  It was a complex matter involving huge sums of
money.  The urgency
of the matter compelled this Court to
prepare judgment even during its long leave.
ORDER
[112]
In the result the following order is made:
1.
The application is
dismissed with costs, including all the costs previously reserved, if
any.
2.
The costs, which shall be
on the scale as between attorney and client, shall include the costs
consequent upon the employment of
two counsel.
__________________________________________
D
S S MOSHIDI
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
COUNSEL
FOR THE APPLICANT
A GAUTSCHI SC
ASSISTED
BY

M SEAPE
INSTRUCTED
BY

KOIKANYANG INC ATTORNEYS
COUNSEL
FOR THE RESPONDENTS
G C PRETORIUS SC
ASSISTED
BY

I M LINDEQUE
INSTRUCTED
BY

BREYTENBACH MOSTERT SKOSANA
INC ATTORNEYS
DATES
OF HEARING

1 AND 2 DECEMBER 2014
DATE
OF JUDGMENT

4 JUNE 2015
[1]
See
transcript 35.
[2]
See
transcript 39.
[3]
See
transcript 48 lines 9 to 15.
[4]
See
transcript 83 to 98.
[5]
See
transcript 100.1 to 100.2.
[6]
See
transcript 155.
[7]
See
transcript 230, lines 7 to 15, witness bundle 2, 418.
[8]
See
witness bundle 2, 451.1.
[9]
See
transcript 251 to 253 and 255.
[10]
Witness
bundle 2, 625, and transcript 263, line 15.
[11]
See
transcript 316, line 10.
[12]
See
626, witness bundle 2.
[13]
See
transcript 317, line 15.
[14]
Witness
bundle 2 at 670.
[15]
See
transcript 392 and witness bundle 2 p 470.
[16]
See
transcript 398.
[17]
See
transcript 422, lines 8 to 12.
[18]
See
trial bundle 236.
[19]
See
trial bundle 243.
[20]
Transcript
432, lines 12 to 23.
[21]
See
transcript 439 to 440.
[22]
Transcript
439 lines 3 to 10.
[23]
Transcript
440 to 442.
[24]
See
clause Z8 – FA 58.
[25]
See
RA paras 9 to 15.
[26]
1909
566 (A).
[27]
Ibid
581.
[28]
1915
AD 166.
[29]
Ibid
176
to 177.
[30]
1915
CPD 68.
[31]
(701-212)
[2013] ZASCA – (now reported at
2013 (6) SA 224
(SCA)).
[32]
[2006] ZASCA 112
;
2007
(3) SA 266
(SCA) para [67].
[33]
2009
(4) SA 529 (CC) 221.
[34]
2008
(2) SA 24
(CC) para [265].
[35]
See
Stell
LR
2014
2 – 247 to 264.
[36]
Amler’s
Precedents
of Pleading
6ed 166 to 167.
[37]
1963
(4) SA (C) at 56G to 57.
[38]
1964
(3) SA 402
(A) at 415.
[39]
2004
(6) SA 491 (SCA).
[40]
Ibid
para
259D-E.
[41]
Ibid
para
235.
[42]
Jajbhay
v Cassim
1939 AD 537.
[43]
At
para [90].
[44]
Schierhout
v Minister of Justice
1926
AD 99
at 109.
[45]
Para
[55].
[46]
Ibid
para
58F.
[47]
[2014]
1 All SA 375 (SCA).
[48]
2008
(2) SA 481
(SCA) paras [28] to [32].
[49]
2013
(5) SA 1
(SCA).
[50]
[2015]
2 All SA 127 (SCA).
[51]
2000
(4) SA 413 (SCA).
[52]
[2009]
4 All SA 231 (SCA).
[53]
Tjabadi,
Sikani, Ms K Pather, Mr Jerry Chosa, Mr Themba Tibane, Ms R
Govender, Ms P Donashe, Ms Suzette Mathe, Mr Andrew Botes,
Mr Kenny
Nkwana, Ms Busi Mthungwa, Mr Leighton Itholeng, and Mr Percy
Mohlabane.
[54]
Para
4.2 pp 204 to 205.
[55]
1974
(1) SA 614
(A) at 623 to 624.
[56]
See
FA p 42, para 10.
[57]
Ibid
at 256.
[58]
2013
(5) SA 84
(SCA).