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[2020] ZAGPJHC 175
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Kuyasa Mninng (Pty) Ltd and Another v Eskom Holdings SOC Limited (02966/2020) [2020] ZAGPJHC 175 (7 August 2020)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
Case No. 02966/2020
In
the matter between:
KUYASA MINING (PTY)
LTD FIRST
APPLICANT
DELMAS
COAL (PTY)
LTD SECOND
APPLICANT
And
ESKOM HOLDINGS SOC
LIMITED RESPONDENT
JUDGMENT
MILLAR, A J
1.
The applicants and the respondent are presently parties to an
arbitration. The arbitration arises out of the cancellation of
a coal
supply agreement that had been entered into between them during
September 2011. The coal supply agreement persisted until
its
cancellation in October 2018 by the applicants whereafter the
respondent, which disputes the cancellation, referred the matter
to
arbitration in February 2019. In consequence of the referral of the
dispute to arbitration by the respondent, the applicants
then filed,
also for determination at the arbitration, a counter claim.
2.
The coal supply agreement provided in clause 33 for the referral of
any disputes arising from the agreement to arbitration and
the
parties thereafter proceeded in terms thereof. A pre- arbitration
meeting was held in February 2019 at which the parties agreed
a
timetable and they then proceeded in accordance therewith. In their
respective preparations for the arbitration, both parties
requested
discovery of documents from the other . Each of the parties disputed
the entitlement of the other to call for the discovery
of the
specific documents that they had and this subsequently resulted in
the arbitrator hearing applications to compel.
3.
On 19 December 2019, the arbitrator delivered a decision in respect
of each of the applications to compel. The applicants have
accepted
and complied with the decision made in respect of the respondent's
request for discovery against them and no more need
be said about
this. The respondent, however, does not accept the decision of the
arbitrator and on 17 January 2020 delivered a
notice of appeal in
respect of that decision.
4.
The decision of the arbitrator in the applicants' application to
compel discovery is variously referred to as "the decision"
and the "partial award" in the papers before the Court. For
the purposes of this judgement the decision of the arbitrator
will be
referred to as "the decision".
5.
It was argued for the applicants that the decision was not "the
decision" referred to in clause 33.6.1 of the arbitration
clause
of the coal supply agreement. In the context of the agreement and the
particular clause, this was the outcome of the arbitration
or the
"award" in respect of the main dispute referred to
arbitration by the respondent and the applicants counter claim
thereto. It was also argued that the decision in respect of the
application to compel discovery was an interlocutory one and that
were it in fact to be "the decision" in terms of clause
33.6.1 then this would have the consequence of making every single
decision of the arbitrator potentially appealable and defeating the
very purpose for which the parties had agreed to arbitration
- that
any disputes arising out of their agreement be resolved
expeditiously.
6.
On the part of the respondent, it was argued that clause 33.6.2
afforded the respondent the right to appeal, and in particular
the
decision to order the discovery sought by the applicants.
7.
The respondent also argued that the fact that the decision to compel
discovery was interlocutory did not render it not appealable
because
the effect, at least insofar as the making of the discovery that had
been ordered was concerned - the furnishing of the
documents sought,
was final in effect once the documents had been handed over.
8.
It was also argued by the respondent that the discovery that had been
sought by the applicants related to documents that contained
confidential third-party information and that the respondent's future
tender or business processes may well be adversely affected
in
consequence of such discovery. It was argued that an appeal in
respect of the decision to order discovery was in the present
circumstances "in the interests of justice".
9.
The relevant provisions of the dispute resolution clause in the coal
supply agreement provides:
"33.6.1.1 either
Party may refer the Dispute to be finally resolved in accordance with
the rules of the Arbitration Foundation
of Southern Africa "''AFSA
';
...
and
33.6.1.5 subject to
the provisions of clause 33.6.2 the Parties irrevocably agree that
the decision in any such arbitration proceedings
will be final and
binding on them, will forthwith be put into effect and may be made an
order of any court of competent jurisdiction"
and
33.6.2 Either Party
has the right to appeal against the decision of the arbitrator
appointed in terms of clause 33.6.1.1 provided
that this is done
within 30 (thirty) days of receipt by the Parties of the arbitrator's
award.
.. "
10.
There are two issues to be decided in this application - firstly
whether the only the decision of the arbitrator on the main
dispute
is appealable or not; and secondly whether, in any event, the
decision in question is appealable because, as the respondent
argues,
its effect is final.
11.
In Gutsche
Family Investments (Pty) Ltd and Others v Mettle Equity Group (Pty)
Ltd and Other
s
[1]
it was held by the Supreme Court of Appeal that:
"[12] The appeal
agreement provides only for an appeal procedure according to the AFSA
rules including rule
22.
8. It
does
not provide
"otherwise", ie it
does
not provide that interim
awards which are not of final effect are appealable and the
appellants do not advance their contention.
The real and only
issue
is
whether the arbitrator's order dismissing the exception, would
if it had been made by the High Court have been
regarded
as
an
order having final
effect,
and
thus
appealable to
the
SCA.
This
is
precisely the test
prescribed by rule
22.
8
and (in the absence of
agreement "otherwise'')
is
applicable in the present
case.
On this matter it
is
settled law that
a
High
Court order dismissing an exception in the High Court is
not
appealable to
the SCA.
It follows that
the first issue, whether the arbitrator's order
was
appealable,
must be decided in the first respondent's favour. The arbitrator
is
entitled to reconsider the interpretation
issue."
12.
The parties
had, at least initially sought to have their dispute determined
through
the
process of
a
private
arbitration. In Lufuno Mphaphuli & Associates (Pty) v Andrews and
Another
[2]
in the Constitutional
Court held in this regard that:
"Courts should be
respectful of the intentions of the parties in
relation
to procedure.
In
so
doing,
they
should bear in
mind
the
purposes of
private arbitration which include
the fast and cost-effective resolution of disputes. If courts are too
quick to find fault with
the manner in which an arbitration has been
concluded, and too willing to conclude that the faulty procedure is
unfair or constitutes
a
gross irregularity within the meaning
of section 33(1), the goals of private arbitration may well be
defeated."
13.
Clause
33.6. of the coal supply agreement refers only to "the
decision". The use
of
the
definite
article "the"
as
opposed to
the
indefinite
article "a",
on
a
plain
reading of the relevant clauses refers to a single and specific
instance. The respondent argues that the use of the definite
article
is
"used
to make
a
generalized
reference to something rather than identifying
a
particular
instance
[3]
"
However, the juxtaposition of the word "decision" with it
makes plain that what is referred to is a specific
"choice
or
judgment
made after considering something.”
[4]
with
reference to clause 33.6.1.1 - the dispute between the parties
referred to arbitration in the first place. Attributing this
meaning
is consonant with the accepted approach to interpretation where the
court
held
in
Natal
Joint
Municipal
Pension
Fund
v
Endumeni
Municipality
[5]
that:
''[18]. Over the last
century there have been significant developments in the law relating
to the interpretation of documents, both
in this country and in
others that follow similar rules to our own. It is unnecessary to add
unduly to the burden of annotations
by trawling through the case law
on the construction of document in order to trace those developments.
The relevant authorities
are collected and summarized in Bastian
Financial Services (Pty) Ltd v General Hendrik Schoeman Primary
School. The present state
of the law can be expressed
as
follows:
Interpretation is the process of attributing meaning to the words
used in
a
document, be it legislation, some other statutory
instrument, or contract, having regard to the context provided by
reading the
particular provision or provisions in the light of the
document
as a
whole and the circumstances attendant upon its
coming into existence. Whatever the nature of the document,
considerations must be
given to the language used in the light of the
ordinary rules of grammar and syntax; the context in
which
the
provision appears; the
apparent
purpose to which it
is
directed and the
material known to
those responsible for its production.
Where more than one meaning is possible each possibility must be
weighed in the light of
all
these
factors. The process is objective, not subjective. A sensible meaning
is to
be preferred to
one that leads to
insensible or unbusinesslike results or undermines the
apparent purpose of the document. Judges must be alert to, and guard
against,
the temptation to substitute what they regard as reasonable,
sensible or businesslike for the words actually used. To do so in
regard to a statute or statutory instrument is to cross the divide
between interpretation and legislation; in a contractual context
it
is to make a contract for the parties other than the one they in fact
made. The "inevitable point of departure is the language
of the
provision itself," read in context and having regard to the
purpose of the provision and the background to the preparation
and
production of the document."
14.
Axiomatically then the agreement between the parties provides only
for an appeal in respect of a final decision made by the
arbitrator.
However this is not the end of the enquiry. Is the decision made by
the arbitrator, on a proper interpretation, final
in effect?
15.
The process of discovery is fundamental to the entire dispute
resolution process - it is described thus:
"The object of
discovery was stated in Durbach v Fairway Hotel Ltd
1
to be 'to
ensure that before trial both parties are made aware of all the
documentary evidence that is available. By this means
the issues are
narrowed and the debate of points which are incontrovertible is
eliminated.'
'Discovery has been
said to rank with cross-examination
as
one of the mightiest
engines for the exposure of the truth ever to have been devised in
the Anglo-Saxon family of
legal systems.
Properly employed where its use is called for, it can be, and often
is
a
devastating tool.'
2
The underlying
philosophy of discovery of documents is that
a
party in
possession or custody of documents is supposed to know the nature
thereof and
thus carries the
duty
to
put
those
documents
in proper order for both the benefit of his adversary and the court
in anticipation of the trial action.
3
Discovery assists the parties and the court in discovering the
truth and, by doing so, helps towards
a
just determination of
the case. It also saves costs.
4
'But it must not be
abused or called in aid lightly in situations for which it
was
not
designed or it will lose its edge and become debased.'
5
The employment of discovery should be confined to cases where parties
are properly before the court and are litigating 'at full
stretch'.
6
The essential feature of discovery is that the person requiring
discovery is in general only entitled to discovery once the battle
lines are drawn and the legal issues established. It is not
a
tool
designed to put
a
party in
a
position
to draw the battle lines
and
establish
the legal issues. Rather, it is
a
tool
used to identify factual issues once legal issues are established.
7
Discovery is not intended to be used as
a
sniping
weapon in preliminary skirmishes.
8
”
[6]
16.
An order or
decision to compel discovery is in the ordinary course of an
arbitration or litigation before a court , an interlocutory
matter.
It is made in the course of bringing the proceedings to finality.
Such orders are not usually appealable but this is not
an inflexible
rule and there are circumstances
where
leave
to
appeal
such orders
has
been
granted.
[7]
Whether it is
granted or not will depend on the specific circumstances of each
matter
[8]
.
17.
The respondent argued that the present case is one in which the
"interests of justice" militate for the decision of
the
arbitrator to be regarded as a final decision - the decision referred
to in clause 33.6.1 and that it ought to be appealable.
It was argued
that once the discovery sought by the applicants had been made the
respondents prejudice would be irreparable.
18.
The parties argued their respective applications to compel fully
before the arbitrator. The prejudice that the respondent claimed
would eventuate from having to make the discovery sought by the
applicants was fully ventilated before the arbitrator and her
decision on the matter reflects this. The arbitrator provided that:
"
50.3
In each case where the financial data contains particulars of third
party
suppliers
of coal to Eskom, their
full names and such further particulars as may render their identity
determinable shall be redacted from
the said financial data."
19
The prejudice that the respondent claims it will suffer when weighed
against the specific terms of the arbitrator's decision
and the
applicant's rights to properly defend the claim against them and to
prosecute their counterclaim is to my mind illusory.
It would be
absurd were the respondent who had initiated the arbitration
proceedings be permitted to frustrate the proper ventilation
of the
dispute by withholding relevant documents. Litigation or arbitration
is not an endeavor to be entered into lightly and once
in motion the
participants must bear the consequences of their decision to do so.
20.
I find that the decision of the arbitrator to order the respondent to
make discovery as she did is not appealable within the
terms of the
arbitration agreement between the parties or that there are any other
compelling reasons for it to be regarded as
such.
21.
In the circumstances I make the following order:
21.1
The partial award published by the Arbitrator, Madame Nkosi
Thomas dated 20 December 2019 compelling the respondent to produce
documents relevant to the arbitration proceedings, in the terms set
out therein is not appealable by the respondent;
21.2
The respondent is ordered to deliver the documents referred to
in the Partial Award dated 20 December 2019 to the applicants within
15 business days of the granting of this order; and
21.3
The respondent is ordered to pay the costs of this application
which costs are to include the costs consequent upon the employment
of two counsel.
______________________
A MILLAR
ACTING JUDGE OF THE HIGH
COURT GAUTENG
LOCAL DIVISION,
JOHANNESBURG
HEARD
ON: 3 AUGUST 2020
JUDGMENT
DELIVERED ON: 7 AUGUST 2020
(HANDED
DOWN ELECTRONICALLY BY EMAIL DELIVERY TO THE PARTIES)
COUNSEL
FOR THE APPLICANT: ADV. DM FINE SC
ADV.
A MILOVANOVIC-BITTER
INSTRUCTED
BY: MCROBERT INC
REFERENCE:
MR K CAMERON
COUNSEL
FOR THE RESPONDENT: ADV. F ISMAIL
ADV.
PN SMITH
INSTRUCTED
BY: KOIKANYANG INC.
REFERENCE:
MR M RAMONYAI
[1]
[2007] 3 ALL SA 223 (SCA)
[2]
2009 (4) SA 529
(CC), at para 236.
[3]
Concise Oxford English Dictionary, 12t h Ed, Oxford University
Press, 2011.
[4]
Compact Oxford English Dictionary, Third Edition, Oxford University
Press, 2005.
[5]
2012 (4) SA 593
(SCA) , para [18] footnotes omitted.
[6]
DE van Loggerenberg Erasmus, Superior Court Practice, Juta, Vol. 2,
RS 9, 2019 D458 - 459, footnotes omitted.
[7]
Nova Property Group Holdings v Cobbett
2016 (4) SA 317
(SCA) at
paras 9 - 10
[9]
It is well established that in deciding what is in the interests of
justice, each case has to be considered in light of its
own facts.
8
The considerations that serve the interests of justice, such as that
the appeal will traverse matters of significant importance
which pit
the rights of privacy and dignity on the one hand, against those of
access to information and freedom of expression
on the other hand,
certainly loom large before us. However, the most compelling, in my
view, is that a consideration of the merits
of the appeal will
necessarily involve a F resolution of the seemingly conflicting
decisions in La Lucia Sands v Barkhan
9
and Bayoglu v
Manngwe,
10
on the one hand, and ;Basson v On-Point
Engineers
11
and Mail & Guardian Centre for Investigative
Journalism v CSR E-Loco,
12
. on the other.
[10]
Section 17(1) of the Superior Courts Act 10 of 2013 (the
Superior
Courts Act), which
provides for the circumstances in which a judge
may grant leave to appeal , gives express recognition to this
consideration .
It provides:
'(1) Leave to appeal may
only be given where the judge or judges concerned are of the opinion
that -
(a) (i) the appeal would
have a reasonable prospect of success; or
(ii) there is some other
compelling reason why the appeal should be heard, including
conflicting judgments on the matter under
consideration;
(b) the decision sought
on appeal does not fall within the ambit of
section 16(2)(a)
; and
(c) where the decision
sought to be appealed does not dispose of all the issues in the
case, the appeal would lead to a just and
prompt resolution of the
real issues between the parties.'
The
provisions of
s 17(1)
of the
Superior Courts Act are
tailor-made for
this appeal principally for two reasons . First, as already alluded
to, there are at least four conflicting judgments,
including that of
the court a quo, on the proper interpretation of
s 26(2)
of the
Companies Act. Second, the appeal would lead to a just and prompt
resolution of the real issues between the parties for
the reasons
set out below.
[8]
Santam Ltd and Others v Segal
2010 (2) SA 160
(N) at para 7