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[2013] ZASCA 14
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Telkom SA Ltd v ZTE Mzanzi (Pty) Ltd and Others (383/12) [2013] ZASCA 14 (18 March 2013)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 383/12
Reportable
In the matter between:
TELKOM SA LIMITED
...................................................................
Appellant
and
Z T E MZANZI (PTY) LIMITED
.......................................
First
Respondent
HUAWEI TECHNOLOGIES AFRICA
(PTY) LTD
.........................................................................
Second
Respondent
ALCATEL-LUCENT (PTY) LIMITED
...........................
Third Respondent
Neutral citation:
Telkom
v Mzanzi & others
(383/12)
[2013] ZASCA 14
(18 March 2013)
Coram:
NUGENT, LEACH and
PETSE JJA, SCHOEMAN and SALDULKER AJJA
Heard:
4 MARCH 2013
Delivered: 18 MARCH 2013
Summary: Invitation to tender
– construction – which it obliged Telkom to submit to
resolving disputes with tenderers.
___________________________________________________________
ORDER
___________________________________________________________
On appeal from North Gauteng High
Court, Pretoria (Prinsloo J sitting as court of first instance).
The appeal is upheld with costs.
The order of the court below is set aside and substituted with an
order dismissing the application
with costs that include the costs of
two counsel.
___________________________________________________________
JUDGMENT
___________________________________________________________
NUGENT JA (LEACH and PETSE JJA,
SCHOEMAN and SALDULKER AJJA CONCURRING)
[1] Telkom SA Limited (Telkom) –
the appellant – invited tenders for the supply of
telecommunications equipment in a
document referred to as a Request
for Proposals (RFP). The first respondent - ZTE Mzanzi (Pty) Ltd
(Mzanzi) – was one of
those who submitted tenders. Others
included the second and third respondents, who were cited for their
interest in the proceedings,
but they played no role in the court
below nor in this appeal.
[2] Tenders were to be evaluated
in phases. They would need to cross the threshold requirements of
each phase before they could
proceed to the next phase. The tender
submitted by Mzanzi was disqualified at an early stage for alleged
want of compliance with
certain criteria. The contract was ultimately
awarded to the second and third respondents.
[3] Mzanzi was aggrieved at the
disqualification of its tender. Its attorneys wrote to Telkom
outlining its grievances and asking
for certain information. It
stated in addition that ‘our client hereby declares a dispute’
as contemplated by clause
43 of the Standard Terms and Conditions’.
It also asked for an undertaking that Telkom would not proceed with
the processes
envisaged by the invitation to tender ‘until such
time that the envisaged process under clauses 43.3 and 43.4 of the
Standard
Terms and Conditions has been complied with’.
[4] Telkom declined to provide
the undertaking and Mzanzi applied to the North Gauteng High Court
for what was said to be an interim
interdict restraining Telkom from
proceeding with the process ‘pending the finalization of the
dispute resolution process
that has been commenced by the applicant
in terms of clauses 43.3 and 43.4 of the Standard Terms and
Conditions read with clause
1.2.2 of the RFP’. The order was
granted by Prinsloo J and Telkom now appeals with his leave.
[5] The Standard Terms and
Conditions referred to were those contained in the contract a
tenderer would be required to conclude
with Telkom if his or her
tender was accepted. The relevant portions read as follows:
‘
43.1
If any dispute arises out of or in connection with this Agreement, or
related thereto, whether directly or indirectly, the
Parties must
refer the dispute for resolution firstly by way of negotiation and in
the event of that failing, by way of mediation
and in the event of
that failing, by way of Arbitration …
43.2 A dispute
within the meaning of this clause exists once one Party notifies the
other in writing of the nature of the dispute
and requires the
resolution of the dispute in terms of this clause’.
The remaining sections provide
the mechanics for the process and need not detain us.
[6] That clause was incorporated
by reference into the RFP by clause 1.2.2 of that document, which
read as follows:
‘
Should
any dispute arise as a result of this RFP and/or the subsequent
contract, which cannot be settled to the mutual satisfaction
of the
Bidders and Telkom, it shall be dealt with in terms of clause 43 of
the Standard Terms and Conditions.'
[7] Although it makes no
difference to the outcome of this appeal one aspect of the relief
granted ought to be corrected. The matter
was dealt with as if what
was being sought was an interim interdict to be decided upon the
rules expressed in cases like
Olympic
Passenger Service (Pty) v Ramlagan.
1
That is not correct. What is
contemplated by those rules is an interdict pending the outcome of
further proceedings in which the
rights of the parties are to be
determined by a court. The fact alone that an interdict is to endure
only until a defined event
occurs and not in perpetuity – as in
this case – does not bring it within the terms of those rules.
As pointed out
recently by this court in
Minister
of Defence v SA National Defence Union
,
2
in such a case it is a final
interdict for that period, to which the ordinary rules for the grant
of final relief apply.
[8] It is trite that the
submission of a tender in response to an invitation to do so creates
no contractual relationship between
the parties. Lest there was any
uncertainty on that score it was reiterated by Telkom’s RFP in
clause 1.1.3. To find that
the introduction into the RFP of the terms
of clause 43 became binding upon Telkom and bidders would make
material inroads into
that principle. It was submitted that it did no
more than determine the forum in which disputes would be resolved.
Once Telkom
has accepted a bid and contracted with the bidder that is
no doubt correct. But to construe it as contended by Mzanzi would
have
the effect of imposing a contractual obligation upon Telkom to
engage in disputes with bidders, which it would ordinarily not have.
[9] That would be a most
unbusinesslike construction to place on the clause. Indeed, its
consequences would be absurd. It would
mean that Telkom would be
obliged to engage in resolving disputes with multiple bidders,
ultimately by arbitration with varying
awards, before it could safely
award the tender. That could not have been intended by Telkom. Nor
can the terms of the RFP sustain
such construction.
[10] The court below concluded
that ‘the only reasonable interpretation to be attached to
1.2.2 is that provision is made
for two separate dispute resolution
procedures: the one flowing from a dispute arising as a result of the
RFP between Bidders and
Telkom and the other flowing from the
subsequent contract between the ultimate service provider and
Telkom’. I cannot agree.
[11] It is true that the use of
that unfortunate term ‘and/or’ suggests that the clause
applies as much between Telkom
and its contractor as it does to
disputes between Telkom and bidders, but that construction leaves out
of account the use of the
definite article ‘the’, which
indicates that a contract exists at the time the dispute arises. It
is true that its
insertion in the RFP is tautology but tautology is
often to be found in commercial documents. Any other construction
would lead
to the absurd results I have mentioned, and would be in
direct conflict with the expressed intention of Telkom in the RFP
that
no contractual relationship would arise by reason only of the
submission of bids.
[12] In my view the court below
misconstrued the clause and its order must be set aside. Two counsel
appeared in the court below
for both parties, but we were told by
counsel for Telkom that it had not been considered necessary to
employ two counsel for the
appeal.
[13] The appeal is upheld with
costs. The order of the court below is set aside and substituted with
an order dismissing the application
with costs that include the costs
of two counsel.
__________________
R W NUGENT
JUDGE OF APPEAL
APPEARANCES:
For
appellants: C H J Badenhorst SC
Instructed
by:
Routledge
Modise Incorporated p/a Eversheds Attorneys c/o Friedland Hart
Solomon & Nicolson, Pretoria
Matsepes,
Bloemfontein
For
respondents: M C Erasmus SC
W
T B Ridgard
Instructed
by:
Langa
Attorneys c/o KMG & Associates, Pretoria
Honey
& Partners, Bloemfontein
1
Olympic
Passenger Service (Pty) v Ramlagan
1957 (2) SA 382
(D) 383D-G.
2
Minister
of Defence v SA National Defence Union
[2012] ZASCA 110.