THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not reportable
Case number: 1262/2022
In the matter between
REMO VENTURES (PTY) LTD FIRST APPELLANT
EKUZENI SUPPLIES (PTY) LTD SECOND APPELLANT
NTHABISENG SEGOALE THIRD APPELLANT
and
CECILE VAN ZYL FIRST RESPONDENT
SUSAN LEONORA MEINTJIES SECOND RESPONDENT
JUDGE NEELS CLAASEN THIRD RESPONDENT
Neutral citation: Remo Ventures Pty Ltd v Cecile Van Zyl and Others (1262/2022) [2023]
ZASCA 09 (26 JANUARY 2024)
Coram: MOCUMIE, MOKGOHLOA, CARELSE and GOOSEN JJA and TOKOTA AJJA
Heard: 6 November 2023
Delivered: This judgment was handed down electronically by circulation to the parties’
legal representatives via e-mail, publication on the Supreme Court of Appeal website and
released to SAFLII. The date and time for hand -down are deemed to be delivered on
26 January 2026
Summary: Arbitration – interpretation of the Sales of Shares agreement –
interpretation of the arbitration agreement – whether the purported arbitration agreement
concluded between the parties and the resultant steps and proceedings are void as a
result of the Sale of Shares agreement upon which it is predicated being a nullity.
2
____________________________________________________________________________
ORDER
On appeal from: Gauteng Division of the High Court, Pretoria (Molefe J, sitting as a court of first
instance):
1 The appeal is upheld with costs.
2 The order of the high court is set aside and replaced with the following:
‘(a) It is declared that the arbitration contract entered into between the applicant
and second to fourth respondents is a nullity.
(b) It is declared that the purported appointment of the first respondent in terms
of Annexure A [the arbitration contract] is a nullity.
(c) It is declared that the resultant purported arbitration proceedings, including
the purported award by the first respondent dated 10 May 2021 Annexure C, is a
nullity.
(d) The costs of the application are to be paid by the se cond and third
respondents.’
____________________________________________________________________________
JUDGMENT
____________________________________________________________________________
Mocumie JA(Mokgohloa, Carelse and Goosen JJA and Tokota AJA
concurring)
Introduction
[1] This is an appeal against the judgment and order of the Gauteng Division of the
high court, Pretoria (Molefe J) sitting as a court of first instance. The matter concerns the
validity of an arbitration agreement to which it related. The arbitration agreement
purported to amend an arbitration clause contained in the Sale of Shares Agreement in
circumstances where that agreement was void, where, unbeknown to the parties the Sale
of Shares A greement had already lapsed . Arbitration proceedings were conducted in
terms of the arbitration agreement and an award was issued. The appeal is with leave of
the court a quo.
Factual matrix
3
[2] The appellant is Remo Ventures (Pty) Ltd, a private for -profit company, duly
incorporated and registered in terms of the company laws of the Republic of South Africa.
The second app ellant is Ekuzeni Supplies (Pty) Ltd, a private for -profit company
(previously Segoale Supplies (Pty) Ltd), duly incorporated and registered in terms of the
company laws of the Republic of South Africa . The third app ellant is Mr Nthabiseng
Segoale (Mr Segoale) a business person and director of the first and second appellants.
The first respondent is the retired Judge of the Gauteng Division of the High court, Judge
Neels Claassen who has since passed on. The second respondent is Ms Cecile Van Zyl,
a business person and entrepreneur. The third respondent is Ms Susan Leonora
Meintjies, a business person and entrepreneur. The fourth respondent is Suceco
Partnerships of which the second and third respondents are the partners.
[3] The facts are largely common cause . On 3 April 2017, the app ellants and the
second and third respondent s (the respondents) concluded a wri tten Sale of Shares
Agreement (the SoS agreement). In terms of this SoS agreement, the purchase price of
R50 million was payable in tranches, with the first tranche of R10 million being paid on
16 March 2017. The second tranche of R20 million was payable on the effective date,
described as 21 June 2017. However, on 20 July 2017, after the agreement had already
lapsed, the parties concluded a so-called ‘Date Agreement’, in terms of which the date
for payment of the second tranche was extended to 26 July 2017. Payment of the second
tranche was effected on 31 August 2017, and accepted by the respondents. Transfer of
the shares was effected on the same day.
[4] In terms of Clause 3.1 of the SoS agreement the sale was subject to a number of
conditions precedent which included that the purchaser, Mr Segoale was to cede a life
insurance policy on his life to the sellers (the first and second respondents) to the value
insurance policy on his life to the sellers (the first and second respondents) to the value
of R15 million (fifteen million rand) on or before the effective date being 21 June 2017 .
Clause 3.4 of the s ale agreement provided that if any conditions precedent is not
timeously fulfilled for any reason whatsoever, and is not waived in terms of clause 3.3,
then the whole s ale agreement shall be of no f orce or effect. Clause 22 had a dispute
resolution/arbitration clause which made provision for arbitration under the rules of the
Arbitration Foundation of South Africa (AFSA) and for the arbitrator to be appointed by
AFSA.
4
[5] By 21 June 2017, Mr Segoale had failed to pay the balance of the purchase price
in full and final settlem ent and to cede his life policy . As a result of this breach, the
suspensive condition in clause 3.4 was triggered. Ex lege, the SoS agreement became
a nullity. Notwithstanding the above non-fulfilment, the parties acted under the belief that
the SoS agreement was still in force and valid and continued to implement it. On 31 July
2018, the respondents demanded payment of the third tranche of R10 million.
[6] During 2018 and 2019, various disputes on performance obligations of the
contracting parties in terms of the SoS agreement arose, which the contracting parties
believed was still in force. However, as a result of the non -fulfilment of the suspensive
condition, the SoS agreement had already fallen away and lapsed. On 20 February 2019,
the parties concluded an arbitration agreement which was predicated and dependent
upon the existence and validity of the SoS agreement and purported to:
‘12.1 Amend clause 22 of the SoS agreement but substituting such clause in its entirety with the
provisions of the arbitration contract; and
12.2 Refer the disputes that had arisen aforesaid to the arbitration in terms of clause 22 as
purportedly amended in terms of which the arbitrator, the late retired Judge Claassen (‘the third
respondent’), was by agreement between the parties appointed to conduct the arbitration in
accordance with a different procedure outside the AFSA rules. In essence, the parties e ntered
into privately conducted and administered arbitration proceedings and appointed the third
respondent as their own arbitrator.’
[7] Clause 4.2 of the arbitration agreement provides:
‘The parties, to the extent that it is necessary, and for the purp oses of the current
arbitration proceedings, substitute the provisions of this Arbitration Agreement for clause
14 of the Sale of Business Agreement, and clause 22 of the Sale of Shares Agreement,
14 of the Sale of Business Agreement, and clause 22 of the Sale of Shares Agreement,
and all the arbitration clause contained in any other ancil lary agreement entered into
between the parties, which will form part of the Disputes to be adjudicated by the
Arbitrator.’
[8] On the basis of the arbitration agreement, and unaware of the SoS having lapsed;
in a later arbitration, the respondents claimed specific performance , ie payment of R20
million, such being the balance of the purchase price. The appellant in the Statement of
Defence and Counter claim , pleaded that the respondents had breached their
5
performance obligations in various respects under the agreement and were entitled to
withhold payment, alternatively to apply for set off. The respondents tried to effect
amendments to their Statement of Claim and also unsuccessfully applied for the recusal
of the arbitrator. Only in the amendment introduced in April 2020 was the non -fulfilment
of the suspensive condition and the resultant lapsing of the SoS raised for the first time.
The appellant c laimed that the SoS agreement had been reinstated but without the
suspensive condition.
[9] Before the high court, t he parties argued the issue whether SoS agreement had
been reinstated, as a separated issue on common cause facts . The main application
before the high court wa s premised on the contention by the appellant that since it was
common cause that the SoS agreement was a nullity due to the failure to fulfil the
suspensive condition, it followed that the arbitration agreement was also a nullity .
Therefore, the subsequent award delivered by the third respondent must also be a nullity
and be declared as such. In the alternative, the third respondent did not have the power
to issue the award, and the award therefore fell to be reviewed and set aside in terms of
s 33 of the Arbitration Act 42 of 1965 (the Arbitration Act).
[10] The respondents’ defence was that the arbitration agreement was a self-standing
agreement extraneous to the SoS agreement. Therefore, it survived the SoS agreement.
Findings of the high court
[11] The high court considered clause 4.2 of the arbitration agreement and held that ‘it
is clear on a proper interpretation of the arbitration agreement that it was entered into intended to
survive the voidness of the share agreement since it was intended to cover various agreements,
which agreements remain valid and binding despite the fact that the shares agreement may be
void. An example is the sale of a business agreement which is still alive despite the death of the
shares agreement. The arbitration agreement cannot therefore lapse merely because the shares
agreement has lapsed due to non-fulfilment of the conditions in that agreement.’
[12] It held further that ‘clause 22.1 of the shares agreement provides that if the parties
are unable to reach an acceptable settlement of any dispute . . . concerning any provision,
6
any party may submit the dispute to the AFSA for mediation in accordance with the terms
set by the secretariat of AFSA.’
[13] Important to the determination of this appeal, the high court also held ‘ . . . on a
proper interpretation, it was not therefore a referral to arbitration in terms of clause 22 of
the shares agreement but a new referral to arbitration which superseded the original
referral to arbitration in terms of clause 22.The only reasonable interpretation is that in so
far as there is a dispute concerning the shares agreement, the arbitration agreement will
‘substitute’ for clause 22 of the shares agreement [in terms of clause 4.2 of the arbitration
agreement].’
Issues for determination before this Court
[14] The issue for determination before this Court is whether the arbitration agreement
is a nullity on account of the SoS agreement being a nullity. In essence, the question was
whether the SoS Agreement could be interpreted in such a manner as to allow for the
existence of the Arbitration Agreement.
[15] Counsel for the appellant contended that the parties agreed to conclude several
commercial agreements with reference to a number of business v entures, inter alia, the
SoS agreement. The SoS agreement was subject to a number of suspensive conditions.
The parties had in mind, one broad composite agreement with various sub-agreements;
interrelated but separate contracts which were moored in the actual text of the contract.
To the extent that these agreements formed part of one composite agreement , if one
agreement (and in this instance the SoS agreement) fell through, then the substratum of
the composite agreement disappeared ; the SoS agreement accordingly becomes
unenforceable between the parties. He relied on clause 12 of the SoS agreement which
provides that ‘all of the transactions and arrangements contemplated by this Agreement
constitutes a single and indivisible transaction.’
constitutes a single and indivisible transaction.’
[16] He submi tted that ‘the ineluctable conclusion from the language, context and
purpose . . . is that the purported arbitration agreement was predicated and dependent
on the existence and validity of the SoS. ’ This is so, because the SoS agreement never
existed, on a ccount of non -fulfilment of the suspensive condition, nothing of the SoS
7
agreement can be used in the arbitration agreement. This would mean that the arbitration
proceedings, as far as it applied to the SoS agreement, could not have taken place
because the SoS agreement did not and does not exist.
[17] He argued on the strength of Capitec Bank Holdings Ltd and Another v Coral
Lagoon Investments 194 (Pty) Ltd1 that, upon proper interpretation, the SoS agreement
and the subsequent arbitration agreement cannot be read in isolation from one another.
Doing so, he argued, will disregard the context and the language of the agreement which
the parties intended to be bound by.
[18] To the contrary, the respondents contend that clause 3.2 of the arbitration
agreement makes specific reference to arbitration proceedings and that ‘any dispute that
arises’ from the ‘said Agreements’, including the sales agreement, will be decided by
private commercial arbitration. On a proper interpretation of the arbitration agreement, it
was intended to be a self-standing agreement and extraneous to the SoS agreement. In
addition, even if the arbitration agreement was not extraneous to the SoS agreement but
became a term there, a proper interpretation of the SoS agreement (as amended) is that
the arbitration agreement was intended to survive the invalidity of the SoS agreement to
allow that very dispute to be decided in arbitration proceedings. This is so on the
presumption that commercial people intend to litigate in one forum and to use arbitration
as a ‘one-stop shop’ to resolve all their disputes arising out of the SoS agreement. The
high court agreed with the respondents. Thus, this appeal is against the order of the high
court.
The law
[19] As a point of departure, the following principles are highlighted: In Africast (Pty)
Ltd v Pangbourne Properties Limited2 in which this Court held:
‘A contract containing a suspensive condition is enforceable immediately upon its conclusion but
some of the obligations are postponed pending fulfilment of the suspensive condition. If the
condition is fulfilled the contract is deemed to have existed ex tunc. If the condition is not fulfilled,
then no contract came into existence. Once the condition is fulfilled: “[T]he contract and mutual
rights of the parties relate back to, and are deemed to have been in force from, the date of the
1 Capitec Bank Holdings Ltd and Another v Coral Lagoon Investments 194 (Pty) Ltd [2021] ZASCA 99;
[2021] 3 All SA 647 (SCA).
2 Africast (Pty) Ltd v Pangbourne Properties Limited [2014] ZASCA 33; [2014] 3 All SA 653 (SCA).
8
agreement and not from the date of the fulfilment of the condition, ie ex tunc.”’ 3
[20] In addition to this, this Court has held in Paradyskloof Golf Estate (Pty) Ltd v
Municipality of Stellenbosch 4 that ‘[a]n agreement of purchase and sale entered into
subject to a suspensiv e condition does not there and then establish a contract of sale
“but there is nevertheless created “a very real and definite contractual relationship” which,
on fulfilment of the condition, develops into the relationship of seller and purchaser. . .”
Upon fulfilment of the condition the contract thus becomes enforceable. Non-fulfilment of
the suspensive condition, however, renders the contract void ab initio . . .’ 5
[21] With specific reference to arbitration agreements, this Court in North East Finance
(Pty) Ltd v Standard Bank of South Africa Ltd6 (North East), held:
‘If a contract is void from the outset then all of its clauses, including exemption and reference to
arbitration clauses, fall with it. The principle was most recently enunciated by this Court in North
West Provincial Government and another v Tswaing Consulting and others where Cameron JA
said that an arbitration clau se “embedded in a fraud -tainted agreement” could not stand. The
court referred in this regard to Wayland v Everite Group Ltd which in turn relied on Allied Mineral
Development Corporation (Pty) Ltd v Gemsbok Vlei Kwartsiet (Edms) Bpk. That decision
referred to Heyman and another v Darwins Ltd where Viscount Simon LC said:
‘An arbitration clause is a written submission, agreed to by the parties to the contract , and, like
other written submissions to arbitration, must be construed according to its languag e and in the
light of the circumstances in which it is made. If the dispute is as to whether the contract which
contains the clause has ever been entered into at all, that issue cannot go to arbitration under the
clause, for the party who denies that he has ever entered into the contract is thereby denying that
he has ever joined in the submission. Similarly, if one party to the alleged contract is contending
that it is void ab initio (because, for example, the making of such a contract is illegal), the
arbitration clause cannot operate, for on this view the clause itself is also void .’7
[22] This Court in Capitec v Coral Lagoon held:
‘Most contracts, and in particular commercial contracts, are constructed with a design in mind,
3 Ibid para 37.
4 Paradyskloof Golf Estate (Pty) Ltd v Municipality of Stellenbosch [2010] ZASCA 92; [2010] 4 All SA 591
(SCA); 2011 (2) SA 525 (SCA) (Paradyskloof).
5 Ibid para 17.
6 North East Finance (Pty) Ltd v Standard Bank of South Africa Ltd [2013] ZASCA 76; 2013 (5) SA 1
(SCA).
7 Ibid para 12.
9
and their architects choose words and concepts to give effect to that design. For this reason,
interpretation begins with the text and its structure. They have a gravitational pull that is important.
The proposition that context is everything is not a lice nce to contend for meanings unmoored in
the text and its structure. Rather, context and purpose may be used to elucidate the text.’8
Discussion
[23] It is common cause that t he suspensive conditions set out in the SoS agreement
were not fulfilled. As such, and following the approach outlined above, the agreement in
question ought to be treated as if it never came into existence; it was never cancelled or
resiled from. The SoS agreement certainly existed prior to the fulfilment of the condition,
and the contract would have become enforceable upon the fulfilment of the condition.
The parties, unfortunately, continued to act in terms of the agreement in the erroneous
belief that all conditions had been properly and timeously fulfilled.
Interpretation of the SoS and arbitration agreement in general
[24] This Court in North East held:
‘The court asked to construe a contract must ascertain what the parties intended their
contract to mean. That requires a consideration of the words used by them and the
contract as whole and whether or not there is any possible ambiguity in their meaning ,
the court must consider the factual matrix (or context) in which the contract was
concluded.
. . .
In addition, a contract must be interpreted so as to give it a commercially sensible
meaning . . . This is the approach taken to considering the ambit of an arbitration clause
. . . We must thus examine what the parties intended having regard to the purpose of
their contract.’ (Footnotes omitted.)9
[25] The respondents argued that the arbitration agreement, was intended to be a self-
standing agreement and extraneous to the SoS agreement . As a result, the arbitration
standing agreement and extraneous to the SoS agreement . As a result, the arbitration
agreement was intended to survive the invalidity of the SoS agreement to allow that very
dispute to be determined in arbitration proceedings. We must, they contend, assume that
the parties intended that the lapsed SoS agreement would be substituted by the new
8 Coral Lagoon para 51.
9 North East paras 24-25.
10
agreement, the arbitration agreement. This is so because when the dispute arose, it was
on the interpretation of the new agreement: whether the substitution of the arbitration
agreement was a reinstatement of the SoS agreement.
[26] For the determination of the issue before this Court several clauses of the SoS
agreement and ar bitration agreement are relevant. Clause 3 of the SoS agreement
stipulates:
‘3.1 This agreement is subject to the following conditions precedent:
3.1.1 That both Sellers sign Executive Employment Agreements with the Company on or
before the Effective Date, copies of which is annexed hereto as “Annexures D2-D3”
3.1.2 That Nthabiseng Segoale signs an Executive Employment Agreement with the
Company on or before the effective date, a copy of which is annexed hereto as Annexure
“D1”
3.1.3 The Directors of the Company of Segoale Supplies (Pty) Ltd, Registration Number:
2017/117592/07 authorising.
3.1.4 That Nthabiseng Segoale cede a life insurance policy on his life to the Sellers to
the total value of R15 million (fifteen million rand) on or before the Effective Date. The
original Policy shall be handed to the Sellers. Nthabiseng SEGOALE shall maintain
payment of the Policy until such time as the full Purchase Price in terms of this Agreement
3.1.5 That the Company sign a Lease Agreement with KALFIELAND CC for the rental of
Plot 22,W HEATLANDS,RANDFONTEIN,being the current Premises from where the
business which forms the subject matter of this Agreement is being operated, for a period
of not less than 7(seven) years calculated from the effective date, Annexure “E1”
3.1.6 . . .
3.1.7 . . .
3.4 If any condition is not timeously fulfilled for any reason whatsoever and is not waived
in terms of clause 3.3 then:
3.4.1 This whole agreement shall be of no force or effect;
3.4. 2 The parties shall be entitled to be restored as near as possible to the positions they
would have been, had this Agreement not been entered into; and
would have been, had this Agreement not been entered into; and
3.4.3 No party shall have any claim against any other party in terms of this Agreement
except for such claims (if any) as may arise from a breach of any other provision of this
Agreement by which the parties remain bound.
11
. . .
10 PURCHASE OF THE SHARES SUBJECT TO THE FULFULMENT OF THE
CONDITIONS.
10.1 Subject to the fulfilment of the Conditions Precedent and subject to the terms and
conditions of this Purchase Agreement
. . .
‘22.1 Save as specifically provided elsewhere in this Agreement, should any dispute
arise between the parties concerning any provision of this Agreement, the parties shall
use their best endeavours to resolve the dispute by negotiation. Any party may call upon
the other party by written notice to [the other party] meet with the former for purpose of
reaching a mutually acceptable settlement of the dispute within 7(seven) days after the
date of such notice.
. . .
22.4 These provisions contain ed in this Clause 22 shall not preclude any party from
obtaining interim relief, on an urgent basis.’
[28] Clause 4.2 of the Arbitration agreement provides:
‘The parties, to the extent that it is necessary, and for the purposes of the current arbitration
proceedings, substitute the provisions of this Arbitration Agreement, for clause 14 of the S ale of
Business Agreement, and clause 22 of the Sale of Shares Agreement, and all the arbitration
clauses contained in any other ancillary agreements entered into between the parties, which will
form part of the disputes, to be adjudicated by the Arbitrator.’
[29] The high court was correct to find that the arbitration agreement was predicated
and dependent on the existence and validity of the SoS agreement. It , however, erred
when it then concluded that the arbitration agreement constituted a self -standing new
arbitration agreement, separate and distinct from the SoS agreement and had survived
the lapsing of the SoS agreement . These two findings are irreconcilable. To the extent
that these are irreconcilable, it means they cannot be correct. It is either one or the other.
In my view, the correct view is th e one supported by the context of the agreement
In my view, the correct view is th e one supported by the context of the agreement
concluded by the parties which spells out their intention to have one umbrella agreement
subsuming all others – if it falls foul and become invalid , all agreements thereunder are
inevitably impacted.
[30] It is evident from the common cause facts that there was no dispute over the non-
12
fulfilment of the suspensive condition between the parties. The parties knew what was
referred for arbitration: a dispute on who had breached the contract (breach of contract
and specific performance). The arbitrator instead went beyond what the parties sought to
be determined on the basis that he had the wide powers to determine what the real issue
in dispute was between the parties, contrary to what the parties expressly referred to him
for arbitration. That is why the appellant raised an application for his recusal , which he
dismissed.
[31] In its counter claim, the appellant introduced a reinstatement of the SoS
agreement. The contention for the respondents was that the conduct of the parties
showed that they considered the arbitration agreement as a reinstatement of the So S
agreement. But this cannot be correct because once it is accepted that , despite the
conduct of the parties after the SoS agreement had lapsed, the truth is, the SoS
agreement lapsed. That should be the end of the matter. In other words, it should mean
that whatever the parties did subsequent to the lapsing of the SoS agreement cannot
resuscitate the SoS agreement in the context of the express provisions of the SoS
agreement that: (a) if any condition is not timeously fulfilled for any reason whatsoever
and is not waived in terms of clause 3.3 then this shall be of no force and effect (3.4.1);
the parties shall be entitled to be restored as near as possible to the positions in which
they would have been, had this agreement not been entered into (3.4.2); and no party
shall have claim against any other party in terms of the agreement except for such claims
(if any) as may arise from a breach of any other provision of the agreement by which the
parties remain bound (3.4.3) ; (b) the parties agreed that all the transactions and
arrangements contemplated by the agreement constituted a single and indivisible
transaction. This means that , if one agreement fell through due to non -fulfilment of the
transaction. This means that , if one agreement fell through due to non -fulfilment of the
suspensive condition, all other agreem ents fell through. Had the parties intended
otherwise, when they concluded the arbitration agreement, they would have expressly
said so.
[32] Even on a cursive reading, the arbitration agreement gives no such impression. In
any event, the SoS agreement m akes no provision for the arbitration agreement the
parties concluded outside of what they contemplated under clause 22, under the rules of
the AFSA and for the arbitrator to be appointed by AFSA. If anything, even if it is accepted
that clause 22 was purportedly substituted by clause 4.2 of the arbitration agreement; this
13
is contrary to the express provision of clause 29 of the SoS agreement that ‘this
agreement constitutes the whole agreement between the parties as to the subject matter
hereof, and no agreement, representations or warranties between the parties other than
those set out herein are binding on the parties.’
[33] The argument that the parties agreed that the arbitration agreement is severable
and can survive outside the SoS agreement , is of no assistance to the respondents as
well because, although clause 25 of the SoS agreement specifically provides that each
provision of the SoS agreement is severable from all of others, this is with reference to
the SoS agreement. To accept , as the r espondents contend , that the arbitration
agreement revived the lapsed SoS agreement , means t hat t he other agreements will
continue to exist and impose on the parties a contract they did not contemplate. This
interpretation will disregard the context and the language of the agreement which the
parties intended to be bound by . This is a dispute as defined by the parties even under
the purported arbitration agreement which means, under definitions, clause 2.10 of the
Arbitration agreement, ‘disputes as framed in the statement(s) of claims , defences,
counter claims, and counter defences, filed as part of these Arbitration Proceedings.’
[34] This is so because, the SoS agreement is but one composite agreement
comprised of several other agreements which should fall by the wayside because one
agreement fell through. Contrary to what the respondents submitted, it would be
‘unbusiness-like’ for commercial people to agree to have a single composite agreement
comprising of more than one agreement subject to one suspensive condition, to continue
with others when one agreement falls through or has lapsed . The agreements are
interrelated. That is the expected domino effect.
[35] I agree with counsel for the appellant that when the SoS agreement is considered
[35] I agree with counsel for the appellant that when the SoS agreement is considered
as a whole with the background of what the parties intended – conclusion of various
agreements as one single and indivisible transaction – the arbitration agreement cannot
be interpreted in isolation from that intention and context. The many contracts under one
umbrella were ‘constructed with a design in mind, and their architects choose words and
concepts to give effect to that design.’ Courts’ approach to interpret such contracts cannot
construct such contracts in piece -meal, but as whole , particularly where there is no
possible ambiguity in their meaning. Assuming that the respondents are correct in their
14
contention that the parties intended the arbitration to be a new agreement, distinct from
the SoS agreement, to the extent that even where the SoS agreement became null and
void, the arbitration agreement concluded subsequently, survived the SoS agreement; in
line with the authorities cited above, this would fly in the face of what the parties clearly
intended. The context is clear; the pa rties intended that all the agreements be one
indivisible agreement which lapsed. The arbitrator simply went beyond what the parties
agreed should be arbitrated . H e deviated from his mandate of the parties. Thus, the
parties could not be bound by that decision which was in essence ultra vires. It is obvious
that if this Court holds that the SoS agreement lapsed and that the subsequent arbitration
agreement could not have survived its death, the arbitration award ought not to have
been granted.
[36] Finally, if consideration is given to the words used by the parties even in the
subsequent Arbitration Agreement, such as ‘any dispute that arises from the said
Agreements’, cannot be taken to mean any dispute, but that which the parties have
agreed upon as defined under the contractual definitions. C lause 2.10 of the purported
Arbitration Agreement referred to private commercial arbitration read with AA1 to AA7.
This means that the dispute referred to the arbitr ator; not the arbitrator ’s unilateral
decision was the issue for determination , contrary to the parties’ mandate. The
respondents know this but are evidently latching on this technicality, the purported
decision of the arbitrator, well aware of what the parties actually intended. Apart from this,
as is trite and in line with judgments such as North East Finance (Pty) Ltd v Standard
Bank of South Africa Ltd , if one party to the alleged contract contends that it is void ab
initio, the arbitration clause cannot operate, for on this view the clause itself is also void.
Conclusion
Conclusion
[37] In conclusion, the question posited was whether or not the arbitration agreement
which was predicated on the existence and validity of the sales agreement, which in turn
purported to amend the SoS agreement and purported to include it being as part of the
arbitration agreement, was void. From the brief exposition above, the answer must be
‘yes’. It is clear that the SoS agreement ought to be treated as having never existed as it
lapsed upon the non -fulfilment of the suspensive condition . The whole SoS agreement
was moor ed in the understanding and purpose of the ‘suite of interrelated and
interdependent ancillary contracts to give effect to the broad transaction and structure of
15
one business contract.’ As such, any reliance placed on any provision in the lapsed
contract i s without basis and cannot stand on the simple basis that in our law ‘non -
fulfilment of the suspensive conditions renders the contract void ab initio. . .’ 10 In the
absence of any ambiguity in the meaning of the words used in the SoS agreement read
with the arbitration agreement, the factual matrix (or context) in which the agreement was
concluded, I am satisfied that the arbitration agreement did not substitute the SoS
agreement in terms of clause 4.2 thereof to revive the SoS Agreement (See Paradyskloof
Golf Estate (Pty) Ltd v Municipality of Stellenbosch ). The SoS agreement also did not
survive after the effective date which had come and gone without the fulfilment of the
suspensive condition. It therefore follows that the arbitration agreement is a nullity as a
result of the SoS agreement being a nullity. For these reasons the appeal ought to
succeed.
[38] In the result, the following order issues.
1 The appeal is upheld with costs.
2 The order of the high court is set aside and replaced with the following:
‘(a) It is declared that the arbitration contract entered between the applicant and
second to fourth respondents is a nullity.
(b) It is declared that the purported appointment of the first respondent in terms
of Annexure A [the arbitration contract] is a nullity.
(c) It is declared that the resultant purported arbitration proceedings, including
the purported award by the first respondent dated 10 May 2021, Annexure C, is a
nullity.
(d) The costs of the application are to be paid by the second and third
respondents.’
B C MOCUMIE
JUDGE OF APPEAL
10 Ibid para 17.
16
For the 1st to 3rd appellant. Adv MC Maritz SC
Instructed by: Pierre Marais Attorneys, Pretoria
Phatsoane Henney Attorneys, Bloemfontein
For the 1st to 3rd respondent: Adv G Kairinos SC
Instructed by: HJ Can Rensburg Inc Attorneys, Vanderbijlpark,
AP Pretorius Attorneys, Bloemfontein