Law Reports
Foize Africa (Pty) Ltd v Foize Beheer BV …

Foize Africa (Pty) Ltd v Foize Beheer BV and Others (752/2011) [2012] ZASCA 123; [2012] 4 All SA 387 (SCA); 2013 (3) SA 91 (SCA) (20 September 2012)

70 Reportability

Commercial Law

Brief Summary

Interdict — Interim interdict — Licensing agreement — Appellant sought interim relief pending final determination of action regarding exclusive rights to market and distribute software in South Africa — Respondents raised jurisdictional objections based on arbitration clause in licensing agreement — Court held that such clauses do not oust South African jurisdiction, and discretion exists to stay litigation based on arbitration agreements — Appeal upheld, interim interdict granted pending final action.

Full Judgment Text (Click to expand)

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Foize Africa (Pty) Ltd v Foize Beheer BV and Others (752/2011) [2012] ZASCA 123; [2012] 4 All SA 387 (SCA); 2013 (3) SA 91 (SCA) (20 September 2012)

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THE SUPREME COURT
OF APPEAL
OF
SOUTH AFRICA
JUDGMENT
Reportable
Case No:
752/2011
In
the matter between:
FOIZE AFRICA (PTY) LTD
.............................................................................
Appellant
v
FOIZE BEHEER BV
...........................................................................
First
Respondent
ALGEMEEN BEHEER NEDERLAND BV
....................................
Second
Respondent
FOIZE SALES BV
............................................................................
Third
Respondent
PAUL VAN OOSTVEEN
................................................................
Fourth
Respondent
LEONARDUS MARIA WINDER
.........................................................
Fifth
Respondent
NORBERT WILMERING
....................................................................
Sixth
Respondent
MERTECH TELECOMMUNICATIONS (PTY) LTD
......................
Seventh Respondent
FOIZE EUROPE BV (FORMERLY FOIZE TRADING BV)
..............
Eighth Respondent
NEW GENERATIONS SMS (PTY) LTD
............................................
Ninth
Respondent
Neutral
citation:
Foize Africa v Foize Beheer
(752/2011)
[2012]
ZASCA 123
(20 September 2012)
Coram:
Mthiyane DP, Cloete, Heher, Shongwe and Leach JJA
Heard:
23 August 2012
Delivered:
20 September 2012
Summary:
Interdict against
peregini
─
effectiveness thereof ─ effect of a contractual provision that
parties to a dispute would proceed to arbitration
in Holland and that
Dutch law would apply to their dispute ─ such clauses not
ousting the jurisdiction of a South African
court ─ discretion
whether to stay South African litigation by reason of such a clause ─
factors to be taken into account.
___________________________________________________________________
O R D E R
___________________________________________________________________
On appeal from:
North Gauteng High Court,
Pretoria (Matojane J sitting as court of first instance):
(a) The appeal succeeds, with costs.
(b) The order of the high court of 13 September 2011 is
set aside and is substituted with the following:
‘
1. That pending the final
determination of an action to be instituted by the applicant against
the respondents for a final interdict
and ancillary relief, an
interim order is issued in the following terms:
a. Interdicting and restraining the first to sixth and
eighth respondents from being involved whether directly or indirectly
in
granting a licence to the seventh or eighth respondents or any
third party from selling, marketing or distributing the product
commonly known as the Foize on Mobile software, more fully described
in annexure MV 3 to the founding affidavit, in South Africa
from the
date of this order to 6 December 2014.
b. Interdicting and restraining the first to the sixth
and eighth respondents from marketing, selling or distributing the
said product
in South Africa from the date of this order up to and
until 6 December 2014.
c. Interdicting and restraining the seventh and ninth
respondents from entering into a licensing agreement with the first
to sixth
and/or eighth respondents which purports to grant any rights
to the seventh or ninth respondents to market, distribute or sell the

of certain software and customised hardware, designed for use in the
telecommunications industry. The agreement also included the

following terms relevant to the present dispute:
(a) The appellant was extended the exclusive right to
sell, market and distribute the product in certain specified
geographical
areas (referred to as the ‘Territory’),
including South Africa, for a period of five years until 6 December
2014.
(b) The third respondent warranted that the use of the
product would not infringe on the intellectual property rights of any
third
parties and that it was fully authorised to appoint the
appellant as its exclusive licensee for the ‘Territory’.
1
(c) In clause 9 the third respondent undertook to ensure
that the first respondent (described as being the holder of all
intellectual
property rights relating to the product) was fully aware
and consented to the terms of the licensing agreement, and that:
‘
If,
for any reason, the agreement between [the first respondent] and [the
third respondent] is terminated the [third respondent]
shall procure
that its license agreement with [first respondent] contains a
provision that [first respondent] will honour the terms
of this
license agreement and all the rights and obligations of the [third
respondent] in terms of this agreement shall then vest
in [first
respondent].’
[3] The first respondent was a further signatory to the
licensing agreement. Also represented at the time by the fourth and
fifth
respondents who signed on its behalf, it agreed to be bound by
the terms and conditions therein contained, particularly those in

clause 9 of the agreement (quoted in para 2(c) above).
[4] Unfortunately, business relations between the
parties soon soured. The second respondent subsequently announced
that it, and
not the first respondent, in fact held both the
intellectual property rights and the marketing and distribution
rights to the product,
and that it was going to market the product in
South Africa through two South African companies owned by a
businessman, Mr Stephen
van der Merwe (these latter companies were
cited as the seventh and ninth respondents in the court a quo).
[5] This led to the appellant instituting proceedings in
the North Gauteng High Court in April 2011, seeking interim relief
pending
the final determination of an action which it intended to
institute against the respondents for a final interdict that would,
in
effect, compel the respondents to honour the terms of the
licensing agreement. Essentially the appellant sought (a) an order
piercing
the corporate veil of the first respondent and declaring
that its sole director, the second respondent, was bound, together
with
the first and third respondents, by the licensing agreement, and
(b) interdictory relief designed to protect its rights under the

licensing agreement. In regard to the latter, the appellant cited not
only the present respondents but also, as seventh and ninth

respondents, Van der Merwe’s two South African companies,
alleging that the second respondent had purported to grant them
the
exclusive right to market and distribute the product in South Africa.
The precise relief relevant to the present dispute was
set out in the
notice of motion in the following terms:
‘
2.
That pending the final determination of an action to be instituted by
the applicant against the respondents for a final interdict
and
ancillary relief an interim order be granted as follows:
a. Declaring the first to third
respondents as parties, in their capacities as licensors, to the
licensing agreement . . . .
b. Interdicting and restraining
the first to sixth and eight respondents from being involved whether
directly or indirectly in granting
a licence to the seventh or eighth
respondents or any third party from selling, marketing or
distributing the product . . . in
South Africa from the date of this
order to the 6 December 2014.
c. Interdicting and restraining
the first to the sixth and eighth respondents from marketing, selling
or distributing the product
. . . in South Africa from the date of
this order up to and until the 6 December 2014.
d. Interdicting and restraining
the seventh and ninth respondents from entering into a licensing
agreement with the first to sixth
and/or eighth respondents which
purports to grant any rights to the seventh or ninth respondents to
market, distribute or sell
the product . . . in South Africa for any
period prior to the 7 December 2014.
e. Costs of the application
against the first to the sixth and eighth respondents to be costs in
the cause of the action to be instituted.
f. . . . .
3. The applicant is to institute
an action against the respondents within a period of 30 days from the
date of this order seeking
an order that the interim relief be final.
4. In the event that the
applicant fails to bring an action against the respondents as
envisaged in paragraph 3 supra the interim
relief will lapse.’
[6] Neither the seventh nor the ninth respondent (Van
der Merwe’s two companies) sought to oppose the application
and, when
the matter came before it on 24 May 2011, the high court
granted an interim interdict against them in terms of prayer 2d of
the
notice of motion. The matter was then postponed and the remaining
respondents (ie the respondents in this appeal) were put on terms
to
file their answering affidavits by 27 May 2011.
[7] This they failed to do. Instead, when the
application was subsequently set down, they sought to resist it by
raising an objection
in limine
to
the appellant's case. We were informed from the bar that the
respondents had in fact prepared an opposing affidavit in which
they
outlined their objection
in limine,
but that it had not been timeously filed. As the
respondents were out of time, they did not seek condonation and leave
to file the
affidavit; instead, they merely raised their objection in
argument.
[8] Although in the judgment of the court a quo it is
stated that there were three points
in limine
,
the terms thereof were unfortunately not specifically recorded. But
however the points may have been framed, they were based squarely

upon the three parts of clause 10 of the licensing agreement which
reads as follows:
’
10.1
This agreement shall, for all intents and purposes, be governed by
and executed according to Dutch Law.
10.2 The parties irrevocably
consent to the jurisdiction of the Courts of Holland for any matter
arising out of or in connection
with this agreement.
10.3 Should any dispute arise
out of or in connection with this agreement, that dispute shall be
referred to and finally decided
by arbitration in accordance with the
rules of the International Chamber of Commerce on arbitration with
the seat of the arbitration
being Amsterdam and the language of such
arbitration shall be English.’
[9] The essence of the objection was, first, that the
appellant, by submitting to the courts of Holland, had waived its
right to
seek relief in the courts of this country in respect of any
matter arising out of or in connection with the licensing agreement

and, second, that the appellant was bound to proceed to arbitration
in Holland in respect of any such matter. Both these points
were
upheld and the appellant’s application for interim relief was
dismissed. With leave of the court a quo, the appellant
now appeals
to this court.
[10] The decision to refuse the interim interdict, as I
understand the judgment of the court a quo, was based on a finding
that
by agreeing to the provisions of clause 10, the appellant had
precluded the high court from exercising jurisdiction over the
respondents
in the action the appellant intended to bring against
them. In order to consider the correctness of this conclusion, it is
necessary
to outline briefly the background to the dispute and the
relationship between the respondents.
[11] At all material times the fourth respondent was the
sole director of the second respondent which, in turn, was the sole
director
of the first respondent (presumably, contrary to the
position in this country,
2
under the laws of Holland a company may be a director of
another company). The first respondent, in turn, held 80% of the
shares
in the eighth respondent, which was the controlling body of
the third respondent. The appellant therefore alleged that the second

respondent in fact controlled the first, third and eighth respondents
at the time the licensing agreement was concluded –
and that,
as the fourth respondent was the sole director of the second
respondent, he, together with the fifth respondent (who
held a third
of the shares in the second respondent and 25% of the shares in the
first respondent) and sixth respondent (who held
20% of the eighth
respondent’s shares and who was a director of the third
respondent) were the controlling minds behind the
first, third and
eighth respondents at that time.
[12] The appellant alleged that the licensing agreement
had been signed pursuant to a representation that the first
respondent owned
the intellectual property rights to the product, had
given the third respondent the right to market and distribute it, and
had
authorised the third respondent to enter into the licensing
agreement. It alleged further that if in fact the distribution and
marketing rights to the product were vested in the second respondent,
the first, second and third respondents must have known at
the time
the licensing agreement was concluded that this representation was
false and were therefore parties to a fraud against
it. The appellant
therefore expressed its intention to seek to pierce the corporate
veil of the first respondent so as to hold
the second respondent,
together with the first and third respondents, bound by the licensing
agreement; and to obtain an interdict
restraining all three from
acting in breach of their contractual obligations. Moreover, as the
appellant alleged that the fourth,
fifth, sixth and eighth
respondents controlled the first, second and third respondents, it
contended that they were also parties
to the fraud and should be
interdicted to prevent them from relying on their fraud to circumvent
the licensing agreement.
[13] For convenience I intend first to consider the
position of the fourth, fifth, sixth and eighth respondents. Relying
on the
decision in
Atlas Organic Fertilizers
(Pty Ltd v Pikkewyn Ghwano (Pty) Ltd
1981 (2)
SA 173
(T) and the authorities referred to in that judgment, the
appellant based its claim for relief against them on the allegation
that
they were wrongfully interfering with the contractual
obligations of the first and third respondents arising from the
licensing
agreement. The claim to an interdict against them arises
from conduct of a delictual nature, brought against persons who are
not
parties to the licensing agreement. As the appellant does not
(and cannot) seek to enforce that contract in their case, they cannot

seek to invoke the protection of clause 10, to which they were not
parties, to seek to avoid the high court exercising jurisdiction
over
them, nor was it suggested otherwise in argument. This the court a
quo appears not to have appreciated, its judgment having
been based
solely upon the effect of the provisions of clause 10. Although this
was specifically raised in the application for
leave to appeal, it
was not dealt with in the judgment on that application. The inference
is irresistible that the learned judge
overlooked the fact that not
all the respondents had been parties to the licensing agreement, and
clause 10 in particular, and
exercised his discretion on an incorrect
factual basis.
[14] Counsel for the respondents however sought to
defend the court a quo’s decision in regard to the fourth,
fifth, sixth
and eighth respondents by raising two general
contentions, of equal application to the remaining respondents, to
justify the decision
not to grant an interim interdict. I shall deal
with each seriatim.
[15] The first was that as the respondents are
peregrini
who have no presence in this country, it would be futile
to grant an interdict against them. The basis of this argument was
that,
as the respondents are in Holland, it would not be possible to
ensure that they complied with an interdict granted by a court in

this country as contempt of court proceedings could not be brought
against them. This is a somewhat surprising argument as,
historically,
the courts of this country have as a matter of course
granted interdictory relief against
peregrini
3
and, presumably for this reason, the argument was
somewhat tentatively advanced. Such diffidence was well founded. The
issue is
really one of effectiveness, and while I accept that a court
of this country should not grant an interdict against a
peregrinus
where the act sought to be interdicted would take place
outside its area of jurisdiction,
4
this is not such a case. This is a matter involving a
contract concluded in this country, which is to be performed in this
country,
which the respondents threaten to breach in this country,
and which the appellant, an
incola
,
seeks to enforce in this country. In these circumstances a court of
this country will be able to enforce an interdict if granted,
even if
contempt proceedings are not available (about which I express no
opinion).
[16] The respondents’ second general objection to
the issue of an interim interdict against them was based on the
interdict
already granted against the seventh and ninth respondents
on 24 May 2011. In the light of that order, so it was argued, there
was
no longer any threat of the licensing agreement being breached
and thus an interim interdict against them was not required. But
the
mere fact that an interdict has been granted against certain persons
does not mean that similar relief need not be granted
against others
who have conducted themselves in a manner justifying the grant of an
interdict against them. Moreover, the grant
of an interdict against
the seventh and ninth respondents would not operate to restrain the
remaining respondents from conducting
themselves in such a way so as
to frustrate the appellant’s rights under the licensing
agreement.
[17] There was therefore no reason for the high court
not to have entertained the appellant’s envisaged action
against the
fourth to ninth respondents, and the court a quo erred in
failing to appreciate that to be the case.
[18] That brings me to the position of the second
respondent. As already mentioned, the appellant’s papers
foreshadow an argument
that the corporate veil of the first
respondent should be pierced in order to hold its sole director, the
second respondent, bound
by the licensing agreement. It is
unnecessary to consider whether the suggested piercing of the veil
would be appropriate as, at
the very least, the second respondent, as
sole director of the first respondent, would be responsible for the
first respondent’s
decision not to honour the terms of the
licensing agreement. In these circumstances the appellant’s
allegations concerning
the second respondent are equally capable of
founding a claim for an interdict based on its wrongful and
intentional interference
with the first respondent’s
contractual obligations under the licensing agreement, and in that
regard it is in the same position
as the fourth to sixth and eighth
respondents.
5
That being so, on a parity of reasoning with that
already expressed in regard to those respondents, the high court can
exercise
jurisdiction over the second respondent irrespective of the
provisions of clause 10. This the court a quo does not appear to have

appreciated, and it erred in reaching the contrary conclusion that
the high court could not interdict the second respondent.
[19] I turn to consider the position of the first and
third respondents who successfully relied upon clause 10 to persuade
the court
a quo that it should not entertain the matter against them.
In their case it is necessary to consider the effect of a foreign
jurisdiction
and arbitration clause upon the jurisdiction of a court
which would otherwise be able to deal with a dispute.
[20] It is clear from its judgment that the court a quo
regarded the respondents' objection
in limine
as relating to the high court's jurisdiction to
entertain the dispute between the parties. In upholding that
objection it found
that by reason of clause 10.2 of the licensing
agreement ‘the only courts being possessed of jurisdiction are
the courts
in the country of Holland’ and that under clause
10.3 the appellant was bound by its agreement to proceed to
arbitration.
It therefore held that the high court in fact had no
jurisdiction in respect of the parties’ dispute.
[21] In doing so, the court quo erred. It can now be
regarded as well settled that a foreign jurisdiction or arbitration
clause
does not exclude the court’s jurisdiction. Parties to a
contract cannot exclude the jurisdiction of a court by their own
agreement, and where a party wishes to invoke the protection of a
foreign jurisdiction or arbitration clause, it should do so by
way of
a special or dilatory plea seeking a stay of the proceedings.
6
That having been done, the court will then be called on
to exercise its discretion whether or not to enforce the clause in
question
─ see eg
Commissioner for
Inland Revenue and another v Isaacs NO
1960
(1) SA 126
(A) at 134B-H,
Yorigami Maritime
Construction Co Ltd v Nissho-
Iwai
Co Ltd
1977 (4) SA 682
(C),
Butler
v Banimar Shipping Co
SA
1978
(4) SA 753
(SE) and
Universiteit van
Stellenbosch v J A Louw (Edms) Bpk
1983 (4)
SA 321
(A) at 333G-H.
7
[22] The court a quo should therefore have approached
the objection
in limine
on the basis that it enjoyed a
discretion whether or not to enforce the clause, taking into account
all the relevant facts and
circumstances. In concluding that clause
10 excluded the jurisdiction of the high court to adjudicate upon the
parties’ dispute,
it clearly misunderstood the position.
[23] In seeking to meet this, counsel for the
respondents drew attention to the fact that the court a quo, after
reaching the conclusion
already mentioned, had gone on to refer to
the decision in
Butler
and had then purported to exercise its
discretion adverse to the appellant. A number of issues arise from
this.
[24] First, in purporting to exercise its discretion,
the court a quo did so by holding ‘that this court has no
jurisdiction
to hear this matter’. This, too, constituted a
misdirection on its part. It had no discretion to hold that the high
court
lacked jurisdiction. Its discretion lay in deciding whether or
not the exercise of that jurisdiction should be stayed pending the

outcome of foreign proceedings or arbitration – something it
had not been called upon to do.
[25] Secondly, it is necessary to consider whether it
was appropriate for the court quo to have purported to exercise its
discretion
at a time when all that was before it was a preliminary
application for an interim interdict pending a decision on an action
still
to be instituted. In
Butler
,
where the court was asked to authorise an attachment to found
jurisdiction for a claim for damages which the respondent contended

had to be pursued in Greece by reason of a foreign jurisdiction
clause, the court concluded that it would be for the trial court
to
decide whether to enforce that clause.
8
On the other hand, in similar circumstances in
Yorigami
,
the court held, albeit obiter, that despite the existence of a clause
in a charter requiring the dispute to be decided by arbitration
in
Japan, the proceedings should not be stayed but determined by a Cape
Town court.
9
Similarly in
Polysius
(Pty) Ltd v Transvaal Alloys (Pty) Ltd & another
1983 (2) SA 630
(T), in an application brought after the
issue of summons but before the trial, the court held that the
hearing should be stayed
by reason of the term in the parties’
contract providing for the submission of their dispute to arbitration
in Europe.
[26] The cases mentioned above show that no hard and
fast rule can be laid down as to the stage when a court should
exercise its
discretion to enforce a foreign jurisdiction or
arbitration clause. In each given case much will depend upon its own
particular
facts and circumstances as well as the stage at which and
the manner in which the issue of enforcement of the clause in
question
is raised. Certainly the mere fact that the respondents
raised the issue when the appellant sought interim relief as a
precursor
to the trial did not, in itself, preclude the court a quo
from exercising its discretion at that stage. But whether it was
appropriate
for it to exercise its discretion in the light of the
circumstances of the case and the way in which the issue was raised,
is another
matter to which I now turn.
[27] Of course the factors relevant to the discretion a
court is called on to exercise are of importance. In the light of my
view
on the outcome of this appeal, it is unnecessary to deal in
detail with what factors appear at this stage to be relevant. Indeed

it would be premature and improper to do so without the parties
having had the opportunity to properly canvass the facts.
Nevertheless
it is of assistance to consider in broad terms the
factors which may be relevant. In
The
Eleftheria
[1969] 2 All ER 641
(PDA), when
considering whether an action should be stayed by reason of a foreign
jurisdiction clause, Brandon J stated:
10
‘
In
particular . . . the following matters, where they arise, may
properly be regarded: (a) In what country the evidence on the issues

of fact is situated, or more readily available, and the effect of
that on the relative convenience and expense of trial as between
the
(local) and foreign courts; (b) Whether the law of the foreign court
applies and, if so, whether it differs from (local) law
in any
material respects; (c) With what country either party is connected,
and how closely; (d) Whether the defendants genuinely
desire trial in
the foreign country, or are only seeking procedural advantages; (e)
Whether the plaintiffs would be prejudiced
by having to sue in the
foreign court because they would ─ (i) be deprived of security
for that claim, (ii) be unable to
enforce any judgment obtained,
(iii) be faced with a time-bar not applicable (locally), or (iv) for
political, racial, religious
or other reasons be unlikely to get a
fair trial.
’
[28] These are not the only factors to which regard may
be had. Others which may be relevant include the following:
(a) Flowing from the sanctity of contracts, it has often
been said that a decision not to enforce either an arbitration or
foreign
jurisdiction clause should only be made where there is a very
strong case made out for the parties not to be bound by their
agreement.
11
(b) It is desirable if at all possible to avoid a
multiplicity of actions in different courts with the associated
potential complication
of conflicting decisions.
12
In the present case this may well be a weighty factor
bearing in mind that there is no reason why the appellant’s
claims in
respect of all but the first and third respondents cannot
be determined in the high court and only those two respondents may
seek
to invoke clause 10 to have their dispute with the appellant
determined elsewhere.
(c) Moreover, a single action has the undoubted
advantage of saving time, expense and costs when compared to a
multiplicity of actions.
This too may be a weighty factor as the
appellant’s claims that are capable of being determined in the
high court against
most of the respondents will involve the same
factual matrix and the same witnesses as in the foreign proceedings
against the first
and third respondents.
(d) When considering the issue of costs, it should also
be remembered, certainly if the cost of litigation in England is any
barometer,
13
that the cost of litigation in Europe may well be
astronomical when compared to the cost of litigation in this country.
Sight must
also not be lost of the likely fees and charges of the
arbitrators should an arbitration take place.
(e) If the dispute involves questions of law rather than
of fact, arbitration may well prove to be both inconvenient and
impractical.
Consequently regard should be had to whether the dispute
is readily capable of being dealt with by way of arbitration. If not,
it would count heavily against the enforcement of an arbitration
clause.
[29] These are some of the relevant factors which spring
readily to mind. The list is certainly not intended to be exhaustive.
Of
course the discretion to be exercised is fact specific in the
sense that each case must be considered in the light of its own
discrete
facts, with the various relevant factors being afforded
whatever weight in the scales is appropriate in the circumstances.
Certainly
no hard and fast rules can be prescribed.
[30] The court a quo, in purporting to exercise its
discretion, stated that it did so in the light of ‘the
attendant circumstances’
without in any way identifying what
circumstances it took into account. But as the respondents’
objection was merely raised
from the bar without any supporting
affidavits, the only relevant circumstance then known appears to have
been the existence of
the foreign jurisdiction and arbitration
clauses as most of the facts and circumstances as outlined above
which would have been
relevant to the exercise of the court’s
discretion had not been canvassed in the papers. As already
mentioned, a party wishing
to raise an arbitration or foreign
jurisdiction clause as a reason to stay a court from exercising
jurisdiction, should do so by
way of a dilatory plea. As in motion
proceedings the affidavits serve as both pleadings and evidence,
14
in a case such as this it would be necessary to place
the relevant facts upon which reliance is placed before court by way
of affidavit.
This the respondents failed to do. By the same token,
the appellant was not obliged to deal with a dilatory plea based on
clause
10 until it had been properly raised. In the light of this the
court a quo was left in a position where, apart from a few basic

facts, it was not in a position to take an informed decision in
exercising its discretion.
[31] That being so, this was clearly a matter in which
the court a quo ought not to have taken a final decision at that
stage on
whether a South African court should exercise jurisdiction
in respect of appellant’s proposed action. It was a matter
which
cried out for that issue to stand over for decision by the
trial court. On the bare facts then available it was, in truth,
impossible
to do justice to either side in regard to the disputed
questions flowing from clause 10 and the court a quo clearly erred on
deciding
on the papers, as they were then, that the dispute was one
in which the arbitration and foreign jurisdiction clauses should be
upheld against the appellant.
[32] On the other hand the appellant, whose factual
allegations had not been challenged, had clearly shown that its
rights were
being infringed. However, the respondents submitted that
the appellant had failed to establish that it was likely to suffer
irreparable
harm or that it harboured a fear of such harm should the
order it sought not be granted. The simple answer to this latter
contention
is that by seeking an interdict in this manner the
appellant, in reality, was asking for an order of specific
performance of the
licensing agreement. That being the case, the
appellant was not required to prove it would suffer harm if the
interdict was not
granted. All it had to show was that the
respondents were either breaching or threatening to breach the
licensing agreement, or
were intentionally assisting or encouraging
another to breach such agreement.
15
For the reasons already given, this the appellant
established.
[33] In these circumstances the court a quo erred in not
granting the interim relief and leaving it to the trial court, once
the
material facts and circumstances were available, to determine
whether the provisions of clause 10 should be enforced and the action

stayed.
[34] The appeal must therefore succeed and an interim
interdict against the first to sixth and eighth respondents granted.
While
I see no reason to include the declarator in 2(a) of the notice
of motion quoted in para 5 above as part of the interim order, it
was
not suggested on behalf of the respondents that an interdict in the
terms sought would not be appropriate. However it is necessary
to
alter those terms somewhat to reflect that the interdict relates only
to the first to sixth and eighth respondents (the seventh
and ninth
respondents already having been interdicted) and to put the appellant
on terms to institute its proposed action. As its
notice of motion
envisaged the institution of such action within a month of the order
granting interim relief, and given the delays
that have already
occurred, it would in my view be appropriate to direct that the
anticipated action be instituted by the end of
October 2012. To allow
for the possibility that the appellant may justifiably be unable to
meet that deadline, I intend to authorise
it to seek an extension on
good cause shown. That will be reflected in the order below.
[35] The following order will therefore issue:
(a) The appeal succeeds, with costs.
(b) The order of the high court of 13 September 2011 is
set aside and is substituted with the following:
‘
1. That pending the final
determination of an action to be instituted by the applicant against
the respondents for a final interdict
and ancillary relief, an
interim order is issued in the following terms:
a. Interdicting and restraining the first to sixth and
eighth respondents from being involved whether directly or indirectly
in
granting a licence to the seventh or eighth respondents or any
third party from selling, marketing or distributing the product
commonly known as the Foize on Mobile software, more fully described
in annexure MV 3 to the founding affidavit, in South Africa
from the
date of this order to 6 December 2014.
b. Interdicting and restraining the first to the sixth
and eighth respondents from marketing, selling or distributing the
said product
in South Africa from the date of this order up to and
until 6 December 2014.
c. Interdicting and restraining the seventh and ninth
respondents from entering into a licensing agreement with the first
to sixth
and/or eighth respondents which purports to grant any rights
to the seventh or ninth respondents to market, distribute or sell the

said product in South Africa for any period prior to 7 December 2014.
d. Costs of the application against the first to the
sixth and eight respondents are to be costs in the cause of the
action to be
instituted.
2. The applicant is to institute an action against the
respondents by 31 October 2012 seeking an order that the interim
relief be
made final.
3. In the event that the applicant fails to bring an
action against the respondents as envisaged in paragraph 2 above,
then, unless
this Court grants an extension of time on good cause
shown, the interim relief will lapse.’
______________________
L E Leach
Judge of Appeal
APPEARANCES:
For Appellant: M Smit
Instructed by:
Kruger
& Sharf Attorneys
Pretoria
Lovius Block, Bloemfontein
For Respondent: M C Erasmus SC
Instructed by:
On behalf of 1
st
to 6
th
& 8
th
:
Geyser Attorneys, Pretoria
On behalf of 7
th
& 9
th:
Kerron Edmunson Attorney, Johannesburg
The main application was not opposed on behalf of 7
th
& 8
th
respondents and they did not take part in the
appeal.
Honey
Attorneys, Bloemfontein
1
Clause
6.1.
2
See
s 69(7
)(a)
of the
Companies Act 71 of 2008
.
3
Some
of the authorities are usefully collected in
Zokufa v Compuscan
(Credit Bureau)
2011 (1) SA 272
(ECM) ─ see also Lawsa
(first re-issue) vol 11 para 305.
4
Compare
Ex parte
Hay Management Consultants (Pty) Ltd
2000 (3)
SA 501
(W) at 507H,
[2000] 2 All SA 592
(W) at 599f-g and
South
Atlantic Islands Development Corporation Ltd v Buchan
1971 (1)
SA 234
(C).
5
Cf
Genwest Batteries (Pty) Ltd v Van der Heyden & others
1991
(1) SA 727
(T) at 728G-729B.
6
Yorigami
Maritime Construction Co Ltd v Nissho-Iwai Co Ltd
1977 (4) SA
682
(C)
at 692H.
7
See
further Forsyth
Private International Law
5
ed
(2012) at 218.
8
I
should remark that the court misdirected itself in incorrectly
finding at 761H that it had been held in
Yorigami
that it was
not for the court hearing the attachment application to decide
whether the trial ought to be stayed and referred to
arbitration
under the arbitration clause.
9
At
693F-694B.
10
At
645C-E.
11
Polysius
at 656D-E and
Universiteit
van Stellenbosch v J A Louw
(Edms)
Bpk
at 333H-334A.
12
See
for example
Halifax Overseas Freighters Ltd v Rasno Export
;
Techno-Prominport
;
and
Polskie Minie Oceaniczne PPW
(the ‘Pine Hill’)
[1958] 2 Lloyd’s Law Reports
146 (QB) at 152 and
El Amrid
[1981] 2 Lloyd’s Law
Reports 119 (AC) AT 128.
13
See
for comparison
Motto & others v
Trafigura Ltd & another
[2011]
EWCA Civ 1150
;
[2012] WLR 657
(CA);
[2012] 2 ALL ER 181
(CA) and
AB
v Ministry of Defence
[2012] 3 ALL ER
673
(SC):
[2012] UKSC 9.
14
Absa
Bank Ltd v Kernsig 17 (Pty) Ltd
2011 (4) SA 492
(SCA) para 23.
15
Genwest
Batteries
(referred to in footnote 5) and Christie
The Law of
Contract in South Africa
(6 ed) at 555.

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