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2021
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[2021] ZAGPJHC 136
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OCA Testing Inspection and Certification South Africa (Pty) Ltd v KCEC Engineering and Construction (Pty) Ltd and Another (2172/2021) [2021] ZAGPJHC 136 (6 August 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
Case
No.: 2172/2021
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
OCA
Testing Inspection and Certification
Applicant
South
Africa (Pty) Ltd
and
KCEC
Engineering and Construction (Pty) Ltd
First Respondent
The
Honourable Judge NP
Willis
Second Respondent
JUDGMENT
Malindi J:
[1]
This matter came before me as an unopposed application wherein the
Applicant, which
is the Claimant in concluded Arbitration
proceedings, seeks an order remitting the Arbitration Award as
follows:
“
1.
In terms of
section 32
of the
Arbitration Act, 1965
, paragraph 1 of
the Award of the Second Respondent published on 14 December 2020 (a
copy of which is annexed to the founding affidavit)
is set aside;
2.
In terms of
section 32
of the
Arbitration Act, 1965
, the Applicant’s
claims for payment in respect of the second and third agreements (as
referred in the Award) is remitted
to the Second Respondent for
reconsideration and the making of a further Award or a fresh Award;
3.
The Second Respondent is ordered to reconsider the Applicant’s
claims in
respect of the second and third agreements in light of the
content of the founding affidavit in this application, together with
any further affidavits filed in the matter and any judgment of this
Court.”
[2]
The First Respondent’s attitude to the application is rather
ambiguous. In its
letter dated 29 January 2021 to the Applicant
(which has been made available by the Applicant to the court) it
states:
“
KCEC
consider that is no justification for a remittal to reconsider the
Award requested by OCA. That is the reason to not opposing
at Court
to the Application of OCA in terms of
section 32
of the
Arbitration
Act, paragraph
1 of the Award of the Second Respondent published on
14 December 2020 for your reconsideration.”
[3]
I therefore proceed on the basis that the application is not opposed
as a matter of
fact as no opposing responses have been filed even
though a view is expressed in the letter that there is no
justification for
a remittal for reconsideration of the Award.
Grounds for Remittal
[4]
Prayer 1 seeks the setting aside of paragraph 1 of the Award in terms
of
section 32
of the Act. However, the Act provides for a setting
aside of an award in
section 33(1)
which provides for the
circumstances under which an Arbitration Award may be set aside.
These are:
“
33.
Setting aside of award- (1) Where-
(a)
any member of an arbitration tribunal has
misconducted himself in relation to his duties as arbitrator or
umpire; or
(b)
an arbitration tribunal has committed any
gross irregularity in the conduct of the arbitration proceedings or
has exceeded its powers;
or
(c)
an award has been improperly obtained, …”
[5]
Prayer 2 seeks the remittal of claims for payment in respect of the
second and third
agreements to the Arbitrator (“the Second
Respondent”) for reconsideration and the making of a further
Award or a fresh
Award in terms of
section 32(2)
of the Act which
empowers the court to remit any matter which was referred to
arbitration to the arbitration tribunal for reconsideration
and for
making a further award or a fresh award or for such other purpose as
the court may direct.
[6]
The Applicant contends that:
“
Thirdly
I shall address the question of whether good cause exists for the
remittal of the Award back to the Second Respondent for
the making of
a further award, or a fresh award or for such other purpose as the
Court may direct;”
[7]
It is alleged that the Second Respondent made a material mistake by
omitting to make
any award in respect of two of the Applicant’s
claims. It is contended that the Second Respondent made an Award only
in respect
of the first agreement and that the claims in respect of
the second and third agreements have no result.
Analysis
[8]
The Statement of Claim recapitulates the history of entering into the
three relevant
agreements and the applicable terms and condition.
Paragraph 2 thereof states that during the period of 25 May 2018 to
25 August
2018 the Claimant rendered services to the Defendant in
terms of the first, second and third service agreements.
[9]
After rendering the said services in terms of each of the agreements
the Claimant
delivered seven invoices to the Defendant. The Claimant
pleaded that the Defendant was at the time of the claim, “indebted
to the Claimant in the cumulative sum of R2 603 729.44…”,
and that:
“
Notwithstanding
demand, the Defendant has failed and/or refused to make payment to
the Claimant of the total amount owing in the
sum of R2 603 729.44
(Two million six hundred and three thousand seven hundred and
twenty-nine Rand and forty- four cents).
Wherefore the Claimant
claims from the Defendant:
(a)
R2 603 729.44 (two million six hundred and
three thousand seven hundred and twenty-nine Rand and forty-four
cents);
(b)
Interest thereon at the rate of 10,25% per
annum from date of demand to date of payment in full;
(c)
Costs of suit;
(d)
Further and/or alternative relief. “
[10]
The Claimant claimed the amount with neither breaking it down in
individual amounts per service
agreement nor was this globular amount
broken down in terms of each agreement in the letter of demand dated
3 October 2018.
[11]
The Applicant referred to the case of Lochrenberg v Sululu
[1]
for the proportion that each invoice forms a separate cause of action
and that the Second Respondent ought to have made it clear
in his
Award that he was discussing the claims under each agreement.
[12]
Reference was then made to Leadtrain Assessments (Pty) Ltd and Others
v Leadtrain (Pty) Ltd and
Others
[2]
for the submission that “good cause” for remittal
would have been shown “where the arbitrator has failed
to deal
with an issue that was before him or her.”
[13]
The question that arises therefore is whether the Second Respondent
failed to deal with the validity
of the claims under the second and
third agreements. The Applicant contends that although the Second
Respondent correctly identified
the dispute between the parties as
relating to three separate agreements
[3]
,
he only considered the merits of the claim for the invoices relevant
to the first agreement when he stated:
“
The
claimant has sought judgment for monies due in terms of its unpaid
invoices. The total amount allegedly owing to the claimant
is in the
R2 603 729.44. The defence raised to the payment of the invoices
relating to the first agreement was the failure by the
claimant
timeously to deliver the CoC to the defendant. The evidence makes it
clear that claimant was indeed in breach of its agreement
with the
defendant by failing so to deliver the CoC and consequently, its
claim must fail.”
[14]
The contention is that the result was only in respect of the first
claim because only it was
subjected to analysis and reasons given for
its dismissal.
[15]
In my view, although the Award dismisses the Claimant’s claim
without traversing the claims
under each agreement the Second
Respondent clearly considers the claimed globular amount which
comprises claims under all three
agreements in paragraph 53 of the
Award.
[16]
Paragraph 54
[4]
also makes it
clear that the Second Respondent is alive to whether all eleven
invoices divided under each agreement are valid claims.
This is
further mentioned in paragraph 17 of the Award.
[17]
The Applicant’s submission that the Award is vague in respect
of whether the dismissal
of the claim is in respect of the claims
under the second and third agreements is not well founded. There is
no doubt that the
whole claim for R 2 603 729.44, inclusive of the
claims under the three agreements, is dismissed, with all claims
under each agreement
having been separately considered.
[5]
[18]
It is obvious, even on the Applicant’s contention, that by
addressing the defences to the
claims under the second and third
agreements, the Second Defendant did consider their merits and came
to the conclusion that they
too are to be dismissed.
[19]
The Second Respondent’s non–tabulation of the claims
under each agreement in his
Award does not amount to a “material
and inexcusable mistake” as contended for by the Applicant or a
failure to deal
or consider the issue(s) before him. It was stated in
Leadtrain
[6]
that “once an
issue has been pertinently addressed and decided there seems to …
be little room for remitting the matter
for reconsideration.”
In this case the claims under the second and third agreements were
addressed in the process of considering
the defences thereto.
[20]
The question also arises whether a case for setting aside of
Paragraph 1 of the Award has been
made. “Setting aside”
is different from “remitting for reconsideration”. In
Palabora Copper v Motlokwa
Transport
[7]
the Supreme Court of Appeal said:
“…
It
suffices to say that where an arbitrator for some reason misconceives
the nature of the enquiry in the arbitration proceedings
with the
result that a party is denied a fair hearing or a fair trial of the
issues, that constitutes a gross irregularity. The
party alleging the
gross irregularity must establish it. Where an arbitrator engages in
the correct enquiry, but errs either on
the facts or the law, that is
not an irregularity and is not a basis for setting aside an award…”
[21]
The Applicant has not alleged the basis for setting aside Paragraph 1
of the award and the consequences
thereof in view of the fact that
only a reconsideration of part of the Award is pleaded. It seems that
the consequence would be
the reconsideration of the validity of the
claims under the second and third agreements only. Nevertheless, the
same test would
apply as in the remittal test, that is that the
arbitrator must have misconceived the nature of the enquiry. For the
reasons already
stated, the Second Respondent fully understood the
nature of the enquiry into the first agreement as stated in paragraph
53 of
the Award. Therefore, there is no reason to set Paragraph 1 of
the Award.
Conclusion
[22]
I therefore make the following order:
The application for
setting aside the first order of the Award and remitting the
Claimant’s claims for payment in respect
of the second and
third agreements is dismissed.
Judge
of the High Court
Malindi
J
Counsel
for the Applicant
:
Adv Immanuel Verasamy
Instructed
by
:
Pather and Pather Attorneys
Counsel
for the Respondent
:
No appearance
Date
of hearing
: 02
August 2021
Date
judgment delivered
:
06 August 2021
[1]
1960(2)
SA 502 (E) at 503 F-H
[2]
2013(5)
SA 84 (SCA) at [9] – [15]
[3]
See
Award: 002-133 para 3
[4]
“
Moreover,
it may be pointed out,
en
passant,
that
the agreements were obviously not interlinked in the sense that a
failure to pay an outstanding invoice due in terms of the
second
agreement and/or the third agreement would have the contractual
consequence of not obliging the claimant to furnish the
CoC in terms
of the first agreement.”
[5]
Award:
002-139 to 002 -140
[6]
At
[15]
[7]
2018
(5) SA 462
(SCA) at [8]