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[2021] ZAGPPHC 376
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Tzaneng Treated Timbers (Pty) Ltd v Komatiland Forest Soc Limited and Another (43966/2020) [2021] ZAGPPHC 376; 2021 BIP 3 (GP) (22 June 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER: 43966/2020
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED
In
the matter between :
TZANENG
TREATED TIMBERS (PTY)
LTD
Applicant
And
KOMATILAND
FOREST SOC LIMITED
First Respondent
PEET
COETZEE SC N.O.
Second
Respondent
JUDGMENT
Heard
on:
3 June 2021
Judgment
handed down: 22 June 2021 (by publication on CaseLines)
VAN
ZYL AJ
Introduction
1.
This is an
application for certain declaratory relief regarding arbitration
proceedings between the Applicant (“
Tzaneng
”),
the defendant in the arbitration proceedings, and the First
Respondent (“
Komati
”),
the claimant in each instance. The Second Respondent is the
appointed Arbitrator (hereinafter “
the
Arbitrator
”).
2.
The declaratory
relief being sought is formulated thus by Tzaneng:
“
1.
It is declared that no arbitration agreement exists between the
applicant
and the first respondent in respect of the disputes set out
in the statements of claim delivered by the first respondent and
annexed
to the founding affidavit as annexures “A13”,
“A14” and “A15” (the statements of claim”);
2.
It is declared that the second respondent does not have jurisdiction
to determine the disputes set out in the statements of claim;”
3.
The parties are in
agreement that the statements of claim are in material parts the same
and any order by this court will impact
on all three arbitrations
equally. Each of the three statements of claim rely on written
agreements between the parties,
which in each instance contains a
similarly worded clause referring disputes, falling in the ambit of
that clause, to arbitration.
Komati has initiated the
arbitration proceedings in each instance relying on that clause to
allege that the Arbitrator has jurisdiction
to entertain its claims.
4.
The irony of the
matter is that both parties are contending that it (the arbitration
agreement) does not apply to certain payment
disputes that have
arisen between them. The dividing point is that Tzaneng
contends that the Arbitrator does not have jurisdiction
to make any
declaration in this regard, whereas Komati contends the contrary.
5.
The relief sought by
Tzaneng raises a number of matters for consideration in the main:
5.1
First, whether a
court may grant declaratory relief of the type sought herein in
circumstances where arbitration proceeds have been
commenced, but not
yet concluded;
5.2
Secondly, whether
there is an arbitral dispute between the parties; and
5.3
Lastly, how to deal
with the Arbitrator’s jurisdiction.
6.
The facts are
considered first, whereafter each of these matters is considered in
turn.
Background
7.
Tzaneng conducts
business in the sourcing, treatment and supply of timber products to
industrial customers in South Africa.
Komati is a wholly owned
subsidiary of the South African Forestry Company SOC Ltd and conducts
forestry related business which
includes timber harvesting,
processing and the sale of timber products to entities such as
Tzaneng.
8.
It is common cause
between the parties that three written contracts were concluded which
they have referred to as the “Woodbush
Contract”
(concluded on 21 May 2019), the “Entabeni (a) Contract”
(concluded on 26 March 2019) and the “Entabeni
(b) Contract”
(concluded on 22 March 2019). (The parties are
ad
idem that
there were a total of seven such contracts, but only the
aforementioned ones are currently relevant.) For convenience
the
aforementioned three contracts are collectively referred to herein as
“
the
Contracts
”.
In terms of the Contracts, Tzaneng was allowed to harvest and remove
standing eucalyptus trees from the areas (referred
to as
compartments) in the plantations referred to in each of the
Contracts.
9.
The Contracts each
record the point of sale as being “Standing” and then
provides for a price/m
3
(excluding VAT), eg. under the Woodbush contract it is R475 per m
3
.
10.
All three the
Contracts have the exact same Conditions of Sale, which contains the
following clause (quoted in relevant part):
“
3.3
The Purchaser shall have the right to a reduction in price in respect
of logs
delivered at roadside and processed in South Africa that
contain inherent quality defects.
In
the event of a claim based on inherent quality defects the following
procedure shall apply:
[…]
·
the parties
shall use their best endeavours to agree a reduction in price in
respect of such logs, including such reasonable compensation
in
respect of wasted transport costs incurred by the Purchaser as the
parties may agree to, failing which the matter shall referred
to
arbitration.
·
The arbitrator
shall be such person agreed upon by the parties, or failing such
agreement a person appointed by the Dean of agriculture
and Forestry
of the University of Stellenbosch, who shall act as an expert and
whose award shall be final and binding on the parties.”
11.
Clause
3.3 also provides for an arbitrator (appointed in terms of the
clause) to verify that the product constituting the subject
matter of
the claim is derived from deliveries by the Seller, that the
arbitrator shall make his award within 20 days from the
date of
referral and an entitlement to make a costs award.
[1]
There may be a question whether the Arbitrator is acting as an
arbitrator or a valuer, but the point was not taken and is
accordingly not considered.
12.
At the outset it is
important to emphasise that clause 3.3 only applies to claims in
respect of “logs delivered at road side”.
This
interpretation of the clause is common cause between the parties.
13.
On 10 March 2020, Ms
Rasha Raamdhew of Komati sent Tzaneng a notice of default in which
payment in the sum of R12,441,750.81 was
claimed seemingly as a
globular amount for all of seven of the contracts.
14.
On 12 March 2020, Mr
Riaan du Plessis responded to the notices by email. The email
is worth quoting in full:
“
Dear
Rasha ,
Thank
you for your email below and the letter attached.
Komatiland
Forests account records are totally wrong as you know……..
Tzaneng Treated Timbers (Pty) Ltd is NOT indebted
with Komatiland
Forests with an amount of R12,441,750.80 whatsoever, we totally
disagree with this outstanding balance.
We
had several meetings ,discussions and communications with yourself
and Mr Andries Themba about Tzaneng’s outstanding payments
/Credits from Komatiland Forests but absolute nothing was sorted.
We
contacted Mr Seteria now ( See attached email to Mr Seteria) after
the suspension of Mr Themba to sort all payments/credits out
that is
due to Tzaneng.
Tzaneng
will settle the final balance that is due once ALL Tzaneng’s
payments/credits that is due are sorted and issued and
when we agree
with the balance on the account.
This
outstanding balance of R 12,441,750,80 is totally wrong and is the
incorrect reflection of what Tzaneng need to pay to Komatiland
Forests, please be aware before any actions are taken as per your
demand letter attached.
If
Tzaneng Treated Timbers (Pty)Ltd credit rating, image or name suffer
any damages due to this mismanagement, negligence and misconduct
by
Komatiland Forests on our account we will not hesitate to claim for
damages caused by Komatiland Forests.
I
humbly request you and everybody involved to sort out payments
/credits that is due to Tzaneng out urgently to enable us to settle
the correct balance on the accounts and to enable us to move
forward.”
(Typographical
errors not corrected.)
15.
It is noticeable that
nowhere in this correspondence, or for that matter in any of the
following correspondence, is there a challenge
to the price
per
m
3
under any of the Contracts or any reliance on clause 3.3.
16.
Between 11 to 14 May
2020, Komati delivered seven separate notices of referral to
Tzaneng. The dispute declared in each of
the notices is generic
and is recorded as being “
the
refusal of [Tzaneng] despite demand to pay the total amount of
[amount recorded] that is due to [Komati] on the Eucalyptus timber
delivered to Tzaneng in terms of the Agreement
”
(parenthesis added). From this statement it is clear that the
dispute as formulated by Komati is a dispute about payment
under the
Contracts.
17.
Each of the notices
then proceeded to record that Komati refers the “
foregoing
dispute
as
it relates
to the Outstanding Payment to an arbitration process as contemplated
under the 2
nd
bullet of sub-clause 3.3 of the Conditions of Sale of 2019/20 of the
Agreement
”.
In the end, Komati only proceeded with three of the declared
disputes, but has reserved its rights to also proceed
in respect of
the others.
18.
Mr Louis Erasmus of
Tzaneng’s appointed attorneys, Thomas & Swanepoel Inc,
responded to the notices on 15 May 2020.
Erasmus did not take
issue with the dispute as formulated by Komati, i.e. one of a dispute
about payment. Instead, his letter
recorded that Tzaneng
objected to Komati resorting to the provisions of clauses 3 of the
Contracts as the instrument by which the
arbitration process was
called into action. In this regard his letter recorded the
following:
“
3.
We are particularly concerned with your reliance upon portions of
the
applicable clause 3 (in relation to all of the above defined
agreements) in order to substantiate your insistence upon
arbitration.
[…]
5.
A simple reading of the above passage evidences that the disputes
identified in your referenced notices must certainly are not limited
to “…
inherit quality defects
…”. We
must state that the disputes, in the main, deal with the failure to
credit our client consequent to, inter
alia, incorrect charges,
non-application of incurred credits and the like. Consequently, your
reliance upon clause 3 of the agreement,
for purposes of arbitration,
is wrong.
6.
The above being said, we are instructed that our client
is not
(in principle) opposed to alternative disputes resolution
mechanisms in order to finally resolve the current
impasse
as
between our client and KLF. Such mechanisms may include (and are of
course subject to) an agreed meditation process, alternatively
a
substantive agreement in relation to arbitration.”
19.
Komati did not agree
with Tzaneng’s phrasing of the disputes and wrote back in the
following terms:
“
3.
Please take note that KLF does not want to be drawn into a debate
about the particulars of the dispute that it is formally referring to
arbitration in terms of the Agreements as referenced above
at this
stage. It is suffice to state at this stage that KLF stands by the
content of each letter of notification of arbitration
that has been
formally sent to your client on each of the Agreements mentioned
hereinabove in the subject line.
4.
Based on the excerpt of the Agreements that you have quoted
in
paragraph 4
[2]
of your
abovementioned letter, there is a (sic) clear and undisputable
provisions for an arbitration process in terms of the Agreements
concluded between KLF and your client …”
20.
Further
correspondence exchanged iterated the parties’ disparate views
on whether there is an arbitral dispute or not and
need not be
repeated, suffice to say that Tzaneng did not relinquish its stance
that the anticipated dispute did not fall within
the four corners of
sub-clause 3.3. In the founding affidavit deposed to by Du
Plessis, he remarks that Komati “
remained
coy about the full particulars of the “disputes” referred
by it
”.
The facts validated the comment in full.
21.
The parties failed to
agree on the way forward and Komati then resorted to the provisions
of the fourth bullet point under clause
3.3 which provides for the
Dean of Agriculture at the University of Stellenbosch to appoint an
arbitrator. The Dean then
appointed the Arbitrator.
22.
Following his
appointment, the Arbitrator wrote to the parties, but his
correspondence was not placed before the court. What
is before
the court is the response from Mr Siyabonga Mpotshana, Head of Legal
Services of Komati, on 30 June 2020. Therein
Mpotshana
inter
alia
recorded that Komati “
is
incapable of any agreement with Tzaneng at the moment on the issue of
the dispute and other procedural matters
”.
Erasmus also responded on 1 July 2020. Therein he
inter
alia
again
recorded that Tzaneng had invited Komati to disclose the nature /
grounds of the disputes claims referred by it in terms
of the
agreements. Erasmus then recorded that Tzaneng required that
“
the
parties agree, for purposes of the referral, that the Arbitrator be
clothed with the power / jurisdiction to make a finding
in the
arbitration as to his own jurisdiction if an objection thereto is
raised by [Tzaneng]
”.
23.
A virtual
pre-arbitration meeting was held before the Arbitrator on 6 July 2020
at which Tzaneng was represented by Mr Els, counsel
for Tzaneng, and
Komati was represented by Mponthsana. No other attendees were
recorded. Tzaneng contends that there
is a dispute about what
was discussed and agreed at the meeting. This is dealt with
further below.
24.
On 30 July 2020 and
as agreed at the procedural meeting, Komati filed its statements of
claim. The contents of these statements
of claim are dealt with
in greater detail below. This was the first time that the
disputes that it contended were referred
to arbitration were set
down.
25.
On 24 August 2020,
Tzaneng filed its statements of defence (referred to as “pleas”
by Tzaneng), which in each instance
included a special plea under the
heading “
no
arbitration agreement / jurisdiction of the arbitrator
”.
This too is considered in more detail below.
26.
At the same time as
filing its statements of defence, Erasmus also addressed
correspondence to Mpontshana in which Tzaneng, for
the first time,
took issue with the minute of the procedural meeting.
Mpontshana thereafter took issue with Erasmus’s
version of what
should be in the minute.
27.
The present
application was launched on 20 September 2020.
The power of the Court to
make a declaratory order
28.
Before dealing with
the main issues, it is necessary to consider the Court’s powers
in granting declaratory relief of the
type sought by Tzaneng.
Counsel for Komati submitted that the court cannot such declaratory
relief unless the application
is brought in terms of the provisions
of section 3 of the Arbitration Act (Act 42 of 1965) (”
the
Arbitration Act
”).
The submissions is correct insofar as Tzaneng did not expressly refer
to section 3 of the Arbitration Act, but that
is not fatal.
29.
If
a party seeks to rely on a particular section of a statute, he must
either state the number of the section and the statute he
is relying
on or formulate his defence sufficiently clearly so as to indicate
that he is relying on it.
[3]
In
Naude
v Fraser
)
[4]
at 563G, Schutz JA said that there is no magic in naming numbers. The
significance is that the other party should be told what
he is
facing. In
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Tourism and Others
[5]
it
was held that where a litigant relies upon a statutory provision, it
is not necessary to specify it, but it must be clear from
the facts
alleged by the litigant that the section is relevant and operative.
In the present case these sentiments apply.
That said, the
matter concerns the inherent jurisdiction and powers of a court
rather than the provisions of section 3 of the Arbitration
Act.
30.
The
learned authors of
Mustill
& Boyd
[6]
(2
nd
Edition) state (in the context of the then operative English
Arbitration Act 1950) that the courts of England have frequently
exercised a jurisdiction to grant declaratory relief in the context
of a pending arbitration, it seems as part of the courts’
general supervisory powers. Unfortunately no authorities are
cited, but the footnote records that the authors “
have
never heard of a challenge to the general propriety of declaratory
relief
”.
The same sentiments are repeated in Ramsden’s
The
Law of Arbitration
[7]
also notes this as a general occurrence:
“
There
is no need for a defendant to await the making of an award before
challenging the jurisdiction of the arbitrator. It
is common
practice for a party to apply to court for a declaration that he is
not bound by the alleged arbitration agreement which
usually results
in the arbitration being stayed pending a decision of the court on
the jurisdictional issue.”
31.
In
Zhongji
Development Construction Engineering Co Ltd v Kamoto Copper Co
SARL
[8]
,
Wallis JA said, in interpreting the majority judgment in the
Constitutional Court delivered by O'Regan ADCJ in
Lufuno
Mphaphuli v Andrews
[9]
,
that the South African law of arbitration is not only consistent with
but also in full harmony with prevailing international best
practice
in the field.
32.
I was referred to no
judgment in our courts which pronounces expressly on the power of a
South African court to grant declaratory
relief on whether there was
an arbitral dispute or on the jurisdiction of an arbitrator while an
arbitration was
in
media res
.
There are, however, ample examples in our jurisprudence of where our
courts have granted such relief or taken no issue when
it was asked
for (but declined on other grounds).
33.
In
Pretoria
City Council v Blom and Another
[10]
,
the applicant disputed that there was a valid arbitration agreement
and applied for an order declaring the arbitration invalid
and that
the appointed arbitrator was not entitled to proceed with the
arbitration. Jansen J found that the alleged arbitration
agreement had not been proved and granted an order in terms of the
prayer.
34.
In
South
African Transport Services
[11]
an application was made for a declaratory order and certain ancillary
relief relating to the jurisdiction of an arbitrator.
In that
matter an arbitrator had made certain interim awards as to costs but,
after his jurisdiction had been challenged, he refused
to make
further costs awards. The court
per
Van
Zyl J issued a declaratory order that the“
[arbitrator
in that matter] at all relevant times had the jurisdiction to make
interim awards in respect of costs …
”.
The judgment does not deal with the basis upon which the application
was launched, but it seems clear that it was
not brought as review
proceedings under the Arbitration Act.
35.
Goodwin
Stable Trust
[12]
an
application was made to put a stop to arbitration proceedings which
had commenced before an arbitrator.
[13]
The matter came before Selikowitz J. In that matter a
pre-arbitration meeting had been held before the arbitrator,
Prof
Christie, and the parties had agreed to his appointment and, what the
judgment records as “
formal
and procedural matters were then considered and agreed upon
”.
A dispute subsequently arose about the
locus
standi
of
the claimant and the respondent (the applicant in the proceedings
before Selikowitz J) refused to further participate in the
arbitration proceedings. The application was subsequently
launched by the respondent in the arbitration proceedings, but
referred to in the judgment as “the applicant”. At
615D – F, Selikowitz J stated the following in respect
of onus
and the jurisdiction of an arbitrator:
“
Applicant
now contends that the first respondent bears the onus of proving that
the arbitration can proceed. Mr MacWilliam, who
appears for applicant
submits that although his client has initiated these proceedings the
onus to prove that there is a valid
arbitration agreement which
permits it to make a claim; an arbitrable issue and that the
arbitrator has been validly appointed
rests upon first respondent who
wishes to proceed with the arbitration.
These
issues go to jurisdiction and the party wishing to utilise the
arbitration procedure should, in my view, establish that it
is
competent in the particular circumstances so to do. Jurisdiction
either exists or it does not. Jurisdiction cannot arise simply
because applicant fails to prove that the jurisdictional requirements
are absent.”
36.
Selikowitz J referred
by analogy to situations where orders were obtained
ex
parte
and
then states the following at 616B - C that:
“
The
respondent in those proceedings contends that there is no arbitration
agreement or that there is arbitrable issue. The arbitrator
cannot
determine his/her own jurisdiction. (See Christopher Brown Ltd v
Genossenschaft Oesterreichischer Waldbesitzer
Holzwirtschaftsbertriebe
Registrierte Genossenschaft mit Beschrankter
Haftung
[1953] 2 All ER 1039
(QB) at 1042B--G; South African
Transport Services v Wilson NO and Another
1990 (3) SA 333
(W)
at 336E.). The respondent in the arbitration is thus compelled
to approach the Court to set aside the arbitration proceedings.
This
he does by launching an application on notice.”
37.
The
decision of Snyders J (as she was then) in
Greenacres
Unit 17CC and Another v Body Corporate of Greenacres and
Another
[14]
is instructive. In that matter, the first respondent, the body
corporate of a sectional title scheme, had initiated arbitration
proceedings against
the
owner of a unit in the sectional title scheme (the first applicant in
the matter). The first respondent had filed a statement
of
claim.
In
the statement of claim the body corporate relied upon the provisions
of rule 71(1) of annexure 8 to the
Sectional
Titles Act (Act
95
of 1986) which provided that “
a
ny
dispute between the body corporate and an owner or between owners
arising out of or in connection with or related to the Act,
these
rules or the conduct rules, save where an interdict or any form of
urgent or other relief may be required or obtained from
a Court
having jurisdiction, shall be determined in terms of these rules.
”
The
first applicant protested that the dispute was not arbitrable and in
due course served a special plea to that effect raising
four grounds
of objection, one of which was that, in essence,
the
provisions of rule 71(1)
excluded
the dispute between the body corporate and the owner from the
jurisdiction of an arbitrator appointed under the rules.
The
arbitrator ultimately ruled against the first applicant whereupon the
proceedings before high court proceedings were instituted.
The
basis for application before the high court does not appear from the
judgment of Snyders J, but it is also clearly not a review
application. Snyders J found for the owner and issued an order
in the following terms:
“
The
current claims by the first respondent against the first applicant
set out in the first respondent’s statement of claim
annexure
NOM1 to the Notice of Motion are not capable of being determined by
arbitration in terms of rule 71 of annexure 8 to the
Sectional Titles
Act 95 of 1986
.”
38.
The
decision of Snyders J was overturned by the Supreme Court of
Appeal
[15]
, but on the basis
that she had interpreted the provisions of
rule 71(1)
incorrectly.
Neither court took issue with the fact that declaratory relief had
been sought in the fashion that it was.
39.
In
The
Law of Arbitration
it
is opined that the court should grant relief by way of an interdict
where an applicant can show that the impending arbitration
proceedings would be invalid.
[16]
The rationale being that it would be unrealistic and inconvenient to
expect such an applicant to participate in proceedings
under protest,
or otherwise await the conclusion and then, if the result goes
against him, oppose the award being made an award
of court, and
suffer the costs in the meantime.
Mustill
& Boyd
express
the same sentiments
[17]
and
point out that a party in such a position may find himself having to
spend money on costs which he may have difficulty in recovering.
40.
The
power to issue declaratory relief orders in respect of anticipated or
ongoing arbitration proceedings is consistent with section
21(1)(c)
of the Superior Courts Act (Act 10 of 2013) which deals with the
power of the court to grant declaratory orders.
[18]
41.
I accordingly find
that the court has the power to grant declaratory relief in respect
of ongoing arbitration proceedings.
42.
An
application for a declaratory order involves a two-stage enquiry:
First the Court must be satisfied that the applicant is a person
interested in an existing, future or contingent right or obligation,
and then, if satisfied on that point, the Court must decide
whether
the case is a proper one for the exercise of the discretion conferred
on it.
[19]
43.
In
Baleni
and Others v Minister of Mineral Resources and Others
[20]
at paragraph [30], Basson J said:
“
Declaratory
orders are discretionary and flexible as the court pointed out in
Rail Commuters Action Group and Others v Transnet
Ltd t/a Metrorail
and Others:
'[107]
It is quite clear that before it makes a declaratory order a court
must consider all the relevant circumstances. A declaratory
order is
a flexible remedy which can assist in clarifying legal and
constitutional obligations in a manner which promotes the protection
and enforcement of our Constitution and its values. Declaratory
orders, of course, may be accompanied by other forms of relief,
such
as mandatory or prohibitory orders, but they may also stand on their
own. In considering whether it is desirable to order
mandatory or
prohibitory relief in addition to the declarator, a court will
consider all the relevant circumstances.'”
44.
The
discretion in this sense means no more than that the court is
entitled to have regard to a number of disparate and incommensurable
features in coming to a decision.
[21]
In the context of arbitration proceedings these would include
honouring the parties’ bargain to resolve their dispute
by
arbitration
[22]
, caution no to
enlarge the powers of courts in matters concerning arbitrations
[23]
,
minimising the extent of judicial interference in the arbitration
process
[24]
and a general
reluctance to retard arbitration proceedings by constant recourse to
courts
[25]
.
45.
Keating
on Construction Contracts
[26]
refers
to the power of English courts to restrain arbitration
proceedings
[27]
,
but says it will only be deployed by the court in exceptional
circumstances. This is said in the context of interdicts,
but I
can think of no reason why the same the principles would not be
equally applicable in instances where a declaratory order
will bring
an end to arbitration proceedings. With reference to
authorities cited in the text,
Keating
says
further that it was held that for exceptional circumstances to exist,
it must be shown that a “
legal
or equitable rights have been infringed or threatened by a
continuation of the arbitration, or that its continuation will
be
vexatious, oppressive or unconscionable
”.
[28]
The equivalent of these requirements are found in the requirements
set for the granting of declaratory relief referred to
above
[29]
.
Amongst such recognised instances in English jurisprudence are when
an arbitrator lacks the necessary jurisdiction
[30]
and the matter referred for arbitration is clearly outside the
arbitrator’s jurisdiction
[31]
.
46.
I return to these
principles below when dealing with the issue of whether there is an
arbitral dispute, but before doing so some
comments on the
arbitration agreement and its ambit are appropriate.
The arbitration agreement
and its ambit
47.
The Arbitration Act
defines “arbitration agreement” to mean a written
agreement providing for the reference to arbitration
of any existing
dispute or any future dispute relating to a matter specified in the
agreement, whether an arbitrator is named or
designated therein or
not. Clause 3.3 satisfies these requirements and stands as an
arbitration agreement.
48.
In
Heyman
v Darwins Ltd
[32]
,
Viscount Simon said that 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 language and in the light of the circumstances in which
it is
made.
49.
The
general principles of interpretation are well known and need not be
restated.
[33]
In short,
in interpreting any document the starting point is inevitably the
language of the document but it falls to be construed
in the light of
its context, the apparent purpose to which it is directed and the
material known to those responsible for its production.
Context,
the purpose of the provision under consideration and the background
to the preparation and production of the document
in question are not
secondary matters introduced to resolve linguistic uncertainty but
fundamental to the process of interpretation
from the outset.
50.
Clause 3.3 of the
Contracts is not the normal, widely worded arbitration clause.
Its provisions are only triggered in the
event that a claim based on
inherent quality defects is made. The phrase “inherent
quality defects” is further
limited to logs delivered at
“roadside”. There is nothing contentions about
coming to this finding as the parties
are in fact
ad
idem
that
clauses 3.3 only applies to deliveries at roadside.
51.
The jurisdictional
facts required for an arbitration under clause 3.3 appear from the
clause itself and are twofold. Firstly,
there had to have been
a notice of a claim from Tzaneng to Komati based on inherent quality
defects in logs delivered at roadside.
Secondly, there must be
a failure between the parties to agree on a reduction in price of the
logs delivered at roadside.
The dispute that clause 3.3
contemplates will be placed before the arbitrator is therefore one of
limited scope and can only relate
to claims for a reduction in the
selling price of logs delivered at roadside. Clause 3.3 further
provides (in the third bullet
point) that the arbitrator is to act as
an expert and that he shall verify that the product constituting the
subject matter of
the claim is derived from deliveries by Komati.
52.
The remarks in
paragraphs 49
to
50
above
find application in the question on whether the Arbitrator has
jurisdiction.
An arbitral dispute
53.
In
Parekh
v Shah Jehan Cinemas (Pty) Ltd and
[34]
it was held that:
“
Arbitration
is a method for resolving disputes. That alone is its object, and its
justification. A disputed claim is sent to arbitration
so that the
dispute which it involves may be determined. No purpose can be
served, on the other hand, by arbitration on an undisputed
claim.
There is then nothing for the arbitrator to decide. He is not needed,
for instance, for a judgment by consent or default.
All this is so
obvious that it does not surprise one to find authority for the
proposition that a dispute must exist before any
question of
arbitration can arise.”
54.
Subject to statutory
limitations that are not relevant at present, any dispute can be the
subject of arbitration, but there must
be a dispute.
55.
In
Body
Corporate Pinewood Park v Dellis (Pty) Ltd
[35]
,
Mpati P writing on behalf of the Court summarised the judgment of
Plewman JA in
Telecall
(Pty) Ltd v Logan
[36]
as follows:
“…
in
Telecall (Pty) Ltd v Logan this court (per Plewman JA) said that
before there can be a reference to arbitration, a dispute which
is
capable of proper formulation at the time when an arbitrator is to be
appointed must exist and there cannot be an arbitration,
and
therefore no appointment of an arbitrator can be made, in the absence
of such a dispute. Thus, if the word 'dispute' is used
in a context
which indicates that what is intended 'is merely an expression of
dissatisfaction not founded upon competing contentions
no arbitration
can be entered into'.”
56.
When
a “dispute” is understood in the sense described above,
it is clear that care should be taken not to elevate considerations
applicable to whether there is a triable issue
[37]
to the question of whether there is an arbitral dispute. An
example of what is not a dispute is to be found in
PCL
Consulting (Pty) Ltd t/a Phillips Consulting SA v Tresso Trading 119
(Pty) Ltd.
[38]
Therein a defendant in summary judgment proceedings sought a stay of
proceedings in terms of the provisions of section 6 of the
Arbitration Act and
simply
pointed out that the contract between the parties contains an
arbitration clause in wide terms. The Supreme Court of Appeal
per
Cloete
JA held that that was not sufficient
,
that “
t
he
defendant was obliged to go further and set the terms of the
dispute
”
[39]
.
This statement must, however, be read in the context of that judgment
where no explanation of what the nature of the dispute
was given.
57.
The
learned authors of
Mustill
& Boyd
[40]
observe that:
“…
the
existence of a dispute between the parties is material, not only to
the classification of the agreement to refer, but also to
the rights
of the parties to put the agreement in effect. Thus if one
party to an arbitration agreement makes a claim which
the other party
admits, this cannot usually be made the subject of arbitration;”
58.
As is evident from
the correspondence preceding the pre-arbitration meeting on 6 July
2020, Komati had been uncommunicative about
what the dispute was that
it was referring to arbitration. In his letter of 14 May 2020,
Mpotshana merely states that because
there is a dispute about
payment, the dispute must be referred to arbitration in terms of
clause 3.3. The statement is a
study in circular reasoning.
59.
In his letter of 15
May 2020, Erasmus made it clear that Tzaneng was not relying on any
inherent quality defects and that Komati’s
reliance on clause
3.3 to determine the payment dispute was wrong. Mpotshana
replied on the same day and, as he put it, declined
to be drawn into
a debate. The upshot was that there was still no answer as to
what the dispute was that Komati was seeking
to refer.
60.
On 9 July 2020, a
minute was produced of the 6 July 2020 meeting. The standing of
this minute is dealt with further hereunder,
suffice to state for
present purposes that nowhere in that minute is it recorded what the
disputes are that were being referred
to arbitration, nor was any
effort made to formulate the disputes. Paragraph 1.3 of the
minute merely records that Komati
“
has
referred 7 disputes to arbitration
”
and in paragraph 2.4 Komati recorded that “
the
disputes will only be formulated in the statement of claim in each of
the 7 arbitrations
”.
At the time these disputes can notionally only have been the payment
disputes raised in the correspondence referred
to above.
61.
The nearest to which
the parties came to formulate the disputes was in paragraphs 4.1 to
4.4 of the minute. Tellingly, paragraph
4.3 records that it was
Komati’s stance that, to paraphrase, Tzaneng was jumping the
gun “
because
[Komati]
was
yet to deliver its statement of claim
”.
On Tzaneng’s approach the referred dispute would only become
known once the pleadings were exchanged.
62.
What emerged in the
statements of claim is more attempted sophistry than actual cause of
action. In substance it comes down
to an argument that
Tzaneng’s refusal to make payment is actually a claim for a
reduction in selling price under clause 3.3,
that clause 3.3 only
applies to road side deliveries and that
ergo
Tzaneng cannot claim for a reduction in the selling price. The
pivot of this argument is reflect in the statements of claim
as
follows:
“
10
The defendant’s claim against the totality of sums of various
monies
due to the claimant has an effect in reduction the invoice
price of R475.00 per m³ excluding value added tax for Products
delivered by the claimant to the defendant in terms of
Ad
hoc
Sale Agreement-Woodbush as provided
for in sub-clause 3.3 of the Conditions of Sale.”
63.
This is a contortion
of what Tzaneng’s defence is to Komati’s claims for
payment. On the common cause facts Tzaneng
does not claim for a
reduction in the selling price in terms of clause 3.3 and, if that
was not already clear in the preceding
correspondence, it was made
clear in Tzaneng’s subsequently filed pleadings that (i) all
deliveries were on the standing
basis; (ii) it does and will not rely
on the provisions of clause 3.3; and (iii) the provisions of clauses
5.6 and 5.6.1 apply
to the sales made by Komati to it. On the
face of it, no dispute therefore arises as to whether Tzaneng’s
claims fall
or will ever fall under the rubric of clause 3.3.
64.
Secondly, Komati’s
argument also seems to be based on a fatally flawed premise: In order
for its contention that the refusal
to pay has the effect of reducing
the cubic meter sales price to be true and hence that Tzaneng’s
defence to its payment
claims is actually a “claim” for a
reduction under clause 3.3, the assumption has to be made that the
parties are in
agreement on both the volume of logs and the price for
those logs and that Tzaneng’s refusal to pay is only in respect
of
a reduction of the sale price. For that assumption to have
been put in play Komati would have to have pleaded those facts,
but
none were pleaded.
65.
If the dispute is
whether Tzaneng can claim under clause 3.3, then no dispute has
arisen. Tzaneng agrees that it cannot and
also states that it
will not.
66.
What
remains is an argument based on what seems to be a fatally flawed
premise, but that is not enough for Tzaneng to succeed.
Nomihold
v Mobile Telesystems Finance SA
[41]
is authority for the principle that even if an argument may seem to
be unarguable, that is not a ground for a court to intervene
at stage
such as the present matter.
67.
The
same sentiments are repeated in
Hyde
Construction CC v Deuchar Family Trust and Another
[42]
by Rogers J (as he was then and writing on behalf of the full Court)
when he said:
“
The
party seeking to invoke the court's residual jurisdiction must make
out a 'very strong case' or provide 'compelling reasons',
though in
Universiteit van Stellenbosch v JA Louw (Edms) Bpk
1983 (4) SA 321
(A) Galgut AJA thought it impossible and indeed undesirable to
attempt to define with any degree of precision what would constitute
a 'very strong case' (at 334A – B).”
68.
In
Pledream
Properties Limited v 5 Felix Avenue London Limited
[43]
,
a matter concerning the provisions of the Leasehold Reform, Housing
and Urban Development Act 1993, Lewison J said:
“…
a
dispute may arise in fact even if the outcome of a dispute is a
foregone conclusion. We all have experience of litigants advancing
hopeless cases with no prospects of success. It would be a misuse of
language to say that there was no dispute simply because the
outcome
was inevitable.”
69.
Lewison
J referred to the judgment of Saville J in
Hayter
v Nelson
[44]
as authority for his views. The headnote of
Hayter
supra
accurately summarises Saville J’s finding that “”
disputes”
and “differences” in the arbitration clause should be
given their ordinary meaning ; neither the word
"disputes"
nor the word "differences" was confined to cases where it
could not then and there be determined
whether one party or the other
was in the right; and because one party could be said to be
indisputably right and the other indisputably
wrong did not entail
that there was never any dispute between them
”.
These statements accord with
Telecall
supra
.
[45]
70.
Therefore as weak as
Komati’s contentions seem to be, a notional dispute exists and
it remains for the Arbitrator to determine
whether there actually is
an arbitral dispute before him. Whether the dispute is a
dispute that falls in the Arbitrator’s
jurisdiction is a
different matter.
Jurisdiction
71.
In
Christopher
Brown Ltd v Genossenschaft Oesterreichischer Waldbesitzer
Holzwirtschaftsbertriebe Registrierte Genossenschaft mit Beschrankter
Haftung
[46]
it was held that for an arbitrator to have jurisdiction, three
requirements must be answered. These are (i) that there must
be
an arbitration agreement between the parties; (ii) that the dispute
that arose must be within the terms of the agreement; and
(iii) that
the arbitrator was appointed in accordance with the clause that
contains the agreement. The first and third requirements
are
not in issue in the present matter. The jurisdiction of the
Arbitrator has, however, throughout been a matter of dispute
between
the parties.
72.
An
arbitrator derives his jurisdiction from the agreement of the parties
at whose instance he is appointed. He has such jurisdiction
as they
agree to give him and none that they do not.
[47]
73.
The
learned authors of
Keating
supra
state
that the extent of an arbitrator’s jurisdiction depends upon
the proper construction of the arbitration agreement in
each case and
in all the circumstances, including the terms of the notice of
dispute which initiated the arbitration.
[48]
Since arbitration is a matter of contract, a party cannot be required
to submit to arbitration any dispute which he has not
agreed so to
submit.
[49]
74.
In
Radon
Projects (Pty) Ltd v NV Prop (Pty) Ltd
[50]
,
Nugent JA said that the question whether a tribunal has jurisdiction
to consider a claim is not dependent upon its merit or otherwise.
The
question is only whether the claim as formulated in in the pleadings
falls within the scope of his jurisdiction to consider.
There
is no presumption that a dispute is arbitrable.
[51]
75.
As was shown above,
the Arbitrator’s jurisdiction in the present matter is pegged
by the narrow provisions of clause 3.3.
Komati’s claim
has the paradoxical feature that the Arbitrator must find that the
“claim” by Tzaneng (as Komati
calls it) is a claim that
in fact falls outside the parameters of clause 3.3. Assuming
that there was actually a dispute
on this score (which there is not),
then success on the part of Komati would mean that the Arbitrator
decides that he does not
have jurisdiction to decide on Tzaneng’s
claim since it is not a claim advanced in terms of clause 3.3.
More specifically,
he cannot declare that a claim outside of the
purview of clause 3.3 is in fact or in law good or bad.
76.
Which brings on to
the questions of whether the Arbitrator has the power to decide on
his jurisdiction and, if he does, whether
there are nonetheless
grounds for this court to rule on that before he does.
77.
Clause
3.3 of the Contracts patently does not grant the arbitrator the power
to decide his own jurisdiction, but that does not mean
that the
parties could not by agreement have clothed him with that
authority.
[52]
In
Total
Support Management (Pty) Ltd v Diversified Health Systems (SA) (Pty)
Ltd
[53]
,
Smallberger AJP said that the hallmark of arbitration is that it is
an adjudication, flowing from the consent of the parties to
the
arbitration agreement, who define the powers of adjudication, and are
equally free to modify or withdraw that power at any
time by way of
further agreement. Whether or not such a separate arbitration
agreement was subsequently concluded is a question
of fact.
[54]
78.
The factual enquiry
starts with the procedural meeting of 6 July 2020. After that
meeting Els prepared a minute of the meeting
which was circulated to
Komati (“
the
Els minute
”).
Mpotshana amended the Els minute and then sent it back to by
Erasmus. The amendments are dealt with in more
detail below.
79.
On 9 July 2020, the
Arbitrator addressed an email to the parties to which he attached a
draft minute (“
the
9 July minute”
)
which he stated “
constitutes
an accurate reflection of the matters discussed, agreed and disagreed
upon and can be signed as such
”.
Mpontshana signed the minute on the same day and sent it back to the
Arbitrator and Erasmus. As pointed out
below, there was no
demur from Erasmus until 24 August 2020.
80.
In reply, Erasmus did
not dispute that the arbitrator had circulated the minute, but stated
that the arbitrator did not purport
to make any ruling as to what was
discussed or agreed between the parties. This misses the point.
There is no need for the
arbitrator to make any ruling on what was
discussed. The minute either correctly records what was
discussed at the meeting
or it does not. E. S. Pugsley states
the following in
The
Law of South Africa (LAWSA)
in
regard to minutes of meetings in general:
“
Minutes
of a meeting are the official record of meetings that were held, as
well as the business that was dealt with at those meetings.
Once
signed by the chairperson, they are regarded as prima
facie evidence of what took place.”
[55]
81.
Although the
Arbitrator did not sign the minutes, I see no reason why the same
principle should not also apply to the 9 July minute,
which he
clearly indicated was acceptable to him.
82.
On 24 August 2020 and
in response to the Statements of Claim, Erasmus sent an amended
minute and Tzaneng’s Statements of Defence
to Mpotshana.
This minute struck through certain of the additions made by Mpotshana
to the Els minute and reverted to back
to the Els minute.
Mpotshana in turn rejected this amended minute on 25 August 2020.
The differences in opinion are
more perceived than actual. This
is apparent from the statements of defence filed by Tzaneng.
83.
In the statements of
defence a special plea challenging the jurisdiction of the Arbitrator
was raised in each instance. Significantly,
it was pleaded that
“
the
Arbitrator has jurisdiction, as agreed between the parties at a
pre-trial conference, to make a determination regarding his
jurisdiction
”.
Paradoxically, Du Plessis states in his founding affidavit that the
Arbitrator cannot make a finding as to his own jurisdiction,
because,
so says Du Plessis, the parties failed to agree that he has
jurisdiction to do so.
84.
There are a reasons
that make Du Plessis’s statements untenable:
84.1
First, none of the
minutes record that Du Plessis was present at the 6 July 2020
meeting. He can therefore not speak to what
was discussed or
not. There is also no confirmatory affidavit from Els, who
acted as counsel for Tzaneng in the present application.
Mr Els
sought to make statements from the bar regarding what occurred at the
meeting, but that is not permissible and I have taken
no cognisance
of his submissions that strayed beyond what may permissibly be made
on the affidavits before me. On the facts
the
prima
facie
proof
of what was discussed at the procedural meeting stands firm.
84.2
Secondly, there is
patently an agreement between the parties that the Arbitrator has
jurisdiction to make a determination regarding
his jurisdiction.
That is specifically pleaded in paragraph 1.8 of the Tzaneng’s
statements of defence and Du Plessis
cannot now seek to gainsay what
is recorded in Tzaneng’s pleadings.
84.3
Thirdly, these are
motion proceedings and the application fell to be determined on the
version of Mpotshana, together with any undisputed
evidence in the
affidavit of Du Plessis and the supporting affidavit of Erasmus.
On that version there is an agreement that
the Arbitrator has “
the
necessary jurisdiction to at least make a ruling on his own
jurisdiction
”.
85.
It is necessary to
consider the minute in order to ascertain what the agreement was
between the parties in regard to the powers
granted to the Arbitrator
to determine his jurisdiction.
86.
By way of background
introduction, the 9 July minute records
inter
alia
that
“
the
parties consequently agreed that the Arbitrator shall be appointed in
all 7 matters and that the pre-arbitration meeting will
be in respect
of all 7 matters
”.
Paragraph 2.4 of the minute records that Tzaneng placed in issue
whether the arbitration fell within the ambit of
clause 3.3.
87.
Paragraph 2.5
specifically dealt with the jurisdiction of the Arbitrator.
Komati recorded that it was of the view that the
Arbitrator has the
necessary jurisdiction “
in
terms of the relevant provisions of the agreements concluded to
consider the claims of the claimant
”.
In turn, Tzaneng expressly disputed the Arbitrator’s
jurisdiction, but stated that it was prepared to agree
that the
Arbitrator will have jurisdiction to make a ruling regarding his own
jurisdiction.
88.
Paragraph 2.7 of the
9 July minute records as follows (for the sake of reference the
portion subsequently struck through by Erasmus
is also struck through
below):
“
2.7
Whether the Arbitrator can decide his own jurisdiction?
Answer
:
The claimant and the defendant both agreed that the Arbitrator shall
have the necessary jurisdiction to at least make a ruling
on his own
jurisdiction
within
the relevant provisions of the agreements concluded by the claimant
and defendant
.”
89.
As pointed out above,
on the facts the entire paragraph must be accepted as a correct
recordal of what was discussed and agreed
at the 6 July meeting.
The inclusion of the last portion of the paragraph, however, does not
take matters any further.
The reference to “the relevant
provisions of the agreements concluded by the claimant and the
defendant” is no more
than a reference to the Contracts.
It is common cause between the parties that the only provision in
those agreements that
provide for arbitration is clause 3.3.
The preposition “within” makes it clear that any
determination of the
Arbitrator’s jurisdiction must happen in
the limits set by the Contracts and more specifically clause 3.3.
90.
In paragraphs 4.1 and
4.2 Tzaneng recorded that it was of the view that only issues
relating to inherent quality defects raised
by Komati could be
referred to arbitration under clause 3 of the Contracts. It was
then recorded that Tzaneng was of the
view that “
regardless
of the nature and formulation of the disputes in the statement of
claims, the Arbitrator will not have jurisdiction to
consider the
claims of the claimant
”.
Komati recorded what can only be described as an opaque response in
which it recorded that it disagreed with Tzaneng’s
views.
Paragraph 4.4 of the 9 July minute then records (Erasmus’s
struck through portion is again indicated):
“
4.4.
The parties have agreed that, notwithstanding the aforesaid, the
Arbitrator shall
have jurisdiction to rule upon his own jurisdiction.
in terms of the relevant agreements
concluded by the claimant and the defendant
.”
91.
In
Tzaneng’s replying affidavit, deposed to by Du Plessis, he
states that it “
was
in any event made clear by both parties that the agreement will
ultimately have to be reduced to writing to ensure that it complies
with the Arbitration Act
”.
That statement does not find support anywhere in the 9 July minute,
nor were any facts placed before the court that
indicated that this
was the parties’ intention. In truth, all the facts
before court expressly show that the parties
considered the minute
would be a sufficient recordal of the agreement. This much was
also submitted by Mr Els in his heads
of argument, albeit that the
submission was that there would be an agreement that the Arbitrator
would be allowed to make a ruling
on his own jurisdiction, “
provided
that an express agreement to that effect be reflected in the
pre-trial minute
”.
On any score all the drafts of the minutes record that there was an
agreement that the Arbitrator shall have jurisdiction
to rule upon on
his own jurisdiction, which was reduced to writing and both parties
signed versions of the minute which record
that
[56]
and this is also repeated in Tzaneng’s statement of defence.
92.
In
Zhongji
Development Construction Engineering Co Ltd v Kamoto Copper Co
SARL
[57]
the rules applicable to the arbitration in that matter included rule
12.1 of the sixth edition of the Rules of the Arbitration
Association
which provided that:
“
The
Arbitrator may decide any dispute regarding the existence, validity
or interpretation of the arbitration agreement and, unless
otherwise
provided therein, may rule on his own jurisdiction to act.”
93.
At paragraph [36] of
Zhongji
supra
and
in light of the provisions of rule 12.1, the majority of the Court
held:
“
it
was held that In the light of an arbitrator's power to determine his
or her jurisdiction in an issue that arises from the referral
to
arbitration itself, there is, therefore, no reason why the dispute
about whether or not the claims arising from the appellant's
performance in terms of the interim agreement is indeed arbitrable,
should not be decided by the arbitration tribunal prior to
an
application to the high court.”
94.
In
Zhongji
supra
the parties had not yet filed any pleadings, but the issue of
jurisdiction loomed large in the affidavits filed of record.
95.
While the current
agreement between the parties refers to the Arbitrator having the
jurisdiction to “determine” his
jurisdiction, as opposed
to “rule” in
Zhongji
supra
,
the difference is immaterial. The parties clearly agreed that
the Arbitrator is clothed with the power to make a decision
on
whether or not he had jurisdiction.
96.
In light of
Zhongji
supra
this court is compelled to honour the parties’ agreement and
leave the question of jurisdiction to the Arbitrator to determine.
Other objections
97.
For the sake of
completeness, two further aspects raised by Tzaneng are dealt with.
98.
Firstly,
Tzaneng argued that the Arbitrator’s award as requested by
Komati would not be final. In
SA
Breweries Ltd v Shoprite Holdings Ltd
[58]
,
Scott JA, in dealing with the question of the finality of an award
said that, depending on the questions, the determination may
not
necessarily result in a final resolution of a dispute between the
parties. That is also the case in the present instance.
Tzaneng’s point is therefore bad.
99.
Secondly,
Tzaneng argued that declaratory relief is improper. The law
affords an arbitrator a considerable variety of forms
from which to
choose the type of award best suited to the circumstances of the
case, including the power to make an award declaring
what the rights
of the parties are.
[59]
Tzaneng’s point in this respect is therefore also bad.
100.
Lastly, a waiver
point was raised by Komati, on whose behalf it was contended that
Tzaneng had waived its right to challenge the
Arbitrator’s
jurisdiction. There is no need for this court to decide that
and it too is left for the Arbitrator to
consider.
Conclusion and costs
101.
In the premises the
application falls to be dismissed. I see no reason why the
costs should not also follow the result.
Order
102.
I accordingly make
the following order:
102.1
The application is
dismissed.
102.2
The Applicant to pay
the costs.
Appearances:
For
the Applicant:
Adv A. P. J. Els
Instructed
by:
Thomas &
Swanepoel Inc
For
the First Respondent: Adv I. Pillay SC
Instructed
by:
Mpungose & Dlamini Inc
[1]
In
argument on the day of the hearing, Mr Els, counsel for Tzaneng,
sought to rely on the 20 days’ period. This had
not been
raised in the affidavits filed of record, nor was it raised in Mr
Els’s heads of argument. In fact, in an
email dated 1
July 2020, Mr Louis Erasmus of Tzaneng’s appointed attorneys,
Thomas & Swanepoel Inc, wrote to the Arbitrator
and recorded
that, with “
reference
to the 20 days limitation, we are of the view that such a period is
impractical … My client is willing to waive
that
limitation
.”
I need not decide whether such a waiver occurred, because it was not
a point open to Tzaneng to take in argument
without having raised it
in its founding affidavit.
[2]
Paragraph
4 of Erasmus’s letter merely quotes the provisions of clause
3.3.
[3]
Yannakou
v Appollo Club
1974 (1) SA 614
(A) at 623G-H.
[4]
Naude
v Fraser
[1998] ZASCA 56
;
1998 (4) SA 539
(SCA
at 563G; Caratco (Pty) Ltd v Independent Advisory (Pty) Ltd
2020
(5) SA 35
(SCA);
Fundstrust
1997 (1) SA 710
(A) at 725H – 726A.
[5]
Bato Star Fishing (Pty) Ltd v Minister of
Environmental Affairs and Tourism and Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC) paragraph [27].
[6]
The Law and Practice of Commercial
Arbitration in England, Mustill & Boyd, 2
nd
Edition, 1989 (hereinafter “
Mustill
& Boyd
”),
page 525.
[7]
In
Ramsden’s
The
Law of Arbitration
,
2012 Reprint (hereinafter “
The
Law of Arbitration
”),
page 91.
[8]
Zhongji Development Construction
Engineering Co Ltd v Kamoto Copper Co SARL
2015 (1) SA 345
(SCA) at paragraph [29].
[9]
Lufuno Mphaphuli & Associates (Pty) Ltd
v Andrews and Another
2009 (4) SA 529
(CC)
(2009 (6) BCLR 527
;
[2009] ZACC 6)
especially in paras [195] – [236].
[10]
Pretoria
City Council v Blom and Another
1966 (2) SA 139
(T)
;
Inter-Continental Finance and Leasing Corporation (Pty) Ltd v Stands
56 and 57 Industria Ltd and Another
1979 (3) SA 740
(W) at 753.
[11]
South
African Transport Services v Wilson NO
1990 (3) SA 333
(W).
[12]
Goodwin
Stable Trust v Duohex (Pty) Ltd 1998 (4) SA 606 (C).
[13]
The grounds upon which the application were
brought are recorded at 610B - C as: “Applicant contended
that
there was no binding arbitration agreement between applicant and
first respondent; that the appointment of second respondent
as
arbitrator was invalid; that there was no arbitrable issue between
itself and first respondent; that the cession by which
first
respondent claimed the right to arbitrate was invalid or
alternatively unenforceable against applicant; and that the clause
purporting to permit first respondent to act in the name of the
cedent was invalid.”
[14]
Greenacres
Unit 17CC and Another v Body Corporate of Greenacres and
Another
[2006] 4 All SA 78
(W), overturned on appeal.
[15]
Body Corporate of Greenacres v Greenacres Unit 17
CC 2008 (3) SA 167 (SCA).
[16]
Law
of Arbitration
supra page 110.
[17]
Mustill
& Boyd supra
,
page 525.
[18]
Section 21(1)(c) provides: “'A Division has
jurisdiction over all persons residing or being in, and
in relation
to all causes arising and all offences triable within, its area of
jurisdiction and all other matters of which it
may according to law
take cognisance, and has the power … in its discretion, and
at the instance of any interested person,
to enquire into and
determine any existing, future or contingent right or obligation,
notwithstanding that such person cannot
claim any relief
consequential upon the determination.'”
[19]
Durban City Council v Association of Building
Societies
1942 AD 27
; Cordiant Trading CC v Daimler Chrysler
Financial Services (Pty) Ltd
2005 (6) SA 205
(SCA) at paragraph
[16].
[20]
Baleni
and Others v Minister of Mineral Resources and Others
2019 (2)
SA 453
(GP) at paragraph [30], referring also to JT Publishing (Pty)
Ltd and Another v Minister of Safety and Security and Others
[1996] ZACC 23
;
1997
(3) SA 514
(CC) at paragraph
[15]
.
[21]
Knox D'Arcy Ltd and Others v Jamieson and
Others
[1996] ZASCA 58
;
1996 (4) SA 348
(A) at 361I.
[22]
Zhongji Development Construction Engineering Co
Ltd v Kamoto Copper Co SARL
2015 (1) SA 345
(SCA) at paragraph
[57].
[23]
Lufuno
Mphaphuli and Associates (Pty) Ltd v Andrews and Another
2009
(4) SA 529
(CC)
at [235]; Zhongji
supra
at
paragraph [56].
[24]
Aveng Africa Ltd (formerly Grinaker LTA Ltd) t/a
Grinaker-LTA Building East v Midros Inv (Pty) Ltd
2011 (3) SA
631
(KZD) at paragraph [13].
[25]
Cf the
obiter
remark
by Gorven AJA in
Zhongji
supra
at paragraph [59], referring to the speech of Lord Hoffman in
Fiona
Trust & Holding Corporation and others v Privalov and others
[2007] UKHL 40
;
[2007] 4 All ER 951
(HL) at paragraphs [6] and [7].
[26]
Keating
on Construction Contracts
,
11
th
Edition (hereinafter “
Keating
”),
§17-116.
[27]
This is in terms of section 37 of Senior Courts
Act of 1987 wich provides: “
(1) The
High Court may by order (whether interlocutory or final) grant an
injunction or appoint a receiver in all cases
in which it appears to
the court to be just and convenient to do so.
”
[28]
Keating
supra
at §17-116.
[29]
Durban City Council v Association of Building
Societies
1942 AD 27
; Cordiant
supra
at paragraph [16].
[30]
Keating
supra
at
§17-116 referring to
Siporex
v Comdel [1986] 2 Lloyd’s Rep. 428.
[31]
Keating
supra
at
§17-116 referring to
AmTrust
Europe Ltd v Trust Risk Group SpA
[2015] EWHC 1927
(Comm)
,
referred to with approval in
Sabbagh
v Khoury
[2019] EWCA Civ 1219
.
[32]
Heyman
v Darwins Ltd (1942) 1 All E. R. 337 at page 343.
[33]
KPMG Chartered Accountants (SA) v Securefin Ltd
and Another
2009 (4) SA 399
(SCA) paragraphs [39] – [40];
Natal Joint Municipal Pension Fund v Endumeni Municipality
2012 (4)
SA 593
(SCA) at paragraph [18]; Bothma-Batho Transport (Edms) Bpk v
S Bothma & Seun Transport (Edms) Bpk
2014 (2) SA 494
(SCA)
paragraph [12]; Dexgroup (Pty) Ltd v Trustco Group International
(Pty) Ltd and Others
2013 (6) SA 520
(SCA) paragraphs [10] –
[17].
[34]
Parekh
v Shah Jehan Cinemas (Pty) Ltd and Others
1980
(1) SA 301
(D) at 304E – H.
[35]
Body Corporate Pinewood Park v Dellis (Pty)
Ltd
2013 (1) SA 296
(SCA) at paragraph [8].
[36]
Telecall (Pty) Ltd v Logan
[2000] ZASCA 97
;
2000 (2) SA 782
(SCA) at paragraph
[12]
; De Lange v Presiding Bishop, Methodist
Church of Southern Africa
2015 (1) SA 106
(SCA) at paragraph
[44]; Mustill & Boyd
supra
at
pages 46 – 47.
[37]
Trans-Drakensberg
Bank Limited (under judicial management) v Combined Engineering
(Pty) Ltd & Another 1967 (3) SA 632 (D)
at
637G; Commercial Union Assurance Co Ltd v Waymark NO
1995 (2) SA 73
(Tk)
at
77G – H.
[38]
PCL
Consulting (Pty) Ltd t/a Phillips Consulting SA v Tresso Trading 119
(Pty) Ltd 2009 (4) SA 68 (SCA).
[39]
PCL
Consulting
supra
at paragraph [7].
[40]
Mustill
& Boyd
supra
at
page 47.
[41]
Nomihold
v Mobile Telesystems Finance SA
[2012]
EWHC 130
at paragraph 49.
[42]
Hyde
Construction CC v Deuchar Family Trust and Another
2015 (5) SA
388
(WCC) at paragraph [69].
[43]
Pledream
Properties Limited v 5 Felix Avenue London Limited
[2010] EWHC 3048
(Ch) [2011] L&TR 20.
[44]
Hayter
v Nelson [1990) 2 LI.Rep 265; endorsed in Court of Appeal decision
in Halki Shipping Corporation v Sopex Oils Ltd [1998]
2 All ER 23.
[45]
Telecall
supra
at paragraph [12.
[46]
In
Christopher Brown Ltd v Genossenschaft Oesterreichischer
Waldbesitzer Holzwirtschaftsbertriebe Registrierte Genossenschaft
mit Beschrankter Haftung [1953] 2 All ER 1039 (QB).
[47]
Ashville
Investments v Elmer Contractors
[1989] Q.B. 488
CA at 506;
referred to in
Keating
supra
at §11-023.
[48]
Keating
supra
at §11-023, referring to
Heyman
v Darwins Ltd
[1942] A.C. 356
HL at 360 and
Lesser
Design & Build v Surrey University (1991) 56 B.L.R. 57.
[49]
AT&T
Technologies Inc. v. Communication Workers of Am.
475 U.S. 643
at
648
.
[50]
Radon Projects (Pty) Ltd v NV Prop (Pty) Ltd
2013
(6) SA 345
(SCA) at paragraph [23].
[51]
Law
of Arbitration supra
at page 88, referring to Local 827 International Brotherhood of
Electrical Workers v Verizon New Jersey Inc U.S. 3
rd
Circuit Court of Appeals 08/17/06 05-3613.
[52]
Allied
Mineral Development Corporation (Pty) Ltd v Gemsbok Vlei Kwartsiet
(Edms) Bpk
1968 (1) SA 7
(C) at 14G – 15B; Amalgamated
Clothing and Textile Workers Union of South Africa v Veldspun (Pty)
Ltd
[1993] ZASCA 158
;
1994 (1) SA 162
(A) at 169C – E; South African
Transport Services
supra
.
[53]
Total
Support Management (Pty) Ltd v Diversified Health Systems (SA) (Pty)
Ltd
[2002] ZASCA 14
;
2002 (4) SA 661
(SCA) at paragraph
[25]
.
[54]
The Law of South Africa (LAWSA),
Arbitration
(Volume 2 - Third Edition), paragraph 90, footnote 18.
[55]
LAWSA,
Meetings
(Volume 29 - Third Edition), §200
.
[56]
City of Cape Town v Khaya Projects (Pty) Ltd and
Others
2016 (5) SA 579
(SCA) at paragraphs [41] – [43].
[57]
Zhongji Development Construction Engineering Co
Ltd v Kamoto Copper Co SARL 2015 (1) SA 345 (SCA)
[58]
SA Breweries Ltd v Shoprite Holdings Ltd
2008
(1) SA 203
(SCA) at paragraph [22].
[59]
Bidoli v Bidoli and Another
2011 (5) SA 247
(SCA) at paragraph [16].