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[2017] ZAGPPHC 149
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Moipone Group of Companies (Pty) Ltd v City of Tshwane Municipality (13874/2017) [2017] ZAGPPHC 149 (29 March 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
29/3/2017
CASE
NO: 13874/2017
Reportable
Not
of interest to other judges
Revised
In
the matter between:
MOIPONE
GROUP OF COMPANIES (PTY)
LTD
Applicant
and
CITY
OF TSHWANE METROPOLITAN
MUNICIPALITY
Respondent
JUDGMENT
DAVIS,
AJ:
[1]
NATURE OF THE APPLICATION:
This
was an urgent application by a group of companies, incorporated as
such as Moipone Group of Companies (Pty) Ltd (“
Moipone”)
for an order compelling the City of Tshwane Metropolitan
Municipality
(“CTMM' )
to adhere to a Public Private
Partnership Agreement
(“the agreement”)
concluded
between the parties.
[2]
RELIEF CLAIMED:
The
Applicant, apart from claiming that the application should be heard
as one of urgency in terms of Rule 6(12) of the Rules of
the High
Court, claimed the following relief:
“
2.
An order directing the Respondent to comply with its
obligations under the Public Private Partnership Agreement ('the
agreement]
concluded between the Applicant and the Respondent on 24
March 2016 pending the finalisation of the urgent arbitration
proceedings
to be initiated by the Applicant.
3. That the Applicant
initiate urgent arbitration proceedings wherein it seeks, inter alia,
a
declarator that the
agreement is valid and enforceable and compelling the Respondent to
comply with its obligations thereunder within
10 days of this order.
4. That the Respondent
is interdicted and restrained from appointing and/or concluding any
agreement with
a
service
provider for the services that the Applicant provides in terms of the
agreement pending the finalisation of the arbitration
proceedings.
5.
That
the Respondent pay the costs of the application on the attorney and
client scale alternatively that the costs be costs in the
arbitration
proceedings.”
[3]
THE TERMS OF THE AGREEMENT AND THE
IMPLEMENTATION THEREOF:
3.1
It is common cause that the agreement referred to
in Moipone's notice of motion was indeed entered into between the
parties. The
agreement and the terms thereof were expressly admitted
by CTMM.
3.2
In terms of the agreement Moipone agreed to
provide CTMM with full maintenance lease services, fitments and
accessories, short-term
rentals, driver hire services, licensing of
vehicles, vehicle cleaning services, services concerning vehicle
accidents, training
of city based employees, the management of
the abuse of vehicles, call centre services, administration of
vehicle licences
and traffic fines, information and management
reports and managed maintenance services. These services were to be
rendered in respect
of so-called Category A and Category C vehicles
as defined in the agreement.
3.3
In terms of the agreement Moipone was required to
provide CTMM with small vehicles (Category A) and large vehicles for
industrial
use (Category C). The terms of the agreement are analogous
to an instalment sale agreement in terms whereof a monthly instalment
is payable by CTMM in respect of all vehicles supplied whilst the
Moipone would provide full maintenance of the vehicles, the
installation and monitoring of tracking devices as well as the
cleaning and washing of the vehicles.
3.4
The documentation comprising the agreement is
extensive and virtually each and every aspect pertaining to the
furnishing of the
vehicles are catered for. This much is clear from
the agreement itself as well as Schedule 1 thereto, being a schedule
prescribing
the “
payment mechanisms'',
Schedule 2, being the “
output
specification”,
Schedule 3, being the “
variation procedure” ,
Schedule
4, being the “
master lease schedule”,
Schedule 5, being the “
breach
and termination provisions'',
Schedule 6,
being the “
function schedule'',
Schedule
7, being the “
ad hoc rental provisions”
,
Schedule 8, being the “
settlement
value calculation”,
Schedule 9, being
the “
managed maintenance schedule”,
Schedule 10, being the “
BBEEE
obligation schedule',
Schedule 11, being the
“
performance bond'
and
Schedule 12, being the “
training
requirements” .
Various annexures to
these schedules were also agreed upon which deals with ancillary and
auxiliary matters.
3.5
In terms of the agreement CTMM undertook to make
payment to Moipone in accordance with the provisions of Schedule 1
which provided
for capped annual amounts. In respect of 2015/2016
these were some R66 million for Category A vehicles and some R64
million for
Category C vehicles. These capped amounts escalated for
the year 2016/2017 to some R68 million and some R65 million
respectively.
3.6
The following terms and conditions of the
agreement itself are also relevant:
“
2.
SUSPENSIVE CONDITIONS
2. 1
Conditions
This agreement is
subject to the fulfilment of the following suspensive conditions,
that:
2.1.1 The Private
Party provides to the City
a
duly
executed Performance Bond in the form attached hereto
as
Schedule 11 (Performance Bond) and
as
referred to in clause 37; and
2.1.2 The City
provides the Private Party with documentation evidencing that the
City has the required power and authority to conclude
the agreement.”
[The
“
Private Party”
refers to Moipone and “
the
City''
refers to CTMM.]
3.7
The Performance Bond referred to in the
suspensive condition contained in clause 2.1.1 is dealt with in
clause 37 as follows:
“
37.
PERFORMANCE BOND
37. 1
The Private
Party to provide Performance Bond
The Private Party
shall provide the City a
Performance Bond
in the amount of 10% (ten per cent) of total contract value
as
provided for in clause
7
above in accordance with the terms
set
out in the agreement, which bond shall be
provided by
a
registered
South African financial institution or other entity reasonably
acceptable to the City, for the due performance of the
Private
Party's obligations in terms of this agreement and the implementation
thereof
37.2
Exercise of
the Performance Bond
The Performance Bond
will be exercised in the event of
a
breach
as a
result of
non-performance with respect to the SLA which remains unremedied
following notice of breach in accordance to Schedule
5
(Breach in Termination Procedure) being
furnished to the Private Party, without further notice to the Private
Party . . .”
3.8
In respect of waiver clause 43 of the agreement
contains the following stipulation:
“
43.2
WAIVER
No waiver of any of
the terms and conditions of this agreement will be binding or
effectual for any purpose unless expressed in
writing and signed by
the party thereto giving the
same
and
any such waiver will be effective only in the specific instance and
for the purpose given.”
3.9
In respect of the suspensive conditions, the
agreement further provides as follows:
“
2.2
PARTIES TO USE BEST ENDEAVOURS
The parties will use
their best endeavours and shall negotiate in good faith to procure
the fulfilment of the suspensive condition
as
soon
as
reasonably
possible after the signature date and shall at all times act in good
faith to procure
same.
2.3
CONSEQUENCES OF FAILURE
Should the suspensive
condition fail to be fulfilled
as
contemplated in this clause
2.
2
within
90
(ninety)
days of the Signature Date or within such longer period
as
the parties may agree in writing, the
provisions of this agreement, save for those which by their nature
and content seek to protect
the ongoing interest of the parties,
shall automatically lapse and be of no force or effect and no party
shall have any claim against
the other in terms hereof or arising
therefrom.
2.4
FULFILMENT
Upon fulfilment of the
suspensive condition, the parties shall sign
a
certificate confirming that the suspensive
conditions have been fulfilled and that the agreement is
unconditional, provided that
any failure
so
to sign shall only constitute prima facie
evidence of the continued conditional nature of this agreement.”
3.10
As recorded in the recitals of the agreement, the
agreement was concluded pursuant to a competitive tender process
being followed
by CTMM and based on Moipone's responsiveness to the
requirements of the bid. This much was also admitted in the answering
affidavit
deposed to on behalf of CTMM.
3.11
After having been awarded the tender, Moipone was
provided with a copy of the agreement which was signed by its Group
Executive
Chairman on 13 November 2015. The agreement was thereafter
returned to CTMM for its signature.
3.12
On 28 January 2016 the CTMM City Council
authorised its City Manager to conclude the agreement with Moipone.
The resolution reads
as follows:
“
RESOLVED:
1. That cognisance be
taken of the alignment process undertaken since Mayoral Committee
Resolution of item
1.1.1 of 17 June 2015
and Council Resolution item 23 of
25
June 2015.
2.
That cognisance be
taken of the process followed in terms of Section 120 of the
Municipal Finance Management Act (MFMA), Section
78 of the Municipal
Systems Act (MSA)
as
well
as
Section 33 of the
Municipal Finance Management Act (MFMA).
3. That the accounting
officer be authorised to sign all the necessary agreements with the
preferred service providers to give effect
to the Public Private
Partnership (PPP) agreements.”
3.13
On 20 April 2016 the City Manager addressed a
letter to the Applicant, the contents of which read as follows:
“
CONFIRMATION OF
APPOINTMENT: TENDER FOR THE PROVISION OF FLEET-VEHICLES AND
FLEET-RELATED SERVICES THROUGH A CO-SOURCED MECHANISM
FOR THE CITY OF
TSHWANE (COT): 5 YEAR PERIOD UNDER CATEGORY A AND C
I confirm that the
MFMA Section 33 process has been completed and that the Public
Private Partnership (PPP) agreement was approved
by Council on 28
January 2016.
I also confirm that as
delegated by Council, I signed the PPP Agreement between the City and
yourselves on 24 March 2016, for the
provision of fleet vehicles and
fleet-related services through a co-sourced mechanism for the City of
Tshwane under Category A
and C.
This letter serves to
confirm the completion of the process envisaged in your preferred
bidders' letter and confirms your outright
appointment for the
provision of fleet vehicles and fleet-related services through a
co-sourced mechanism for the City of Tshwane
under Category A and C .
. .”
3.14
On 9 February 2016 the CTMM's Strategic Executive
Director: Group Legal Services forwarded an Executive Memorandum to
the City Manager
which read as follows:
“
CATEGORY C PPP
AGREEMENT
Find enclosed herewith
abovementioned agreement with annexures which has been renegotiated,
drafted, vetted and reviewed. We
confirm that the City Manager
may proceed to
sign the agreement of the
approved PPP Agreement as approved by Council on
28
January 2016.”
3.15
The letter was also forwarded to CTMM's Corporate
and Shared Services: Corporate Fleet Management, its Chief Financial
Officer and
its Supply Chain Management Department.
[4]
THE SUSPENSIVE CONDITIONS:
4.1
In terms of clauses 2.1 to 2.3 of the agreement
the suspensive conditions were required to be fulfilled,
alternatively
waived within 90 days from 24 March 2016,
i.e. on or before 22 June 2016.
4.2
On 22 May 2016 (i.e. within the aforementioned 90
day period) the parties agreed in writing to extend the period of 90
days to 180
days from the signature date of the agreement. The City
Manager furnished Moipone with a letter in this regard dated 22 May
2016
which reads as follows:
“
EXTENSION AS
ENVISAGED IN CLAUSE 2.3 OF THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT
(PPP AGREEMENT): SUPPLY OF FLEET VEHICLES AND FLEET
RELATED
SERVICES THROUGH A CO-SOURCED MECHANISM BETWEEN THE CITY OF TSHWANE
METROPOLITAN MUNICIPALITY AND MO/PONE GROUP OF COMPANIES
(PTY) LTD
As envisaged in clause
2.
3 of the PPP
Agreement signed between the parties on 24 March 2016 we confirm, by
signature hereto, that the parties agree to an
extended period of 180
(one hundred and eighty) days from signature date of the PPP
Agreement to fulfil the suspensive condition
therein.”
4.3
For various reasons the parties on 10 August 2016
entered into a further written agreement in terms whereof the CTMM
waived the
fulfilment of the suspensive condition contained in clause
2.1.1 of the agreement.
4.4
The waiver was done by way of a letter sent by
the City Manager and subsequently co-signed by both parties which
reads as follows:
“
WAIVER AS
ENVISAGED IN CLAUSE 43.2 OF THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT
(PPP) AGREEMENT: SUPPLY OF FLEET VEHICLES ANO FLEET-RELATED
SERVICES
THROUGH A CO-SOURCED MECHANISM BETWEEN THE CITY OF TSHWANE
METROPOLITAN MUNICIPAL/ TY AND MO/PONE GROUP OF COMPANIES (PTY)
LTD
WHEREAS the Council of
the City of Tshwane in its meeting on 28 January 2016 authorised,
inter alia, the conclusion of
a
PPP
Agreement with Moipone Group of Companies (Pty) Ltd and further in
Resolution no. 3 resolved
as
follows:
'3. That the
Accounting Officer be authorised to sign all necessary agreements
with the preferred service providers to give effect
to the Public
Private Partnership (PPP) agreements.
'
AND WHEREAS the City
of Tshwane on 10 August 2016 accepted and acknowledged the cession
and step-in rights of funders in relation
to Moipone Group of
Companies (Pty) Ltd
AND WHEREAS the City
of Tshwane, having accepted and acknowledged the cession and step-in
rights of the funders of Moipone Group
of Companies (Pty) Ltd runs no
risk of
performance in relation to the
obligations of the PPP Agreement concluded between the parties
NOW THEREFORE
as
envisaged in clause 43. 2 of the PPP Agreement
signed between the parties on 24 March 2016 we confirm, by signature
hereto, that
the parties agreed to waive the fulfilment of the
suspensive condition in terms of clause
2.
1.1
referred in clause 37 by virtue of the signature of the full
Maintenance
Lease
Agreement
and the
Cession
Agreement
between the Private Party and Absa Vehicle Management Solutions and
the Banker's Step-In Rights in terms of clause 6 of
Schedule 5.”
[5]
SUBSEQUENT EVENTS:
5.1
During the course of 2016 CTMM placed orders on
Moipone from time to time and Moipone in turn provided CTMM with
vehicles and services.
During the latter part of 2017 however,
tensions arose between the parties which came to a head on 5 December
2016 when CTMM delivered
a termination notice in respect of Schedule
9 of the agreement alleging a failure on the part of Moipone to
perform in accordance
with the agreement. This prompted the launch of
an urgent application in case no. 98028/2016 by Moipone. The urgent
application
was set down for hearing on 10 January 2017 on which date
CTMM through its attorneys withdrew the letter of termination
pursuant
to which the urgent application was also withdrawn at the
costs of CTMM.
5.2
Some 10 days later, on 20 January 2017, CTMM
through its attorneys referred to the contents of Moipone's founding
affidavit in the
urgent application as follows:
“
As
we understand it from Moipone's founding affidavit
under
case
no.
2016198022, Moipone contends that the agreement
is
valid and of full force and effect
-
which means that on Moipone's version, the
suspensive conditions have been fulfilled and were fulfilled
timeously ... In relation
to the suspensive conditions contained in
clause 2 of their agreement, we have been instructed to request that
you provide us with
the following:
3.1 A copy of the
Performance Bond referred to in clause
2.
1. 1 of the agreement;
3.2
The documentation which the City was required to provide to Moipone
in terms of clause
2.
1.2
of the agreement;
3.3 The certificate
signed by both parties in terms of clause
2.
4
of the agreement.”
5.3
Having regard to the chronology already set out
above pertaining to the implementation of the agreement and the
fulfilment of the
suspensive conditions, the letter is curious in
that it does not deal with the waiver of the Performance Bond
requirement and that
it requires Moipone to furnish CTMM with copies
of CTMM's own documents.
5.4
It is common cause that there was no certificate
signed as provided for in clause 2.4 of the agreement but this fact
must also have
been to the knowledge of CTMM. This much was conveyed
to CTMM by Moipone in a subsequent letter of 23 January 2017.
5.5
Moipone contends that, since the despatch of the
letter of 23 January 2017 it appeared that CTMM has elected not to
comply with
the terms of the agreement. It
inter
alia
failed to accept delivery of a number of
vehicles which were provided pursuant to written orders received from
CTMM and failed to
make payments due in respect of the full
Maintenance Lease Agreement as well as the Managed Maintenance
Schedule. Reportedly its
officials on the instructions of the mayor
also refused to attend meetings or to engage with Moipone. CTMM also
started placing
orders directly with Moipone's suppliers and has
appointed two other companies to provide managed maintenance services
for Category
A and Category C vehicles.
5.6
Various attempted settlement negotiations and
meetings came to nought which prompted the present application.
[6]
CTMM's CONTENTIONS:
6.1
In the answering affidavit deposed to on behalf
of CTMM by the Acting Executive Director of its Shared Services
Department, it is
contended that the agreement has lapsed due to the
fact that the suspensive conditions contained in clause 2.1.1 of the
agreement
were not fulfilled and were not lawfully waived.
6.2
The contentions are further that Moipone, being a
party relying on a contract, had the onus to prove that the
suspensive conditions
had been fulfilled. The contention is further
that Moipone had the onus to prove that CTMM had provided it with
documentation “
. . .
evidencing that
the City has the required power and authority to conclude the
agreement' .
6.3
CTMM also contends that whilst the City Manager
might have been authorised to sign the agreement, he did not have the
authority
to agree to the extension of the period for the fulfilment
of the suspensive conditions and neither did he have the authority to
waive the provision requiring a Performance Bond.
[7]
WAS THE SUSPENSIVE CONDITION
CONTAINED IN CLAUSE 2.1.2 FULFILLED?
7.1
This suspensive condition places an obligation on
CTMM to provide documentation to Moipone evidencing CTMM's power and
authority
to conclude the agreement. It is not set out what this
documentation would purport to be or what would constitute
“
evidence”.
7.2
The power of CTMM as local authority is derived
from Chapter 7 of the Constitution of the Republic of South Africa,
1996 and in
particular Sections 156 and 217 thereof. It is further
regulated by the Local Government: Municipal Finance Management Act,
56
of 2003
(“the MFMA”).
7.3
CTMM's argument is therefore that no
“
documentation evidencing”
that
CTMM has complied with the jurisdictional prerequisites for the
conclusion of the Public Private Partnership Agreement in terms
of
the enabling legislation and in particular Sections 33 and 120 of the
MFMA has been placed before court by Moipone.
7.4
What has however been produced by Moipone is the
letter by the City Manager dated 20 April 2016 which confirmed the
Applicant's
appointment pursuant to a tender process as well as the
confirmation that Section 33 of the MFMA has been complied with. This
is
strengthened by the executive memorandum from CTMM's Strategic
Executive Director: Group Legal Services dated 9 February 2016. It
is difficult to understand on what basis CTMM contends that no “
...
documentation evidencing that
a
valid tender process preceded the
conclusion of the agreement is contemplated in
clause
2.
1.2 of the
agreement'
has been placed before court in
view of the admissions of CTMM that such a process had indeed taken
place. The contention by CTMM
is technical to the point of being
cynical. In view of its own admission, CTMM's criticism of Moipone
for not having placed documentation
before court which CTMM had the
obligation to produce, appears somewhat spurious. CTMM also had the
obligation to utilise its “
best
endeavours”
to procure fulfilment of
the suspensive conditions as agreed to by it in clause 2.2 of the
agreement.
7.5
It was not alleged by CTMM and neither was it its
case that no valid tender process had been concluded or that the
appointment of
Moipone was invalid or deficient because of any
non-compliance with any of the statutory provisions, constitutionally
or otherwise.
7.6
Although it was referring to the issue of whether
affidavits disclose a real, genuine or
bona
fide
dispute of fact, the Supreme Court of
Appeal in
Wightman t/a JW Construction v
Headfour (Pty) Ltd and Another
2008(3) SA
371 (SCA) stated the following (at [13]):
“
A real, genuine
and bona fide dispute of fact can exist only where the court is
satisfied that the party who purports to raise the
dispute has in his
affidavit seriously and unambiguously addressed the fact, said to be
disputed. There will of course be instances
were
a
bare denial meets the requirement because
there is no other way open to the disputing party and nothing more
can therefore be expected
of him. But even that may not be sufficient
if the fact averred lies purely within the knowledge of the averring
party and no basis
is laid for disputing the veracity or accuracy of
the averment.
Where the facts averred
are such that the disputing party must necessarily possess knowledge
of them and be able to provide an answer
to countervailing evidence
if they be not
true
or accurate but, instead of doing so rests
his case
on a bare or ambiguous denial the court
will generally have difficulty in finding that the test is
satisfied. ..”
. (my emphasis)
7.7
In the present instance the averment by Moipone
is that the suspensive condition has been fulfilled. The ambiguous
denial by CTMM
is that insufficient documentation has been placed
before the court. This denial pales into insignificance if regard is
had to
the documentation which was indeed supplied coupled with the
failure to raise a
bona fide
dispute
as to whether the statutory or jurisdictional preceding requirements
have been fulfilled or not. I therefore find that Moipone
has proven,
on a balance of probabilities, that there has been substantive
compliance with the abovementioned suspensive condition.
[8]
AD THE SUSPENSIVE CONDITION
CONTAINED IN CLAUSE 2.1.1 OF THE AGREEMENT:
8.1.
Of the various points and contentions raised by
CTMM, the one averment which is correct is that at the date of the
waiver of this
condition relied upon by Moipone, namely 10 August
2016, the cession agreements between Moipone and Absa Vehicle
Management Solutions
and the Banker's Step-In Rights (being contained
in a set of four documents annexed to the replying affidavit as
Annexures “RAS”,
“RA9”, “RA10”
and “RA11”), were not yet in existence. Although it
is correct, as stated
in the waiver that these agreements removed the
risk of non-performance in relation to the obligations of the PPP
Agreement concluded
between the parties, they only came into
existence upon the signature thereof being on 19 and 23 August 2016.
8.2.
In addition to this, CTMM was at pains to stress
that while the City Manager had been authorised to sign the PPP
Agreement, he was
not expressly otherwise authorised to agree to any
extension of the period of fulfilment of the suspensive conditions or
to agree
to the wavier thereof. Whether this is correct or not, it
does not detract from the fact that the administrative actions
constituting
an extension of the agreement and the waiver of the
fulfilment of the clause under consideration did in fact take place.
8.3.
When confronted with the above factual situation
during argument, counsel for CTMM averred from the bar that CTMM
intends launching
the requisite steps for the review and setting
aside of these administrative acts. None of this had however yet
taken place and
apart from the technical legal arguments referred to
above, no basis had been disclosed for such review and rescission.
Significantly
also, there was, apart from the answering affidavit
referred to above, no affidavit from the City Manager himself nor
from any
other councillor or from the Strategic Executive Director:
Group Legal Services dealing with this issue.
8.4.
In this regard, the Supreme Court of Appeal has
more than a decade ago pointed out in
Oudekraal
Estates (Pty) Ltd v City of Cape Town
2004(6)
SA 222 (SCA) that even if an administrative act constitutes an
illegality, until it is set aside by a court it exists in
fact and is
capable of having legally valid consequences meaning that even an
obvious illegality cannot simply be ignored. The
judgment
inter
alia
states the following:
“
The proper
functioning of
a
modem
state would be considerably compromised if all administrative acts
could be given effect to or ignored depending on the view
the subject
takes of the validity of the act in question. No doubt it is for this
reason that our law has always recognised that
even an unlawful
administrative act is capable of producing legally valid consequences
for
so
long
as
the unlawful act is not set aside.”
(at
par. [26] in the joint judgment of Howie P and Nugent JA).
8.5.
The abovementioned principle is still very much
applicable to the facts of this case. See
inter
alia
the discussion thereof by Cora Hoexter
in
Administrative Law in South Africa
(2nd Edition) at p. 547 and
Nzimande
v Nzimande
2005(1) SA 83 (W) and, in
particular, more recently
MEC for Health,
Eastern
Cape and Another v Kirland
Investments (Pty) Ltd v Eye
and Laser
Institute
2014(3) SA 481 (CC).
8.6.
It appears that CTMM's attitude towards the
administrative acts regarding the extension of time and the waiver of
the fulfilment
of the suspensive conditions is similar to that of the
Provincial Department of Health, Eastern Cape which was dealt with by
Cameron
J in the abovementioned constitutional judgment as follows:
“
[89] By
corollary, the Department's argument entails that administrators can,
without recourse to legal proceedings, disregard administrative
actions by their peers, subordinates or superiors if they consider
them mistaken. This is
a
licence
to self-help. It invites officials to take the law into their own
hands by ignoring administrative conduct they consider
incorrect.
That would spawn confusion and conflict to the detriment of the
administration and the public and it would undermine
the court's
supervision of the administration.”
8.7.
Accordingly, factually as matters currently
stand, fulfilment of the suspensive condition contained in clause
2.1.1 of the agreement
has been waived by CTMM.
8.8.
It follows that the agreement is still
in
esse.
[9]
THE ARBITRATION I
SSUE:
9.1
As already indicated above, the Applicant claimed
an order compelling CTMM to honour the agreement and to perform its
obligations
in terms thereof pending the finalisation of arbitration
proceedings to be initiated. In addition thereto it claimed an order
that
itself be compelled to initiate urgent arbitration proceedings
...' wherein it
inter a/ia
seeks
a declarator that the agreement is valid and enforceable.
9.2
The relief claimed in the fashion formulated is
not competent. As already indicated above, I have found that the
agreement is currently
still valid and enforceable. It will only
become unenforceable if the administrative acts referred to above
regarding the extension
of time periods for the fulfilment of
suspensive conditions and the waiver thereof has been set aside (or
if it is validity cancelled).
9.3
Regarding the issue of arbitration, CTMM in
extensive parts of its answering affidavit point out that the
initiation of arbitration
proceedings as provided for in the
agreement can only take place once a number of preceding steps had
been taken. It is common
cause that none of these preceding steps
have to date yet been taken.
9.4
In addition, CTMM argues that the dispute which
is envisaged in Moipone's notice of motion is not arbitrable.
9.5
Without finally deciding the issue of the
arbitrability of the question of validity of the agreement, I am of
the view that it would
be inappropriate to make any order subject to
an arbitration or to even force the parties into arbitration
proceedings. It might
be that the matter might be resolved otherwise
or that the prescribed preceding steps prior to an arbitration might
lead to a favourable
result or a resolution of the disputes.
[10]
COSTS:
Having
regard to the facts set out above and the consideration thereof I am,
in the exercise of my discretion, of the view that
there is no reason
why costs should not follow the event. In view of the existing
administrative acts on which Moipone had been
entitled to rely, I am
further of the view that there is no cogent reason why Moipone should
be out of pocket in respect of the
costs of necessity incurred in
launching the application.
[11]
ORDER:
Accordingly
I make the following order:
1.
The Respondent is directed to comply with its
obligations under the Public Private Partnership Agreement
(“
the agreement' )
concluded between the
Applicant and the Respondent on 24 March 2016 pending the final
conclusion of any process, application, action
or arbitration whereby
the validity of the agreement is finally determined or until such
time as the agreement is validly cancelled.
2.
The Respondent is interdicted and restrained from
appointing and/or concluding any agreement with any other service
provider for
the rendering of the services that the Applicant is
obliged to render in terms of the agreement pending the final
determination
of the validity or valid cancellation thereof as
aforesaid.
3.
The Respondent is ordered to pay the costs of the
application on the scale as between the attorney and client including
the costs
attendant upon the employment of two counsel.
______________________
N
DAVIS
ACTING
JUDGE OF THE HIGH COURT
Date
of hearing:
16 March 2017
Judgment
delivered:
29 March 2017
Counsel
for Applicant:
Adv N P G Redman
Adv M Majozi
Attorneys
for Applicant:
Motalane Kgariya Inc.
Counsel
for Respondent:
Adv K Tsatsawane
Adv C Marule
Attorneys
for Respondent:
Gildenhuys Malatji Inc