IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
CASE NUMBERS: 2023-076450; 2023-079688
(1)
(2) (3) REPORTABLE: NO
OF INTEREST TO OTHER JUDGES: NO
REVISED: NO
Ji.l~~.1.~~-~ ...
DATE
In the application between:
SAMSUNG SDS GLOBAL SCL SOUTH AFRICA
PROPRIETARY LIMITED
And
RHENUS LOGISTICS PROPRIETARY LIMITED
In re:
SAMSUNG SDS GLOBAL SCL SOUTH AFRICA
PROPRIETARY LIMITED
and Applicant
Respondent
Plaintiff
1
RHENUS LOGISTICS PROPRIETARY LIMITED
In the counter-application between:
RHENUS LOGISTICS PROPRIETARY LIMITED
and
SAMSUNG ELECTRONICS SOUTH AFRICA
PROPRIETARY LIMITED
SAMSUNG SOS GLOBAL SCL SOUTH AFRICA
PROPRIETARY LIMITED
RAPS K9 LAW ENFORCEMENT
PROPRIETARY LIMITED
MENZIES AVIATION SOUTH AFRICA
PROPRIETARY LIMITED
WORLDWIDE FLIGHT SERVICES
PROPRIETARY LIMITED
In re:
SAMSUNG ELECTRONICS SOUTH AFRICA
PROPRIETARY LIMITED
and
RHENUS LOGISTICS PROPRIETARY LIMITED
RAPS K9 LAW ENFORCEMENT
PROPRIETARY LIMITED Defendant
Applicant
First Respondent
Second Respondent
Third Respondent
Fourth Respondent
Fifth Respondent
Plaintiff
First Defendant
Second Defendant
2
MENZIES AVIATION SOUTH AFRICA
PROPRIETARY LIMITED
WORLDWIDE FLIGHT SERVICES
PROPRIETARY LIMITED
And in re:
SAMSUNG SDS GLOBAL SCL SOUTH AFRICA
PROPRIETARY LIMITED
And
RHENUS LOGISTICS PROPRIETARY LIMITED
JUDGMENT
PEARSEAJ:
AN OVERVIEW Third Defendant
Fourth Defendant
Plaintiff
Defendant
1. This matter concerns how appropriately and effectively to deal with a proliferation
of action/arbitration and application proceedings arising out of a theft of a
consignment of goods. There is a delictual action by a plaintiff against four
defendants alleged to be liable for the loss. There are also a contractual arbitration
and a contractual action by a related plaintiff against one of the defendants alleged
to be liable for the loss. That defendant intends to join the other defendants as third
3
parties in each of the actions and also, in a further action, to seek an
indemnification or contribution by those defendants in respect of any adverse
award in the arbitration.
2. The plaintiff in the contractual proceedings applies to stay its action in favour of its
arbitration. The defendant in both the delictual and the contractual proceedings
counter-applies to halt the arbitration and consolidate the existing actions. The
application and counter-application are considered and decided in this judgment.
3. As regards the application, I find that the primary legal basis on which it is founded
is unavailable to the plaintiff but this court's inherent jurisdiction to protect and
regulate its process (including the power to stay proceedings where doing so
serves the interests of justice) is sufficiently discernible as an alternative legal basis
to warrant an adjudication of the merits of the application. In the circumstances of
this case, I do not regard the plaintiff as having breached (or remained in breach
of) an arbitration agreement with the defendant, or as having waived or abandoned
its right to arbitrate, when, at about the same time and out of caution, it referred an
arbitration and initiated an action in respect of the same claim. Staying the action
in favour of the arbitration gives effect both to the principle of party autonomy in
the conclusion of arbitration agreements and to the constitutional right of access
to courts. In addition, at this stage of the proceedings, before close of pleadings in
the actions or the arbitration and before the existence of any /is between the
defendant and any third party, it is unclear whether the defendant would be
disproportionately inconvenienced by prioritising arbitration over action. If anything
4
may be predicted at this stage, it is that the third parties would probably be less
inconvenienced by prioritising arbitration over action. On balance, I consider that
the interests of justice would be served by staying the action. I therefore exercise
my discretion in favour of granting the relief sought in the application.
4. As regards the counter-application, I am mindful of the defendant's submission
that, should its application fail, three or even four proceedings could fall to be
conducted and determined against the same factual backdrop and expose the
parties and the court to risks of duplicated proceedings and conflicting findings.
Similarly compelling is the submission that the interests of achieving convenience
and averting substantial prejudice could be served by having all the parties'
disputes resolved in a single set of judicial proceedings. But these concerns are
ameliorated by a likelihood that the success of the application will bring about a
single, expeditious and final arbitral determination of the central contractual dispute
between plaintiff and defendant. Save for that observation, as noted in paragraphs
79 to 82 and 87 to 96 below, competing considerations of convenience and
prejudice, including those of the court itself, require a multi-faceted and nuanced
enquiry in this matter. For reasons of prematurity, given that pleadings are yet to
close in the various proceedings and there is not yet a /is between the defendant
and any third party, I am of the view that such an enquiry would not properly be
undertaken at this time. And I am unpersuaded that the defendant shows good
cause to end the arbitration. I therefore exercise my discretion in favour of refusing
the relief sought in the counter-application.
5
THE PARTIES
5. Samsung Electronics South Africa Proprietary Limited (Samsung ESA) is the
plaintiff in the first action (paragraph 18 below) and a respondent in the counter
application (paragraph 34 below).
6. Samsung SDS Global SCL South Africa Proprietary Limited (Samsung SDS) is
the plaintiff in the arbitration (paragraph 20 below) and the second action
(paragraph 21 below), the applicant in the application (paragraph 32 below) and a
respondent in the counter-application.
7. These Samsung parties are members of a group of companies that manufactures
and distributes electronic devices such as mobile telephones.
8. Rhenus Logistics Proprietary Limited (formerly World Net Logistics Proprietary
Limited) (Rhenus), a provider of aviation logistics services, is a defendant in the
first action, the arbitration and the second action, the respondent in the application
and the applicant in the counter-application.
9. RAPS K9 Law Enforcement Proprietary Limited (RAPS), a provider of aviation
security services, is a defendant in the first action and a respondent in the counter
application.
6
10. Menzies Aviation South Africa Proprietary Limited (Menzies), a provider of aviation
logistics services, is a defendant in the first action and a respondent in the counter
application .
11. Worldwide Flight Services Proprietary Limited (WFS or Worldwide), a provider of
aviation logistics services, is a defendant in the first action and a respondent in the
counter-application.
12. The context sketched below is not disputed on the papers or appears from
documents that are not challenged in these proceedings.
THE CONTEXT
13. Samsung SOS and Rhenus concluded a written logistics services agreement on
01 July 2015 (the Rhenus agreement). The joint practice note referred to in
paragraph 41 below records an understanding that, in terms of that agreement,
"Rhenus would be liable to pay compensation to Samsung SDS for cargo lost in
transit in defined circumstances; f11 and disputes arising out of the agreement would
be resolved by arbitration in accordance with the rules of AFSA."2 The phrase
2 Clause 9.6 provides that, "[n]otwithstanding 9.1, LSP [Rhenus] indemnifies the SOS in relation to:
9.6.1. any damage to the Product(s) which occurs whilst such Product(s) are under LSP's
custody due to gross negligence; and
9.6.2. any loss/damage/costs/expenses arising to the Product(s) from the dishonesty or willful
negligence of any employee, contractor or agent of LSP'.
In relevant part, clause 19 provides that:
"19. 2. Any dispute or difference of any nature whatsoever arising out of or in relation to this
Agreement on any manner incidental thereto or any claim, cross-claim, counter-claim or
7
"[a]ny dispute or difference" is of wide amplitude and the word "shalt' signifies that
a referral to arbitration is peremptory .3
14. It appears that on 15 August 2020 part of a consignment of mobile telephones in
transit from Vietnam via the United Arab Emirates was stolen at OR Tambo
International Airport (ORT).
15. The record includes exchanges of correspondence between Samsung SDS,
Rhenus and others in the period November 2020 to August 2023 relating to the
theft and resultant loss. Since these communications are marked without
prejudice, I disregard their contents for purposes of this judgment. The record also
contains with-prejudice documents disclosing a dispute between Samsung SDS
and Rhenus as regards whether certain trading terms and conditions were of
application to their contractual relationship.
16. Besides the pleadings traversed in the paragraphs that follow, I am unaware of any
other pleas and/or replications in the action and arbitration proceedings between
set off regarding any right, liability, act or omission of any of the Parties hereto shall be
referred to arbitration , unless mutually settled in an amicable way.
3 19.3. ff the dispute cannot be settled through friendly consultation within twenty (20) days after
written notice of the dispute is first given, all disputes, controversies, or differences arising
out of or in relation to or in connection with this Agreement or for the breach thereof shall
be finally settled by arbitration in Johannesburg, South Africa in accordance with the
current Rules of Arbitration Foundation of Southern Africa. The award rendered by the
arbitrator(s) shall be final and binding upon the Parties."
Industrial Development Corp of SA Ltd and another v Kalagadi Manganese (Pty) Ltd (661/2024)
[2025) ZASCA 70 (30 May 2025) [11]
8
the parties. My understanding is that pleadings are yet to close in each of the
proceedings. 4
THE LITIGATION
The Action and Arbitration Proceedings
17. Samsung SOS' attorneys informed Rhen us' attorneys on 26 July 2023 of Samsung
SOS' intention to refer its dispute with Rhenus for determination in arbitration
proceedings.
18. First, however, Samsung ESA initiated an action against Rhenus, RAPS, Menzies
and WFS, under case number 2023-076450, on 02 August 2023 (the Samsung
ESA action). The cause of action is delictual in nature. The allegations pleaded in
the particulars of claim include that:
4 18.1. "On arrival at OR Tambo International Airport representatives of Rhenus,
Raps and Menzies met the shipment in order to carry out and supervise
the splitting and further transport of the goods contained therein" (para
12.2).
This understanding was confirmed by senior counsel who appeared at the hearing for the Samsung
parties, Rhenus and WFS.
9
18.2. "While the splitting of the shipment was taking place, two employees of
Raps, namely . . . and . . . stole two pieces containing 1 070 devices by
moving them into the Menzies warehouse and then moving them to the
land side using a roller bed' (para 12.5).
18.3. "The theft of the two pieces was carried out with the knowledge and co
operation of all of the employees of Rhenus, Raps and Menzies who
attended the offloading, transport and breaking down of the consignment,
and by the WFS employee who loaded the stolen pieces onto a Raps
vehicle, all acting in collusion with each other to achieve the common
purpose of carrying out the theff' (para 13).
18.4. "The plaintiff's loss has been caused by the intentional unlawful conduct of
the first to fourth defendants' employees described herein" (para 15).
18.5. "The conduct of the relevant employees of the first to fourth defendants is
objectively closely connected to the carrying out of their employment duties
and the scope of their employment obligations" (para 19).
18.6. "The plaintiff has accordingly suffered a loss amounting to $956 611. 76 as
a consequence of the unlawful and intentional conduct of the first to fourth
defendants' employees, for which the first to fourth defendants are
vicariously liable" (para 22).
10
19. The combined summons in the Samsung ESA action was served on Menzies on
03 August 2023.
20. It seems that Samsung SOS referred its dispute against Rhenus for arbitration,
under AFSA reference number S.383, on 10 August 2023 (the Samsung SDS
arbitration).5 (The referral, including a statement of claim and certain related
documents, appears to have been copied by Samsung SOS' attorneys to Rhenus'
attorneys.) Although I have not had sight of the pleading, the cause of action is
understood to be contractual in nature. And it may be gleaned from paragraph 28
of the affidavit referenced in paragraph 32 below that the allegations pleaded in
the statement of claim include that:
20.1. On 05 August 2020, acting in terms of the Rhenus agreement, Samsung
SOS engaged Rhenus to provide services for inbound transportation and
perform import clearance in relation to nine Samsung SOS pieces
documented on a pleaded air waybill.
20.2. Rhenus employed the services of RAPS to assist it in rendering the
inbound transportation and custom clearance services.
5 I make no finding as regards when the Samsung SOS arbitration was referred.
11
20.3. On 15 August 2020 and at ORT two of the pieces, consisting of 1,070
mobile phones, were stolen during the course of unloading and unpacking
the goods.
20.4. The theft was carried out with the knowledge and cooperation of
employees of Rhenus, RAPS and Menzies acting in collusion with each
other to achieve the common purpose of carrying out the theft.
20.5. The stolen devices, which have not been recovered and are permanently
lost, have a landed value of $956 611.76.
20.6. The loss of such devices is loss arising to "Products" from the dishonest
and wilful conduct of an employee and of a contractor or agent of Rhenus
as contemplated in clause 9.6.2 of the Rhen us agreement; hence Rhenus
is liable to indemnify Samsung SOS in relation to the loss of the devices.
21. It seems that Samsung SOS initiated an action against Rhenus, under case
number 2023-079688, on 11 August 2023 (the Samsung SDS action).6 Although
I have not had sight of the pleading, the cause of action is understood to be
contractual in nature. And it may be gleaned from paragraph 28 of the affidavit
referenced in paragraph 32 below that the allegations pleaded in the particulars of
claim include those set out in paragraph 20 above.
6 I make no finding as regards when the Samsung SDS action was initiated.
12
22. The combined summons in each of the Samsung ESA action and the Samsung
SDS action (the Samsung actions) was served on Rhenus on 11 August 2023.
23. The statement of claim and certain related documents in the Samsung SDS
arbitration were emailed by AFSA to Rhenus on 14 August 2023.
24. It is unclear whether Rhenus delivered notice of intention to defend the Samsung
SDS arbitration.
25. On 15 August 2023 Samsung SDS' attorneys reiterated to Rhenus' attorneys
Samsung SDS' intention to pursue the Samsung SDS arbitration against Rhenus,
having initiated the Samsung SDS action as a precautionary means of interrupting
prescription. In relevant part, the letter reads as follows:
"3 We record that the dispute between Samsung SOS and Rhenus
Logistics is arbitrable, and we consider that the referral thereof on 10
August 2023 interrupted the running of the statutory prescription period
of three years. This notwithstanding, out of an abundance of caution,
the High Court proceedings were commenced by Samsung SOS in
order to ensure that the running of the statutory prescription period was
interrupted.
4 Considering the above, our suggestion is that the parties abide by the
AFSA dispute resolution process and avoid the incurrence of any
further unnecessary costs associated with the High Court
proceedings ."
13
26. On or about 16 August 2023 Rhenus delivered notices of intention to defend the
Samsung ESA and Samsung SOS actions.
27. On 21, 28 and 30 August 2023 WFS, RAPS and Menzies delivered notices of
intention to defend the Samsung ESA action.
28. By letter dated 06 September 2023 Rhenus' attorneys responded to Samsung
SOS' attorneys' letter referred to in paragraph 25 above stating that "our client will
only agree to proceed with arbitration through AFSA on the condition that all
relevant parties are joined to the proceedings." In relevant part, the letter proceeds
as follows:
28.1. "2 pieces [of the consignment], being the devices in question, were not
loaded onto our client's truck but were removed by employees of Menzies
Aviation and redirected to Warehouse 19" (para 4.8.5).
28.2. "The devices were thereaffer loaded by an employee(s) of Worldwide
Flight Services ('WFS? into a RAPS Security Group ('RAPS? vehicle
operated by 2 RAPS employees" (para 4.8. 7).
28.3. "The RAPS employees then leff the airport with the devices in their vehicle"
(para 4.8.8).
14
28.4. "The conduct of Menzies Aviation, WFS and RAPS' employees gave rise
to the loss of the devices and damages, or losses suffered by your clients"
(para 4.8.11 ).
28.5. "Neither Rhenus nor its employees were at fault for your client's loss. Even
if there was a claim (which is denied), it would be excluded or limited under
the aforementioned STCs" (para 5).
28.6. "As such, we will not agree to stay the proceedings unless and until all the
relevant parties are joined to the arbitration proceedings" (para 6).
29. A related exchange of correspondence between the attorneys occurred between
12 September and 17 October 2023.
30. Meanwhile, Menzies' plea in the Samsung ESA action had been delivered on or
about 12 September 2023. It raises special and general defences to the claim that
are irrelevant to these proceedings.
The Application Proceedings
31. In October and November 2023 an impasse was reached in exchanges between
the attorneys -with Samsung SOS maintaining that its arbitration should proceed
and its action should be stayed by agreement or order and Rhenus countering that
"[i]t is our intention to plead in the High Court actions and thereafter to regard those
15
proceedings as the operative dispute resolution process unless your client should
take steps to prevent that course of action."
32. On 29 February 2024 Samsung SDS launched an application against Rhenus,
under case number 2023-079688, seeking to enforce the agreement underpinning
the Samsung SDS arbitration (the arbitration agreement) and stay the Samsung
SDS action pending the final determination of the Samsung SDS arbitration (the
Samsung SDS application). Material contentions set out in the founding affidavit
in that application include the following:
32.1. "Samsung SOS instituted the action proceedings out of caution in order to
make sure that it interrupted prescription. It communicated that fact to
Rhenus, and always made clear that it considered that the dispute should
be resolved in arbitration and that it intended to pursue arbitration
proceedings" (para 11 ).
32.2. "Samsung SOS ... contends that Raps, Menzies and WFS are not
necessary parties to the dispute between Samsung SOS and Rhenus.
Samsung SOS' claim is purely contractual. Samsung SOS does not claim
any relief or contribution from Raps, Menzies or WFS" (para 13).
32.3. "The main dispute between Samsung SOS and Rhenus is over the true
terms of their agreement. Rhenus contends that certain standard terms
and conditions limit its liability, while Samsung SOS contends the terms
16
7 relied on by Rhenus are not part of the agreement. Raps, Menzies and
WFS could make no contribution to the resolution of this dispute" (para
14).
32.4. "The relief that Samsung SOS seeks should be granted because there is
a valid arbitration agreement enforced between Samsung SOS and
Rhenus and there is no sufficient reason [as contemplated in section 6(2)
of the Arbitration Act 42 of 1965 (the Arbitration Act)7] why arbitration
should not proceed'' (para 18).
32.5. "Samsung SOS' claim in this action is based purely on contractual
provisions of an agreement between Samsung SOS and Rhenus.
Samsung SOS cannot advance any such claim against any other parties
and in any event does not wish to do so .... The arbitration can competently
be decided without the participation of Menzies, Raps and WFS as parties"
(para 58(a)).
32.6. "Whether Rhenus is liable to Samsung SOS in contract does not need to
be decided together with delictual issues and the contractual liability
Section 6 provides that:
"(1) If any party to an arbitration agreement commences any legal proceedings in any court
(including any inferior court) against any other party to the agreement in respect of any
matter agreed to be referred to arbitration , any party to such legal proceedings may at
any time after entering appearance but before delivering any pleadings or taking any other
steps in the proceedings, apply to that court for a stay of such proceedings .
(2) If on any such application the court is satisfied that there is no sufficient reason why the
dispute should not be referred to arbitration in accordance with the agreement, the court
may make an order staying such proceedings subject to such terms and conditions as it
may consider just."
17
question should logically be decided first. Samsung SOS is not a party to
the delictual action" (para 58(b )).
32. 7. "Assuming Rhen us has in mind to institute some sort of third-party
procedure to claim an indemnity from Menzies, Raps and WFS, it has not
articulated what the basis for that would be. On the face of it any such
claim would appear to have prescribed by now" (para 58(d)).
32.8. "In any event, a professed intention to pursue contributions or indemnities
from third parties is not an appropriate basis to refuse to enforce a binding
arbitration agreement. The parties elected to include an arbitration clause
despite having agreed that liability could be imposed on Rhenus for wilful
dishonest acts of contractors who are not subject to the arbitration
agreemenf' (para 58(e)).
33. Rhenus delivered notice of intention to oppose the Samsung SDS application on
18 March 2024.
34. On 12 April 2024 Rhenus launched an application against the Samsung parties,
RAPS, Menzies and WFS, under case numbers 2023-076450 and 2023-079688,
seeking to set aside or not enforce the arbitration agreement and consolidate the
Samsung actions for purposes of trial (the Rhen us counter-application). Material
contentions set out in the founding affidavit in that application, which serves also
18
as Rhenus' answering affidavit in the Samsung SDS application, include the
following:
34.1. Rhenus infers that any loss was suffered by Samsung ESA and submits
that "Samsung SOS ... has suffered no loss for which it is entitled to claim
an indemnification" (paras 17-29).
34.2. According to Rhenus, "it may reasonably be inferred that the action was
issued on case lines (and then served) before the arbitration commenced
by notification from AFSA to Rhen us" (paras 30-41 ), an inference said to
have a material bearing on the viability of the Samsung SDS application.
34.3. Indeed, it is submitted that, "having instituted an action in breach of the
arbitration clause (indeed a repudiatory breach of that clause), Samsung
SOS is precluded from advancing an arbitration", especially where
"Rhenus accepts the repudiation by Samsung SOS and elects to proceed
by way of action" (paras 50-51 ).
34.4. Given that it is "entirely clear that the factual background against which the
two actions and the arbitration are to be determined is precisely the same",
Rhen us submits that it is "not convenient (and indeed untenable) that three
different fora should be called upon to make the same factual
determinations", bearing in mind "a material risk that different fora might
come to different conclusions" (paras 42-46).
19
8 34.5. Rhenus discloses that the core of its defence in each instance is likely to
be that:
34.5.1. vis-a-vis the Samsung ESE action, the claim is time-barred under
the applicable terms and conditions and, in any event, "Rhenus
will undoubtedly seek to apportion liability with the other
Defendants" (paras 4 7 .1, 48);
34.5.2. vis-a-vis the Samsung SDS action, the claim is time-barred under
such terms and conditions, Samsung SOS has not suffered a
loss and "Rhenus will undoubtedly third-party RAPS, Menzies
and Worldwide" (paras 47.2, 48); and
34.5.3. vis-a-vis the Samsung SDS arbitration, "Rhenus will adopt the
same defences that it intends in the action but will be procedurally
precluded from bringing the other parties before the Arbitrator''
(para 49).
34.6. Rhenus submits that it would be appropriate for this court to exercise its
power under section 3(2)(b) of the Arbitration Act8 not to enforce the
Section 3(2) provides that "[t]he court may at any time on the application of any party to an
arbitration agreement, on good cause shown -
(a) set aside the arbitration agreement; or
(b) order that any particular dispute referred to in the arbitration agreement shall not be
referred to arbitration; or
(c) order that the arbitration agreement shall cease to have effect with reference to the
dispute referred."
20
arbitration agreement or under section 6(1) thereof not to stay the
Samsung SOS action (paras 52-54 ).
34.7. Should the court decline to exercise either power, "Rhenus would have to
institute a conditional action against RAPS, Menzies, and Worldwide in this
Court for recovery of such amount as it may be obliged to pay Samsung
SOS pursuant to the arbitration", meaning that "this Court will inevitably be
faced with two actions", being the Samsung SOS action and a Rhenus
action (paras 58-59) in addition to the Samsung ESA action.
34.8. By contrast, should the court exercise either power, the Samsung actions
would proceed before court, in which event it would be convenient for the
actions to be consolidated such that a single court could determine all the
disputed issues without the risks of duplicated proceedings and conflicting
findings (paras 55-57, 60-62).
35. The Rhenus counter-application was served on the Samsung parties on 15 April
2024 and on Menzies and WFS on 18 April 2024.
36. The Samsung parties delivered notice of intention to oppose the Rhenus counter
application on 29 April 2024.
37. Notice of intention to oppose the Rhen us counter-application was delivered by
WFS on 02 May 2024.
21
38. On 20 May 2024 the Samsung parties delivered their replying affidavit in the
Samsung SOS application and answering affidavit in the Rhenus counter
application. Material contentions set out in the affidavit include that:
38.1. "Samsung ESA 's interests are aligned with Samsung SOS' in respect of
Samsung SOS' proceedings against Rhenus. If Samsung SOS succeeds
against Rhenus then Samsung ESA will withdraw the action for delictual
damages against Rhenus, Raps, Menzies and Worldwide FS" (para 34 ).
38.2. "Samsung SOS is entitled to pursue Rhenus for payment of the agreed
indemnity under the Logistics Services Agreement. It is logical and
convenient for that claim to be decided first, before any delictual claim is
considered' (para 35).
38.3. According to the Samsung parties, "[t]he main substance of the Samsung
SOS-Rhenus dispute is about the contractual terms governing their
relationship." RAPS, Menzies and WFS cannot contribute to the resolution
of that dispute; nor are they necessary parties to contractual proceedings
between Samsung SOS and Rhenus. Hence "[c]consolidation of the
contractual and delictual actions would create an unwieldy, costly and
misjoined single action out of two logically separate and distinct claims"
(paras 36-39).
22
38.4. A chronology of events is detailed in support of the submission that the
SDS arbitration was referred before the SDS action was initiated (paras
59-61 ). There is thus no substance to the suggestion that Samsung SDS
evinced an intention not to be bound by the arbitration agreement (paras
66-70).
38.5. Since Rhenus is on record as acknowledging that RAPS employees were
involved in the theft, it fails "to identify any risk of a grave conflict of facts
that may arise if the Samsung SOS action and the Samsung ESA action
are adjudicated in separate fora" and "there is no sufficient reason why the
contract dispute between Rhenus and Samsung SOS should not be
decided in arbitration as the parties agreed" (paras 62-65).
38.6. If the Rhenus counter-application were to be granted, the Samsung parties
would be prejudiced in that they would be compelled to incur unnecessary
legal costs in respect of the evidence of parties not privy to the disputes
advanced by them, Samsung SDS would be deprived of the agreed forum
for dispute resolution vis-a-vis Rhenus and it could be held liable for legal
costs incurred by Samsung ESA in a consolidated action.
39. On 31 May 2024 WFS delivered its answering affidavit (without annexures) in the
Rhenus counter-application. The affidavit (with annexures) was deposed to and
delivered again on 03 June 2024. Material contentions set out in the affidavit
include that:
23
39.1. The application is premature for reasons including that:
39.1.1. no plea has been delivered in the Samsung SDS action or
arbitration and only Menzies has delivered a plea in the Samsung
ESA action. Hence it is not possible to determine what is in
dispute between the parties and whether a consolidation of
actions would be appropriate or convenient (para 9.1 );
39.1.2. should Rhenus fail to set aside the arbitration agreement, the
Samsung SDS arbitration would proceed and, in the absence of
clarity on its outcome, it would be premature to consolidate the
Samsung actions (para 9.2); and
39.1.3. if the Samsung SDS arbitration succeeds, Samsung ESA will
withdraw its action and, as threatened but not yet acted on,
Rhenus will or may seek recovery from RAPS, Menzies and/or
WFS, these being possibilities too uncertain to provide a
foundation for consolidation at this time (paras 9.3-9.4).
39.2. Rhenus fails to discharge its onus of demonstrating that a consolidation of
the Samsung actions would be convenient for the court and the other
parties. WFS and others would be required to attend a consolidated trial
"while the contractual claim between Samsung SOS and Rhenus is
determined, as well as the issues which Rhenus has raised, such as
24
whether Samsung SOS is the party which has sustained a loss", which
would "not only be inconvenient and time consuming for WFS, but will also
result in unnecessary costs being incurred by WFS" (paras 10-12).
39.3. In the submission of WFS, "[t]he Contractual Action and the Oelictual
Action have entirely different bases. Different considerations and different
questions of fact and of law will arise in the two actions. As I have pointed
out, WFS can add nothing to the dispute between Samsung SOS and
Rhen us under the Contractual claim" (paras 13-14 ).
39.4. As regards the submission paraphrased in paragraph 34.4 above, WFS
disagrees that "three different fora may be called upon to make the same
factual determination and that there is a material risk that the different fora
might come to different conclusions" in that the Samsung SDS action and
arbitration "appear to be identical. The proceedings appear to be based
entirely on the contractual relationship between the parties and questions
such as the method by which the theft took place will not need to be
determined in these proceedings" (paras 23.2-23.3).
39.5. As regards the submission paraphrased in paragraph 34.7 above, WFS
disagrees that "the Court will inevitably be faced with two actions and that
it will be convenient for the two actions to be consolidated' in that "[t]he
necessity for a conditional action by Rhenus against WFS would only arise
if Samsung SOS succeeds in the arbitration" (paras 26-27).
25
40. On 26 August 2024 Rhenus delivered its replying affidavit in the Rhenus counter
application submitting that it remains convenient that the relief sought therein be
granted by this court (para 7). Material contentions set out in the affidavit include
that:
40.1. The Samsung parties are related entities, represented by the same
attorneys, and "it is highly unlikely that there will be any duplicated costs
between those two parties if all the proceedings take place in one forum"
(paras 8-12).
40.2. Issues such as how the theft took place and what loss was suffered by
which entity and for whose liability would require to be demonstrated in
both actions and in the arbitration, indicating substantial commonality of
disputed issues in the proceedings (paras 13-27).
40.3. Any withdrawal of the Samsung ESA action pursuant to the success of the
Samsung SOS arbitration would not occasion judicial or commercial
economy in that "inevitably Rhenus will nonetheless proceed in Court
against the other parties on the basis that it has suffered damages by
reason of their conducf', meaning not only that "the same issues will
inevitably be ventilated before a Court irrespective of whether there is a
withdrawal by Samsung of the delictual action" but also that "the action that
would have to be instituted by Rhenus if the contractual proceeding were
26
successful would simply commence much later" and "may well lead to a
loss of evidence through unavailability of witnesses" (paras 28-39).
40.4. The prejudice contended for by the Samsung parties is overstated since
they would be represented by the same legal team and the fact that
Samsung SOS itself has initiated an action in court demonstrates that it is
not averse to an action as opposed to an arbitration. By contrast, Rhenus
would suffer "a distinct prejudice because its costs (being the additional
arbitration costs which are inevitably more expensive) will be elevated if it
is forced to run two proceedings" (paras 41-49).
40.5. The prejudice contended for by WFS is "entirely speculative" in that it
appears to reason that Samsung SOS may be unsuccessful. However,
"that proposition ignores the existing delictual action between Samsung
ESA and Worldwide Flight Services which would then proceed'' and in
which "Rhenus would seek an apportionment of damages .... It follows that
Worldwide Flight Services has no prospect whatsoever of avoiding a
proceeding in courf' (paras 50-57).
41 . A joint practice note on behalf of the Samsung parties, Rhenus and WFS was
uploaded on Caselines on 20 February 2025. The issues to be determined by this
court are defined in the following terms:
27
"13. 1. Whether Samsung SOS' claim against Rhenus should be decided in
the arbitration, or whether the arbitration agreement should be set
aside alternatively not be enforced, and the claim decided by the above
Court.
13.2. Whether Samsung SOS' claim against Rhenus should be decided in
proceedings only between Samsung SOS and Rhenus or should that
claim be consolidated with the aforesaid de/ictual action, which would
involve other parties, being Samsung ESA, Raps, Menzies, and WFS,
in circumstances where Samsung SOS has no claim against those
parties but where Rhenus maintains it will be entitled to an
indemnification by those parties."
42. A supplementary joint practice note on behalf of the Samsung parties and WFS
was uploaded on Caselines on 18 April 2025. (Counsel for Rhenus was
discharging an acting judicial appointment at the time.) In elaboration on the issues
quoted in paragraph 41 above, the supplementary practice note identifies a main
issue and three sub-issues "regarding forum for resolution of substantive dispute"
and a main issue and two sub-issues "regarding consolidation of actions".
THE SAMSUNG SOS APPLICATION
43. As noted in paragraph 32 above, the Samsung SOS application seeks to enforce
the arbitration agreement and stay the Samsung SOS action pending the final
determination of the Samsung SDS arbitration.
44. Principles applicable to such an application are traversed in what follows.
28
45. The Samsung parties' heads of argument dated 04 September 2024 state that the
Samsung actions were initiated out of caution to interrupt prescription (paras 14,
21 ). As noted in paragraph 32 above, the Samsung SOS application seeks to
enforce the arbitration agreement and stay the Samsung SOS action pending the
final determination of the Samsung SOS arbitration (paras 2, 23). It is submitted
that, since Samsung SOS recorded its intention to arbitrate at the outset, it did not
breach the agreement and, in any event, remedied any breach by launching the
application (paras 44-50). And the Samsung parties rely on BDE9 for the
proposition that the commencement of litigation does not constitute a waiver or
abandonment of the right to arbitrate (paras 51-52). On the bases outlined in
paragraph 89 below, the argument concludes that "[c]ommon sense and
practicality dictate that the arbitration should proceed without delay. This offers the
cheapest and likely the quickest route to resolution of the whole case" (para 9).
46. In heads of argument dated 20 September 2024 Rhenus submits that there should
be a single judicial pronouncement on the facts underpinning three or even four
proceedings between the parties (paras 1-3). It cites Aveng10 for the proposition
that a stay is unavailable because the Samsung SOS action was initiated in breach
-indeed repudiation -of the very arbitration agreement it now seeks to enforce
(paras 26-29). And it argues that BDE is distinguishable inasmuch as, in that case,
the innocent party had condoned the other party's breach of the arbitration
9
10 BOE Construction v Basfour 3581 (Pty) Ltd 2013 (5) SA 160 (KZD)
Aveng (Africa) Ltd (formerly Grinaker-LTA Ltd) tla Grinaker-L TA Building East v Midros Investments
(Pty) Ltd 2011 (3) SA 631 (KZD)
29
agreement such that it was common cause that the dispute should be determined
by arbitration but in issue whether the action should be stayed or withdrawn (paras
30-32).11
47. WFS does not oppose -hence its heads of argument dated 06 December 2024
do not address -the Samsung SDS application.
48. Before evaluating the submissions advanced on behalf of the Samsung parties
and Rhenus, it may assist to traverse the competing authorities to which they refer.
49. In Aveng a contractor (Aveng) had initiated an action against an employer (Midros)
claiming payment of the balance of the price alleged to be payable for certain
contract works, to which Midros delivered a plea and counterclaim alleging defects
disentitling payment and consequential damages (para 2). Efforts to resolve the
litigation resulted in certain remedial works that generated disputes as to whether
they were properly performed and whether the pleaded cause of action had been
settled (paras 3-5). In the light of proliferating disputes and delays, Aveng invoked
an arbitration clause in the contract (paras 6-7) and applied to stay the action to
pursue an arbitration against Midros (para 1 ). It explained that it had initiated the
action at a time when it did not understand there to be an arbitrable dispute, an
explanation that was resisted by Midros, which argued that Aveng had elected to
11 Rhenus elaborates on these arguments in paragraphs 16 to 21 of its supplementary submissions
referred to in paragraphs 67 and 68 below.
30
litigate and thus waived its right to arbitrate and any claim based on a settlement
agreement was not arbitrable under the contract (paras 8-10).
50. Observing that the application appeared to be novel (para 1 ), Wallis J (as he then
was) found the parties' disputes to fall within the ambit of the arbitration clause
(paras 11-15). Notably, in rejecting the submission that Aveng had abandoned its
right to arbitrate against Midros or that Aveng's election to litigate was an 'offer'
capable of 'acceptance' by Midros, Wallis J traversed a defendant's entitlement to
seek a stay of an action, whether by application under section 6( 1) of the Arbitration
Act or by special plea, without pertinently considering or deciding whether a stay
of litigation could be available to a claimant (paras 17-19). (The judgment appears
to contemplate that the action would have to be withdrawn (paras 18, 20).) In Wallis
J's view, the problem for Aveng was that it had initiated the action in breach of the
agreement to arbitrate, notwithstanding that Midros had not taken the point,
resulting in an untenable and impermissible approach to the proceedings:
"A veng, whilst keeping in place the litigation commenced in breach of its
obligations, seeks to enforce against Midros the very contractual provision of
which it is in breach. It is hardly surprising that Midros objects to this. Whilst it has
phrased that objection in the language of election its character remains that it
objects to having the arbitration clause enforced against it for so long as Aveng
remains in breach of its obligation to arbitrate. It is not in my view an answer for
A veng to say that it is now willing to arbitrate and comply with its obligations. It
seeks to do so whilst maintaining the present litigation that was commenced and
has, been conducted in breach of the arbitration agreement. In other words it
seeks to take advantage of its existing breach whilst trying to hold Midros to the
31
terms of the agreement. That is not something that a court will countenance "
(paras 20-21 ).
51. The decision in Aveng was considered and departed from by the same court in
BOE. The applicant (BDE) sought an order (seemingly under section 6(1) of the
Arbitration Act) staying an application for payment of a sum of money and reserving
its costs for determination by an arbitrator. Relying on Aveng, the respondent
(Basfour) argued that such an order was impermissible -that the applicant was
obliged to withdraw the application and tender payment of the costs (paras 2-3).
The parties were agreed -and the court accepted -that a party to an arbitration
agreement that commences litigation instead of arbitration does not, merely by
doing so, abandon its right to arbitrate (paras 4-5).
52. Swain J (as he then was) found that nothing turns on whether a stay is sought in
respect of an action or an application (para 7). Where a party institutes proceedings
in breach of an arbitration agreement, the other party faces an election whether to
enforce the agreement (para 9). If it elects to do so, that party must:
52.1. apply for a stay of the proceedings under section 6(1) of the Arbitration Act
before delivering a pleading or taking any further step in the proceedings;
or
52.2. deliver a special plea seeking a stay of the proceedings.
32
53. Basfour had not sought to -and had thus elected not to -enforce the arbitration
agreement. It had condoned BDE's breach of the agreement (paras 10-11 ). In the
view of Swain J:
"I accordingly respectfully disagree with the conclusion of Wallis J that a breach
of the arbitration agreement, caused by the failure of one party to refer a dispute
to arbitration and institute legal proceedings, does not cease to be such, where
the other party elects not to rely upon the breach and stay the proceedings. The
consequence of having made an election not to rely upon the breach is to waive
reliance upon it and thereby condone it. That the arbitration agreement imposes
reciprocal obligations upon the parties, such that performance by the one party is
conditional upon performance by the other, and the applicant may have ignored
its contractual obligations under the arbitration agreement and proceeded with
the present application, which the respondent has not challenged, does not alter
the fact that the respondent in electing not to challenge the present proceedings,
made an election not to enforce the arbitration agreement by which it is bound,
which has as a consequence condonation of the applicant's breach of the
arbitration agreemenf' (para 12).
54. The court held that BOE was entitled to a stay of the proceedings and was not
obliged to withdraw them before referring the dispute to arbitration (paras 13, 15).
55. Notably, neither Aveng nor BOE interpreted the wording of section 6(1) of the
Arbitration Act or interrogated the source of the power to uphold a special plea of
arbitration.
33
56. At the start of the hearing before this court on 02 May 2025, I asked counsel for
the parties to address me on the unreported authority of TJM.12
57. In that case a plaintiff (T JM) had issued summons against a defendant (SANRAL)
claiming damages based on an alleged breach of a contract between the parties
(paras 2, 5, 19). On two occasions SANRAL excepted to the particulars of claim
and objected to proposed amendments (paras 6-9). T JM abandoned its second
proposed amendment and applied (under section 6(1) of the Arbitration Act) for a
stay of the action pending a referral of a dispute to arbitration (paras 10, 12), albeit
without adequately explaining its decision to switch to arbitration or ruling out the
possibility of a return to litigation (paras 13-14, 34 ).
58. As a matter of interpretation, Van Niekerk AJ accepted the submission that section
6(1) of the Arbitration Act does not avail a plaintiff seeking a referral to arbitration
of its own case. Only a defendant or third party -not a plaintiff -is capable of
falling within the second "any party' in the provision, i.e. a party that may enter an
appearance to defend and thereafter deliver a pleading or take another step in the
proceedings. In context, that "any party' includes any defendant or third party but
excludes a plaintiff. By contrast, a plaintiff is capable of falling within the first "any
party' in the provision, i.e. a party that may commence proceedings in a court in
12 T JM Investment Trust tla Engen Thoyoyandou Convenience v South African National Roads
Agency SOC Ltd (028653/2021) [2023] ZAGPPHC 1146 (6 September 2023)
34
respect of a matter agreed to be referred to arbitration (paras 24-26).13 Hence the
application was dismissed (para 38).
59. On reflection, Mr Lamplough SC, who appeared with Mr Campbell for the Samsung
parties, did not submit that I should find the decision in T JM to be clearly wrong;
and Mr Wallis SC, who appeared for Rhenus, considered that there is good reason
to regard the decision as being clearly right.
60. In my view, there is much to commend the interpretative reasoning outlined in
paragraph 58 above, including in that it accords with the manner in which the
provision appears to have been read by the former Appellate Division.14
61 . On the strength of the decision in T JM, by which I am in any event bound, I consider
that Samsung SOS is unable to invoke section 6( 1) of the Arbitration Act in seeking
to stay its action in favour of its arbitration.
62. Hence the primary basis on which the Samsung SOS application is brought is
unsustainable.
13
14 Van Niekerk AJ sought to distinguish TJM from Aveng and BDE on the understanding that the
earlier cases had not involved applications under section 6(1) of the Arbitration Act and SANRAL
had not (yet) condoned or contested T JM's non-compliance with the arbitration agreement (paras
28-33). As noted in paragraphs 50 and 51 above, it is unclear to me whether the earlier cases
involved applications under that provision.
Universiteit van Stellenbosch v JA Louw (Edms) Bpk 1983 (4) SA 321 (A) 333G-334C
35
63. Following the hearing, I issued a directive inviting the parties to deliver brief
supplementary submissions on two queries:
63.1. If it is not open to a plaintiff to rely on section 6(1) of the Arbitration Act to
stay its action pending the outcome of an arbitration, may it invoke any
other power of the court to stay the action and, if so, what is the
source/nature of that power?
63.2. What is the source/nature of the power exercised by a court when
upholding a defendant's special plea of arbitration? May that power be
invoked by a plaintiff and, if so, when and by what means?
64. I am grateful for the thoughtful supplementary submissions delivered by counsel
on 14 May 2025 (for Samsung SOS) and 21 May 2025 (for Rhenus).15 My secretary
was informed on 27 May 2025 that WFS did not intend to deliver supplementary
submissions.
65. Samsung SOS submits that the power to stay created by section 6(1) of the
Arbitration Act does not impliedly prohibit a stay by other means: "[t]he section is
permissive and facilitative and does not restrict common law rights" (para 9). A
court's jurisdiction to decide a dispute is not excluded by an agreement to arbitrate;
15 The Rhenus submissions were not uploaded on Caselines and came to my attention, via my
secretary, on 28 May 2025.
36
the court retains a discretion either to halt an action in favour of arbitration or to
decide the dispute itself (paras 16, 22-23).16
66. In addition, it is submitted by Samsung SDS that the power to stay proceedings, in
the interests of justice, arises out of the court's inherent jurisdiction to protect and
regulate its process recognised at common law and confirmed in section 173 of
the Constitution17 (paras 24-29, 35-38).18
67. Save in one respect, Rhenus endorses Samsung SDS' submissions on a court's
enduring discretion, rooted in section 173 of the Constitution, to stay proceedings,
in the interests of justice, in the protection and regulation of its process. The point
of difference is that Rhenus regards the submission that courts have historically
stayed proceedings on a referral to arbitration as being overstated. It counters that
stays in the protection or regulation of process are normally granted only in
exceptional cases19 and the founding affidavit makes out no case on exceptionality
(paras 10-14). In fact, the papers show acceptance by Rhenus of Samsung SDS'
repudiation of the arbitration agreement (paras 16-21 ).
16
17
18
19 Parekh v Shah Jehan Cinemas (Pty) Ltd and others 1980 (1) SA 301 (D) 305E-306C; Foize Africa
(Pty) Ltd v Foize Beheer BV and others 2013 (3) SA 91 (SCA) [19)-[22]
Section 173 provides that "[t]he Constitutional Court, Supreme Court of Appeal and High Courts
have the inherent power to protect and regulate their own process, and to develop the common
Jaw, taking into account the interests of justice."
Caesarstone Sdot-Yam Ltd v World of Marble and Granite 2000 CC and others 2013 (6) SA 499
(SCA) [45]-[48]; Mokane v Tassos Properties CC and another2017 (5) SA 456 (CC) [65]-[68]
Abdulhay M Mayet Group (Pty) Ltd v Renasa Insurance Co Ltd and another 1999 (4) SA 1039 (T)
1048H; Ncube v Liberty Group Ltd [2024) 2 All SA 861 (GJ) [25)-[27]
37
68. Rhenus also raises a preliminary point that the case made out in Samsung SDS'
founding affidavit is not for the exercise of any common law power to order a stay
of proceedings but for the exercise of the statutory power under section 6( 1) of the
Arbitration Act alternatively a common law power "to enforce arbitration
agreements", i.e. "to grant specific performance". According to Rhenus, these
common law powers are distinct in that the former (to stay an action) is procedural
and the latter (to enforce an arbitration) is substantive in nature.20 In addition,
Rhenus submits that an exercise of the former power -which should serve the
interests not of a party but of the court itself -requires an "evidential enquiry [that]
is not fully amplified in the papers" and, in any event, would not offer convenience
since the court is seized with "a number of other related parallel proceedings" and
Samsung SOS remains in breach of the arbitration agreement (paras 2-9).
69. It is probable that many instances in which parties to arbitration agreements elect
to initiate judicial proceedings will involve breaches and even repudiations of the
agreements. (Some such infractions will be condoned; others will not.) In other
instances an election to litigate may amount to a waiver or abandonment of the
right to arbitrate.
70. Given the fact-dependent nature of the enquiry, however, an initiation of judicial
proceedings will not necessarily entail a breach, let alone a repudiation, of an
20 The Rhenus submissions cite no authority for this proposition.
38
arbitration agreement; nor, in my view, will it inevitably or even generally constitute
a waiver or abandonment of arbitration.
71. Where -as in this matter -a party makes plain at the outset that it intends to give
effect to an arbitration agreement but, out of caution, wishes also to place a toe in
the door of a court,21 it acts not in defiance of or disregard for the agreement- or
rejection of arbitration -but in recognition of an independent consideration that
may be destructive of an otherwise viable claim. It seems to me that there is no
closed list of such considerations. It may be unclear whether a claim is disputed
and thus apt for determination by arbitration. There may be a concern that a referral
to arbitration may not interrupt the running of prescription against the claim; or
against other defendants who are not parties to the agreement. If the instrument
housing the agreement is subject to suspensive conditions, their fulfilment may
come to be contested. Whether the dispute falls within the ambit of the agreement
may itself become a matter of contestation. In my view, guarding against such a
risk need not be irreconcilable with an intention to enforce the arbitration
agreement unless and until it proves unsuited to fulfilling its dispute resolution
purpose.22
21
22 See, for example, the letters referenced in paragraphs 17 and 25 above. That there was a referral
to arbitration before or at about the time of initiating an action -as opposed to any disavowal of the
arbitration agreement -appears to be a factor of relevance to the enquiry.
With reference to two subsidiary points raised on behalf of Rhenus, it seems to me that the precise
sequence in which action and arbitration proceedings are commenced or whether a defendant
'accepts' the initiation of an action before the referral of an arbitration is unlikely to be determinative
of the prospects of success of a stay application, although they may be factors of relevance to the
merits of the application.
39
72. Even if I am wrong in this regard, there is force to the submission that any breach
of the arbitration agreement was remedied by the launch of the Samsung SOS
application when it became clear that Rhenus was not amenable to a consensual
stay of the Samsung SOS action. I was not referred to, and am unaware of, any
authority to the effect that only a withdrawal -not a stay-of an action may serve
to purge an infraction of an agreement to arbitrate.
73. In the circumstances of this case, I conclude that the initiation of the Samsung SOS
action despite the existence of the arbitration agreement does not preclude
Samsung SOS from seeking to stay its action in favour of its arbitration. The
question is whether a case is made out on the papers for the relief sought in the
Samsung SOS application.
7 4. I am satisfied that, as was recognised at common law and is confirmed in
section 173 of the Constitution, this court's inherent jurisdiction to protect and
regulate its process includes the power to stay proceedings where doing so serves
the interests of justice. This general power exists independently of the specific
power conferred by section 6(2) of the Arbitration Act.
75. I consider that this conclusion gives effect both to the principle of party autonomy
in the conclusion of arbitration agreements23 and to the constitutional right of
23 Telcordia Technologies Inc v Telkom SA Ltd 2007 (3) SA 266 (SCA) [4]; Lufuno Mphaphuli &
Associates (Pty) Ltd v Andrews and another 2009 (4) SA 529 (CC) [219]-[220]; /DC v Ka/agadi
supra [16]
40
access to courts.24 A contrary finding -that a claimant may not act out of caution
in circumstances such as those contemplated in paragraphs 71 and 72 above -
would curtail dispute resolution options and could heighten prescription or similar
risks.
76. What requires determination, therefore, is whether it is in the interests of justice to
grant or refuse the relief sought in the Samsung SOS application.
77. Rhen us argues that the interests of justice would not be served by the grant of
such relief since the alternative common law basis contended for in the founding
affidavit is a power not to stay an action but to enforce an arbitration and thus that
the parties' affidavits are inadequately directed at enquiring into whether prioritising
the Samsung SOS arbitration over the Samsung SOS action would offer
convenience or prejudice to the court and the parties. The thrust of the argument
appears to be that Rhenus and perhaps WFS would have had more to say had the
founding papers revealed the real basis on which Samsung SOS asks this court to
exercise a common law power.
78. I am not persuaded of the distinction between procedural and substantive powers
for which Rhen us contends. In any event, read in context of prayer 1 of the notice
24 Section 34 provides that "[e]veryone has the right to have any dispute that can be resolved by the
application of law decided in a fair public hearing before a court or, where appropriate, another
independent and impartial tribunal or forum."
41
of motion,25 paragraph 16 of the founding affidavit in the Samsung SDS
application26 invokes the inherent jurisdiction of the court in respect of which there
is consensus in the supplementary submissions. In addition, competing
considerations of convenience and prejudice, including those of the court itself, are
extensively traversed in the parties' affidavits and heads of argument. So too were
they fully ventilated at the hearing by senior counsel for the Samsung parties,
Rhenus and WFS. I do not regard Rhenus as having been taken by surprise or
disadvantaged in the presentation of its views in relation to each of the two
applications. I conclude that Rhenus' preliminary point is without force and the
Samsung SDS application should be considered and decided on its merits.
79. It is not disputed that the arbitration agreement forming part of the Rhenus
agreement is of force and effect and of application to the contractual dispute
between Samsung SOS and Rhenus. When parties agree to resolve their disputes
by arbitration as opposed to litigation, they may well have in mind features of the
former mode of dispute resolution such as negotiation and, failing settlement,
expedition and finality of arbitration. Even full-blown arbitrations are apt to avoid
logjammed court rolls and, as is the case in this matter, parties may also forego
rights of appeal that tend to prolong judicial proceedings. The principle of party
25
26 In relevant part, prayer 1 provides that "ltlhe action proceedings ... instituted by the applicant in the
above Court are hereby stayed pending the final determination of the arbitration proceedings
commenced by the applicant against the respondenf' (emphasis added).
In relevant part, paragraph 16 provides that "[t]his is an application ... based on the Court's common
Jaw power to enforce arbitration agreements, for a stay of the action, pending the final determination
of the disputes referred to arbitration" (emphasis added).
42
autonomy is therefore a firm pointer in the direction of prioritising Samsung SOS'
arbitration over its action.
80. It is also so that, as a matter of interpretation of clauses 9 and 19 of the Rhenus
agreement, Rhenus may be understood to have reconciled itself to the possibility
of defending an arbitration referred by Samsung SOS without an ability to draw
third parties such as RAPS, Menzies and WFS into the fray in that forum. This
understanding goes some way towards meeting the argument that delays and
duplications would be disproportionately prejudicial to Rhenus. In any event,
RAPS, Menzies and WFS need not be cited as parties to the Samsung SOS
arbitration, which seems destined to be primarily a dispute in relation to contractual
rights and obligations, since findings in respect of their conduct would not be
binding on them in any subsequent arbitration or litigation. It is unlikely that RAPS,
Menzies and WFS would have anything or much to contribute to that dispute and
would probably be content to avoid it.
81. From the perspective of Rhenus, if the Samsung SOS arbitration were to succeed,
the Samsung actions would presumably not proceed but Rhenus would likely seek
an indemnification or contribution by third parties, whether in ( other) arbitration or
judicial proceedings. If the Samsung SOS arbitration were to fail, the Samsung
ESA action would probably be revived. In either event, Rhenus would face
arbitration and litigation on contractual and delictual disputes. But essentially the
same would be the case if I were to dismiss the Samsung SOS application and
grant the Rhenus counter-application, save that, in that event, the disputes would
43
be adjudicated on a consolidated, rather than a parallel or sequential, basis. And
the burden of a parallel or sequential process is a function of Rhenus' choice to
arbitrate any dispute with Samsung SDS.
82. From the perspective of RAPS, Menzies and WFS, by contrast, if the Samsung
SDS arbitration were to succeed, the Samsung actions would presumably not
proceed but Rhenus would likely seek an indemnification or contribution by such
third parties, whether in (other) arbitration or judicial proceedings. If the Samsung
SDS arbitration were to fail, the Samsung ESA action would probably be revived.
In either event, RAPS, Menzies and WFS would face arbitration or litigation on a
delictual dispute. But events between now and then could see them avoid such
proceedings. (They have been signalled but not yet instituted.) However, if I were
to dismiss the Samsung SDS application and grant the Rhenus counter
application, RAPS, Menzies and WFS would have no prospect of avoiding
participating in the consolidated Samsung SDS actions, i.e. in both contractual and
delictual disputes.
83. I am mindful of the attraction of having all the disputes between all the parties
decided simultaneously in the same forum. If such a process appeals to the various
parties that may otherwise be exposed to risks of duplicated proceedings and
conflicting findings, it may be possible for them to reach an agreement to have all
such disputes determined in the Samsung SOS arbitration. Time will tell. For now,
there appears to me a sound basis, rooted in the interests of justice, on which to
44
exercise my discretion in favour of validating the arbitration agreement by staying
the Samsung SDS action in favour of the Samsung SDS arbitration.
84. In the result, I consider that the Samsung SDS application should succeed.
THE RHENUS COUNTER-APPLICATION
85. As noted in paragraph 34 above, the Rhenus counter-application seeks to set
aside or not enforce the arbitration agreement and consolidate the Samsung
actions for purposes of trial.
86. Principles applicable to such an application may be summarised as follows:
27 86.1. Section 3 of the Arbitration Act permits a court to overlook an arbitration
agreement, "on good cause shown", but this phrase is to be restrictively
interpreted. A court's discretion to set aside the agreement should be
exercised "only where a persuasive case has been made ouf' and thus,
"[a]bsent infringement of constitutional norms, courts will hesitate to set
aside an arbitration agreement untainted by misconduct or irregularity
unless a truly compelling reason exists."27
86.2. Rule 11 provides for the consolidation of actions in the interests of
achieving convenience and averting substantial prejudice, to the court
De Lange v Methodist Church and another 2016 (2) SA 1 (CC) [36]-[37]; /DC v Ka/agadi supra [17]
45
and/or to the parties, including by avoiding duplicated proceedings and
conflicting findings.28 The rule concerns consolidating actions for purposes
of a single trial as opposed to compelling different plaintiffs with different
causes of action to join as plaintiffs in a single action.29 The two actions
are heard together but they do not become one action.
87. In its heads of argument Rhenus explains that it will join RAPS, Menzies and WFS
as third parties in each of the Samsung actions and also initiate an action against
them - a fourth proceeding -in the event of an adverse outcome to the Samsung
SOS arbitration (paras 8-15). It understands the Samsung parties' intention to be
that, in addition to a formal stay of the Samsung SOS action, there would be an
informal 'stay' of the Samsung ESA action inasmuch as it would proceed only in
the event of the failure of the Samsung SOS arbitration and/or action (paras 4, 16-
19). It is argued that inevitable delays and duplications would be disproportionately
prejudicial to Rhenus (paras 20-24). To ameliorate the burdens of multiple
proceedings (implicating third parties) and the risks of conflicting findings,30
Rhenus asks this court to exercise its discretion in favour of:
28
29
30 New Zealand Insurance Co Ltd v Stone and others 1963 (3) SA 63 (C) 68F-71H; Ne/ v Silicon
Smelters (Edms) Bpk en 'n ander 1981 (4) SA 792 (A) 801A-H
Licences and General Insurance Co Ltd v Van Zyl and others 1961 (3) SA 105 (D) 108A-111E; NZ
Insurance v Stone supra (C) 68F-69B
Stellenbosch v Louw supra 335G-336E, 342B-H
46
87 .1. directing (in terms of section 3(2)(b) of the Arbitration Act) that the
Samsung SOS dispute shall not be referred to arbitration (paras 6, 33-38);
and
87.2. consolidating (in terms of Rule 11) the Samsung actions on grounds that
doing so would not be premature and would be convenient given that the
same factual issues and procedural steps would arise in both actions
(paras 6, 39-44).
88. At the hearing Mr Wallis SC submitted that, if this court were to refuse the stay
sought by Samsung SDS, the relief sought by Rhenus would follow as a natural
consequence or at least a matter of convenience. He referred the court to authority
for the proposition that, where there are several claims only certain of which are
subject to arbitration, convenience will generally dictate that they be resolved in a
single set of proceedings, which, by necessity, will be by way of litigation.31 The
Samsung parties are related entities, represented by the same attorneys, and thus
unlikely to be prejudiced by consolidation. In response to a question whether the
Rules provide for consolidation before close of pleadings, Mr Wallis SC submitted
that the Rules do not preclude pre-close consolidation, in a suitable case, but did
not strenuously resist the prematurity argument advanced on behalf of Samsung
SDS and WFS.
31 lg; Welihockyj and others v Advtech Ltd and others [2003] JOL 11187 (W) [35]-[37]; Aveng supra
[1 O]
47
89. The Samsung parties address both parts of the Rhen us counter-application in their
heads of argument. In their submission:
89.1. As regards non-enforcement per paragraph 87.1 above: In accordance
with the principle of party autonomy, a court should give effect to an
agreement to resolve a dispute by arbitration (paras 83-84, 88) unless the
dispute also implicates persons that are not parties to the agreement such
that there are likely to be significant burdens of multiple proceedings and
risks of conflicting findings on "grave" issues (paras 53-55).
89.2. According to the Samsung parties, conflicting findings on grave issues are
unlikely to arise in this matter because, in the Samsung SOS arbitration,
the contractual disputes concern only Samsung SOS and Rhenus and
there is no real factual dispute between these parties that RAPS
employees were involved in the theft (paras 33-38, 60-81 ). The contractual
issues in the arbitration would be distinct from and irrelevant to the delictual
issues in the Samsung ESA action (para 82).
89.3. In addition, Mr Lamplough SC submitted that, when clauses 9 and 19 of
the Rhenus agreement are read together, its parties must be understood
to have accepted that a dispute relating to the conduct of third parties could
be the subject matter of an arbitration between (only) Samsung SOS and
Rhenus.
48
89.4. In reply, he added that, if this court is not minded to consolidate the
Samsung actions at this time, there is no prospect of all the claims or
disputes being resolved in a single set of (litigation) proceedings and thus
no sufficient reason why the Samsung SOS action should not be stayed in
favour of the Samsung SOS arbitration.
89.5. As regards consolidation per paragraph 87.2 above: Samsung SOS
submits that the convenience for which Rhenus contends is essentially its
own; all other parties and the court would be inconvenienced by a
consolidation of the Samsung actions (paras 5, 39-53).
89.6. The Rhenus counter-application is premature before close of pleadings in
the Samsung actions in that Rule 11 "does not allow for forced
consolidation of actions before pleadings have closed against the will of
distinct plaintiffs" (paras 8.1, 28-31, 85), is non-compliant with Rule 10(1)
in that the actions do not turn on substantially the same question of law or
fact (paras 8.2, 26-27, 86) and would be inconvenient relative to what is
proposed in the Samsung SOS application (paras 8.3-8.4, 32-38, 87).
90. In its heads of argument WFS opposes the Rhenus counter-application on grounds
that jurisdictional requirements for consolidation are not met and consolidation
would not be convenient (para 1 ). It cites authority for the principles that an
applicant for consolidation must show that conjoining proceedings is favoured by
the balance of convenience and would not cause any party substantial prejudice
49
(paras 15-16).32 WFS submits that the Samsung actions have different bases in
law and even in fact (para 3) and observes that pleadings are yet to close in either
of the actions or in the arbitration, rendering the application premature (paras 4-6).
91. WFS relies on further authority for the propositions that a consolidation application
is adjudicated with reference not to the merits of the actions but to their pleadings,
which must disclose a substantial overlap in issues of fact and law,33 and which
only crystallise on close of pleadings in the actions (paras 7-14). It concludes that
WFS should not be dragged into a costly and lengthy contractual fight between
Samsung SOS and Rhenus (paras 17-20).
92. At the hearing Mr van Vuuren SC elaborated on these submissions, pressing the
prematurity point as a bar to the Rhen us counter-application34 and suggesting that
the parties could revisit a possible consolidation on close of pleadings. In his
submission, it would be imprudent for this court to attempt to predict the paths that
the various proceedings may follow or to discount the possibility of prejudice to a
party or parties required to become embroiled in a fight primarily between others.
93. There is force to Rhenus' submission that, should its application fail, three or even
four proceedings could fall to be conducted and determined against the same
32
33
34 NZ Insurance v Stone supra (C) 68F-69B
C v R (A5002/2022) [2022] ZAGPJHC 1015 (15 December 2022) [36]; Siyakhula Sonke
Empowerment Corp (Pty) Ltd and another v Redpath Mining (South Africa) (Pty) Ltd and another
[2024] JDR 3104 (GJ) [26]-[27]
Siyakhu/a v Redpath supra [34]
50
factual backdrop and expose the parties and the court to risks of duplicated
proceedings and conflicting findings. Similarly compelling is the submission that
the interests of achieving convenience and averting substantial prejudice could be
served by having all the parties' disputes resolved in a single set of judicial
proceedings. But these concerns are ameliorated by a likelihood that the success
of the Samsung SDS application will bring about a single, expeditious and final
arbitral determination of the central contractual dispute between Samsung SDS
and Rhenus.
94. Save for that observation, as noted in paragraphs 79 to 82 and 87 to 92 above,
competing considerations of convenience and prejudice, including those of the
court itself, require a multi-faceted and nuanced enquiry in this matter.
95. For reasons of prematurity, I am of the view that such an enquiry would not properly
be undertaken at this time:
95.1. a plea (or exception) and any replication, third party notice(s) and
subsequent pleading(s) are yet to be delivered in the Samsung ESA
action;
95.2. a statement of defence (or exception) and any replication are yet to be
delivered in the Samsung SDS arbitration;
51
95.3. a plea (or an exception) and any replication, third party notice(s) and
subsequent pleading(s) are yet to be delivered in the Samsung SDS
action;
95.4. any Rhenus action is yet to be initiated and pleaded to;
95.5. unless and until pleadings close in each of the Samsung actions and there
is certainty whether there exists any /is between Rhenus and RAPS,
Menzies and/or WFS, it cannot be predicted whether there would be a
sufficient overlap in issues of fact and/or law to merit conjoining the
contractual and delictual claims of distinct ( albeit related) entities, including
whether:
95.5.1. not doing so would expose the parties and the court to risks of
duplicated proceedings and conflicting findings; and/or
95.5.2. doing so would be favoured by the balance of convenience and
would not cause any party substantial prejudice; and thus
95.6. it is unnecessary to determine whether C v R and Siyakhu/a v Redpath
establish a rule that a consolidation application is invariably incompetent
before close of pleadings or apply a principle that a consolidation
application is usually unviable at that stage of proceedings. It suffices to
52
conclude that the Rhenus counter-application is premature in the
circumstances of this case.
96. In the result, I consider that the Rhenus counter-application should fail.
THE ORDER
97. As regards costs, all the participating parties were represented by, and sought the
costs of, senior counsel. Although each of Rhenus and WFS was represented by
one counsel, I am satisfied that the matter is of sufficient complexity to warrant the
engagement of two counsel. There was consensus between the parties -and I
agree -that costs should be agreed or taxed on scale C.
98. In the circumstances, I make the following order:
98.1. The action initiated by Samsung SDS against Rhenus under case number
2023-079688 (the Samsung SDS action) is stayed pending the final
determination of the arbitration referred by Samsung SDS against Rhenus
under AFSA reference number S.383 (the Samsung SDS arbitration);
98.2. Rhenus is directed to pay the costs of the application launched by
Samsung SDS against Rhenus seeking inter alia to stay the Samsung
SOS action pending the final determination of the Samsung SDS
53
arbitration, including the costs of two counsel where so employed (one of
whom being senior counsel), as agreed or taxed on scale C;
98.3. The application launched by Rhenus against the Samsung parties, RAPS,
Menzies and WFS seeking inter alia to consolidate the actions under case
numbers 2023-076450 and 2023-079688 (the Rhenus counter
application) is dismissed; and
98.4. Rhenus is directed to pay the costs of the Rhenus counter-application,
including the costs of two counsel where so employed ( one of whom being
senior counsel), as agreed or taxed on scale C.
--.,.
PEARSEAJ
This judgment is handed down by uploading it on Caselines and emailing it to the parties
or their legal representatives. The date of delivery of this judgment is 18 June 2025.
Counsel for Samsung Parties:
Instructed by: Alan Lamplough SC
Greig Campbell
Clyde & Co Inc
54
Counsel for Rhenus:
Instructed by:
Counsel for WFS:
Instructed by:
Date of Hearing:
Dates of Supplementary Submissions:
Date of Judgment: Paul Wallis SC
Shepstone & Wylie
Emiel van Vuuren SC
Norton Rose Fulbright SA Inc
02 May 2025
14 and 21 May 2025
18 June 2025
55