IN THE HIGH COURT OF SOUTH AFRICA
GAUT ENG DIVISION, PRETOR IA
( l ) REPORTABLE: YES / NO
(2) OF INTEREST TO OTHER JUDGES: YES / NO
(3) REVISED: YES
14 April 2026
DATE SIGNATURE
Case number: 049876/2025
In the matter between:
JVA NETWORKS (PTY) LTD
and
PHAKISA HOLDINGS (PTY) LTD
ADV PIERRE ROSSOUW N.O.
VAN ROOYEN. AJ:
Introduction:
JUDGMENT
APPLICAN T
1sr RESPONDENT
2ND RESPOND ENT
1
2
[1] Applicant approached this Court in terms of section 33(1) of the Arbitration Act,
42 of 1965 ("the Arbitration Act") for the review and setting aside of an award
made by an arbitrator in private arbitration proceedings. The basis for the
application was that the Arbitrator committed a gross irregularity in the conduct
of the arbitration proceedings or has exceeded his powers as provided for in
section 33(1)(b) of the Arbitration Act in that:
1.1. The Arbitrator was required, based on the pleadings between the parties,
to determine the Net Revenue generated as a result of the Engagement
Agreement between the parties.
1.2. After determination of the Net Revenue, the Arbitrator had to multiply the
Net Revenue with a factor of 1.8 (in terms of clause 8.3.2 of the
Engagement Agreement) to arrive at the remuneration payable.
1.3. The interpretation and application of the factor 1.8 on the Net Revenue for
purposes of determining the remuneration payable to the applicant was
admitted in the statement of defence and common cause between the
parties.
1.4. The Arbitrator therefore had to apply the factor of 1.8 on the Net Revenue
determined and was not entitled to interpret the agreement to decide
whether the factor of 1.8 was indeed applicable.
1.5. In interpreting the agreement and finding that the factor of 1.8 was not
applicable to the Net Revenue , the Arbitrator committed a gross
irregularity.
[2] Apart from applying for the review and setting aside of the award made by the
Arbitrator, applicant also seeks condonation for the late institution of the
application insofar as it may be necessary.
[3] In this judgment I will refer to the parties as follows:
3.1. The applicant as “JVA”;
3
3.2. The first respondent as “Phakisa”; and
3.3. The second respondent as “the Arbitrator”.
[4] Phakisa opposed the application on the following grounds:
4.1. JVA failed to comply with the timeframe provided for in section 33(2) of
the Arbitration Act;
4.2. the application amounts to an appeal and not a review under section 33
of the Arbitration Act; and
4.3. the arbitrator was entitled to interpret clause 8 of the Engagement
Agreement and therefore did not commit a gross irregularity when finding
that the factor of 1.8 should not be applied to the Net Revenue.
Background
[5] On 1 September 2019 JVA and Phakisa entered into an agreement termed
"Engagement Agreement" (hereinafter referred to as "the Engagement
Agreement").
[6] The Engagement Agreement regulated the remuneration that would be payable
by Phakisa to JVA for the sale of a business known as the Valorem Group. The
remuneration payable to JVA would be calculated after a period of 12 months
based on certain performance parameters.
[7] The Engagement Agreement provided for arbitration procedures should any
dispute arise between the parties emanating from the agreement.
[8] A dispute subsequently arose between Phakisa and JVA relating to the
remuneration that JVA was entitled to in terms of the agreement . The dispute
was referred to arbitration and the arbitration that followed forms the subject
matter of the present application.
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[9] It is mentioned already at this stage that the parties expressly agreed in the pre-
arbitration agreement1 that the disputes between them shall be defined by the
pleadings exchanged in the arbitration.
Condonation
[10] The first issue that I have to adjudicate upon is whether th is application was
instituted within the peremptory six weeks’ period allowed under section 33(2)
for the review after publication of the award.
[11] The parties agreed that either party shall , after publication of the award, be
entitled to request that the costs award be reconsidered by the Arbitrator.
[12] The award by the Arbitrator was published on 1 November 2024.
[13] Phakisa applied for a reconsideration of the costs award on 4 November 2024.
The parties exchanged heads of argument during January and February 2025
and the application for the reconsideration of the co sts award was heard on 20
February 2025.
[14] The reconsidered costs award was published on 28 February 2025.
[15] The Arbitrator stated the following in paragraph 53 2 of his reconsidered costs
award:
“53. For the reasons stated above, the Award dated 30 October 2024 is
amended as follows …” (emphasis added)
[16] The present application for the review and setting aside of the award of the
Arbitrator was lodged on 9 April 2025. The application was therefore lodged
outside the period of 6 weeks prescribed by section 33(2) of the Arbitration Act if
the commencement date for the calculation is taken as 1 November 2024, the
date of publication of the initial award. On the other hand, the application will be
within the prescribed period of six weeks should the commencement date for the
1 Case Lines 0001-393 par 5 Annexure “FA4”
2 Case Lines 0001-678
5
calculation be taken as the publication of the reconsidered costs award that was
published on 28 February 2025.
[17] The argument on behalf of JVA was to the effect that the award dated 30 October
2024 and published on 1 November 2024 was only a preliminary award and
should not be the determining date for purposes of calculating the six -week
period provided for in section 33(2) of the Arbitration Act.3
[18] I am not persuaded that the Arbitrator’s award dated 30 October 2024 was a
preliminary award as contended for.
[19] I am also not convinced that the remission of the costs award necessarily caused
the first award to be suspended. The amendment / variation related only to the
issue of costs and did not impact on the merits.
[20] For the reasons that follow hereinafter, it is not necessary to further deal with this
issue in detail. As is apparent from what is found hereinafter, I am of the view
that a proper case has been made out for the condonation of the late filing of the
present application insofar as it may be necessary.
[21] I had regard to JVA’s prayer for the extension of the time period in terms of
section 38 of the Arbitration Act.
[22] Section 38 of the Arbitration Act reads as follows:
“38. Extension of periods fixed by or under this Act
The court may, on good cause shown, extend any period of time fixed
by or under this Act, whether such period has expired or not.”
[23] In exercising my discretion I had regard to all relevant facts , inclusive of the
explanation for the delay and the prospects of success.
3 Case Lines 0001-45 par 113
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[24] I am of the view that the explanation proffered by JVA for the delay in bringing
the application is satisfactory. I am further of the view that JVA established good
cause, and its prospects of success are good.
[25] The six-week period allowed for under section 33(2) of the Arbitration Act is
herewith extended and condonation is granted for the late filing of the application.
Appeal or Review
[26] JVA approached this Court in terms of section 33(1)(b) of the Arbitration Act for
the setting aside of the award alleging that the Arbitrator committed a gross
irregularity in that he misconceived the nature of the enquiry or his duties and/or
he exceeded his powers.
[27] Section 33(1)(b) of the Arbitration Act provides as follows:
“33. (1) Where –
(a) any member of an arbitration tribunal has misconducted himself in
relation to his duties as arbitrator or. umpire; or …
(b) an arbitration tribunal has committed any gross irregularity in the
conduct of the arbitration proceedings or has exceeded its powers;
or
(c) an award has been improperly obtained,
the court may, on application of any party to the reference after due notice
to the other parties, make an order setting the award aside.
(2) An application pursuant to this section shall be made within six weeks
after the publication of the award to the parties: Provided that when the
setting aside of the award is requested on the ground of corruption,
such application shall be made within six weeks after the discovery of
the corruption and in any case not later than three years after the date
on which the award was so published.
(3) The court may, if it considers that the circumstances so require, stay
enforcement of the award pending its decision.
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(4) If the award is set aside the dispute shall, at the request of either party,
be submitted to a new arbitration tribunal constituted in the manner
directed by the court.”
[28] Phakisa contends that the application is not a review but instead an attempt at
an appeal4.
[29] In considering this issue I will first have regard to Clause 8 of the Engagement
Agreement that deals with the formula for the calculation of the remuneration
payable by Phakisa to JVA. Clause 8 of the Engagement Agreement reads as
follows:
"8. The parties hereby record that remuneration will be calculated in accordance
with the following formula:
8.1 the remuneration payable to the consultant will be based on expected
projected parameters of the Business for the Revenue period;
8.2 the expected Gross Revenue is projected at R26 1000.00, less the direct
operating costs of R14 166 000.00, resulting in the expected Net
Revenue being projected at R11 800 000.00;
8.3 should the Net Revenue as foreseen in clause 8.2 above be less than
R11 800 000.00 then:
8.3.1 as a remedy, an amount equal to the reimbursements from the
employee tax incentive scheme as generated from the services
of the business during the Revenue Period, as well as an amount
equal to the provisions made in terms of such services for sick
leave and family responsibility leave of seasonal, cyclical or
periodic fixed term contract and which have not been incurred in
the Revenue Period, will be added to the Net Revenue;
4 Case Lines 0003-7 par 10
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8.3.2 after the above remedy has been applied, the consultant will be
remunerated, for the calculated Net Revenue, multiplied by a
factor of 1.8;
8.3.3 in the event that the calculated Net Revenue exceeds the R11
800 000.00, the excess will be paid to the consultant by the client
at a factor of 1 to 1."
[30] It was found by the Arbitrator that the Net Revenue was R 11 623 041.00,
therefore less than R 11 800 000.00.5 This determination of the Net Revenue
by the Arbitrator was accepted as correct by all parties to the application.
[31] It is evident from the pleadings that both JVA and Phakisa were of the view that
the factor 1.8 (referred to in clause 8.3.2) should be applied in arriving at the
amount of remuneration payable. The following is relevant with reference to the
pleadings:
31.1. In JVA’s amended statement of claim it pleaded that the Net Revenue
was less than R 11 800 000.00 and the factor 1.8 was applied.6
31.2 In JVA’s alternative claim, it also pleaded that the Net Revenue was less
than R 11 800 000.00 and the factor of 1.8 was applied.7
31.3. In Phakisa’s amended statement of defence, Phakisa pleaded that the
Net Revenue was less than R 11 800 000.00 and therefore applied the
factor of 1.8.8 The factor of 1.8 was applied by Phakisa, despite the fact
that no provision is made for any ETI or Sick and Family Responsibility
leave as per clause 8.3.1 of the Engagement Agreement. Put differently,
Phakisa applied the factor 1.8 even if no remedy is proved under clause
8.3.1 of the Engagement Agreement.
5 Case Lines 0001-628 par 114
6 Case Lines 0001-19 to 0001-20
7 Case Lines 0001-21
8 Case Lines 0001-21 to 0001- 22 par 48 to 50; and Annexure “FA5”
9
31.4 Phakisa regarded the factor 1.8 to be applicable throughout its
pleadings. This is illustrated by its preceding remuneration calculations.9
[32] It is therefore clear that both parties accepted the factor 1.8 to be applicable if
the Net Revenue was less than R 11 800 000.00.
[33] I am therefore satisfied that i t was common cause between the parties that the
1.8 factor must apply in determining the remuneration and it would render it
unnecessary for any party to adduce evidence to prove it.10
[34] When considering the award by the Arbitrator it is evident that the Arbitrator did
not apply the 1.8 factor:
“138. Because of JVA’s failure to prove ETI reimbursements and provision for
sick leave and family responsibility leave of seasonal, cyclical or periodic
fixed-term workers which have not been incurred, the remedy provided for
in clause 8.3.1 cannot be applied. Clauses 8.3.2 and 8.3.3 also cannot be
applied, because the introductory words of clause 8.3.2, "After the above
remedy" has been applied ... " indicate that application of the remedy is a
requirement.”11
[35] The Arbitrator interpreted the Engagement Agreement and found that the factor
of 1.8 did not apply for purposes of determining the remuneration payable to JVA.
The Arbitrator disregarded the fact that both parties accepted in the pleadings
that the factor of 1.8 will apply in the event that the Net Revenue was found to
be less than R11 800 000.00. The Arbitrator further disregarded the concession
made by Phakisa during the arbitration proceedings that an amount of
R 79 000.00 in respect of ETI ought to be included.
[36] It appears that JVA’s complaint relating to the Arbitrator’s gross irregularity
revolves around his jurisdiction to interpret and apply clauses 8.3.2 and/or 8.3.3
of the Engagement Agreement rather than confining himself to the pleadings 12.
9 Case Lines 0001-22 par 52 and “FA6”0001-402; 0001-404 “FA7”
10 Gordon v Tarnow 1947 (3) SA 525 (A)
10 Gordon v Tarnow 1947 (3) SA 525 (A)
11 Case Lines 0001-635 par 138
12 Case Lines 0001-14 par 29 and 0001-15 par 32
10
A further ground for review relates to the Arbitrator’s failure to consider the
concession made during the arbitration that an amount of R 79 000.00 for ETI
had to be included in the calculation.13
[37] It is settled law that an arbitrator has no jurisdiction to deviate from the pleadings
as it has no inherent jurisdiction to do so. 14 An arbitrator who decides issues
which are common cause and which are not canvassed in the pleadings amount
to gross irregularity under section 33(1)(b) of the Arbitration Act.
[38] What is also relevant, is the express agreement between the parties in the pre -
arbitration agreement that disputes between them shall be defined by the
pleadings exchanged in the arbitration.
[39] I am of the view that the Arbitrator went beyond the pleadings and the common
cause issues, and he disregarded a concession made. I am therefore of the view
that the Arbitrator exceeded his powers and committed a gross irregularity as
envisaged in terms of section 33 of the Arbitration Act.
[40] JVA seeks an order that the arbitration award be reviewed and set aside and that
the dispute be referred to the Arbitrator for purposes of making a new arbitration
award.
[41] Having considered the papers, I make the following order:
41.1. The time period prescribed by section 33(2) of the Arbitration Act, 42 of
1965, for the filing of this application is extended in terms of section 38
of the Arbitration Act, 42 of 1965, and the late filing of this application is
condoned;
41.2. The arbitration award made by the Second Respondent dated 30
October 2024, and as amended by the arbitration award dated 26
February 2025, is reviewed and set aside;
13 Case Lines 0001-32 par 84
14 Hos+Med Medical Aid Scheme v Thebe Ya Bophelo Healthcare Marketing & Consulting (Pty) Ltd &
Others 2008 (2) SA 608 (SCA)
Telcordia Technologies Inc v Telkom SA Ltd 2007 (3) SA 266
41 .3. The arbitration between the Applicant and the First Respondent is
referred to the Second Respondent for purposes of making a new
arbitration award;
41.4 The First Respondent is ordered to pay the costs of the application on
scale B, such costs to include the costs of two counsel.
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION , PRETORIA
This judgment was prepared and authored by the judge whose name is reflected and
is handed down electronically by circulation to the parties/their legal representatives
by email and by uploading it to the electronic file of this matter on Caselines . The
date for hand-down is deemed to be 13 April 2026.
APPEARANCES:
For the Applicant
Instructed by
For the Respondent
Instructed by
Matter heard on
Judgment date
R Grundlingh
T J Jooste
VFV Attorneys
Ref: T van Wyk / 180904
M V R Potgieter SC
C Gibson
Sekekal Simmons Attorneys
Ref: JH Senekal / JAS I P508MAT10970
2 February 2026
14 April 2026
11