[1] This is an application brought by Zscaler Inc. (“Zscaler”) for the reconsideration,
rescission and setting aside of an ex parte order granted by Twala J on 26
August 2024. In terms of that order, Accelerate Networks SA (Pty) Ltd (“ANSA”)
was authorised to attach computer servers belonging to Zscaler at various
premises within the jurisdiction of this Court. The attachment was inte nded to
found and/or confirm the jurisdiction of this Court in respect of an action to be
instituted by ANSA against Zscaler for damages on two fronts . ANSA also
obtained leave to institute proceedings against Zs caler by way of edictal
citation.
[2] Zscaler is a preregrinus company incorporated and domiciled in the United
States of America. The attachment was sought for purposes of an action ANSA
intended to institute against Zscaler in respect of two claims: First, a contractual
claim arising from an alleged agreement concerning the opportunity to respond
positively to a tender from ABSA Bank Ltd (“ABSA” ); and Second, a delictual
claim founded on alleged defamatory statements made by Zscaler to
Dimension Data that has rebranded t o NTT Data . For convenience in these
proceedings it will be referred to as “Dimension Data”.
[3] Zscaler seeks the rescission of the ex parte order and the release of the
attached assets on the grounds that: (a) ANSA failed to make full and frank
disclosure of material facts when it brought the ex parte application before
Twala J; (b) ANSA’s two claims are both bad in law and no proper prima facie
case was made out for the granting of the order; and (c) this Court has no
jurisdiction to adjudicate the disputes, which are required by a binding
arbitration clause to be determined by arbitration in San Fr ancisco, California,
USA.
[4] ANSA resists the relief. Its essential answer is that the Distributor Agreement is
irrelevant because its first claim arises from a separate agreement and, in
relation to the second claim, from a delict independent of the Distributor
relation to the second claim, from a delict independent of the Distributor
Agreement.
Procedural history
[5] The factual and procedural background to this matter is largely common cause
and may be summarised as follows.
[6] On 23 February 2023, Accelerate Networks International Limited ( “ANI”), a
company incorporated in Mauritius, concluded a written Distributor Agreement
(“the Distributor Agreement ”) with Zscaler. In terms of the Distributor
Agreement, Zscaler granted ANI a non -exclusive, non -transferable right to
distribute subscriptions to Zscaler ’s products to persons or entities involved in
the Zscaler Summit Partner Programme. The Distributor Agreement was
governed by the laws of the State of California, USA.
[7] Clause 10.4 of the Distributor Agreement provided, in material terms, that all
disputes arising out of or relating to the agreement would be finally settled by
arbitration conducted in San Francisco, California, USA under the rules of
Commercial Arbitration of the American Arbitration Association.
[8] Clause 10.11 of the Distributor Agreement contained a non -variation clause
providing that no modification, amendment or waiver of any provision of the
agreement would be effective unless in writing and signed by both parties.
[9] The agreement provided, among other things, that ANI was not permitted to
sell, market or promote directly to customers; that any distribution would occur
pursuant to approved quotes or sales proposals; that ANI would determine its
own margin when selling to resellers; and that ANI would not be entitled to
discounts, margins or compensation unless it had provided a quote for the
relevant opportunity.
[10] In April 2023, ABSA issued a request for quotation s for the supply of Zscaler
products.
[11] On 26 April 2023, at a virtual meeting conducted via Microsoft Teams,
representatives of Zscaler (Mr Robert Standing (“Standing”) and ANI (Messrs
Brett Steingo (“Steingo”) and Brett Salovy (“Salovy”) are alleged to have
concluded a separate oral agreement in terms of which Zscaler undertook to
concluded a separate oral agreement in terms of which Zscaler undertook to
provide ANI with certain Zscaler software products at an incumbent price
protection of 10%. The purpose of the agreement was to enable ANI to supply
these products, through a reseller known as ISA, to ABSA in South Africa.
[12] On 28 April 2023, Standing confirmed this undertaking in a written email to
Steingo and on 2 May 2023, a quotation followed.
[13] On 27 July 2023, ABSA informed ANI that the contract had been awarded to
Amazon Web Services ( “AWS”) at a price some 15 to 20% lower than ANI's
offer. ANI contends that this occurred because Zscaler supplied the required
software to AWS at a price below the 10% price protection that had been
promised to ANI, in breach of the oral agreement.
[14] In a separate sequence of events, it is alleged that in 2022, Standing met with
Ms Padma Naidoo (“Naidoo”), the Head of Security at Dimension Data, and
made statements to the effect that Dimension Data should cease procuring
Zscaler products from ANI and instead redirect its procurement to NTT Ltd or
Westcon Group (Pty) Ltd. ANI alleges that these statements carried the
imputation that ANI conducted its business dishonestly and charged
unreasonable margins. Following these statements, and from August 2023
onwards, Dimension Data ceased making any purchases of Zscaler products
from ANI.
[15] On 6 November 2023, Zscaler purported to terminate the Distributor Agreement
with ANI.
[16] On 22 January 2024, ANI concluded a written cession agreement in terms of
which it ceded its damages claims against Zscaler to ANSA. This was plainly to
ensure that the plaintiff in the intended damages claims against Zscaler would
be a South African resident company and thus be in a position to attach Zcaler’s
property in South Africa to found and/or confirm jurisdiction of a South African
court to determine the matter.
[17] ANI is a Mauritian company and the respond ent (ANSA) is an associated
company registered in South Africa. The disputes between the parties would,
but for the cession, be disputes between an American and a Mauritian
but for the cession, be disputes between an American and a Mauritian
companies that would not be judiciable by a South African Court.
[18] On 8 July 2024, ANSA brought an ex parte application seeking, among other
relief, an order authorising the attachment of Zscaler ’s computer servers to
found and/or confirm the jurisdiction of this Court, and leave to institute action
against Zscaler by way of edictal citation. ANSA's two claims were framed as
follows:
a. Claim 1 (contractual): A claim arising from the alleged breach of the oral
agreement concluded on 26 April 2023 for 10% incumbent price protection
in respect of the ABSA bid, resulting in a loss of profit to ANI of USD
700,267.06; and
b. Claim 2 (delictual): A claim arising from the allegedly defamatory
statements made by Standing to Naidoo at Dimension Data, causing
Dimension Data to cease purchasing from ANI, resulting in a loss of profit
to ANI of R19,066,026.70.
[19] On 26 August 2024, Twala J granted the ex parte order authorising the
attachment. The computer servers belonging to Zscaler were attached at
premises including Teraco Data Centre (Isando and Cape Town) and at
premises of Dimension Data (Johannesburg and Cape Town).
[20] On 10 October 2024, Zscaler instituted the present reconsideration and
rescission application.
The applicable legal framework
[21] An application for attachment to found or confirm jurisdiction is a recognised
procedural mechanism, but it is extraordinary in character. It permits
interference with property before the defendant has been heard. For that
reason, the jurisdictional requirements must be properly satisfied.
[22] The applicant must establish, at least prima facie, a cause of action against the
peregrinus. In Hülse-Reutter v Gödde1, the Supreme Court of Appeal held that
a prima facie case is established where there is evidence which, if accepted,
will establish a cause of action; but the Court warned that the remedy is
1 Hülse-Reutter and Others v Gödde 2001 (4) SA 1336 (SCA) at 1340B–E.
exceptional and must be applied with care and caution. The evidence relied
upon must consist of facts, not mere assertions, and any inference must be one
that may reasonably be drawn from the alleged facts.
[23] An order to attach assets to found or confirm jurisdiction in respect of a
contemplated action against a peregrinus is ordinarily and appropriately
obtained ex parte. This is consistent with the established practice described in
Multi-Links Telecommunications Ltd v Africa Prepaid Services Nigeria Ltd , 2
where the Court observed that a defendant has no interest or right to notice of
preliminary steps taken in anticipation of the institution of legal proceedings,
and that a defendant's rights are not affected by the ex parte nature of such an
application. The same principle is reflected in Naylor v Jansen 3 and Tsung v
Industrial Development Corporation of SA Ltd .4
[24] However, the privilege of approaching the Court without notice to the other party
carries with it a corresponding obligation of utmost good faith. It is settled law
that an ex parte applicant must disclose all material facts that might influence
the Court in deciding the application. In Schlesinger v Schlesinger5, the Court
held that: (a) in ex parte applications all material facts must be disclosed which
might influence a court in coming to a decision; (b) the non -disclosure or
suppression of facts need not be wilful or mala fide to incur the penalty of
rescission; and (c) the Court, once apprised of the true facts, has a discretion
to set aside the former order or to preserve it.
[25] This discretion was confirmed and elaborated upon by Howie P in Phillips and
Others v National Director of Public Prosecutions:6
“It is trite that an ex parte applicant must disclose all material facts that might
influence the Court in deciding the application. If the applicant fails in this regard
and the application is nevertheless granted in provisional form, the Court
and the application is nevertheless granted in provisional form, the Court
hearing the matter on the return day has a discretion, when given the full facts,
2 2013 (4) SA 592 (GSJ) at paragraph 33
3 2006 (3) SA 546 (SCA) at 558F
4 2006 (4) SA 177 (SCA) at 182C-D.
5 1979 (4) SA 342 (W) at 348E-350B
6 2003 (6) SA 447 (SCA) paras 28–31.
to set aside the provisional order or confirm it. In exercising that discretion the
later Court will have regard to the extent of the non -disclosure; the question
whether the first Court might have been influenced by proper disclosure; the
reasons for non -disclosure and the consequences of setting the provisional
order aside.”
[26] Where an attachment is ordered ex parte and it is afterwards sought to set it
aside, the onus rests upon the respondent in the rescission application to satisfy
the Court that, had all the facts been before the Court at the time, the
attachment would nevertheless have been made.7
[27] The remedy under Rule 6(12)(c), although concerned with urgent orders,
reflects the broader principle that a party affected by an order granted in its
absence may approach the court for reconsideration. In United Medical Devices
LLC v Blue Rock Capital Ltd,8 the court set aside an ex parte attachment order
where the applicant had failed to disclose material contractual provisions and
where the order caused undue oppression.
[28] In order to succeed in an application for attachment ad fundandam
jurisdictionem, the applicant must demonstrate: (a) a prima facie cause of
action; (b) that the respondent is a peregrinus of this Court; and (c) that the
respondent has property within the Court's jurisdiction. Once these
requirements are satisfied, the Court has no di scretion to refuse the
attachment.9
[29] The standard of proof at the attachment stage is a prima facie case, not one
that must establish the probability of success. Contradictory evidence on the
part of the respondent does not defeat the application unless it shows that the
applicant clearly has no legal claim.10
7 Elscint (Pty) Ltd and Another v Mobile Medical Scanners (Pty) Ltd 1986 (4) SA 552 (W) at 558E.
8 Case no. 13398/2015 (unreported (5 March 2026)
9 Longman Distillers Ltd v Drop Inn Group of Liquor Supermarkets (Pty) Ltd 1990 (2) SA 906 (A) at
914E–G; Simon NO v Air Operations of Europe AB 1999 (1) SA 217 (SCA) at 228E–F
10 Simon NO v Air Operations of Europe AB at 228D; Hülse-Reutter v Gödde 2001 (4) SA 1336 (SCA) at
1343E–I; MT Tigr 1998 (3) SA 861 (SCA) at 868B–H.
[30] A judgment cannot be said to have been “granted erroneously” within the
meaning of Rule 42(1)(a) merely because the respondent subsequently
discloses a factual defence, or because legal objections not placed before the
first Court are subsequently raised. The concept of an erroneous order refers
to a procedural irregularity at the time the order was granted.11
Material non-disclosure
[31] The most prominent ground of rescission advanced by Zscaler concerns the
alleged non-disclosure in the ex parte application of the terms of the Distributor
Agreement- specifically, the arbitration clause (clause 10.4) the non -variation
clause (clause 10.11) , the pricing and discount clause (clause 5.2) and the
limitation of liability clause (clause 9.3).
[32] ANSA’s position, stated in paragraph 14 of its founding affidavit in the ex parte
application, was that the Distributor Agreement was “ not relevant ” to the
disputes between the parties. The Distributor Agreement was, however,
physically annexed to the papers placed before Twala J. The question is
whether ANSA’s characterisation of the Distributor Agreement as irrelevant
constitutes a material non -disclosure of facts that ought to have been placed
before the Court.
[33] ANSA’s case is that its two claims do not arise from the Distributor Agreement
at all. In respect of Claim 1, ANSA contends that the oral price protection
agreement concluded on 26 April 2023 was a separate, freestanding
agreement unconnected to the Distributor Agreement. In respect of Claim 2,
ANSA contends that the defamatory statements by Standing constitutes
delictual conduct unrelated to the parties’ contractual arrangement. On this
basis, ANSA submits that the arbitration clause contained in clause 10.4 of the
Distributor Agreement has no application to either claim.
11 Lodhi 2 Properties Investments CC v Bondev Developments (Pty) Ltd 2007 (6) SA 87 (SCA) at
paragraphs 22–25.
[34] In my view, the question of whether ANSA made full disclosure to Twala J
cannot be assessed in isolation from the underlying substantive question of
whether the arbitration clause does or does not apply to ANSA’s claims. If
ANSA’s characterisation of its c laims is correct, then its statement that the
Distributor Agreement was “ not relevant” would not constitute a material non -
disclosure warranting rescission. If, on the other hand, the claims are properly
characterised as arising out of or relating to the D istributor Agreement, then
ANSA’s failure to bring the import of clause 10.4 to Twala J’s attention becomes
a potentially decisive non-disclosure.
[35] The test derived from Schlesinger12 and Phillips13 requires me to ask: (a)
whether there was a non-disclosure of material facts; (b) whether the first Court
(Twala J) might have been influenced by proper disclosure; and (c) what the
consequences of setting the order aside would be.
[36] On the first consideration, I have already observed that the Distributor
Agreement was physically placed before Twala J. What was not adequately
disclosed was the specific significance of clause 10.4 and the arbitration
provisions. ANSA ’s characterisation of the Distributor Agreement as “ not
relevant” was, in light of the genuine and arguable breadth of clause 10.4, an
incomplete and potentially misleading presentation of the position.
[37] ANSA did bring to the Court's attention that both claims arose outside the scope
of the Distributor Agreement. The Court was accordingly aware that the
Distributor Agreement existed and that ANSA took the position that it did not
govern the claims in question. Whether this was sufficient, or whether Twala J
ought also to have been specifically informed of the terms of clause 10.4 and
left to make his own assessment of whether the claims fell within it, is the critical
question.
[38] Zscaler's evidence of the applicable foreign law - as to which there is no dispute
[38] Zscaler's evidence of the applicable foreign law - as to which there is no dispute
- is that clause 10.4 has been interpreted by Californian law to cover all disputes
arising out of or relating to the agreement, including disputes that might be
12 Schlesinger v Schlesinger 1979 (4) SA 342 (W) at 348E-350B.
13 Phillips and Others v NDPP 2003 (6) SA 447 (SCA) paras 28-31.
characterised as tortious if they have a sufficient connection to the agreement.
On this view, Twala J should have been made aware that there was at least an
arguable case that both claims were governed by the arbitration clause.
[39] In considering whether Twala J might have been influenced by proper
disclosure, I must assess whether, had the terms of clause 10.4 been
specifically placed before him with the explanation that Zscaler would contend
that both claims fell within that clause, he would have declined to grant the order
or at least required a fuller inquiry.
[40] The key deficiency in ANSA’s ex parte presentation was not merely that it
described the Distributor Agreement as irrelevant - the Court could see for itself
that the agreement was there - but that ANSA failed to draw the Court’s
attention to an arguable and potentially dispositive legal point about the scope
of the arbitration clause, a point that should have been brought squarely before
the Court so that Twala J could make a properly informed decision about
whether to grant the relief sought.
[41] There was a material non-disclosure in the ex parte application, namely ANSA’s
failure to properly place before Twala J the terms and significance of clause
10.4 of the Distributor Agreement and the at least arguable applicability of that
clause to ANSA’s claims.
[42] It is probable that had Twala J been properly apprised of this position, he would
have given the matter more careful scrutiny and might not have granted the
order on the basis presented to him.
[43] The Distributor Agreement was plainly material. It was the written instrument
governing the commercial relationship through which ANI was entitled to
distribute Zscaler products. It regulated pricing, quotes, margins, reseller
conduct and the circumstances in which ANI would be entitled to compensation.
[44] ANSA’s contractual claim was founded upon alleged obligations concerning
the ABSA opportunity. That opportunity concerned Zscaler products, a quote
the ABSA opportunity. That opportunity concerned Zscaler products, a quote
issued by Zscaler, ANI’s role as distributor, and the alleged pricing advantage
or discount to be afforded in relation to a reseller/customer opportunity. Those
matters fall squarely within the subject matter of the Distributor Agreement.
[45] The contention that the Distributor Agreement was irrelevant is therefore
unsustainable. At the very least, it was a fact which might have influenced the
court hearing the ex parte application.
[46] The arbitration clause was even more material. It went directly to the propriety
of this Court assuming jurisdiction through attachment. A court asked to attach
property to found or confirm jurisdiction over a foreign defendant must be told
that the relevant written agreement contains a foreign arbitration clause.
[47] The failure to place the existence, import and jurisdictional consequences of
clause 10.4 properly before Twala J was material. Zscaler’s heads submit that
the court was misled in that regard, and that the non-disclosure alone warrants
rescission.
[48] I agree. It is no answer to say that ANSA considered the agreement irrelevant.
The duty is not to disclose only facts favourable to the applicant’s theory. It is
to disclose facts which may influence the court, including facts adverse to the
relief sought.
[49] Had the court been told that the written agreement governing the relationship
contained a California arbitration clause, a non-variation clause and provisions
regulating precisely the commercial terrain from which the dispute arose, the
court might well ha ve refused the attachment or at least required further
explanation.
[50] I think it probable that Twala J would at least have considered the scope of the
arbitration clause more carefully, and that his decision might have been
different. This is sufficient to meet the test in Phillips.14
[51] ANSA has not persuaded me that, had all the relevant facts been properly
placed before Twala J, he would nonetheless have granted the attachment
order. I am satisfied, to the contrary, that the proper disclosure of the arbitration
order. I am satisfied, to the contrary, that the proper disclosure of the arbitration
14 Phillips and Others v NDPP 2003 (6) SA 447 (SCA) paras 28–31
clause and its potential scope would have introduced sufficient uncertainty
about the legal foundation of ANSA’s claims that Twala J would at the very least
have required a fuller hearing before granting the order, if he would have
granted it at all.
[52] Furthermore, in dealing with its second claim, ANSA failed to disclose that the
Dimension Data contract had terminated by the effluxion of time and may thus
the failure to place any further orders through ANI may have nothing to do with
the alleged defamatory statements.
[53] The respondent has thus not satisfied its onus as set out Elscint.15
[54] This in and of itself is dispositive of the matter. I will, however, nevertheless
consider whether the claims were prima facie established in the sense that at
least a triable issue was raised.
Claim 1:
a. The oral agreement and the Shifren clause precluding variation
[55] ANSA’s first claim depends upon an alleged separate oral or partly oral
agreement.
[56] According to the Intendit, Claim 1 is founded upon an oral agreement,
alternatively a partially oral and partially written agreement, concluded on 26
April 2023, in terms of which Zscaler allegedly undertook to supply ANI with
Zscaler products at a 10% incumbent price protection for the purposes of the
ABSA bid.
[57] Zscaler’s response is twofold: First, that no such agreement could exist
alongside the Distributor Agreement by reason of the non-variation clause; and
second, that even if such an agreement existed, it falls within clause 10.4 of the
Distributor Agreement and must be referred to arbitration.
[58] Zscaler's primary submission is that the Distributor Agreement's non -variation
clause (clause 10.11) operates to preclude any oral variation of or amendment
15 Elscint (Pty) Ltd v Mobile Medical Scanners (Pty) Ltd 1986 (4) SA 552 (W) at 558E–H
to the agreement, with the result that the oral price protection arrangement
alleged by ANSA has no binding effect. Zscaler relies on SA Sentrale Ko -op
Graanmaatskappy Bpk v Shifren 16and Brisley v Drotsky .17The principle is
settled: where parties have agreed that variations must be in writing and signed,
the courts will generally enforce that bargain.
[59] Zsacler argues that the alleged contractual obligation relied upon by ANSA
appears to concern discounts, pricing, reseller opportunities and the ABSA
transaction. Those are not extraneous matters. They are the very matters
regulated by the Distributor Agreement.
[60] ANSA’s response is that the oral agreement of 26 April 2023 was not a variation
or amendment of the Distributor Agreement at all: it was an entirely separate,
collateral agreement governing a specific transaction (the ABSA bid) that was
independent of and additional to the distribution arrangement regulated by the
Distributor Agreement. ANSA argues that the Shifren principle has no
application to agreements that do not purport to vary or amend the Distribution
Agreement.
[61] This distinction drawn by ANSA is not without legal merit. The Shifren principle
operates to preclude the modification or variation of the terms of a subsisting
written contract by subsequent oral agreement. It does not, however, preclude
the conclusion of a new and separate oral contract between the same parties,
provided the new agreement does not seek to alter the terms of the existing
written contract. The question is therefore whether the alleged price protection
arrangement truly constituted a freesta nding agreement, or whether it was in
substance a variation or amplification of the Distributor Agreement.
[62] ANSA’s response is that the oral agreement of 26 April 2023 was not a variation
or amendment of the Distributor Agreement at all: it was an entirely separate,
collateral agreement governing a specific transaction (the ABSA bid) that was
collateral agreement governing a specific transaction (the ABSA bid) that was
independent of and additional to the distribution arrangement regulated by the
Distributor Agreement. ANSA argues that the Shifren principle has no
16 1964 (4) SA 760 (A)
17 2002 (4) SA 1 (SCA).
application to agreements that do not purport to vary or amend the existing
written contract.
[63] Zscaler’s counsel made reference to clause 5.2 of the Distribution Agreement
which he urged me to read together with the definitions of a “reseller” in clause
1 of the Distribution Agreement. Clause 5.2 reads:
“Zcaler Summit Partner Program and Retail Price List. Distributor shall be
compensated by Zscaler for an opportunity based on Distributors assigned tier
in the Zscaler Summit Partner Program, as agreed to separately by the parties.
Distributor may obtain a copy of Zscaler’s C Summit Partner Program and Retail
Price List upon request. Prices do not include sales, use, VAT, excise, export,
withholding, or similar taxes or fees. ZScaler reserves the right to change the
Retail Price List for the product at any time; however, any such price change
will not affect orders in progress. For clarity, Distributor shall have sol e
discretion to determine pricing to Resellers, is solely responsible for invoicing a
Reseller for any applicable fees distributor charges a Reseller, and is solely
responsible for collection of any such fees from Reseller. Distributor will not be
eligible for any discounts, margin, or other compensation from Zscaler unless it
has been provided a quote for the relevant opportunity.”
[64] The respondent was defined as the “ Distributor”. It was stated that the
Distribution Agreement governs distributors of the products (as defined in the
Agreement) to Resellers as defined.
[65] In the definition section, a “ Reseller” is defined as “any persons or entities
enrolled in the Zscaler Summit Partner Program that purchases for resale the
products from Distributor to resell to customers.”
[66] “Customer” is defined as “an entity that purchase s a subscription for the
Products from Reseller, for its own internal business use in the territory, and not
for further resale or distribution to third parties.” “Product” in turn means those
for further resale or distribution to third parties.” “Product” in turn means those
Zscaler products “distributed by Distributor to Resellers’ Customers pursued to
a Quote.” A “Purchase Order” means “a purchase order that is submitted by
Distributor to Zscaler for the product (as set forth in the Quote).” A “Quote or
Sales Proposal” means “the approved written quote or sales proposal issued
by Zscaler to Distributor which sets for the opportunity information, such as
products being ordered, pricing, customer name and address, etc.”
[67] Finally, “Sale or Sell or Resell or Resale or Purchase” means “the granting or
receiving of subscription access and use of the product as authorised by
Zscaler pursuant to the terms and conditions of this agreement.”
[68] In terms of clause 3.1 of the agreement the Distributor agrees to distribute and
provide the products only to Resellers in the territory that are enrolled in the
Zscaler Summit Partner Program.
[69] Bearing these definitions in mind, the opportunity to respond to the Absa tender
may well have fallen within the definition of the “sale” or “resale” of the “product”
to ABSA pursuant to a quote from Zscaler and the Distribution Agreement,
including the non-variation clause, would have been binding on the respondent.
As such, not only should these provisions have been disclosed, but they may
have excluded Claim 1 as it referred to a discount that had not been reduced to
writing and signed by the parties.
[70] The terms of the allegedly separate agreement were confirmed by Rob
Standing (“Standing”) of Zscaler in an email to Brett Salovy/ Brett Steingo dated
28 April 2023. In this email Rob Standing recorded:
“Hi Brett,
Following on from the conversations yesterday, now that Asa have released the
R FP for Zskyler-They have requested two quotes:
• 1 yr as is purchase
• 3 yr ELA purchase
We’ve already received a couple of partners request and as the distributor for
this, we’ll be pointing them in your direction.
As previously explained AN will receive an incumbent price protection of 10%
on the renewal portion. As you can see ABSA are purchasing more than
originally licensed for and all additional spend will be priced at the same rate for
all bidders. This leaves AN still with a significant advantage over the rest but we
urge you to be aggressive on the pricing with your partners to get the best result
for all.
As I’m flying today,@Zaheer Ahmad will share two quotes on this thread later
today as soon as they’re fully approved –all pricing is positioned with a strict
expiry of July 31 st, to be able to complete within ABSA’s renewal debt and Z
scaler end of FY.”
[71] On Zscaler’s version, the entire commercial relationship between ANI and
Zscaler was governed by the Distributor Agreement, and the pricing
arrangements applicable to any particular transaction were necessarily
regulated by or reliant upon that agreement. On ANSA’s version, the price
protection arrangement for the ABSA bid was a specific, transaction -level
undertaking by Zscaler that existed independently of the broader Distribution
Agreement.
[72] I note that the email of 28 April 2023 from Standing confirming the price
protection does not, on its face, make explicit reference to the Distributor
Agreement. However, as I have said, the alleged contractual obligation relied
upon by ANSA appears to concern discounts, pricing, reseller opportunities and
the ABSA transaction. Those are not extraneous matters. They are the very
matters regulated by the Distributor Agreement.
[73] As Claim 1 appears plainly to fall within the ambit of Clause 5.2 which precluded
discounts being afforded to distributors, without a formal amendment signed by
the parties allowing a 10% price protection to allow ANSA to secure the ABSA
tender, it broadly speaking did fall within the ambit of the Distribution
Agreement. The quotation that followed the alleged conversation was a quote
delivered pursuant to the Distribution Agreement.
[74] ANSA’s attempt to characterise the alleged obligation as separate and
independent does not withstand scrutiny. The evidence shows that the ABSA
opportunity was in all likelihoo d discussed pursuant to the commercial
opportunity was in all likelihoo d discussed pursuant to the commercial
relationship created by the Distributor Agreement.
[75] Applying, the Court must not finally decide the merits, but it must insist upon
factual allegations which, if accepted, establish a cause of action.
[76] Despite my misgivings , I am mindful that I am not entrusted to decide the
substantive contractual issues that will ultimately fall to the trial court for
adjudication. All that need be established before me is that a prima facie case
be established. I cannot say at this stage that ANSA's characterisation of the
price protection agreement as a freestanding transaction unrelated to the
Distributor Agreement is so manifestly untenable as to deprive Claim 1 of any
prima facie foundation. There are issues of interpretation of clause 5.2 and the
intention behind the 28 April 2023 arrangement that may arise during the course
of evidence that may or may not require that the arrangement be reduced to
writing and signed by the parties in accordance with the non-variation clause of
the Distribution Agreement.
[77] There are at least triable issues as to whether the oral agreement was separate
and distinct from the Distributor Agreement . 18The Shifren point is a proper
substantive defence which Zscaler may advance at trial, but it does not nullify
the claim at the attachment stage.
b. The scope of the arbitration clause (Claim 1)
[78] Clause 10.4 of the Distributor Agreement provides that “all disputes arising out
of or relating to this agreement ” are to be finally settled by arbitration in San
Francisco, California. The question is whether Claim 1, which ANSA
characterises as arising from a separate oral agreement, falls within the scope
of this clause.
[79] If ANSA's characterisation of the oral agreement as a freestanding arrangement
is accepted, there is at least a credible argument that disputes concerning that
arrangement do not “ arise out of or relate to ” the Distributor Agreement, and
accordingly that clause 10.4 has no application to Claim 1. That argument may
accordingly that clause 10.4 has no application to Claim 1. That argument may
not ultimately prevail - especially if a trial court finds that the price protection
arrangement was inextricably linked to ANI’s role as Zscaler”s distributor under
18 Gross v DM 2025 (2) SA 172 (GJ).
the Distributor Agreement - but at the stage of the attachment application, it was
not patently untenable.
[80] In the circumstances, I find that the question of whether Claim 1 falls within the
scope of clause 10.4 is a triable issue.
Claim 2:
a. The delictual claim and whether it is capable of cession
[81] ANSA’s Claim 2 arises from the allegedly defamatory statements made by
Standing to Naidoo (“Naidoo”) of Dimension Data, which ANSA alleges caused
Dimension Data to cease purchasing from ANI, resulting in a patrimonial loss
to ANI of R19,066,026.70. The claim is framed as one for special damages (loss
of profit) flowing from the defamatory statements.
[82] Zscaler challenges Claim 2 on three grounds: (a) that the claim is bad in law
because the actio iniuriarum cannot be ceded before litis contestatio; (b) that
even if the claim is cast as an Aquilian action, it falls within clause 10.4 of the
Distributor Agreement and must be referred to arbitration; and (c) that ANSA
has failed to make out a prima facie case on the merits, particularly in relation
to causation, given ANSA ’s own averment in its answering affidavit that the
contract between ANI and Dimension Data expired by natural effluxion of time.
[83] The central legal issue in relation to Claim 2 concerns the cession by ANI to
ANSA of the damages claim arising from the alleged defamatory statements.
Zscaler’s position is that a claim based on the actio iniuriarum cannot be ceded
before litis contestatio, and accordingly that Claim 2 could not lawfully have
been ceded to ANSA at all.19
[84] ANSA’s response is that Claim 2 is not a claim under the actio iniuriarum at all.
ANSA explicitly frames Claim 2 as a claim for special (patrimonial) damages
19 Scott, Cession: A Treatise on the Law in South Africa at 169–170 and Pienaar & Marais v Pretoria
Printing Works Ltd and Others 1906 TS 654.
only - specifically, the loss of profit suffered by ANI as a result of Dimension
Data’s cessation of purchases - founded in the actio legis Aquiliae.
[85] ANSA relies on the analysis in Media 24 Ltd and Others v SA Taxi Securitisation
(Pty) Ltd 20 for the proposition that claims for special/patrimonial damages
arising from a defamatory publication must be pleaded and proved as an
Aquilian action, and that Aquilian claims for patrimonial loss are freely ceded.
The Supreme Court of Appeal confirmed that a claim for patrimonial losses
resulting from defamatory publications is properly founded in the actio legis
Aquiliae rather than the actio iniuriarum, and that the elements of proof for the
two actions differ accordingly.
[86] The principle articulated in Media 24 is that where a plaintiff seeks to recover
only patrimonial loss (loss of profit) flowing from defamatory statements, the
correct avenue is the Aquilian action, not the actio iniuriarum. A claim framed
exclusively as an Aquilian claim for patrimonial loss is, in principle, assignable
by cession.
[87] Zscaler's reliance on the iniuriarum rule is therefore misplaced in the present
context. The question is whether Claim 2 is properly characterised as an
iniuriarum claim or an Aquilian claim. ANSA has consistently characterised it as
the latter, and as I understand its particulars of claim (as set out in the founding
affidavit and the intendit), no general damages for injured feelings or harm to
reputation as such are sought. The claim is squarely framed as a loss of profit
claim under the Aquilian action.
[88] In these circumstances, Zscaler’s cession objection does not defeat Claim 2 at
the prima facie stage. The claim is at least arguable as an Aquilian action, and
an Aquilian claim can be validly ceded.
[89] Zscaler’s counsel raised a further issue, namely that in terms of clause 9.2 of
the Distribution Agreement liability for damages is limited. This provides in
capital letters that:
20 2011 (5) SA 329 (SCA)
“Except for gross negligence, fraud, or intentional misconduct, (I) in the event
shall either party have any liability for any indirect, special, incidental, punitive
consequence damages, including but not limited to any lost profits, loss of data,
loss of use, costs of procurement of substitute goods or products, how ever
caused, whether in contract, tort or and any other theory of liability and whether
or not such party has been advised of the possibility of such damage or loss;
and (II) each party’s aggregate liability to the other and any third-party (including
customers) arising out of this agreement or otherwise in connection with any
subscription to the product, shall in no event exceed the payments made by
Distributor to Zscaler during the twelve (12) months prior to the first event or
occurrence giving rise to such liability . Distributer acknowledges and agrees
that the essential purpose of this section is to allocate the risks under these
terms between the parties and limit potential liability given the fees charged for
the products, which would have been substantially higher if Zscaler were to
assume any further liability other than a set for th herein, Zskaler has relied on
these limitations in determining whether to provide the product under this
agreement.”
[90] Whether or not this clause applies to the claim for damages for loss of profit
flowing from defamatory statements conveyed to Dimension Data is not without
proper interpretation clear. It may well, however, appear after the hearing of
evidence and argument at the trial that this clause is of application that may
limit the damages claim for defamation brought by ANSA.
b. The causation issue
[91] Zscaler raises a more specific challenge to the merits of Claim 2 that I regard
as more compelling. Zscaler draws attention to ANSA’s own statement at
paragraph 30.5 of its answering affidavit in the rescission application, where
ANSA alleges that the cont ract between ANI and Dimension Data “ expired by
ANSA alleges that the cont ract between ANI and Dimension Data “ expired by
natural effluxion of time when Dimension Data re -evaluated its vendors and
stopped sending purchase orders to ANI .” Zscaler argues that this admission
defeats the causation element of Claim 2 . Clearly, if Di mension Data ’s
disengagement from ANI was the natural result of a contractual expiry and a
vendor re-evaluation, it cannot be attributed to Standing’s allegedly defamatory
statements.
[92] ANSA responds that the cause of Dimension Data’s disengagement was the
defamatory statements by Standing, not the lapse of any fixed-term agreement.
The “natural effluxion of time” reference is, on ANSA’s version, a description of
the form of the disengagement rather than its cause.
[93] This is, in my view, a genuine factual dispute on the papers that cannot be
resolved at this stage. However, the tension in ANSA’s own pleaded case - and
the possibility that the causation element of Claim 2 may ultimately not be
established - are factors that I take into account when exercising my overall
discretion in reconsidering the attachment application.
d. The failure to properly plead the factual basis for the innuendo pleaded
[94] Zscaler argues that the defamatory meaning alleged by ANSA does not appear
ex facie the statements allegedly made. I agree with this. In truth, ANSA relies
on an innuendo that Dimension Data should not purchase from ANSA because
they are dishonest or disrep utable. It is, however, trite that to establish an
innuendo, it is necessary to plead the background facts and circumstances
which have not been pleaded in the indendit.
[95] Nevertheless the failure of ANSA’s pleading does not necessarily mean that a
prima facie case has not been established and on this ground, I am prepared
to give ANSA the benefit of the doubt.
c. The scope of the arbitration clause (Claim 2)
[96] I turn to Zscaler's contention that Claim 2 also falls within clause 10.4 of the
Distributor Agreement on the basis that the defamatory statements relate to the
relationship between ANI and Dimension Data, which was itself conducted
under the umbrella of ANI’s distributorship of Zscaler products.
[97] ANSA’s response is that Standing's statements to Naidoo constituted conduct
entirely extrinsic to the Distributor Agreement; they were statements made at a
personal meeting and concerned the commercial reputation of ANI rather than
any matter arising from the Distributor Agreement.
[98] Whether Standing’s conduct in allegedly inducing Dimension Data to cease
purchasing from ANI falls within a dispute “ arising out of or relating to ” the
Distributor Agreement is genuinely controversial. The statements were
allegedly made in the context of Zscaler ’s commercial relationships with
distributors of its products, which is the subject matter of the Distributor
Agreement. However, Standing ’s conduct was not itself regulated by any
express term of the Distributor Agreement, and the connection is not therefore
as direct as Zscaler suggests. This too is a triable issue.
Reconsideration and discretion
[99] The Court is not bound to preserve an ex parte attachment merely because a
case was put up at the first hearing. Once the affected party appears and places
the full facts before the Court, the Court must reconsider whether the order
ought to stand.
[100] Blue Rock21 is instructive. There, an ex parte attachment order was set aside
where a material contractual provision had not been brought to the court’s
attention and where the order created oppressive consequences.
[101] The present case is similar in principle. The omitted facts were not peripheral.
They went to the heart of jurisdiction, forum, the existence of a cause of action,
and whether the attachment was competent at all.
[102] The attachment was sought to found or confirm jurisdiction. But the very
agreement governing the commercial relationship directs disputes to arbitration
in San Francisco.
[103] The existence of a foreign arbitration clause does not physically prevent a party
from approaching a South African court; but it is a powerful and usually decisive
21 United Medical Devices LLC and Others v Blue Rock Capital Ltd and Others (KZN Local Division,
Case No 13398/2015)
factor against permitting a party to found jurisdiction by attachment in order to
litigate here in disregard of its bargain.
[104] In Multi-Links Telecommunications Ltd v Africa Prepaid Services Nigeria Ltd,22
the Court emphasised the importance of an adequate connection between the
dispute and the forum, and identified factors such as the governing law,
convenience, background facts and where the parties carry on business.
[105] Here, the governing contractual forum points away from this Court. Zscaler is
based in the United States. The Distributor Agreement points to California
arbitration. The claim is rooted in that agreement or in a relationship governed
by it.
[106] ANSA’s reliance on South African connections is not sufficient. The ABSA
opportunity had South African features, but the relevant legal relationship was
not thereby transformed into one properly triable in this Court contrary to the
parties’ arbitration bargain.
[107] This is not a case where attachment is required to give efficacy to a South
African forum that is naturally and substantially connected to the dispute. It is
rather an attempt to create jurisdiction in South Africa despite the contractual
forum selected by the parties and both parties residence outside of the court’s
jurisdiction.
[108] The attachment of Zscaler’s servers is an intrusive remedy. It should not stand
where the ex parte applicant failed to make full disclosure and where the
underlying claims only just got over the prima facie hurdle facing them.
[109] Drawing together the various threads of analysis set out above, I must exercise
the broad discretion that the law vests in me as the court hearing the
reconsideration application.
[110] On the one hand:
22 Multi-Links Telecommunications Ltd v Africa Prepaid Services Nigeria Ltd 2014 (3) SA 265 (GP)
a. ANSA’s Claim 2 faces a potentially significant causation difficulty arising
from ANSA ’s own pleaded case, namely , the admission that Dimension
Data’s disengagement may have resulted from a natural contractual re -
evaluation rather than from Standing’s statements; and
b. The Shifren clause presents a real obstacle to Claim 1 that was not
adequately disclosed to the ex parte Court.
[111] On the other hand:
a. The Distributor Agreement was physically placed before Twala J, and its
existence was not concealed;
b. ANSA’s characterisation of the claims as falling outside the scope of the
Distributor Agreement is not manifestly untenable; there are genuine triable
issues on both claims.
[112] The standard for ex parte attachment relief is a low one: only a prima facie case
is required.
[113] At the prima facie stage, contradictory evidence from the respondent does not
defeat the application, since the Court cannot at this stage resolve disputed
questions of fact and law.
[114] Setting aside the order will not permanently extinguish ANSA’s rights. ANSA
will remain free to approach a court of competent jurisdiction (or the arbitration
tribunal in California, if the arbitration clause ultimately proves applicable) to
pursue its claims.
[115] I have weighed these considerations carefully. In my judgment, the balance falls
in favour of rescission, primarily on the basis of the material non -disclosure of
the terms and potential significance of clause 10.4 of the Distributor Agreement
as well as the fact that the Dimension Data agreement had been terminated by
the effluxion of time.
[116] It is probable that had Twala J been properly apprised of this position, he would
have given the matter more careful scrutiny and might not have granted the
order on the basis presented to him;
[117] The key deficiency in ANSA’s ex parte presentation was not merely that it
described the Distributor Agreement as irrelevant - the Court could see for itself
that the agreement was there - but that ANSA failed to draw the Court ’s
attention to an arguable and potentially dispositive legal point about the scope
of the arbitration clause, a point that should have been brought squarely before
the Court so that Twala J could make a properly informed decision about
whether to grant the relief sought.
[118] In accordance with the onus articulated in Elscint, ANSA has not persuaded me
that, had all the relevant facts been properly placed before Twala J, he would
nonetheless have granted the attachment order. I am satisfied, to the contrary,
that the proper disclosure of the arbitration clause and its potential scope would
have introduced sufficient uncertainty about the legal foundation of ANSA’s
claims that Twala J would at the very least have required a fuller hearing before
granting the order, if he would have granted it at all.
[119] In reaching this conclusion, I emphasise that I am not deciding that ANSA’s
claims are bad in law, or that they are subject to the arbitration clause, or that
this Court lacks jurisdiction. All of those questions remain open for
determination by the approp riate tribunal. What I am deciding is that the ex
parte order cannot stand, because it was obtained without proper disclosure of
material facts that might have influenced the granting judge. The consequences
of setting the order aside are not fatal to ANSA ’s substantive rights: ANSA
retains whatever rights it has and may pursue them through the appropriate
legal channels.
Costs
[120] Zscaler seeks costs on the attorney -and-client scale, citing the material non -
Costs
[120] Zscaler seeks costs on the attorney -and-client scale, citing the material non -
disclosure and the conduct of ANSA in the proceedings. I have found that there
was a material non -disclosure. Non -disclosure in ex parte applications is a
serious matter, and the courts have consistently expressed their disapproval of
it.23
[121] The duty of full disclosure in ex parte proceedings is fundamental. ANSA failed
to disclose facts of obvious materiality.
[122] In United Medical Devices,24 the Court granted attorney-and-client costs where
the ex parte attachment had been ill -considered and where there had been a
failure of full and frank disclosure.
[123] However, Multi-Links cautions that punitive costs are exceptional and should
not be granted merely because a party erred in law or because an ex parte
order is set aside.
[124] In this matter, the non-disclosure concerned the central written agreement and
its arbitration clause. The omission was substantial. ANSA’s later insistence
that the agreement was irrelevant was unreasonable. This justifies a cost order
against ANSA.
[125] But does this justify a punitive costs order?
[126] The very fact that the respondent attached the Distribution Agreement to its
application is suggestive of its relevance. Its averment that it was not relevant
ought properly to have been substantiated.
[127] A judge in a busy motion court cannot be expected himself to interrogate the
Distribution Agreement and determine whether in fact is irrelevant. It was
ANSA’s duty to draw the clauses that may be deemed relevant to Twala J’s
attention, at the same time indicating why in its view they were not relevant.
ANSA did not attempt to do this at all; instead it relied upon the fact that the
judge hearing the matter would accept its word that the Distribution Agreement
was not relevant.
23 Schlesinger at 354A-E.
24United Medical Devices LLC and Others v Blue Rock Capital Ltd and Others (KZN Local Division,
Case No 13398/2015)
[128] The test in this regard is extremely low; it is only that Twala J, knowing the true
facts, may not have granted the order or may have made further inquiries. I am
of the firm view that had the terms in the Distribution Agreement dealt with in
this judgment, and in particular the arbitration clause, been drawn to Twala J’s
notice, he would have at the very least sought further comprehensive argument.
[129] A further consideration is ANSA’s conduct in the procedural history of the
rescission application itself. ANSA filed its answering affidavit only two days
before the hearing that had been set down on the unopposed roll, despite
having had ample opportunity to do so. On 16 April 2025, Crutchfield J already
made an order for costs on the attorney -and-client scale in respect of the
wasted costs occasioned by that conduct. That order stands separately.
[130] In addition, ANSA failed to deliver its heads of argument timeously and required
a demand letter from DLA Piper before it complied. It declined to participate in
the drafting of a joint practice note, necessitating a unilateral practice note by
Zscaler. These factors inform the overall backdrop against which costs are to
be considered.
[131] Bearing in mind all the circumstances, including the nature and extent of the
non-disclosure, I am persuaded that a punitive costs order is appropriate.
Order
[132] In the result, the following order is made:
1. The order granted ex parte by this Court on 26 August 2024 under case
number 2024/058137 is reconsidered, rescinded and set aside.
2. The attachment authorised under that order is discharged.
3. Any assets, rights or property attached pursuant to the order shall be released
forthwith.
4. The respondent, Accelerate Networks SA (Pty) Ltd, shall pay the costs of this
application on the scale as between attorney and client, including the costs of
counsel.