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[2016] ZACC 51
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Areva NP Incorporated in France v Eskom Holdings Soc Limited and Others (CCT20/16, CCT24/16) [2016] ZACC 51; 2017 (6) BCLR 675 (CC); 2017 (6) SA 621 (CC) (21 December 2016)
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Heads of arguments
CONSTITUTIONAL
COURT OF SOUTH AFRICA
Cases CCT
20/16 and CCT 24/16
In the matter
between:
AREVA NP
INCORPORATED IN
FRANCE
Applicant
and
ESKOM HOLDINGS SOC
LIMITED
First Respondent
WESTINGHOUSE ELECTRIC
BELGIUM
SOCIÉTÉ
ANONYME
Second Respondent
Neutral citation:
Areva NP v Eskom Holdings SOC Limited and
Another
[2016] ZACC 51
Coram:
Mogoeng CJ, Moseneke DCJ, Bosielo AJ,
Froneman J, Jafta J, Khampepe J, Madlanga J,
Mhlantla J,
Nkabinde J and Zondo J
Judgments:
Zondo J (majority): [1] to [48]
Moseneke DCJ (dissenting): [49] to [86]
Heard on:
18 May 2016
Decided on:
21 December 2016
Summary:
Locus standi
—
party that did not submit a bid in its own right
instituting review to challenge award of tender — not the right
party to
challenge — no
locus
standi
ORDER
On appeal from the Supreme
Court of Appeal (hearing an appeal from the High Court of South
Africa, Gauteng Local Division, Johannesburg):
1.
Condonation is granted to all parties who
applied for condonation in respect of their non-compliance with the
Rules of this Court.
2.
Leave to appeal is granted to both Eskom
Holdings SOC Limited and Areva NP.
3.
Westinghouse Electric Belgium Société
Anonyme is refused leave to cross-appeal.
4.
Westinghouse Electric Belgium Société
Anonyme’s two applications for the admission of further
evidence are dismissed
with costs including the costs of two counsel.
5.
Areva NP’s appeal is upheld.
6.
The order of the Supreme Court of Appeal
and that of the High Court are set aside and the order of the High
Court is replaced with
the following:
“
(a)
The application is dismissed.
(b)
Westinghouse Electric Belgium Société Anonyme is
ordered to pay Areva NP’s
costs including the costs of two
counsel.”
7.
Westinghouse Electric Belgium Société
Anonyme must pay Areva NP’s costs in this Court and in the
Supreme Court
of Appeal including the costs of two counsel.
JUDGMENT
ZONDO J (Mogoeng CJ,
Froneman J, Jafta J, Khampepe J, Madlanga J, Mhlantla J and
Nkabinde J concurring):
Introduction
[1]
Before us are four applications. Two
of them are applications for leave to appeal against a certain
decision of the Supreme
Court of Appeal. Another one is an
application for leave to cross-appeal against part of that decision.
The last one
is an application for the admission of new evidence.
The first application for leave to appeal has been brought by Areva
NP Incorporated in France (Areva), a company that is registered in
France. The other has been brought by Eskom Holdings SOC
Limited (Eskom). The decision in respect of which Eskom and
Areva seek leave to appeal is a decision of the Supreme Court
of
Appeal overturning a decision of Carelse J of the High Court of South
Africa, Gauteng Local Division, Johannesburg (High Court)
in favour
of Eskom and Areva and setting aside Eskom’s award of a certain
tender to Areva. The application for leave
to cross-appeal has
been brought by Westinghouse Electric Belgium Société
Anonyme (WEBSA). WEBSA seeks leave
to cross-appeal against a
part of the decision of the Supreme Court of Appeal in terms of which
the Supreme Court of Appeal did
not award the tender to WEBSA and,
instead, remitted the tender to Eskom to adjudicate it afresh. The
application for the admission
of new evidence has been brought by
WEBSA.
[2]
The decision of the High Court was given in
a review application brought by WEBSA against Eskom and Areva to have
Eskom’s
decision to award the tender of the replacement and
installation of six steam generators in the Koeberg Nuclear Power
Station (Koeberg),
Western Cape to Areva reviewed, set aside and
awarded to it. Carelse J dismissed WEBSA’s application
with costs.
WEBSA then appealed to the Supreme Court of Appeal.
[3]
WEBSA had also sought that the Supreme
Court of Appeal should award the tender to it after setting it aside
and not remit the matter
to Eskom to adjudicate the tender afresh.
WEBSA’s application for leave to cross-appeal is directed at
the setting
aside of the Supreme Court of Appeal’s decision to
remit the tender to Eskom to award afresh. WEBSA seeks an order
from this Court awarding the tender to itself. If they are
granted leave to appeal, Areva and Eskom seek to have the decision
of
the Supreme Court of Appeal set aside and the High Court’s
order restored. Before considering the application for
leave to
appeal, it is necessary to first set out the background to the
matter.
Brief background
[4]
Koeberg is the only nuclear power station
in Africa. It comprises two units. Each unit has three
steam generators.
Since 2010 Eskom has been aware of the need
to replace the steam generators. They are said to be prone to
“Inter Granular
Stress Corrosion Cracking”. By the
end of 2016 one of the units will have been in operation for about 32
years.
Eskom considered that by 2018 all the six steam
generators would need to be replaced as a nuclear safety priority.
The replacement
of the generators would cost about R5 billion.
The generators can only be replaced during a scheduled shut down in
the course
of routine maintenance that takes place every 18 months.
Eskom intended that the installation and replacement of the steam
generators should occur during such a shut down in 2018. For
this project, Eskom had to call for tenders.
[5]
In or around June 2012 Eskom called for
expressions of interest for the replacement of the six steam
generators for Koeberg.
This was directed to suppliers on its
supplier database which would be capable of supplying these services
to various consulates,
including Brazil, China, India, Korea, Japan
and Russia. In the relevant Eskom tender document, an
“expression of interest”
is defined as a non-competitive
enquiry issued/advertised to the external market to establish market
interest in offering the required
goods, assets or services to
Eskom. There was a checklist of mandatory criteria to be
completed by each supplier who expressed
an interest. Those
criteria were to be used to assess each supplier as to whether it
qualified to be issued with an invitation
to tender. If a
supplier answered “No” against any criterion in the
checklist, it could be disqualified.
[6]
Several interested parties responded to the
call for expression of interest. They included Areva and
WEBSA. Suppliers
who met the requisite mandatory criteria were
to be invited to submit bids for the project. Areva and WEBSA
were the only
companies that met the mandatory criteria.
[7]
Eskom then issued the two companies with an
Invitation to Tender. Both submitted tenders. There is no
indication on
the record whether WEBSA was responding in its own
right or on behalf of another entity. Their bids were
considered by various
committees within Eskom. At this stage it
was contemplated that the tender could be split between two or more
companies.
If the tender was split, Lots 1 and 3 could be given
to one company and Lot 2 could be given to the other company or vice
versa.
However, a decision was taken by the Board Tender
Committee (BTC) to request the two bidders to submit bids for a
composite project
covering all the three Lots. They did.
[8]
In June 2014 the BTC decided to invite the
two bidders to parallel negotiations in regard to the tender.
The negotiations
took place between 24 June 2014 and 4 July
2014. On that last day the bidders were asked to make their
final offers
to Eskom by 11 July 2014.
[9]
On 11 July 2014 WEBSA submitted a bid under
cover of a letter dated 11 July 2014. The letter was
written by Mr Luc
Van Hulle and co-signed by Mr Frederic
Poncelet and Mr Frederik Wolvaardt. Mr Van Hulle is the same
official who deposed
to WEBSA’s affidavits. That letter
bore the letterhead of WEBSA. It was addressed to Eskom.
The subject
of the letter was given as “Westinghouse Offer In
response to Eskom Request for Offer Post Negotiations for The
Replacement
of the Steam Generators at the Koeberg Nuclear Power
Station for Units 1 and 2 (Tender no: PSE020; 021 and 022)”.
[10]
The opening paragraph of the letter reveals
that WEBSA was submitting the “Westinghouse Offer” on
behalf of Westinghouse
Electric Company. The paragraph reads:
“
In
response to Eskom Request for Offer Post Negotiations for the
Replacement of the Steam Generators at the Koeberg Nuclear Power
Station for Units 1 and 2 (Tender no. PSE020; 021 and 022),
Westinghouse Electric Belgium on behalf
of Westinghouse Electric Company
is
pleased to submit the present offer to
Eskom
.”
The reference to
Westinghouse Electric Belgium is a reference to WEBSA. The
reference to Westinghouse Electric Company is
a reference to
Westinghouse Electric Company LLC which is Westinghouse USA.
Thereafter, the authors of the letter set out
how the offer was
structured. It is not necessary to reproduce that part of the
letter.
[11]
Under the heading “Quality
Assurance”, the authors of the letter wrote:
“
Westinghouse
provides services in accordance with the Westinghouse Electric
Company Quality Management System (QMS, Rev. 7).
This system
meets the requirements of the United States Nuclear Regulatory
Commission related to quality control and quality assurance
including
the requirements set forth in 10CFR50 Appendix B, NQA-1 and also the
standards set forth In ISO 9001.”
Under the heading
“Proprietary Information”, the authors wrote:
“
This
offer, any financial or other supporting information submitted in
connection therewith, and any subsequent communications relating
to
this offer are property of and contain information which is
proprietary and confidential to, Westinghouse Electric Company LLC,
and may be used only for purposes of offer evaluation.
Accordingly, do not publish, reproduce, transmit, or disclose to
others outside your organization any information contained in or
submitted in support of this offer without the prior written consent
of Westinghouse.”
[12]
Areva also submitted its final offer on 11
July 2014. On 12 August 2014 the BTC decided to award the
tender to Areva.
Review Proceedings
[13]
WEBSA was aggrieved by the award of the
tender to Areva and instituted a review application in the High Court
to have that decision
set aside and the tender awarded to it.
Eskom and Areva opposed the review application. Mr Van Hulle
deposed to WEBSA’s
founding affidavit in the review
application. In the founding affidavit Mr Van Hulle describes
himself as Vice President:
Marketing employed by WEBSA. For
convenience he refers to that entity as Westinghouse or applicant.
Mr Van Hulle
says in WEBSA’s founding affidavit in the
High Court:
“
I
am duly authorised to depose to this affidavit on behalf of the
applicant, and to represent it in the proceedings for the relief
sought in the Notice of Motion to which this affidavit is attached.
In this regard I attach a resolution marked ‘LVH1’.
This
application concerns a tender process in which first respondent
(‘Eskom’) invited bids for the provision of new
steam
generators to be installed in the nuclear reactors at the Koeberg
nuclear power plant (‘Koeberg’), situated near
Cape
Town.”
[14]
Mr Van Hulle explains in the founding
affidavit that he was “integrally involved in the formulation
and submission of [WEBSA’s]
bid in response to” the
invitation for bids extended by Eskom in 2010. He says that
that process was eventually cancelled
by Eskom and then the tender in
issue in these proceedings was initiated in 2012. Mr Van Hulle
states that he was “again
integrally involved in the
formulation and submission of [WEBSA’s] bid in 2012”.
He says: “. . . I led
the [WEBSA] team during the tender
process, including the negotiations that took place in June-July
2014”.
[15]
Mr Van Hulle described the applicant as
being Westinghouse Electric Belgium Société Anonyme
which he said “is
a company registered in accordance with the
laws of the Kingdom of Belgium, with its principal place of
business at Rue de L’ Industrie
43, Nivelles,
Belgium”. He says: “It is a subsidiary of
Westinghouse Electric UK Holdings Limited, a multi-national
corporation. Westinghouse, in South Africa, has its local head
office at Eden on Bay, Big Bay, Cape Town”. Mr
Van Hulle
describes WEBSA as the entity that lost the tender to Areva.
Eskom seems to have accepted this without any question.
[16]
In its answering affidavit in the High
Court, Areva said:
“
I
emphasise that in the [WEBSA] response, ‘LVH26’, under
the heading ‘PROPRIETARY INFORMATION’, Van Hulle,
Wolvaardt and one Poncelet state:
‘
Our
offer, these clarifications and any subsequent communications
relating to this offer are the property of and contain information
which is proprietary and confidential to, Westinghouse Electric
Company LLC…’. viz, Westinghouse USA. From this,
it must be deduced, I contend, that the true tenderer was not
[WEBSA], but rather Westinghouse USA. This would mean that
the
applicant has no locus standi in these proceedings.”
[17]
WEBSA denies Areva’s averment that
WEBSA was not the true tenderer and that the true tenderer was
Westinghouse Electric Company
LLC. Mr Van Hulle says that WEBSA
was the tenderer. He goes on to say that WEBSA and Westinghouse
USA are members of
“the Westinghouse group”. He
adds that WEBSA received the support of other entities in the
Westinghouse group.
This is WEBSA’s defence to Areva’s
challenge of its
locus standi
.
[18]
Later on in its answering affidavit, Areva
said:
“
In
the first instance it needs to be pointed out that, as stated in
paragraph 1.0 of Annexure ‘LVH 36’: ‘The current
proposal is a joint effort of Westinghouse Electric Company and
Bechtel Power Corporation’. That means the true tenderer
is
Westinghouse USA, and not [WEBSA], as adverted to above. As
also mentioned above, the memorandum of understanding produced
by
[WEBSA] in the interdict application pursuant to a rule 35(12)
notice, shows that Westinghouse USA intended to engage Bechtel
as a
sub-contractor on the project.”
Mr Van Hulle’s
reply on behalf of WEBSA to this paragraph was to refer to the
defence to which reference has been made above.
[19]
Annexure “YMP7” to Areva’s
answering affidavit is a letter of intent addressed to Doosan Heavy
Industries &
Construction Co Ltd on the letterhead of WEBSA.
The author of the letter is Mr Brian G Roberts who describes himself
as:
“
Senior
Sourcing Specialist Primary Equipment – Steam Generators
Westinghouse
Electric Company LCC.”
At this stage it must
be remembered, once again, that the reference to “Westinghouse
Electric Company LCC” is a reference
to Westinghouse USA and
not WEBSA. The letter is dated 1 August 2014. That was
about 11 days before the BTC was to
take a decision as to whom it
would award the tender.
[20]
In the first paragraph of the letter the
author wrote:
“
This
letter of intent is to confirm the commitment of Westinghouse
Electric Company LLC (‘Westinghouse’) to purchase
Replacement Steam Generators (‘RSGs’) for Koeberg Nuclear
Power station Units 1 & 2 in accordance with reference
(a) and to
be finalized contract Terms and Conditions. The Purchase
Agreement will be issued pending contract award from
the customer,
Eskom, and finalization of contract Terms and Conditions.”
Special attention
needs to be drawn to the fact that, although this letter was on
WEBSA’s letterhead, it makes it clear that
it confirms the
commitment of Westinghouse Electric Company LLC to purchase
Replacement Steam Generators (RSGs) for Koeberg.
The terms of
the letter do not reflect confirmation of WEBSA’s commitment to
purchase Replacement Steam Generators for Koeberg.
Instead,
they reflect Westinghouse USA’s commitment to do so.
[21]
In regard to the second paragraph of that
letter, it is necessary to bear in mind that the reference therein to
Westinghouse is
a reference to Westinghouse Electric Company LLC as
defined in the first paragraph and not to WEBSA. In the second
paragraph
the author writes:
“
This
letter of Intent is issued as an interim measure to document
Westinghouse’s intention to award a Purchase Agreement for
RSGs
to Doosen Heavy Industries & Construction Co, Ltd (‘Doosen’).
Pending Westinghouse contract award from
Eskom, Westinghouse and
Doosen shall negotiate in good faith to finalise the Purchase
Agreement.”
The last sentence of
the fourth paragraph makes it clear that Westinghouse Electric
Company LLC and not WEBSA was the one expecting
to be awarded the
tender. It reads:
“
Westinghouse
[i.e. Westinghouse Electric Company LLC] and Doosen agree that if
Westinghouse is not awarded the tender by August
31, 2014, the
subject Letter of Intent shall be void.”
[22]
Counsel for Areva drew our attention to the
letters referred to above in support of his contention that WEBSA has
no
locus standi
in these proceedings. He emphasised that what was submitted to
Eskom as Westinghouse’s final offer on 11 July 2014
was Westinghouse USA’s final offer submitted by WEBSA on behalf
of Westinghouse USA. He referred to the fact that the
terms of
the letter said so expressly. He submitted that the Supreme
Court of Appeal did not provide any convincing reasons
for its
decision that WEBSA has
locus standi
in these proceedings.
High Court Decision
[23]
The High Court dismissed Areva’s
challenge to WEBSA’s
locus
standi
.
[1]
In arriving at its decision, the High Court made no reference to the
fact that in the final offer given to Eskom by WEBSA
it was written
that that final offer was made on behalf of Westinghouse USA and that
that offer and the clarifications that had
preceded it belonged to
Westinghouse USA. The High Court recorded that Areva’s
counsel had referred it to certain passages
in the record that
suggested that Westinghouse might not have
locus
standi.
However, quite strangely,
the High Court said that it did not intend to deal with those
passages as they did not affect the conclusion
to which it had come.
One would have thought that the fact that those passages seemed to
support Areva’s contention
on
locus
standi
would have been a reason for the
Court to deal with those passages rather than a reason for the Court
not to deal with them.
Assuming that, for example, the High
Court was referred to the passages in the final offer which are
quoted earlier in this judgment,
the High Court was bound to deal
with those passages before it could reach a conclusion that was
adverse to Areva.
[24]
The High Court largely based its decision
that WEBSA had
locus standi
on the fact that Eskom treated WEBSA as if it was one of the two
bidders. It seems not to have occurred to the High Court
that
Eskom may have wrongly but
bona fide
treated WEBSA as one of the bidders or that Eskom might have dealt
with WEBSA in the manner in which it did because it took WEBSA
to be
the agent of Westinghouse USA. In any event, how Eskom treated
WEBSA is neither here nor there. The question
is whether or not
WEBSA was a bidder in its own right to the tender. If it was,
it had
locus standi
.
If it was not, it did not have
locus
standi
to institute the proceedings in
its own right and not as an agent of the true tenderer.
Supreme Court of Appeal
Decision
[25]
The judgment of the Supreme Court of Appeal
was written by Lewis JA and concurred in by Ponnan, Theron, Petse and
Mathopo JJA.
[2]
On the issue of whether WEBSA had
locus
standi
, the Supreme Court of Appeal
recorded the parties’ contentions. At the end thereof, it
referred to a passage in Cameron
JA’s judgment in
Sandton
Civic Precinct (Pty) Ltd
[3]
and simply said:
“
I
consider that Westinghouse has established its legal lineage.”
For this conclusion
it did not offer any reasons. Thereafter, the Court said:
“
Moreover,
Areva did not deny that Westinghouse had submitted its first bid in
October 2012 and a revised offer in 2014. The
references to
acting on behalf of Westinghouse USA are mere surplusage and must be
disregarded. Areva’s argument on
Westinghouse’s
standing must thus fail as it did in the
court
a quo
.”
I do not think that
the Supreme Court of Appeal did justice to Areva’s challenge to
Westinghouse’s
locus standi
.
The relevant passages in the final offer submitted to Eskom on behalf
of Westinghouse USA were not mere surplusage that
had to be
disregarded. They were very important parts of the record on
which Areva relied to support its contention that
WEBSA was not a
tenderer in its own name and thus had no
locus
standi
to institute the review
proceedings.
In
this Court
Jurisdiction
[26]
This case is about whether Eskom acted
lawfully in awarding the tender for the replacement of the six steam
generators in Koeberg
to Areva. That matter raises
constitutional issues and this Court has jurisdiction. Furthermore,
whether a litigant
has
locus standi
is also a constitutional issue.
[4]
Leave to appeal
[27]
The tender in issue relates to an important
national project. That is the replacement of the six steam
generators in Koeberg.
Koeberg is the only nuclear power
station in the continent. The monetary value of the tender is
estimated at about R5 billion.
The issue of whether Eskom acted
lawfully in awarding the tender to Areva is an important
constitutional issue.
[28]
There are reasonable prospects of success
for the appeal. This can be inferred from the fact that the
High Court and the Supreme
Court of Appeal reached opposite
conclusions on whether Eskom had acted lawfully in awarding the
tender to Areva. The High
Court answered this question in the
affirmative whereas the Supreme Court of Appeal answered it in the
negative. On the issue
of
locus
standi
, too, I think that there are
reasonable prospects of success for Areva. Both the High Court
and the Supreme Court of
Appeal did not adequately address Areva’s
contention. It is in the interests of justice that leave to
appeal be granted.
The appeal
Does WEBSA have locus
standi?
[29]
Before us counsel for Areva pursued Areva’s
challenge to WEBSA’s
locus
standi
. In support of Areva’s
challenge he referred to the passages in the affidavits and
correspondence to which reference
has been made above. He
submitted that both the High Court and the Supreme Court of Appeal
had given unpersuasive reasons
for holding that WEBSA had
locus
standi
. He referred to
Sandton
Civic Precinct (Pty) Ltd
and
Giant
Concerts
.
[30]
There is some similarity between
Sandton
Civic Precinct (Pty) Ltd
and the
present case. Sandton Civic Precinct (Pty) Ltd’s name is
almost identical to that of the entity that had
locus
standi
to institute the proceedings in
that case, namely, Sandton Civic Precinct Consortium. In the
present case WEBSA’s name,
namely, Westinghouse Electric
Belgiuim Société Anonyme, is almost identical to that
of Westinghouse Electric Company
LLC which Areva contends is the
entity that was a tenderer competing with Areva.
Sandton
Civic Precinct (Pty) Ltd
falsely
claimed that a resolution of the predecessor to the City of
Johannesburg that had been passed in November 2000 had
sought to
alienate a certain property to it.
[5]
The City of Johannesburg accepted that in law its predecessor’s
decisions or resolutions were its own decisions and
resolutions.
The resolution of November 2000 had been made in favour of Sandton
Civic Precinct Consortium.
[31]
After a period of five years had lapsed
without the implementation of the resolution, the City passed a
resolution effectively withdrawing
the resolution of November 2000.
At that stage Sandton Civic Precinct (Pty) Ltd – and not
Sandton Civic Precinct Consortium
or its constituents –
instituted an application in the High Court to set aside the later
resolution and enforce the November
2000 resolution. In the
present case WEBSA averred that it was a bidder and lost the tender
to Areva. However, it has
been shown that Westinghouse Electric
Company LLC was one of the two bidders and the bid had been submitted
by WEBSA on behalf
of Westinghouse Electric Company LLC and WEBSA had
not submitted the final offer in its own right. That being the
case, it
seems to me that WEBSA’s statement that it had
submitted a bid in respect of the tender and had lost to Areva must
be rejected
in the same terms in which Cameron JA rejected
Sandton
Civic Precinct (Pty) Ltd
’s claim
that the November 2000 resolution had sought to alienate
property to itself. In that case, Cameron JA
rejected that
averment as “plainly wrong”.
[6]
In my view, WEBSA should be told the same answer. That is that
its statement that it made the bid in its own right
is “plainly
wrong”.
[32]
This Court held in
Giant
Concerts
that, “where a litigant
acts solely in his or her own interest, there is no broad or
unqualified capacity to litigate against
illegalities”.
[7]
We said: “The own interest litigant must therefore demonstrate
that his or her interests or potential interests are
directly
affected by the unlawfulness sought to be impugned”.
[8]
[33]
Has WEBSA demonstrated the interests that
confer standing on it to bring the challenge and the impact the
decision to award the
tender to Areva had or has on those interests?
I think not. In the present case the only thing that WEBSA said
in its
founding affidavit in the High Court in support of its
contention that it has
locus standi
was that it was one of the two bidders and it lost the bid to Areva.
This has been shown not to be true. It also said
that it and
Westinghouse USA are part of the same group of companies. I
deal with this later.
[34]
It is abundantly clear from the language of
the final offer upon which WEBSA relies as the offer that it made to
Eskom in its own
right that that offer was submitted by WEBSA on
behalf of Westinghouse USA and not in its own right. In the
final offer submitted
by WEBSA, Mr Van Hulle, who has now deposed to
an affidavit in support of the contention that WEBSA submitted the
final offer in
its own name, wrote:
“
.
. .Westinghouse Electric Belgium on behalf of Westinghouse Electric
Company LLC is pleased to submit the present offer to Eskom.”
This is the offer
that was rejected by Eskom in favour of Areva’s one. If
this does not show that WEBSA submitted the
final offer as an agent
for Westinghouse USA and not in its own right, then nothing will.
There is, of course, also the passage
quoted earlier
[9]
which made it clear that the offer and the other communications were
those of Westinghouse USA.
[35]
As I indicated earlier, in WEBSA’s
founding affidavit in the High Court, Mr Van Hulle described
WEBSA as a company that
is registered in accordance with the laws of
the Kingdom of Belgium. He also said that WEBSA is a subsidiary
of Westinghouse
Electric UK Holdings Limited, a national
corporation. In the light of this statement in the founding
affidavit, one would
have expected that in the replying affidavit Mr
Van Hulle would at least explain how it comes about that he signed an
affidavit
in which he said that WEBSA tendered for the tender in
question and lost and yet he was also party to a statement that the
offer,
clarifications and all communications belonged to Westinghouse
Electric Company LLC which is a different legal entity to WEBSA.
Mr Van Hulle failed to reconcile these contradictory statements by
himself.
[36]
While Areva referred to the documentation
before the Court to support its assertion that the applicant was not
one of the tenderers,
WEBSA simply baldly asserted in its replying
affidavit that it was a tenderer but did not refer to any documents
before the Court
to support its assertion. In my view, the
reason why WEBSA did not refer to any supporting documentation is
that there is
no documentation supporting the proposition that it
submitted the bid in its own right and not as an agent of
Westinghouse USA.
Mr Van Hulle says in his affidavit that WEBSA
tendered in its own right and yet he wrote and signed the letter of
the final offer
in which he said that WEBSA was submitting the final
offer on behalf of Westinghouse USA. He was obliged to explain
these
contradictory statements he made but he failed to do so.
I, therefore, find that WEBSA did not submit the bid in its own
right. This also means that WEBSA did not lose the tender to
Areva. For that reason, it cannot be said that the decision
to
award the tender to Areva “adversely affects the rights”
of WEBSA.
[37]
WEBSA’s other defence is that it and
Westinghouse USA are part of “the Westinghouse group”.
It adds that
it received the support of other entities in the
Westinghouse group. The answer to this is that, if WEBSA was
not one of
the two bidders for the tender in its own right and it
instituted the review application in its own right and not as an
agent of
Westinghouse USA, the fact that it and Westinghouse USA are
part of the same group of companies cannot help it. This is
because
WEBSA and Westinghouse USA are two separate legal entities
and each one of them bears its own separate rights and incurs its own
separate obligations.
[38]
When each one of the two separate legal
entities acts in its own right, no obligations or rights attach to
the other simply by virtue
of the fact that they both belong to the
same group of companies. This purported defence is no defence
at all in law.
Just because company A belongs to the same group
of companies as company B does not give any one of the two companies
locus standi
to institute court proceedings in its own right in a matter that only
directly affects the other company. So, if company
A submitted
a bid for a certain tender and lost that tender to company C, company
B cannot then institute review proceedings in
its own right to set
aside the award and to seek an order that the tender be awarded to it
just because it and company A belong
to the same group of companies.
[39]
The proposition implied in WEBSA’s
second defence is as bad as would be the proposition that, if one
brother submitted a bid
for a tender in his own right and lost it to
a competitor, any of his brothers or sisters may institute legal
proceedings in his
or her own right to have the award of the tender
reviewed and set aside just because the two siblings belong to the
same family.
The issue here is about separate legal entities.
In my view, Eskom’s decision to award the tender to Areva did
not
affect any of WEBSA’s rights or interests because WEBSA did
not bid for the tender in its own right.
[40]
It was said in
Giant
Concerts
that the issue of
locus
standi
is separate from the merits and
will usually be dispositive of an own interest litigant’s
claim. This Court went on
to say that—
“
an
own-interest litigant may be denied standing even though the result
could be that an unlawful decision stands. This is
not
illogical. As the Supreme Court of Appeal pointed out, standing
determines solely whether
this
particular litigant is entitled to mount the challenge: a successful
challenge to a public decision can be brought only if ‘the
right remedy is sought by the right person in the right
proceedings’.”
[10]
However, this Court
immediately qualified the general principle that an own-interest
litigant’s challenge of a public decision
may be dismissed
solely on the basis that the litigant lacks
locus
standi
. It said:
“
To
this observation one must add that the interests of justice under the
Constitution may require courts to be hesitant to dispose
of cases on
standing alone where broader concerns of accountability and
responsiveness may require investigation and determination
of the
merits. By corollary, there may be cases where the interests of
justice or the public interest might compel a court
to scrutinise
action even if the applicant’s standing is questionable. When
the public interest cries out for relief, an
applicant should not
fail merely for acting in his or her own interest.”
[11]
[41]
It seems to me that, part of what this
Court held in
Giant Concerts
was that, where a litigant has failed to show that it has standing,
the Court should, as a general rule, dispose of the matter
without
entering the merits and that it should only enter the merits in
exceptional cases or where the public interest really cries
out for
that. It does not appear to me that this is a case which cries
out for that. In saying this, I am not suggesting
that on the
merits the challenge is necessarily without merit but I do so
because: (a) the two bidders appear to have been neck
and neck in the
competition for the tender; (b) both bidders were accepted as
technically capable of doing the job properly; and
(c) time is of the
essence in regard to the installation and replacement of the steam
generators and, if the steam generators are
not installed and
replaced on time, there may be severe consequences for the country in
regard to nuclear energy. Furthermore,
Areva has been working
on the project for the past two years and there is not much left
before the time by when the installation
and replacement of the
generators is required to have been completed.
[42]
In the circumstances I conclude that WEBSA
had no
locus standi
to institute the review proceedings in its own right to have the
award of the tender to Areva set aside. It would have been
entitled to do so as an agent of Westinghouse USA but it did not do
so. Indeed, it insisted that it instituted those proceedings
in
its own name because it had submitted the tender in its own right
which I have found not to have been the case. The result,
therefore, is that Areva’s appeal succeeds and the decisions of
both the Supreme Court of Appeal and the High Court must
be set
aside. The High Court dismissed WEBSA’s application on
the merits and awarded both Areva and Eskom costs.
We say that
it should have dismissed it for WEBSA’s lack of
locus
standi
and awarded costs only to Areva
and not to Eskom. Therefore, the High Court’s order must
be replaced with an order
dismissing WEBSA’s application and
awarding costs only to Areva.
[43]
Areva’s application for leave to
appeal included an application for leave to appeal against a decision
of the Supreme Court
of Appeal dismissing its cross-appeal against
the High Court’s refusal to award it the costs of three counsel
and to limit
it to the costs of two counsel. Areva submitted
that this is a complex matter of great importance involving a tender
with
a monetary value of R5 billion. It submitted that,
therefore, the employment of three counsel was justified.
Access
to justice is very important. Courts must constantly
guard against making decisions that contribute to making access to
justice
more difficult than it already is. In my view, although
the monetary value of the tender involved is about R5 billion,
this matter is not one that justifies the employment of three
counsel. One only has to read the judgments of the High Court
and the Supreme Court of Appeal to reach this conclusion.
[44]
In the light of the issues in the matter,
what may be complex are not matters that a lawyer dealing with this
matter would have
to go into. I am here referring to technical
matters relating to nuclear energy. In my view, the legal and
factual
issues which counsel had to understand in order to argue this
case are not so complex as to justify the employment of three
counsel.
In this Court we are disposing of the matter on the
basis of the challenge to WEBSA’s
locus
standi
by Areva. The
locus
standi
point, too, was not complex at
all. Having regard to all of the circumstances of the matter, I
am not satisfied that the
employment of three counsel was justified.
Costs for two counsel would have been enough. For these
reasons, Areva’s
appeal in regard to the issue of costs falls
to be dismissed.
[45]
Just so that there can be no misconception
about what the effects or implications are of our conclusion that
WEBSA has no
locus standi
and that, consequently, Areva’s appeal must be upheld, I wish
to make it clear that this judgment holds that WEBSA was a
wrong
litigant to challenge Eskom’s decision in its own right.
This judgment says nothing about whether Eskom’s
decision to
award the tender to Areva was lawful or reasonable or justifiable.
[46]
After the hearing in this Court, WEBSA
brought an application to lead further evidence in support of its
cross-appeal. The
result of the conclusion that WEBSA has no
locus standi
is that that application falls to be dismissed with costs including
the costs of two counsel.
[47]
Only Areva is entitled to costs.
Eskom is not entitled to any costs because it did not challenge
WEBSA’s
locus standi
which is the basis on which the appeal is upheld. Eskom’s
stance was that it abided by the Court’s decision on
whether
WEBSA had
locus standi
.
It only sought to have the Supreme Court of Appeal’s decision
reversed on the merits. Lastly, all the parties
failed to
comply with one or other rule of this Court and they all sought
condonation for their failure to so comply. No
party opposed
any other party’s application for condonation. We are
satisfied that all the applications for condonation
should be
granted.
Order
[48]
In the result the following order is made:
1.
Condonation is granted to all parties who
applied for condonation in respect of their non-compliance with the
Rules of this Court.
2.
Leave to appeal is granted to both Eskom
Holdings SOC Limited and Areva NP.
3.
Westinghouse Electric Belgium Société
Anonyme is refused leave to cross-appeal.
4.
Westinghouse Electric Belgium Société
Anonyme’s two applications for the admission of further
evidence are dismissed
with costs including the costs of two counsel.
5.
Areva NP’s appeal is upheld.
6.
The order of the Supreme Court of Appeal
and that of the High Court are set aside and the order of the High
Court is replaced with
the following:
“
(a)
The application is dismissed.
(b)
Westinghouse Electric Belgium Société Anonyme is
ordered to pay Areva NP’s
costs including the costs of two
counsel.”
7.
Westinghouse Electric Belgium Société
Anonyme must pay Areva NP’s costs in this Court and in the
Supreme Court
of Appeal including the costs of two counsel.
MOSENEKE DCJ (Bosielo AJ
concurring):
Introduction
[49]
The judgment of my esteemed colleague Zondo
J (main judgment), makes for a crisp and compelling read. It
disposes of the dispute
between the parties on the only ground that
Westinghouse Electric Belgium Société Anonyme
(Westinghouse), the second
respondent, did not have the requisite
standing to initiate the review proceedings in the High Court of
South Africa, Gauteng Local
Division, Johannesburg (High Court).
By this fiat, the main judgment steers clear of deciding the merits
of the dispute.
I disagree.
[50]
Westinghouse had the requisite standing in
the judicial review it sought. It had a direct and substantial
interest under the
common law
[12]
and an own standing conferred by section 38 of the Constitution
brought about by the section 33 right to just administrative action
by Eskom, a public body.
[13]
In any event, it is not in the interests of justice for a court of
final instance to dispose of a matter, of this constitutional
magnitude, commercial import and of high public interest, by way of
only a technical and dilatory bar as
locus
standi
.
Standing
[51]
The High Court dismissed out of hand
Areva’s contention that Westinghouse had no right to institute
review proceedings to
set aside the adverse tender decision made by
Eskom.
[14]
In the Supreme Court of Appeal, again Areva argued that Westinghouse
did not have the necessary standing.
[15]
Areva submitted that various letters sent by Westinghouse to Eskom
revealed that it was acting not for itself but for its
associate –
Westinghouse USA. Westinghouse answered that it was always the
bidder and that all concerned, including
Areva, so accepted.
The Supreme Court of Appeal found that the arguments by Areva were
“surplusage and must be disregarded”.
[16]
It dismissed the claim of standing together with Areva’s
cross-appeal.
[52]
The main judgment holds that the Supreme
Court of Appeal was wrong, but I think not.
[53]
It is prudent to recall the own standing
standard we have laid down as a unanimous Court in
Giant
Concerts
. Do pardon the long
quotations – they are necessary to disclose the scope of the
standard:
“
The
separation of the merits from the question of standing has two
implications for the own-interest litigant. First, it signals
that the nature of the interest that confers standing on the
own-interest litigant is insulated from the merits of the challenge
he or she seeks to bring. An own-interest litigant does not
acquire standing from the invalidity of the challenged decision
or
law, but from the effect it will have on his or her interests or
potential interests. He or she has standing to bring
the
challenge even if the decision or law is in fact valid. But the
interests that confer standing to bring the challenge,
and the impact
the decision or law has on them, must be demonstrated.
Second,
it means that an own-interest litigant may be denied standing even
though the result could be that an unlawful decision
stands.
This is not illogical. As the Supreme Court of Appeal pointed
out, standing determines solely whether this
particular litigant is
entitled to mount the challenge: a successful challenge to a public
decision can be brought only if ‘the
right remedy is sought by
the right person in the right proceedings’.
To this
observation one must add that the interests of justice under the
Constitution may require courts to be hesitant to dispose
of cases on
standing alone where broader concerns of accountability and
responsiveness may require investigation and determination
of the
merits. By corollary, there may be cases where the interests of
justice or the public interest might compel a court
to scrutinise
action even if the applicant’s standing is questionable.
When the public interest cries out for relief,
an applicant should
not fail merely for acting in his or her own interest.
Hence, where a
litigant acts solely in his or her own interest, there is no broad or
unqualified capacity to litigate against illegalities.
Something more must be shown.”
[17]
[54]
After meticulously collecting the cases,
Cameron J for a unanimous Court summarised:
“
These
cases make it plain that constitutional own-interest standing is
broader than the traditional common law standing, but that
a litigant
must nevertheless show that his or her rights or interests are
directly affected by the challenged law or conduct.
The
authorities show:
(a)
To establish own-interest standing under the Constitution a litigant
need not show
the same “sufficient, personal and direct
interest” that the common law requires, but must still show
that a contested
law or decision directly affects his or her rights
or interests, or potential rights or interests.
(b)
This requirement must be generously and broadly interpreted to accord
with constitutional
goals.
(c)
The interest must, however, be real and not hypothetical or academic.
(d)
Even under the requirements for common law standing, the interest
need not be capable
of monetary valuation, but in a challenge to
legislation purely financial self-interest may not be enough –
the interests of justice
must also favour affording
standing
.
(e)
Standing is not a technical or strictly-defined concept. And
there is no magical
formula for conferring it. It is a tool a
court employs to determine whether a litigant is entitled to claim
its time, and
to put the opposing litigant to trouble.
(f)
Each case depends on its own facts. There can be no general
rule covering all
cases. In each case, an applicant must show
that he or she has the necessary interest in an infringement or a
threatened
infringement. And here a measure of pragmatism is
needed.”
[18]
[55]
Later the judgment reverted to the broad
ambit of constitutional standing:
“
Thus,
while I endorse the overall conclusion of the Supreme Court of
Appeal, it is important to emphasise that the broad ambit of
constitutional standing must be preserved even for own-interest
challenges.”
[19]
[56]
Finally, the judgment warned:
“
While
constitutional own-interest standing is broad, it is not limitless.
Ferreira
draws the line at hypothetical and academic interests.”
[20]
[57]
Now that the standard for joinder is clear,
the High Court and the Supreme Court of Appeal were rightly not
impressed by the
standing point. They preferred the substantive
justice approach which eschews a “technical or
strictly defined”
notion of standing in favour of the
enquiry whether it would be in the interests of justice to decide the
merits of a dispute even
if the claimant’s standing may be
questionable.
[58]
The two Courts were correct because
Westinghouse and Westinghouse USA acted in concert and Eskom
negotiated with them throughout
the long and complex tender process
without quibbling about their identity and standing. In all
that time, Areva too never
raised concerns about the identity of
Westinghouse. It may be rightly added that even if Westinghouse
acted for a disclosed
or undisclosed principal, that would confer on
it sufficient own interest to review a decision that adversely
affects its interest
or that of its principal.
[21]
[59]
Westinghouse’s interest here is real,
direct and substantial and not merely hypothetical or academic. And
unlike in
Giant Concerts
,
Westinghouse was not—
“
merely
toying with process, or seeking to thwart a propitious public
development because it had been made available to someone else
. . .
. The consequence is that Giant [Concerts] lacks standing,
since its interest remains incipient and has never become
direct or
substantial.”
[22]
[60]
In assessing where the interests of justice
lie on standing here, it is relevant that in the earlier Courts and
in this Court, Eskom
did not claim that Westinghouse lacked own
standing. If it did, it would have been surprising.
Equally so, it is surprising
that Areva now disavows the direct and
substantial interest of Westinghouse, its competitor throughout the
tender process, that
stood ready to assume tender obligations that
were to run into several billions of rand. Whatever the correct
description
of Westinghouse or its relationship with Westinghouse USA
is, it was never a thing of substance in the tender process.
That
little matter changed nothing in the tender or subsequent
litigation process and no entity may correctly claim that it had been
thereby prejudiced.
[61]
Another interests of justice consideration
is that the litigants poured their effort into resolving the dispute
on the merits.
All parties invested so much in presenting their
cases on the merits and we heard them on the merits. It is
indeed in the
public interest for us to pronounce on whether Eskom, a
state-owned entity, acted within the prescripts of the Constitution
and
of the Promotion of Administration of Justice Act
[23]
(PAJA) or not in awarding a massive tender of great economic and
monetary value. In my view, the judgment would have been
the
stronger if, after disposing of the standing point, it went further
to say: “In any event, the appeal on the merits is
without
substance.” This approach speaks to an apex court that
will not lightly look away at a potential injustice
only because a
party may have mixed up its corporate identity within the litigating
multinational group of companies.
[62]
Here in the words of
Giant
Concerts
, “broader concerns of
accountability and responsiveness may require investigation and
determination of the merits”.
[24]
More so, on the facts, the work to be performed under the tender is
plainly urgent. A decision on standing only will
almost
inevitably attract fresh litigation and may render the tender
useless. That could hardly be in the interests of justice.
[63]
For all these reasons, the main judgment
should have found that Westinghouse has the requisite own standing
and should have reached
and decided the merits of the appeal by Areva
and counter-appeal by Westinghouse.
Merits
[64]
The view I take on standing compels me to
look at the merits of the appeal and the counter-appeal. This
being a minority judgment,
I do so only in pithy terms. But
first a brief background.
Background
[65]
The process under review began in 2012 when
Eskom called for expressions of interest in a tender process to
replace and install
six steam generators at Koeberg. The
generators in issue are prone to Inter Granular Stress Corrosion
Cracking and this necessitates
their replacement. Koeberg
comprises of two units; by the end of 2015, both units would have
been in operation for 30 years.
Eskom considered that they
would need to be replaced by 2018 as a nuclear safety priority.
[66]
An independent consultant audited the
tender invitations in June 2012, and shortlisted prospective
suppliers. Only Areva and
Westinghouse qualified to make bids.
A non-negotiable requirement of the tender was that Areva and
Westinghouse be able to
meet the 2018 shutdowns (referred to as the
X23 outage). At the start of the process, when Eskom invited
expressions of interest
in the tender, the tender was divided into
three lots. It was envisaged that different lots would be
awarded to different
bidders. The Invitations to Tender stated:
“
The
tender evaluation process will be based on evaluating the overall
value to Eskom rather than the tendered prices only.
Eskom
reserves the right not to award this tender to the highest ranked or
highest scoring tender, as it needs to leverage or align
its
procurement practices to driving socio-economic development
objectives that are enshrined in various government policies such
as
Broad Based Black Economic Empowerment (BBBEE), Plan Industrial
Policy Action, and the New Growth Path. Preference will
be
given to responses that score high in these areas.”
[67]
The invitation to tender also provided that
Eskom reserved the right to conduct a further procurement process
through negotiating
with bidders, even after the evaluation process,
provided that it had the permission of the Eskom Board of Directors
or the relevant
delegated authority.
[25]
[68]
Eskom’s Board Tender Committee (BTC)
was delegated with the authority to make the final determination on
the tender award.
The initial evaluation of the tenders was
referred to an in-house technical committee. Its role was to
assess the bids with
reference to the bid criteria. The
technical committee recommended that Westinghouse be awarded the
contract for two lots
(Lot 1 and 3), as it obtained the highest
scores for these lots. And Lot 2 was recommended to be awarded
to Areva.
These recommendations were communicated to the BTC.
In February 2013, the BTC, after considering these recommendations,
concluded
that it did not have the expertise to make a final
determination in respect of the bids. The BTC resolved to
appoint a Swiss
firm, AF-Consult Switzerland Limited (AF-Consult) to
advise on technical matters.
[69]
On 12 August 2013, the BTC considered
AF-Consult’s report. The report recommended that Eskom
should take into account
strategic considerations which included
previous experience of Koeberg and Eskom with suppliers. The
report also recommended
awarding the tender to one supplier.
Pursuant to AF-Consult’s recommendations, the BTC decided that
the technical bids
should be reopened. On 13 December
2013, Eskom invited Westinghouse and Areva to submit composite bids
for the three
lots. The BTC decided to appoint a team that
would hold parallel negotiations with the bidders.
[70]
On 13 June 2014, Areva and Westinghouse
were invited to participate in negotiations with Eskom’s team.
An external negotiator,
Mr Koenig, was appointed by Eskom to
facilitate the process, along with independent auditors and
consultants. Negotiations
commenced between 24 June and 4 July
2014. On 11 July 2014, Areva and Westinghouse submitted their
final offers. Eskom
then required an unconditional acceptance
of its key commercial terms by 22 July 2014. On 22 July 2014,
Areva submitted a
schedule indicating that it would meet the
scheduled deadline, three months ahead of time.
[71]
From 19 July to 7 August 2014, the merits
of the two offers were considered by various bodies within Eskom.
On 12 August 2014,
the BTC in its meeting decided by way of a secret
ballot that the contract would be awarded to Areva. The BTC
then sent a
letter to the Minister of Public Enterprises explaining
the processes that had led to the decision and the reasons for the
decision.
On 15 August 2014, Areva was told that its bid had
been accepted.
High Court
[72]
Dissatisfied with the decision,
Westinghouse sought a review in the Gauteng Local Division High Court
by way of urgent application.
It attacked the tender process
and sought an order setting aside the tender award and in the event
that such order is granted,
the tender be awarded to it. Both
Eskom and Areva opposed the application. Carelse J dismissed
the application with
costs including the costs of two counsel.
[26]
[73]
The High Court dealt with the alleged
irregularities. Westinghouse contended that there were six
additional criteria introduced
during the negotiations that were
procedurally unauthorised and extraneous. Westinghouse further
complained that it had not
been informed how these considerations
would be included in the matrix of factors that would be taken into
account. The Court
found that it is not in issue that these
considerations were taken into account and there is no suggestion
that these strategic
considerations were not also applied to the
evaluation of Areva’s bid. The Court found that there was
no suggestion
by Westinghouse prior to the parallel negotiations or
even during the negotiations that the strategic considerations were
extraneous
or that it did not understand them. Neither did
Westinghouse seek clarity on what these considerations were.
Instead,
Westinghouse took part in the negotiations without even
whispering a complaint. The Court held the tender process to be
procedurally
fair. It also held that there was nothing to
support the submission that the BTC’s final decision was
arbitrary or
capricious.
Supreme Court of Appeal
[74]
Westinghouse appealed against the High
Court’s substantive order. Areva cross-appealed against
the High Court’s
costs order. It wanted a costs order
that included all three of its counsel. The Supreme Court of
Appeal had to determine
whether the award followed an unlawful tender
process and whether Westinghouse had standing to institute the
application or pursue
the appeal.
[75]
The Court looked at whether the BTC was
entitled to take into account what it termed strategic
considerations. It found that
the answer to this question lay
with the bid evaluation criteria. If the strategic
considerations fell outside the criteria,
and if any one of the
considerations was taken into account when it should not have been,
then that would be sufficient to vitiate
the decision. The
Court found that the BTC resorted to strategic considerations without
making these known to either Westinghouse
or Areva, and without
making them part of the bid evaluation criteria. It held that
the process appeared to be fundamentally
unfair. The Court
further found that the strategic considerations by the BTC in
awarding the tender to Areva made the decision
unlawful in terms of
section 6(2)(e)(iii) of PAJA. Section 6 provides that a court
or tribunal may review an administrative
action if it was taken
because of irrelevant considerations were taken into account or
relevant considerations were not considered.
[27]
In this Court
Areva’s
submissions
[76]
Areva was adamant that, if leave were
granted, the appeal has reasonable prospects of success as intimated
by the conflicting judgments
between the High Court and the
Supreme Court of Appeal. It added that the correct
determination of this dispute is of
national significance.
Should the tender process and decision be set aside, it will be
impossible for the X23 deadline to
be met. Then Eskom, and
South Africa, would have to make a difficult choice between
shutting down Koeberg and undermining
the integrity of the national
power grid, or continuing to operate the steam generator units with
the risk, however remote, of
a nuclear incident.
[77]
Areva also said that the Supreme Court of
Appeal erred and misdirected itself by finding that the strategic
considerations fell
outside the bid evaluation criteria. It
submitted that the Supreme Court of Appeal failed to give full and
proper consideration
to the actual bid evaluation criteria.
[78]
Areva contended that the strategic
considerations, as well as the schedule float, were considerations
either explicit or reasonably
to be read as implicit in the bid
evaluation criteria,
[28]
and were therefore matters which could be
considered properly by the BTC. Areva added that it is the
invitations to tender
that contain the substance of the tender
requirements. Areva submitted that the parallel negotiations
were based on the invitations
of interest and the criteria contained
therein.
Eskom’s
submissions
[79]
Eskom argued that the Supreme Court of
Appeal’s finding that it made a concession that the strategic
considerations did not
form part of the evaluation is not borne out
by Eskom’s version expressly set out in its opposing affidavit,
and the argument
advanced on behalf of Eskom in the Supreme Court of
Appeal.
[80]
It submitted that the strategic
considerations that were taken into account by the BTC fell within
the evaluation criteria.
In the event that the strategic
considerations did not form part of the evaluation criteria, their
consideration nevertheless did
not constitute a material departure
from the evaluation criteria. Those considerations were
directed at achieving Eskom’s
purpose of procurement.
Eskom therefore submitted that Westinghouse failed to show that
taking the strategic considerations
into account constituted a
material departure from the evaluation criteria. Eskom argued
that to the extent that the considerations
constituted a deviation
from the bid criteria, the deviation by the BTC was justifiable in
the circumstances of the present case.
Westinghouse’s
submissions
[81]
Westinghouse observed that it was the
frontrunner throughout the tender process. It noted that it was
only when Eskom included
additional strategic considerations at the
final stage of adjudication that Areva was awarded the tender.
This, despite the
fact that Westinghouse was the lowest priced
bidder. Although Eskom had reserved the right not to award the
tender to the
highest-ranked bidder based on its development and
empowerment objectives, it does not mean that Eskom was authorised to
employ
other considerations in awarding the tender.
Westinghouse repeated that the Supreme Court of Appeal was correct in
finding
that the BTC’s inclusion of strategic considerations in
awarding the tender was unlawful, and vitiated the tender award.
It submitted that strict compliance with the procurement process was
necessary for the process to be lawful.
Conclusion
[82]
On the merits, I think Eskom was truly
meticulous and proper in its assessment of the bids. It
resorted to independent interlocutors
to help it assess the technical
strength of the respective bids. Here there was no suggestion
in evidence or argument that
the BTC was actuated by malice,
irrationality, corruption or other improper motive.
[83]
I am unable to agree that the strategic
considerations by the BTC in awarding the tender to Areva made the
decision unlawful because
irrelevant considerations were taken into
account or relevant considerations were not considered. The
evidence suggests that
the process was a hallmark of careful
consideration of all relevant factors.
[84]
Westinghouse’s claim that certain
vital strategic tender requirements were irregularly considered
mid-stream is not supported
by a careful evaluation of the tender
process. In my respectful view the Supreme Court of Appeal
erred by finding that the
strategic considerations fell outside the
bid evaluation criteria. Had the Supreme Court of Appeal given
full and proper
consideration to the actual bid evaluation criteria,
it should have found that the strategic considerations were integral
to the
bid evaluation criteria or at the very least, could be
properly inferred from the bid evaluation criteria.
[85]
That must have been the understanding of
Westinghouse too. As the High Court rightly observed,
there was no suggestion
by Westinghouse prior to the parallel
negotiations or even during the negotiations that the strategic
considerations were extraneous
or that it did not understand them.
Neither did Westinghouse seek clarity on what these considerations
were. Instead,
Westinghouse took part in the negotiations
without even whispering a complaint.
[86]
In the view I take, the tender process was
procedurally fair. I would have upheld the appeal of Areva with
costs and dismissed
all counter-appeals with costs.
For
Areva:
For Eskom:
P
Hodes SC with D Goldberg and D Simonsz
instructed by Dentons Incorporated as
Kapditwala Inc
V
Maleka SC with N Mayet and H Rajah
instructed by Mchunu
Attorneys
For
Westinghouse:
J
Gauntlett SC with D Borgstr
ö
m and
L Kelly
instructed by Webber Wentzel
[1]
Westinghouse Electric Belgium v Eskom Holdings
[2015] ZAGPJHC 315 (High Court judgment).
[2]
Westinghouse Electric Belgium SA v Eskom
Holdings (SOC) Ltd
[2015] ZASCA 208
;
2016 (3) SA 1
(SCA) (SCA judgment).
[3]
Sandton Civic Precinct (Pty) Ltd
v City of Johannesburg
[2008]
ZASCA 104; 2009 (1) SA 317 (SCA); [2009] 1 All SA 291 (SCA).
[4]
Giant Concerts CC v Rinaldo Investments (Pty)
Ltd
[2012] ZACC 28
;
2013 (3) BCLR 251
(CC)
(
Giant
Concerts
) at para 27.
[5]
Sandton Civic Precinct (Pty) Ltd
above n 3 at para 11.
[6]
Id.
[7]
See
Giant Concerts
above n 4 at para 35.
[8]
Id at para 43.
[9]
See [20] and [21] above.
[10]
See
Giant Concerts
above n 4 at para 34.
[11]
Id.
[12]
Under the common law doctrine of
locus
standi
,
an applicant must have a sufficient, personal and direct interest in
the matter. See, for example,
Beukes
v Krugersdorp Transitional Local Council
1996 (3) SA 467
(W) at 473B-C;
Mgedle v
Administrator, Cape
1989 (1) SA 752
(C) at 758F-G;
Ahmadiyya Anjuman
Ishaati-Islamlahore (South Africa) v Muslim Judicial Council (Cape)
1983 (4) SA 855
(C) at 863G-864B;
PE
Bosman Transport Works Committee v Piet Bosman Transport (Pty) Ltd
1980 (4) SA 801
(T) at 804B;
United
Watch and Diamond Co (Pty) Ltd v Disa Hotels Ltd
1972
(4) SA 409
(C) at 415H. Westinghouse has established
sufficient interest on the facts, as discussed in the judgment.
[13]
Section 38 of the Constitution provides:
“
Anyone
listed in this section has the right to approach a competent court,
alleging that a right in the Bill of Rights has been
infringed or
threatened, and the court may grant appropriate relief, including a
declaration of rights. The persons who
may approach a court
are—
(a)
anyone acting in their own interest;
(b)
anyone acting on behalf of another person who cannot act in their
own name;
(c)
anyone acting as a member of, or in the interest of, a group or
class of persons;
(d)
anyone acting in the public interest; and
(e)
an association acting in the interest of its members.”
See
Giant Concerts
above n 4 at paras 28-9, which found that the
right to just administrative action as set out in section 33 of the
Constitution
confers standing in terms of section 38 under the Bill
of Rights.
[14]
High Court judgment above n 1 at paras 22 and 63.
[15]
SCA judgment above n 2 at para 67.
[16]
Id at para 70.
[17]
Giant Concerts
above 4 at paras 33-5. (Own emphasis).
[18]
Id at para 41. (Own emphasis).
[19]
Id at para 47.
[20]
Id at para 50 citing
Ferreira
v Levin NO; Vryenhoek v Powell NO
[1995] ZACC 13
;
1996 (1) SA 984
(CC);
1996 (1) BCLR 1
(CC) at paras
164-5.
[21]
In the situation of a disclosed principal, it is
generally accepted that the agent cannot institute proceedings
against a third
party in their own name where there is a contract
between the principal and the third party. See for example,
Waikiwi Shipping Co Ltd v Thomas Barlow
and Sons (Natal) Ltd
1978 (1) SA 671
(A) at 680D-F. The Court held in
Sentrakoop
Handelaars Bpk v Lourens
1991 (3) SA
540
(W) at 545D-E that it is not proper for an agent to institute
proceedings in his name as a representative or agent of his
principal
where the claim is against the principal. However,
it went on to state that this does not apply where the agent “has
the right to sue in his own name”. Where an agent has
expressly or impliedly agreed to be bound by an agreement,
the agent
will be liable under the agreement. In
Scholtz
v Sieff
1928 OPD 131
at 133, the Court
held:
“
[A]n
agent, though contracting as agent for a disclosed or undisclosed
principal, may validly acquire for himself the right of
bringing
action on such contract in his own name. At the same time that
right of action, though exercisable by the agent
in his own name, is
really acquired by him for the purposes of the agency and must
therefore necessarily be at the disposal of
the principal, and may
therefore be revoked by the principal.”
Courts have also held
that, in some instances, where the agent is held liable against the
third party, the agent also has corresponding
rights against the
third party. See
Natal Trading and Milling Co Ltd v Inglis
1925 TPD 724
at 726-7; and
Langham Court (Pty) Ltd v
Mavromaty
1954 (3) SA 742
(T) at 745D-G.
[22]
Giant Concerts
above n 4 at para 55.
[23]
3 of 2000.
[24]
Giant Concerts
above n 4 at para 34.
[25]
SCA judgment above n 2 at para 14.
[26]
High Court judgment above n 1 at para 65.
[27]
Section 6(2)(e)(iii) of PAJA provides:
“
A
court or tribunal has the power to judicially review an
administrative action if—
. . .
(e)
the action was taken—
. . .
(iii)
because irrelevant considerations were taken into account or
relevant
considerations were not considered.”
[28]
It relies on jurisprudence on the interpretation
of documents in
Novartis SA v Maphil
Trading
[2015] ZASCA 111
;
2016 (1) SA
518
(SCA) at paras 24-34;
Bothma-Batho
Transport v S Bothma & Seun Transport
[2013]
ZASCA 176
;
2014 (2) SA 494
(SCA) at paras 10-2; and
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012]
ZASCA 13
;
2012 (4) SA 593
(SCA) at para 18.