REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
JUDGMENT
CASE NO: 2026-116404
In the matter between:
PDS AFRICA (PROPRIETARY) LIMITED APPLICANT
and
ATLANTIC iBUILD (PROPRIETARY) LIMITED RESPONDENT
Coram: MTHIMUNYE AJ
Heard: 03 August 2026
Delivered: Electronically on 24 August 2026
Neutral citation: PDS Africa (Proprietary) Limited v Atlantic iBuild
(Proprietary) Limited (Case No: 2026-116404) [2026] ZAWCHC … (24
August 2026)
Summary: Urgent applications – rule 6(12) – applicant to establish the
absence of substantive redress at a hearing in due course. Appointment of
arbitrator is an abuse of process – waste of judicial resources - pending elected
liquidation on opposed roll – waiver of right to arbitra te- Costs of application
including counter application to be paid by the applicant on an attorney and
client scale C.
ORDER
1. First point in limine raised by respondent is dismissed. Leave is granted
that the application be heard as one of urgency.
2. The second point in limine raised by respondent that the application for
the appointment of an arbitrator is an abuse of process is upheld.
3. The application for appointment of an arbitrator in terms of section 12(2)
read with section 12(1)(a) of Arbitration Act 42 of 1965 (as amended) is
struck off the roll.
4. The costs of this application, including costs of the counter -application
are to be paid by the Applicant, PDS Africa (Pty) Ltd, on the scale as
between attorney and client , scale C, including the costs of the counter -
application.
JUDGMENT
Mthimunye AJ:
Introduction
[1] The Applicant urgently seeks an order in terms of Section 12(1) (a) read
with Section 12(2) of the Arbitration Act 42 of 1965 (“the Act” ) that an
arbitrator be appointed. Respondent opposes the relief sought on the basis that
the applicant’s application is not a bona fide attempt to bring about an
arbitration process or for the relief which is sought ; as the applicant reali ses
that its chances to succeed in the ir pending elected liquidation proceedings is
severely compromised.
[2] Respondent has also filed a conditional counter -application in terms
whereof it seeks in the event that the applicant’s application is successful, that
the arbitration clause 14.2 in the Subcontrator Agreement be set aside in terms
of Section 3(2)(a) of the Act. The applicant opposes the counter-application.
[3] For purposes of convenience I will refer to the applicant in this matter as
PDS Africa and the respondent as Atlantic iBuild. Both the main application
and counter-application before me are concerned with clause 14.2 of the
Subcontractor Agreement (“SCA”) concluded between the parties.
Points in limine
[4] Respondents raised two points in limine. Firstly, that the relief sought by
the applicant is an abuse of process. Secondly, that the application lacks
urgency. Both these aspects are intertwined and will be dealt with
simultaneously. If the respondents ’ points in limine are upheld and the
application to appoint an arbitrator is consequently dismissed, the conditional
counter application by the respondent becomes moot and won’t need any
further determination by this court.
[5] I will deal with the issues in the following order. First, I will outline the
procedural history of the matter, together with the background facts. Second, I
deal with the points in limine . Third, I deal with the urgency of the relief
sought in the context of the procedural history. Finally, if the points in limine
are dismissed, I will deal with the relief sought and the counter-application.
Litigation Facts
[6] On 18 February 2025 and at Durbanville the applicant represented by
Hendrick Jacobus Waldeck, sole director of PDS Africa concluded the written
SCA with Robert Schroeder who duly represented the respondent , Atlantic
iBuild. In terms of the SCA the applicant was the respondent’s appointed
subcontractor.
[7] On 22 September 2025 under case number 2025 -171814 PDS Africa
launched liquidation proceedings in this court. Whereas on 12 November 2025
the matter became opposed and was postponed by agreement to 17 November
2026 for hearing on the opposed roll, as per order of Pather AJ.
[8] Atlantic iBuild complied with the order by delivering its answering
affidavit, whereas the applicant did not file its replying affidavit by 16
December 2025 as provided for in th at order. On the date of the hearing of the
current matter, PDS Africa had still not filed its replying affidavit. PDS Africa
now eight months later after launching liquidation proceedings seeks to invoke
an arbitration clause contained in the SCA.
Historical Background
[9] In terms of the SCA, Atlantic iBuild appointed PDS Africa as a
subcontractor to perform the drilling of pre -collar holes as part of its
responsibilities under a First Subcontract. PDS Africa had the authority to
appoint sub-contractors to assist it in the drilling of the pre -collar holes. The
subcontractors together with PDS Africa thereafter agreed to provide their
services of drilling pre -collar holes to Atlantic iBuild, as a further
subcontractor as per the terms of the SCA.
[10] The contract price for the “Works” in terms of the SCA was R19 485
956,50. The parties agreed that the Works would form part of the project,
which is a phased construction project ; with timelines subject to the progress
of the Project. Atlantic iBuild was to pay PDS Africa a deposit of 20% of the
Contract Price for mobilisation of the equipment , and subject thereto that
Atlantic iBuild received a deposit from the First Contractor. Atlantic iBuild
must then inform PDS Africa once it has received the deposit and will then
instruct PDS Africa to proceed with mobili sation. The Deposit would then be
proportionately reduced over the duration of the Works on every occasion that
PDS Africa presents an invoice to Atlantic iBuild which would include a claim
for the meters drilled, subject to Atlantic iBuild having fully paid all prior PDS
Africa invoices.
[11] On 5 September 2025 PDS Africa’s attorneys sent a letter of demand to
Atlantic iBuild informing them that they are indebted to PDS Africa in the
amount of R 11 894 821.94 in respect of drilling and ancillary services
rendered by them to Atlantic iBuild pursuant to the SCA. PDS Africa further
informed Atlantic iBuild that due to the failure to pay the outstanding amount
in terms of a written undertaking b etween them were indicative of Atlantic
iBuild’s commercial insolvency. Furthermore, if Atl antic iBuild should fail to
bring their account up to date within 21 days business days upon the receipt of
the letter of demand, PDS Africa will exercise their right to cancel the written
agreement between the parties.
[12] Consequently, on 16 September 2025 Atlantic iBuild responded to PDS
Africa’s letter of demand , denying indebtedness to PDS Africa or that they
were in breach of SCA. Atlantic iBuild further alleged that they overpaid PDS
Africa an amount of R1 761 255,19 and sought that the dispute between them
be resolved amicably. Accordingly, on 17 September 2025 Atlantic iBuild sent
a notice of material breach of the SCA to PDS Africa, asserting that on 11
August 2025 PDS Africa unilaterally and without justification ceased all
drilling operations on the Project site. Further that the contractual
consequences in terms of the breach in terms of clause 12.1 of the SCA, PDS
Africa is deemed to be the “Defaulting Party” and Atlantic iBuild the
“Aggrieved Party”. That the afore-mentioned breaches constituted material
breaches as defined in clause 12.1.2 of the SCA , being capable of remedy but
not remedied within reasonable time . Atlantic iBuild then requested PDS
Africa to remedy the material breaches within twenty -one business days from
date of receipt of the notice of the breach, by immediately resuming all drilling
operations at the Project Site, completing all outstanding redrills in the affecte d
areas, providing a detailed catch -up program to complete all Works within the
contracted timeframe and ensuring continuous operation until completion of all
contractual obligations.
[13] Failing to remedy the breach by PDS Africa within the specified notice
period, Atlantic iBuild w ould exercise their right in enforcing Clause 12.1 of
the SCA to claim immediate specific performance of all outstanding
obligations with or without claiming damages, cancel the Agreement with
immediate effect and claim damages and recover all costs on an att orney-and-
own-client scale as provided for in clause 12.2 of the SCA.
[14] PDS Africa responded to the notice on 22 September 2025 by informing
Atlantic iBuild that they have issued a liquidation application against them and
that the matter had been enrolled for hearing on 12 November 2025. Atlantic
iBuild subsequently opposed the liquidation and matter was then subsequently
postponed for hearing on the opposed roll 17 November 2026.
[15] Thereafter, further discussions ensued between the parties, including
possible settlement in resolving the dispute, including request by PDS Africa
for an indulgence in the late filing of their replying affidavit. In consequences
of these events the liquidation is still pending and PDS Africa has yet to file its
replying affidavit if any.
[16] Against this background and perhaps in the hope of achieving a speedier
resolution of the disputes, PDS Africa now wishes to go to arbitration. It relies
on the clause in the SCA dealing with dispute resolution. The relevant clause
read as follows:
“14.1 The Agreement shall be governed by and construed in accordance with the Laws of
the Republic of South Africa.
14.2 Any disputes arising under this Agreement shall first be resolved through good -faith
negotiations. Failing such resolution, disputes shall be referred to mediation or arbitration,
as agreed between the parties.”
PDS Africa’s case
[17] PDS Africa explains that it applied for the winding up of Atlantic iBuild,
as Atlantic iBuild raised various contractual disputes in its answering affidavit
in the liquidation proceedings. PDS Africa confirms that the liquidation
application has been postponed to the opposed roll, on 17 November 2026.
[18] PDS Africa avers in their founding papers that the veracity and effect of
the contractual disputes raised by the respondent cannot be adjudged in this
application and that it is a process best left to the arbitrator to be appointed
upon this application. Further , that the dispute raised by Atlantic iBuild is
contractual in nature and falls squarely within the ambit of the arbitration
clause of the SCA.
[19] In addition, that it does not abandon its liquidation application, as should
the arbitral tribunal confirm the indebtedness of Atlantic iBuild, they will
persist with the current pending liquidation application. Further if the debt
should be found not to exist the liquidation application will fall away. Further
that the approach by them in referring the dispute to arbitration balances the
statutory nature of liquidation proceedings with the parties’ contractual
commitment to arbitrate disputes and avoids the duplication of proceedings or
the risk of inconsistent findings.
[20] Furthermore, if the liquidation application is only finally determined
after the expiry of three years from when the debt arose, its debt will become
prescribed. That as a result of this consideration they are compelled to refer the
matter to arbitration given the realistic delays in the time that the liquidation
matter is expected to be heard and finally determined as a result of the court’s
congested rolls.
[21] In addition that they have sent various communications demanding
payment from Atlantic iBuild as well as an in mora notice informing Atlantic
iBuild about the liquidation application. Further, that they have good prospects
of success in the liquidation proceedings. They have also attempted to settle
the matter with Atlantic iBuild through mediation but have so far been unable
to resolve their disputes through good -faith negotiations, thus they are now
opting to refer the matter for arbitration. Therefore, they are now entitled in
terms of Section 12(2) of the Act, upon notice to Atlantic iBuild to apply to this
court to make the necessary appointment of an arbitrator, as the parties were
unable to reach an agreement with in 7 days as to the appointment of an
arbitrator.
Respondent’s (“Atlantic iBuild”) case
[22] Atlantic iBuild on the other hand avers in their answering papers that
PDS Africa ’s application is fundamentally misconceived, in that it seeks to
invoke an arbitration clause after having elected to pursue liquidation
proceedings against them, based upon the very same alleged indebtedness
which PDS Africa now seeks to refer to arbitration. Further , that Atlantic
iBuild delivered a comprehensive answering affidavit in the liquidation
proceedings, which is still pending and has not been withdrawn by PDS Africa.
[23] In their conditional counter-application Atlantic iBuild avers that PDS
Africa should not be allowed to invoke the arbitration clause in the SCA and/or
that the arbitration agreement it contains (if any) be set aside in terms of
section 3(2) of the Act. The grounds upon which Atlantic iBuild relies in
support of their oppos ition to the relief sought by PDS Africa and their
counter-application are as follows:
“1. Waiver of the right to arbitration;
2. That PDS Africa elected not to arbitrate and approbated the remedy to apply for
liquidation which remedy it now seeks to reprobate;
3. That the present application is an abuse of the legal process and/or mala fide.
4. That the liquidation was a debt collection exercise in terrorem of the Atlantic iBuild;
5. The application was brought as one of urgency in terms of Rule 6(12) wh ilst it is not
urgent at all.
6. That the arbitration clause 14.2 is inchoate and/or void for vagueness and
unenforceable in that it does not define the language or seat of the arbitration, the
applicable rules or how the Arbitrator is to be selected in the absence of an
agreement between the parties.”
[24] Atlantic iBuild avers that PDS Africa has waived any right it may have
had to insist upon arbitration. Further, t hat the doctrine of election is well -
established in our law. In that PDS Africa elected to pursue liquidation
proceedings against them instead of invoking the arbitration clause contained
in clause 14.2 of the SCA. Further that PDS Africa had full knowledge of the
existing dispute between them at the time they launched the liquidation
proceedings.
[25] They aver t hat on 16 September 2025 prior to the liquidation
proceedings they had addressed detailed correspondence to PDS Africa’s
attorneys identifying numerous bona fide disputes relating to the alleged
indebtedness, incorrect invoicing, overcharging, defective and unworkmanlike
performance, breach by PDS Africa, damages suffered by them and
misapplication of tariffs. Notwithstanding the knowledge that the debt was
disputed by them, PDS Africa deliberately elected to invoke the jurisdiction of
this court and abused the drastic remedy of winding -up as a debt recovery
process, which according to them was designed to intimidate and terrori se
Atlantic iBuild. T hey further aver t hat PDS Africa only sought to invoke
arbitration proceedings months after having received their answering affidavit
in the liquidation proceedings.
[26] Furthermore, that the liquidation application remains pending and has
not been withdrawn by PDS Africa. Thus, PDS Africa’s conduct is wholly
inconsistent with an intention to insist upon arbitration as the exclusive
mechanism for determining the dispute between the parties.
[27] Atlantic iBuild further avers that the present application before court
constitutes an abuse of process and falls to be dismissed on that basis alone.
Further that PDS Africa was compelled to file its replying papers on/or before
16 December 2025 in terms of the 12 November 2025 court order by Pather
AJ. They seek the court to note that PDS Africa by their own admission seek to
act in contempt o f the court order by filing their replying papers only after the
proposed arbitration has been concluded.
[28] In substantiation of this averment, Atlantic iBuild referred the court to
paragraph 47.1 of PDS Africa’s founding papers which expressly states that,
should the arbitration be determined in its favour, the outcome thereof will
guide the formulation of a replying affidavit to be filed in the pending
liquidation application. They aver that PDS Africa is thus acknowledging that
the contemplated arbitration is intended to influence, supplement and
strengthen their case in the liquidation proceedings . Furthermore, on 10
February 2026 in a correspondence addressed to PDS Africa’s attorney’s PDS
Africa was warned that their proceedings an d litigious strategy constituted an
abuse of this court’s process.
[29] Atlantic iBuild further avers that the commercial consequences flowing
from this pending liquidation application are profound. As, whilst the
liquidation is pending, it is impossible for them to obtain a tax clearance
certificate from SARS. This severely impairs their ability to tender for large
contracts which almost inevitably require tenderers to submit tax clearance
certificates with their tenders, in the absence of which, the tender being
rejected as “unresponsive”. Fu rther they are unable to apply for credit to
purchase new equipment and to access new suppliers for their operations, and
present suppliers threatened to withdraw their credit facilities , which is the
cause of immeasurable reputational damage to a company.
Applicant’s (“PDS Africa”) Reply
[30] PDS Africa in their replying affidavit avers that the present application is
not an application for the determination of the contractual dispute between the
parties, or for the de termination whether a declarator must be made whether
liquidation proceedings must proceed or not. Further, the only issue for
determination is whether the jurisdictional requirements of Section 12(1) (a),
read with section 12(2), of the Arbitration Act, have been satisfied.
[31] They aver t hat Atlantic iBuild’ s counter -application and its defence
based on alleged vagueness directed at clause 14.2 of the SCA is wrong, as
clause 14.2 creates a binding dispute -resolution mechanism, and not a
meaningless or optional provision which either party may ignore once a
dispute arises.
[32] Further, they aver that the clause contains two -stages. The first is a
mandatory attempt at good -faith negotiation. That stage has been exhausted as
demonstrated by the extensive engagement, including settlement discussions
and an in-person meeting on 26 February 2026. PDS Africa further claims that
the second stage is introduced by the peremptory words “disputes shall be
referred”. In that these words show that once negotiations fail, the dispute must
be referred to arbitration as a private dispute -resolution process. In addition,
the words “as agreed between the parties” do not nullify the obligation to refer
the dispute but rather regulate the practical choice and machinery of the
process, namely mediation and arbitration.
[33] Further that the interpretation by Atlantic iBuild would render the words
“shall be referred” commercially ineffective. That would mean that,
notwithstanding the inclusion of a dispute -resolution clause, either party could
prevent any binding private process merely by refusing to agree. In addition,
the absence of a detailed appointment mechanism, procedural rules, a seat,
language or an identified arbitrator does not render the arbitration agreement
void for vagueness.
[34] PDS Africa further avers in their replying papers that the pending
liquidation application and arbitration are two processes that operate on
different planes. Furthermore, they claim that the fact that the outcome of the
arbitration may bear upon whether they persist with the liquidation application
does not make the process inconsistent. That it merely reflects the commercial
reality that the existence and quantum of the debt are relevant to the liquidation
application.
[35] Furthermore, PDS Africa avers that Atlantic iBuild bears the onus of
establishing waiver, by showing a clear , unequivocal and intentional
abandonment of th eir right in relying on arbitration, which they aver that
Atlantic iBuild has failed to do. In addition, their conduct is not consistent with
abandonment of arbitration, on the contrary the y demonstrated, through their
attorney, repeatedly that they sought to resolve the dispute by negotiation and
only raised arbitration expressly thereafter. In substantiation of their averment,
they refer to correspondence annexures “FA 11”, “FA 13”, “FA 15”, “FA 18”,
“FA 19” and “FA 21” of their founding papers.
[36] PDS Africa further avers that the fact that the liquidation application was
launched before the arbitration was invoked does not constitute waiver.
Furthermore, they aver that the doctrine of election is equally not engaged, as
election applies where a party is faced with inconsistent remedies, and with the
full knowledge, chooses one to the exclusion of the other. Whereas in this
matter liquidation and arbitration are not inconsistent remedies as although
they serve different purposes, they are capable of co-existing.
[37] Further, PDS Africa avers that Atlantic iBuild’s reliance on approbation
and reprobation is similarly misplaced, as they do not seek to affirm and
disaffirm the same instrument or take inconsistent positions. T hey aver further,
that they rely on the SCA for the arbitration clause. They further deny that they
only sought arbitration because the liquidation application has become
inconvenient or strategically disadvantageous.
[38] In so far as to the abuse of process allegation by Atlantic iBuild, PDS
Africa avers that the allegation is unfounded and denied. In that the present
application seeks a statutory appointment of an arbitrator, where the parties
failed to agree to the appointment. Further that the reliance placed on
paragraph 47.1 of their founding affidavit by Atlantic iBuild is misplaced. As
paragraph 47.1 does not say that arbitration is being used to manufacture a new
case in the liquidation application but merely records that a binding arbitral
determination of the disputed indebtedness will simplify the liquidation
proceedings and assist the court hearing the proceedings.
[39] PDS Africa further denies that they are in contempt of the Order made
by Pather AJ, dated 12 November 2025, as they requested an indulgence and
invited Atlantic iBuild to indica te whether a formal condonation application
was required, whereafter matter was overtaken by trying settlement
negotiations between the parties. They however concede that the order by
Pather AJ is not optional, to the extent that an extension or condonation is
required in the pending liquidation proceedings. However, they submit that it is
a matter to be regulari sed in the liquidation proceedings before the court is
seized with it. They aver that, it cannot be a basis to refuse the appointment of
the arbitrator in this application.
Applicants’ (“PDS Africa”) submissions
[40] Counsel on behalf of PDS Africa submitted during argument that the
liquidation application is not before th is Court and thus need no consideration
by this Court. That if th is Court were to make a determination on the
liquidation, the n this Court will de facto close the book on the liquidation
proceedings which still has to be heard in November 2026. Further, that the
argument raised by Atlantic iBuild that they are in contempt of the Order made
by Pather AJ is fundamentally flawed, in that an applicant has to make out its
case in its founding affidavit and not in the replying affidavit which is still
outstanding. Furthermore, even if they were to decide to supplement their
papers in the liquidation or want to file their replying affidavit in order to
introduce the award that might be awarded by the arbitrator, they can still do so
by applying for condonation.
[41] They submitted further , that the outco me of the arbitration will
determine the fate of the liquidation. That one of the scenarios are that if the
arbitrator makes an award in favour of PDS Africa and Atlantic iBuild fails to
make payment, the liquidation application will proceed.
[42] PDS Africa further submitted that the argument raised by Atlantic iBuild
aligned with the “Badenhorst Principle” is a non-starting argument. In that the
defence raised by Atlantic iBuild whether the debt is disputed on reasonable
grounds will be tested when they are given a chance to vindicate themselves.
They further submitted that there is no abuse of process at issue, as had they
approached this court first by way of summons Atlantic iBuild would have
raised arbitration as a defence.
[43] Furthermore, they submitted that Atlantic iBuild is disputing the validity
of the arbitration clause , while they are facing prescription. They concede that
only an action can stay prescription or if they go to arbitration . In addition,
they submitted as a result of the court’s congested rolls , if this matter had to be
placed on the ordinary court roll , they will not have substantial redress in due
course as the matter might become prescribed. They further concede that if
three processes were to run in the court it will make no sense and create havoc.
[44] PDS Africa further submitted that waiver is not easily offered or
presumed. That the onus is on Atlantic iBuild to show that by unequivocal
conduct PDS Africa has chosen to enforce its right to elect the liquidation
process and waived their right to pursue arbitration. They further concede that
they had enforced the SCA in the liquidation , by asking for a liquidation order.
They dispute that they have waived their right to arbitrate and elected
liquidation proceedings as these remedies arose from the same SCA.
[45] They further submitted they leave it in the courts discretion to determine
the costs to be awarded, alternatively that attorney and client costs be awarded
on scale C against Atlantic iBuild for the waste in opposing this application.
Respondents’ (“Atlantic iBuild”) submissions
[46] Counsel on behalf of Atlantic iBuild submitted during argument that in
order to determine the urgency of PDS Africa’s application we need to
holistically look at the agreement and when the dispute was raised in relation
to the timeline of this application. The agreement on which the PDS Africa
relies was signed on 18 February 2025. The claim of PDS Africa will thus only
become prescribed, at the earliest in 2028. Further that the second date the
court has to look at is 16 September 2025 , when a letter was sent by Atlantic
iBuild to PDS Africa’s attorneys disputing the debt and the reasons for the
dispute.
[47] They further submitted that on 20 September after being informed of the
disputes, PDS Africa proceeded to issue liquidation proceedings.
Consequently, PDS Africa placed it on the urgent roll 17 November 2025, and
Pather AJ made an order by agreement, for further papers to be filed and the
matter to be postponed to the opposed roll. As per agreement between the
parties PDS Africa had to file their replying affidavit which they have failed to
do so until now.
[48] Atlantic iBuild submitted that the argument of prescription by PDS
Africa has no merit as PDS Africa knew by 17 November 2025 that there was a
dispute, yet they did absolutely nothing until February 2026 when PDS Africa
started sending letters to th eir attorney ’s. They submitted that o n the papers
before this court no case for prescription is made out by PDS Africa. They
submitted further that if PDS Africa sue on the breach in terms of the SCA and
that contract contains an arbitra tion clause it is Atlantic iBuild’s right to raise
the arbitration as a defence.
[49] Atlantic iBuild further submitted that the reason why PDS Africa
brought this urgent application can be found in PDS Africa’s founding affidavit
at paragraph 47, where they state that the result of arbitration will guide the
formulation of their replying affidavit. That is an utmost abuse of the process
of the liquidation as well as the arbitration process. Further, they submitted that
PDS Africa want s the disputes of fact to be determined by arbitration a s it
cannot be adjudged in the liquidation. Further, they submitted that PDS Africa
is aware of the Badenhorst Principle and knows that the ir liquidation
application is doomed for failure.
[50] Atlantic iBuild submit f urther that the choice by PDS Africa not to file
their replying affidavit in the liquidation application is deliberate as
demonstrated in their founding papers where they do not state that they want to
use the arbitration for the final determina tion of the dispute but only to use the
arbitration for the formulation of their replying affidavit. They further
submitted that the application for the appointment of an arbitrator should be
dismissed with costs on an attorney and client scale C.
[51] Further they submitted that the matter is not urgent as the explanation by
PDS Africa, that they tried to settle the matter which resulted in them waiting
for almost 8 months to refer the matter to arbitration is flawed as PDS Africa
does not say why the matter is urgent. That on this basis alone the matter
should be struck off the roll for lack of urgency with costs on an attorney and
client scale C.
Points in Limine
Urgency
[52] The law on urgency is clear . In East Rock Trading 7 (Pty) Ltd v Eagle
Valley Granite (Pty) Ltd and Others,1 it was held that in determining whether a
matter should be treated urgently an applicant must state why he claims he
cannot be afforded substantial redress in due course if the application is not
heard immediately.2 An applicant cannot sit idly and rely on urgency after there
has been a long delay.
[53] The urgency of PDS Africa is set forth explicitly in their papers. It is
common cause that the parties were busy with good-faith negotiations in trying
to settle the breach of contract between them . They explain the delay from
September 2025, in that a fter the failed negotiations between themselves and
Atlantic iBuild, they immediately approached this Court in order to enforce an
arbitration clause by applying to appoint an arbitrator as they believed that a
hearing in due course will not afford substantial redress as their claim against
Atlantic iBuild suffers the risk of prescription due to the congestion of the
court rolls.
1 East Rock Trading 7 (Pty) Ltd v Eagle Valley Granite (Pty) Ltd and Others [2011] ZAGPJHC 196; (2011)
JDR 1832 (GSJ).
2 Ibid para 6; and Cape Town Minstrel Carnival Association v City of Cape Town (Reasons) [2026] ZAWCHC
34 paras 23&4.
[54] In commercial matters the court has to view urgency objectively as an
applicant in certain situations may suffer dire consequences if they do not act
swiftly. Taking into consideration the circumstances of this matter, and having
considered the affidavits, oral submissions and case law cited I am satisfied
and find that there are sufficient and satisfactory grounds including an explicit
explanation by PDS Africa why the ordinary time periods would not provide
substantial redress in due course. I therefore find that the matter is urgent and
condone in terms of Rule 6(12) of the Uniform Rules of Court that PDS
Africa’s non -compliance with the forms, service and timelines be condoned
and direct that the application be heard as one of urgency. First point in limine
raised by Atlantic iBuild is thus dismissed.
Abuse of Process
[55] An arbitration clause is inserted in a contract at the time of its conclusion
because parties usually, in contracts, contemplate that disputes might arise that
will need to be resolved before instituting costly legal proceedings against each
other. Where a party who has the option in a n agreement to refer a matter to
arbitration commences legal proceedings against another party to that
agreement the other party has got a right to apply for a stay in the proceedings
and in this case for the matter not to be referred to arbitration as the other party
already elected the process to resolve the matter . PDS Africa’s argument that
they have not waived their right to arbitrate by electing liquidation proceedings
first as both these remedies arose from the same SCA is fatally flawed and
incorrect.
[56] It is clear from the founding papers and the annexed correspondence that
PDS Africa was aware that there was a dispute between them and Atlantic
iBuild. Despite PDS Africa’s attorneys already being made aware by Atlantic
iBuild on 20 September 2025 , that they were disputing being in breach of
contract, PDS Africa still proceeded with liquidation proceedings. It is my
considered view that a party may only commence litigation rather than
arbitration where it genuinely believes that there is no dispute between it and
the other party.
[57] Even after failed settlement negotiations, PDS Africa instead of
withdrawing the ir elected liquidation application by removing it from the
opposed roll , proceeded to approach this court to enforce arbitration
proceedings by appointing an arbitrator. In my view once PDS opted to
continue with the liquidation proceedings , they abandoned their right to resort
to arbitration under the SCA. It is my considered view that by ignoring its
contractual obligation under the arbitration clause by pursuing its claim by way
of litigation , PDS Africa elected to waive their right to arbitration . What is
further concerning while keeping the liquidation in place, PDS Africa wants to
use the arbitration process as a phishing expedition in order to formulate their
replying affidavit, as evidenced in paragraph 47 of their founding affidavit:
“47 The latter would prevent undue process in the motion court because if the arbitration is
concluded:
47.1 In favour of the applicant the result will guide the formulation of replying affidavit that
the applicant is still to deliver (by simplifying it and making the final determination known
to the court.”
I pause to note that this replying affidavit had to be filed by PDS Africa by 16
December 2025 as per the order made by Pather AJ. In Beinash v Wixley
[1997] ZASCA 32; 1997 (3) SA 721 (SCA), the Supreme Court of Appeal held
that an abuse of process in general terms occur s “where the procedures
permitted by the rules of the Court to facilitate the pursuit of the truth are used
for a purpose extraneous to that objective”.3
3 Beinash v Wixley [1997] ZASCA 32; 1997 (3) SA 721 (SCA) at 30.
[58] The doctrine of election generally involves waiver. It is trite that it arises
in the context of a breach of contract, where a party is faced with an election to
keep the contract alive and claim damages or cancel the contract. Provision is
made in the SCA at clause 12 for PDS Africa to claim damages or cancel the
contract. In addition, at clause 14.2 PDS Africa was afforded a further remedy
to either mediate or arbitrate the matter. PDS Africa although being fully aware
of both these remedies as set out in the SCA, elected to proceed with litigation
by instituting liquidation proceedings.
[59] In Bowditch v Peel & Magill 1921 AD 561 at 572-3; Culverwell v Brown
1990 (1) SA 7 (A) at 17, it was observed that once a party has made an election
it is final and irrevocable unless the other party agrees to its reversal. It can be
inferred on a balance of probabilities that by keeping the liquidation on the
opposed roll, while being aware of the arbitration process, PDS Africa intends
to proceed with the liquidation in favour of rejecting the arbitration. Thus, the
only option for PDS Africa in this case , where they have already elected
liquidation proceedings , is to remove the matter from the roll and follow the
correct process or to get the consent of Atlantic iBuild to refer the matter to
arbitration, as was held in Bowditch [supra] that where a party has already
elected to make use of a process he needs the other party to agree to the
reversal of the election . The argument by PDS Africa that their claim might
prescribe is as a result of their own actions, because had they elected from the
onset to abide by the SCA by making use of the arbitration clause, they would
not have found themselves facing this possible eventuality of prescription.
Conclusion
[60] By electing to pursue litigation proceedings against Atlantic iBuild, PDS
Africa cannot now claim the right to submit the dispute to arbitration without
Africa cannot now claim the right to submit the dispute to arbitration without
the consent of Atlantic iBuild. When a litigant contemplates any procedure in
an agreement, it must do so by taking into consideration the agreed terms of
that agreement as between the parties that regulates the process to follow . A
litigant cannot upon subsequently realising that he had elected a procedure not
provided for in the agreement and not beneficial to him, decide on his own take
a new course and without the consent of the other party to the agreement. N ot
only is this a litigious abuse of process but also a waste of judicial resources. It
is trite that every court is entitled to protect itself and others against an abuse of
its processes (Beinash supra).
[61] As discussed above and after consideration of both the merits and the
motive by PDS Africa for bringing this application to appoint an arbitrator it is
obvious that there is an abuse of process which is prejudicial to Atlantic iBuild
and which this court cannot allow. The second point in li mine that the
application by PDS Africa is an abuse of process is upheld. As a result, the
court will not venture into the merits of this matter nor the optional counter -
application of Atlantic iBuild.
[62] I am therefore of the considered opinion that the proper order to be made
is to strike, the matter from the roll due to an abuse of process.
Costs
[63] The Appellate Division in Union Government v Gass 1959 4 SA 401 (A)
at 413 observed, that a s a general rule , costs follow the result, and the
successful party should be awarded the costs. I have considered the complexity
of the matter and that PDS Africa was aware from September 2025 that there
was a dispute raised by Atlantic iBuild, and instead of first making use of the
remedies as provided for in the SCA they elected to institute liquidation
proceedings. This is not only a waste of judicial resources, but it also forced
Atlantic iBuild to incur costs in drafting opposition papers and coming to court
to oppose this matter. For all the reasons set out above, I am of the view that an
attorney and client costs order should be awarded in favour of Atlantic iBuild
on scale C, including costs of the counter-application.
Order
[64] In the result, the following order is made:
(a) First point in limine raised by respondent is dismissed. Leave is granted
that the application be heard as one of urgency.
(b) The second point in limine raised by respondent that the application for
the appointment of an arbitrator is an abuse of process is upheld.
(c) The application for appointment of an arbitrator in terms of section 12(2)
read with section 12(1)(a) of Arbitration Act 42 of 1965 (as amended) is
struck off the roll.
(d) The costs of this application, including costs of the counter -application
are to be paid by the Applicant, PDS Africa (Pty) Ltd, on the scale as
between attorney and client, scale C including the costs of the counter -
application.
___________________________
S MTHIMUNYE
ACTING JUDGE OF THE HIGH COURT
Appearances:
Counsel for the Applicant : Adv Jaco Van Rooyen (Johannesburg)
Email: advjvr@yahoo.com
Instructed by : Donn E Bruwer Attorney
Email: donn@debattorneys.co.za
Counsel for the Respondent : Adv Almero De Villiers
Email: almero@capebar.co.za
Instructed by : MSA Attorneys
Morné Strydom
Email: morne@msi-law.co.za