Afribusiness NPC v Minister of Finance (1050/2019) [2020] ZASCA 140; [2021] 1 All SA 1 (SCA); 2021 (1) SA 325 (SCA) (2 November 2020)

Afribusiness NPC v Minister of Finance (1050/2019) [2020] ZASCA 140; [2021] 1 All SA 1 (SCA); 2021 (1) SA 325 (SCA) (2 November 2020)

The Supreme Court of Appeal held that the Minister of Finance exceeded his powers under section 5 of the Preferential Procurement Policy Framework Act by promulgating regulations that introduced discretionary pre-qualification criteria without providing a guiding framework for organs of state. These regulations deviated from the constitutional and statutory requirements that public procurement be conducted in a fair, equitable, transparent, competitive, and cost-effective manner, and that preferential policies be implemented only within a prescribed legislative framework. The court found that the impugned regulations were inconsistent with both the Framework Act and section 217 of the...

Citation
[2020] ZASCA 140
Parties
Appellant: Afribusiness NPC; Respondent: Minister of Finance
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
2 November 2020
Case Number
1050/2019
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal upheld. Preferential Procurement Regulations, 2017 declared invalid and set aside. Declaration of invalidity suspended for 12 months.
Judges
Ponnan, Zondi, Dambuza, Eksteen, Goosen
Legal Topics
Preferential Procurement Policy Framework Act, Promotion of Administrative Justice Act, Ultra Vires, Public Procurement, Broad Based Black Economic Empowerment, Constitutional Review
Administrative Law Constitutional Law Commercial and Corporate Preferential Procurement Policy Framework Act Promotion of Administrative Justice Act Ultra Vires Public Procurement Broad Based Black Economic Empowerment +1 more

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Parties

Afribusiness NPC

Appellant

Minister of Finance

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether the Minister of Finance exceeded his powers under section 5 of the Preferential Procurement Policy Framework Act 5 of 2000 in promulgating the Preferential Procurement Regulations, 2017.
  2. 2 Whether the 2017 Regulations are inconsistent with the Preferential Procurement Policy Framework Act and section 217 of the Constitution.
  3. 3 Whether the promulgation and adoption of the Regulations was procedurally unfair or unlawful due to inadequate public participation and non-compliance with SEIAS Guidelines.

Ratio Decidendi

The Supreme Court of Appeal held that the Minister of Finance exceeded his powers under section 5 of the Preferential Procurement Policy Framework Act by promulgating regulations that introduced discretionary pre-qualification criteria without providing a guiding framework for organs of state. These regulations deviated from the constitutional and statutory requirements that public procurement be conducted in a fair, equitable, transparent, competitive, and cost-effective manner, and that preferential policies be implemented only within a prescribed legislative framework. The court found that the impugned regulations were inconsistent with both the Framework Act and section 217 of the...

Court Disposition

Appeal upheld. Preferential Procurement Regulations, 2017 declared invalid and set aside. Declaration of invalidity suspended for 12 months.

Orders

  • The appeal is upheld with costs.
  • The order of the court a quo is set aside and replaced with: (a) The application succeeds with costs. (b) It is declared that the Preferential Procurement Regulations, 2017 are inconsistent with the Preferential Procurement Policy Framework Act 5 of 2000 and are invalid. (c) The declaration of invalidity is...