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South Africa Judgment

South Gauteng High Court, Johannesburg

Industrius D.O.O v IDS Industry Service and Plant Construction South Africa (Pty) Ltd (15862/2020) [2021] ZAGPJHC 528 (13 October 2021)

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Professional case brief

Research organized from the available case record

Source document

01

Holding and result

The court found that the applicant failed to demonstrate reasonable prospects that another court would differ from the judgment refusing to stay execution of the arbitral award. The counterclaim raised by the respondent was considered res judicata, as it had already been addressed by the arbitrator in the arbitral award. Furthermore, any remedies sought regarding the enforcement of the arbitral award should have been pursued under the International Arbitration Act and Model Law, which the applicant did not do. Accordingly, the application for leave to appeal was refused.

Court disposition

Application for leave to appeal refused with costs.

Orders

  • The application for leave to appeal is refused with costs.

02

Material facts

Parties

Industrius D.O.O

Applicant Counsel: Adv I Currie

IDS Industry Service and Plant Construction South Africa (Pty) Ltd

Respondent Counsel: Adv HJ Fischer

Amounts and remedies

  • Counterclaim Amount Alleged: EUR 20.8

03

Procedural history

  1. Posture

    Leave to Appeal / Application for Leave to Appeal After Judgment Enforcing Arbitral Award and Dismissing Counterclaim

04

Questions and positions

Legal issues

Party arguments

Applicant
The applicant contended that the execution of the order making the arbitration award an order of court should be stayed, or alternatively, that the applicant should be interdicted from executing the order pending final adjudication of the respondent's action under case number 2020/19156. The applicant argued that there are reasonable prospects of success on appeal regarding the dismissal of the counterclaim and the refusal to stay execution.
Respondent
The respondent conceded that the arbitration award was capable of being made an order of court and did not dispute this during the hearing. The respondent maintained that the remedies sought by the applicant should have been pursued under the International Arbitration Act and Model Law, and that the counterclaim was already dealt with by the arbitrator, rendering it res judicata.

05

Court’s reasoning

  1. 01

    Section 17(1)(a) of the Superior Courts Act

    Leave to appeal may only be granted if the appeal would have a reasonable prospect of success or there is some compelling reason for the appeal to be heard, such as conflicting judgments.

  2. 02

    Mont Chevaux Trust v Tina Goosen & 18 Others 2014 JDR 2325 (LCC)

    The threshold for granting leave to appeal has been raised; there must be a measure of certainty that another court will differ from the judgment appealed against.

  3. 03

    International Arbitration Act and Model Law

    Enforcement of international arbitral awards is governed exclusively by the International Arbitration Act and Model Law, and remedies should be sought under these instruments.

06

Ratio, limits and disposition

Ratio decidendi

The court found that the applicant failed to demonstrate reasonable prospects that another court would differ from the judgment refusing to stay execution of the arbitral award. The counterclaim raised by the respondent was considered res judicata, as it had already been addressed by the arbitrator in the arbitral award. Furthermore, any remedies sought regarding the enforcement of the arbitral award should have been pursued under the International Arbitration Act and Model Law, which the applicant did not do. Accordingly, the application for leave to appeal was refused.

Obiter and limits

  • The pro-enforcement bias required by the Model Law would be undermined if remedies were sought outside its framework.
  • The applicant did not seek remedies under the International Arbitration Act and Model Law, which govern the enforcement of international arbitral awards.

Court disposition

Application for leave to appeal refused with costs.

  • The application for leave to appeal is refused with costs.

Source and reliance status

South Gauteng High Court, Johannesburg

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Judgment reading view

Judgment text

The complete available source text.

Source document

South Gauteng High Court, Johannesburg

Judgment

[2021] ZAGPJHC 528

REPUBLIC

OF SOUTH AFRICA

IN

THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 15862/2020

REPORTABLE:

NO

OF INTEREST TO OTHER JUDGES: NO

REVISED: NO

13/10/2021

In the matter between:

INDUSTRIUS D.O.O

Applicant

and

IDS

INDUSTRY SERVICE AND PLANT CONSTRUCTION

Respondent

SOUTH AFRICA (PTY) LTD

JUDGMENT

(LEAVE TO APPEAL)

Delivered: By transmission to the parties via email and uploading onto Case Lines the Judgment is deemed to be delivered. The date for hand-down

is deemed to be 13 October 2021

SENYATSI J:

[1] On 20 August 2021, I granted an order making an arbitrator’s award an order of this court and dismissed the counterclaim of the applicant. I also refused to stay the execution of the order pendente lite.

[2] Although the application for leave to appeal is sought against the whole judgement as well as orders inclusive of the dismissed counterclaim by the respondents which was granted by the court on 20 August 2021, there is no appeal against the order of this court making the arbitration award an order of court. This is conceded by the respondent when it states that during the hearing it did not dispute that the arbitration award was capable of being made an order of court.

[3] The appeal is confined to the dismissal of prayer 3 that the execution of any order making the arbitration award dated 9 June 2020 delivered by Mr K Trisk SC an order of court be stayed alternatively that the applicant be interdicted pendente lite from executing the said order pending the final adjudication of the respondent’s action under the case number 2020/ 191 56.

[4] The test for leave to appeal is regulated by Section 17(1)(a) of the Superior Courts Act which provides as follows:

“(1) Leave to appeal may only be given by the judge or judges concerned are of the opinion that:

(a)(i) appeal the appeal would have a reasonable prospect of success or

(ii) there is some compelling reason why the appeal should be heard including conflicting judgements on the matter under consideration;”

[5] The test for leave to appeal under section 17(1)(a) of the Superior Courts Act requires a measure of certainty that the appeal court will differ from the court whose judgment is sought to be appealed against.[1]

[6] In the Mont Chevaux Trust v Tina Goosen & 18 Others[2] the court held as follows in commenting on the threshold for granting leave to appeal:

“It is clear that the threshold for granting leave to appeal against the judgement of the High Court has been raised in the new Act. the former test whether leave to appeal should be granted was a reasonable prospect that another court might come to a different conclusion.” See Van Heerden v Conwright and Others 1985 (2) SA 342 (T) at 343H. The use of the word “would” In the new statute Indicates a measure of certainty that another court will differ from the court whose judgment is sought to be appealed against.

[7] The enforcement of International arbitral awards is governed exclusively by the International Arbitration Act and Model Law. Any other conclusion would clearly undermine the pro-enforcement bias that is required by the Model Law which has been adopted into our law by the Act. Any remedies that the applicant seeks in this leave to appeal could and should be sought in terms of the Act and the Model Law.

[8] As stated in the judgment appealed against, IDS did not seek any remedies in terms of the Act and the Model Law.

[9] I have also found that the counterclaim that IDS claims to have of EUR20.8 million alleged under case number 2020/19156, are most likely, res judicate in that the arbitrator, Mr Trisk, dealt with them in his arbitral award.

[10] It therefore follows that the applicant has failed to show that another court would differ with the judgment sought to be appealed against.

ORDER

[11] The following order is made:

(a) the application for leave to appeal is refused with costs.

SENYATSI ML

Judge of the High Court of South Africa

Gauteng Local Division, Johannesburg

REPRESENTATION

Date Judgment reserved: 18 September 2021

Date of Judgment: 13 October 2021

Applicants Counsel: Adv I Currie

Instructed by: Knowles Husain Lindsay

Respondents Counsel: Adv HJ Fischer

Instructed by: Spellas Lengert Kuebler Braun Inc.

[1] See Acting National Director of Public Prosecutions and Others vs Democratic Alliance: In Re: democratic Alliance v ANDPP [2016] ZAGPPHC at [25] See also: National Union of Public Service and Allied Workers v The MEC: Health, Gauteng & Others Case 78454/2016 at para [6]

[2] 2014 JDR 2325 (LCC) at para [6]

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Authorities

Authorities used by the court

Cases, legislation, regulations, and constitutional provisions identified in the available record.

Mont Chevaux Trust v Tina Goosen & 18 Others 2014 JDR 2325 (LCC)

Case cited

Van Heerden v Conwright and Others 1985 (2) SA 342 (T)

Case cited

Acting National Director of Public Prosecutions and Others vs Democratic Alliance: In Re: Democratic Alliance v ANDPP [2016] ZAGPPHC

Case cited

National Union of Public Service and Allied Workers v The MEC: Health, Gauteng & Others Case 78454/2016

Case cited

Superior Courts Act

Legislation

Legislation referenced in the available case record.

International Arbitration Act

Legislation

Legislation referenced in the available case record.

Model Law

Legislation

Legislation referenced in the available case record.

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