Morgan Stanley Capital Group Inc v Strategic Fuel Fund Association; Strategic Fuel Fund Association v Morgan Stanley Capital Group Inc (28167/2012) [2019] ZAGPJHC 332 (28 June 2019)

Morgan Stanley Capital Group Inc v Strategic Fuel Fund Association; Strategic Fuel Fund Association v Morgan Stanley Capital Group Inc (28167/2012) [2019] ZAGPJHC 332 (28 June 2019)

The court held that the arbitration award was final and binding, and that the prescribed rate of interest under PRIA was properly applied to the foreign currency damages. The claims between the parties were unliquidated until quantified by the arbitration award on 5 December 2017, and thus set off could only operate from that date. SFF failed to raise the issue of the interest rate before the arbitrators, and there was no justification for the court to develop the common law in this regard, as PRIA provides a discretionary mechanism for adjusting interest rates where just. The court found SFF's conduct obstructive and unjustified, and dismissed its counter-application.

Citation
[2019] ZAGPJHC 332
Parties
Applicant: Morgan Stanley Capital Group Inc; Respondent: Strategic Fuel Fund Association; Applicant: Strategic Fuel Fund Association; Respondent: Morgan Stanley Capital Group Inc
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
28 June 2019
Case Number
28167/2012
Procedural Posture
Review Application / Application to Make Arbitration Award an Order of Court; Counter Application for Ancillary Orders and Development of Common Law
Outcome
Morgan Stanley's application to make the arbitration award an order of court is granted; SFF's counter-application is dismissed with costs.
Judges
Twala M L, Victor M
Legal Topics
Arbitration Award Enforcement, Prescribed Rate of Interest Act, Set Off, Liquidated and Unliquidated Claims, Development of Common Law
Commercial and Corporate Civil Procedure Arbitration Award Enforcement Prescribed Rate of Interest Act Set Off Liquidated and Unliquidated Claims Development of Common Law

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 6 Authorities cited 11 Party arguments 2 Amounts and remedies 7
Sign in to unlock

Parties

Morgan Stanley Capital Group Inc

Applicant

Strategic Fuel Fund Association

Respondent

Strategic Fuel Fund Association

Applicant

Morgan Stanley Capital Group Inc

Respondent

Procedural Posture

Review Application / Application to Make Arbitration Award an Order of Court; Counter Application for Ancillary Orders and Development of Common Law

Legal Issues

  1. 1 Should the common law be developed to allow interest on foreign currency damages to follow the foreign currency rate unless justice requires otherwise.
  2. 2 Was the arbitration award final and binding, and should it be made an order of court.
  3. 3 Were the claims between the parties liquidated or unliquidated for purposes of set off.

Ratio Decidendi

The court held that the arbitration award was final and binding, and that the prescribed rate of interest under PRIA was properly applied to the foreign currency damages. The claims between the parties were unliquidated until quantified by the arbitration award on 5 December 2017, and thus set off could only operate from that date. SFF failed to raise the issue of the interest rate before the arbitrators, and there was no justification for the court to develop the common law in this regard, as PRIA provides a discretionary mechanism for adjusting interest rates where just. The court found SFF's conduct obstructive and unjustified, and dismissed its counter-application.

Court Disposition

Morgan Stanley's application to make the arbitration award an order of court is granted; SFF's counter-application is dismissed with costs.

Orders

  • Prayers 1, 2 and 3 of the notice of motion are granted.
  • SFF's counter-application is dismissed with costs, including costs of two counsel.