Palabora Copper (Pty) Ltd v Motlokwa Transport and Construction (Pty) Ltd (298/2017) [2018] ZASCA 23; [2018] 2 All SA 660 (SCA); 2018 (5) SA 462 (SCA) (22 March 2018)

Palabora Copper (Pty) Ltd v Motlokwa Transport and Construction (Pty) Ltd (298/2017) [2018] ZASCA 23; [2018] 2 All SA 660 (SCA); 2018 (5) SA 462 (SCA) (22 March 2018)

The Supreme Court of Appeal found that the arbitrator committed a gross irregularity in the conduct of the arbitration proceedings by striking out Palabora's amplified denials and preventing a fair trial of the issues regarding Motlokwa's ability to perform the contract and suffer damages. The arbitrator failed to require Motlokwa to prove the assumptions underlying the quantum agreement, which were essential to establishing damages. As a result, Motlokwa was awarded damages without any evidentiary basis. The Court held that only paragraph D of the award, relating to the counterclaim and damages, was infected by the irregularity and could be severed from the remainder of the award. The...

Citation
[2018] ZASCA 23
Parties
Appellant: Palabora Copper (Pty) Ltd; Respondent: Motlokwa Transport & Construction (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
22 March 2018
Case Number
298/2017
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal upheld; paragraph D of the arbitration award set aside; dispute on the counterclaim referred to new arbitration.
Judges
Wallis, Dambuza, Van der Merwe, Plasket, Schippers
Legal Topics
Arbitration Act 42 of 1965, Gross Irregularity, Severability of Award, Damages for Breach of Contract, Onus of Proof, Specific Performance
Commercial and Corporate Civil Procedure Alternative Dispute Resolution Arbitration Act 42 of 1965 Gross Irregularity Severability of Award Damages for Breach of Contract Onus of Proof +1 more

Case Brief

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Parties

Palabora Copper (Pty) Ltd

Appellant

Motlokwa Transport & Construction (Pty) Ltd

Respondent

Procedural Posture

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

Legal Issues

  1. 1 Whether the arbitration award should be set aside under section 33(1)(b) of the Arbitration Act 42 of 1965 due to gross irregularity.
  2. 2 Whether the award of damages to Motlokwa was justified in the absence of evidence proving loss.
  3. 3 Whether the quantum agreement between the parties required Motlokwa to prove certain assumptions before damages could be awarded.

Ratio Decidendi

The Supreme Court of Appeal found that the arbitrator committed a gross irregularity in the conduct of the arbitration proceedings by striking out Palabora's amplified denials and preventing a fair trial of the issues regarding Motlokwa's ability to perform the contract and suffer damages. The arbitrator failed to require Motlokwa to prove the assumptions underlying the quantum agreement, which were essential to establishing damages. As a result, Motlokwa was awarded damages without any evidentiary basis. The Court held that only paragraph D of the award, relating to the counterclaim and damages, was infected by the irregularity and could be severed from the remainder of the award. The...

Court Disposition

Appeal upheld; paragraph D of the arbitration award set aside; dispute on the counterclaim referred to new arbitration.

Orders

  • The appeal is upheld with costs, including the costs of two counsel.
  • The order of the High Court is set aside and replaced with an order dismissing the application to make the arbitration award an order of court.