Sunday River Citrus Company v Valour Fruit Processors (Pty) Ltd and Another (1580/11) [2012] ZAECPEHC 38 (12 June 2012)

Sunday River Citrus Company v Valour Fruit Processors (Pty) Ltd and Another (1580/11) [2012] ZAECPEHC 38 (12 June 2012)

The court found that the first respondent did not expressly consent to the arbitrator determining his own jurisdiction, nor was there a valid arbitration agreement covering the disputes referred by the applicant. Clause 14 of the supply agreement only covers disputes relating to interpretation, application, or breach of the agreement, not deadlocks in negotiations over purchase price. The correspondence between the parties did not evidence clear consent to arbitration of the issues raised. The applicant's attempt to refer the fixing of an increased purchase price to arbitration was based on an incorrect interpretation of clause 8.2, which does not provide a deadlock resolution mechanism....

Citation
[2012] ZAECPEHC 38
Parties
Applicant: Sundays River Citrus Company; Respondent: Valor Fruit Processors (Pty) Ltd; Respondent: Reneé Paul van Rooyen
Court
Eastern Cape High Court, Port Elizabeth
Jurisdiction
South Africa
Judgment Date
12 June 2012
Case Number
1580/11
Procedural Posture
Urgent Application / Judgment on Application for Declaratory Relief and Striking Out
Outcome
Application dismissed. Portions of the affidavits specified in the judgment are struck out. Each party to pay its own costs in respect of the application to strike out.
Judges
N Dambuza
Legal Topics
Arbitration Agreement, Jurisdiction of Arbitrator, Contractual Interpretation, Supply Agreement Dispute, Deadlock Resolution
Commercial and Corporate Alternative Dispute Resolution Arbitration Agreement Jurisdiction of Arbitrator Contractual Interpretation Supply Agreement Dispute Deadlock Resolution

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Parties

Sundays River Citrus Company

Applicant

Valor Fruit Processors (Pty) Ltd

Respondent

Reneé Paul van Rooyen

Respondent

Procedural Posture

Urgent Application / Judgment on Application for Declaratory Relief and Striking Out

Legal Issues

  1. 1 Whether the first respondent consented to the second respondent determining his own jurisdiction as arbitrator.
  2. 2 Whether there is an arbitrable dispute between the applicant and the first respondent under the supply agreement.
  3. 3 Whether the breakdown in negotiations regarding purchase price constitutes a dispute capable of arbitration under clause 14 of the supply agreement.

Ratio Decidendi

The court found that the first respondent did not expressly consent to the arbitrator determining his own jurisdiction, nor was there a valid arbitration agreement covering the disputes referred by the applicant. Clause 14 of the supply agreement only covers disputes relating to interpretation, application, or breach of the agreement, not deadlocks in negotiations over purchase price. The correspondence between the parties did not evidence clear consent to arbitration of the issues raised. The applicant's attempt to refer the fixing of an increased purchase price to arbitration was based on an incorrect interpretation of clause 8.2, which does not provide a deadlock resolution mechanism....

Court Disposition

Application dismissed. Portions of the affidavits specified in the judgment are struck out. Each party to pay its own costs in respect of the application to strike out.

Orders

  • The application is dismissed with costs.
  • The specified portions of the founding and replying affidavits are struck out as detailed in paragraph 56 of the judgment.