Telkom SA Ltd v ZTE Mzanzi (Pty) Ltd and Others (383/12) [2013] ZASCA 14 (18 March 2013)

Telkom SA Ltd v ZTE Mzanzi (Pty) Ltd and Others (383/12) [2013] ZASCA 14 (18 March 2013)

The Supreme Court of Appeal held that the dispute resolution clause incorporated into the RFP did not create a contractual obligation for Telkom to resolve disputes with bidders prior to contract formation. The clause only becomes operative once a contract is concluded with a successful bidder. To interpret the clause otherwise would be unbusinesslike and lead to absurd consequences, such as obliging Telkom to arbitrate with multiple bidders before awarding the tender. The court found that the interim interdict granted by the court below was inappropriate, as the relief sought was in fact final for the period specified and should have been assessed under the rules for final relief. The...

Citation
[2013] ZASCA 14
Parties
Appellant: Telkom SA Limited; Respondent: ZTE Mzanzi (Pty) Ltd; Respondent: Huawei Technologies Africa (Pty) Ltd; Respondent: Alcatel-Lucent (Pty) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
18 March 2013
Case Number
383/12
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court, Pretoria
Outcome
Appeal upheld; order of the court below set aside and substituted with an order dismissing the application with costs, including the costs of two counsel.
Judges
Nugent, Leach, Petse, Schoeman, Saldulker
Legal Topics
Tender Process, Contractual Relationship, Dispute Resolution Clause, Interpretation of Contract, Interdict, Arbitration
Commercial and Corporate Civil Procedure Tender Process Contractual Relationship Dispute Resolution Clause Interpretation of Contract Interdict Arbitration

Case Brief

Summary, issues, holding and outcome

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Parties

Telkom SA Limited

Appellant

ZTE Mzanzi (Pty) Ltd

Respondent

Huawei Technologies Africa (Pty) Ltd

Respondent

Alcatel-Lucent (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court, Pretoria

Legal Issues

  1. 1 Whether the dispute resolution clause in the RFP created a contractual obligation for Telkom to resolve disputes with bidders prior to contract formation.
  2. 2 Whether the interim interdict granted by the court below was appropriate given the nature of the relief sought.
  3. 3 How the relevant clauses in the RFP and Standard Terms and Conditions should be interpreted.

Ratio Decidendi

The Supreme Court of Appeal held that the dispute resolution clause incorporated into the RFP did not create a contractual obligation for Telkom to resolve disputes with bidders prior to contract formation. The clause only becomes operative once a contract is concluded with a successful bidder. To interpret the clause otherwise would be unbusinesslike and lead to absurd consequences, such as obliging Telkom to arbitrate with multiple bidders before awarding the tender. The court found that the interim interdict granted by the court below was inappropriate, as the relief sought was in fact final for the period specified and should have been assessed under the rules for final relief. The...

Court Disposition

Appeal upheld; order of the court below set aside and substituted with an order dismissing the application with costs, including the costs of two counsel.

Orders

  • The appeal is upheld with costs.
  • The order of the court below is set aside.