Umsombomvu Coal (Pty) Ltd v Transasia Minerals (Pty) Ltd and Others (09023/2019) [2019] ZAGPJHC 105 (29 March 2019)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 09023/2019

In the matter between:

UMSOBOMVU COAL (PTY) LTD Applicant

and

TRANSASIA MINERALS (PTY) LTD First Respondent

11 MILES INVESTMENTS (PTY) LTD Second Respondent

MINISTER OF POLICE Third Respondent

PHILLIP LEVINSOHN N.O Fourth Respondent

J U D G M E N T

MODIBA J:

[1] On 3 March 2019, the applicant obtained an arbitration award on an urgent basis, directing the respondents, its agents and employees to afford the applicant’s authorized representatives unrestricted 48 hour access to immovable property comprising the Malonjeni and Cambiran mining rights (“the mining rights”) through the Transasia gate.

[2] The award is interim in nature. It was granted pending the resolution of the main arbitration dispute between the parties, scheduled for June 2019. In the main dispute, the applicant seeks an order evicting the respondents from the immovable property for the reason that it has cancelled the sale agreement entered into with the respondents in 2010, in terms of which the respondents purchased the holdership of the mining rights from the applicant.

[3] In these proceedings, the applicant seeks to make the interim arbitration award an order of court on an urgent basis, in order to enforce it. The application is opposed by the respondents who have counter applied for an urgent stay and review of the arbitration award. The respondents also seek an interdict against the applicant from selling the holdership of the mining rights. The applicant opposes the counter application.

THE URGENCY OF BOTH APPLICATIONS

[4] The applicant sought and was granted the interim award on an urgent basis. I agree with the applicant that the arbitrator’s finding on urgency is a substantive non-appealable finding. For that reason, the enforcement of the award, which the applicant may only achieve on the strength of a court order, is also urgent.

[5] In any event, the basis for urgency as found by the arbitrator continues to prevail. The applicant requires access to the properties to compile the revised Social Labour Plan (“SLP”) in respect of the Malonjeni mines. The arbitrator found that the applicant carries such an obligation as the holder of the mining right in terms of the Mineral and Petroleum Resources Development Act (“MPRD Act”) and the mining charter. The applicant alleges that absent compliance, it may lose the mining right. Such a loss would cause it irreparable harm, as it would render the arbitration proceedings moot.

[6] The respondents resist the arbitration award being made an order of court on the basis that it is susceptible for review in terms of section 33(1) (b) of the Arbitration Act[1]. Therefore if the court finds that the application is urgent, they are also entitled to an urgent audience in respect of the counter

application.

[7] The review of the award became the main bone of contention between the parties during these proceedings; for a good reason. If upheld, the award becomes a nullity. Therefore the application to have it made an order of court becomes redundant. So is the respondents’ prayer for a stay. If the review is dismissed, the application to have the award made an order of court would succeed. The respondents’ prayer for a stay of the order would not be sustained.

[8] The respondents’ interdictory relief will be the only prayer that remains to be determined. It was not specifically argued. It will therefore be determined on the basis of the papers filed, as well as the parties’ written submissions.

[9] Therefore the urgency of the application and the counter application are no doubt intertwined. For these reasons, I find that both applications are urgent.

[10] The review application is ready for hearing as the full arbitration record is before court.

THE REVIEW APPLICATION

[11] The respondents seeks to challenge the interim arbitration award in terms of section 33(1) (b) of the Arbitration Act on the basis that:

[11.1] the arbitrator lacks jurisdiction to grant the order for access;

[11.2] if the arbitrator is found to have jurisdiction, by granting the order, the arbitrator committed a gross irregularity by making an order which impacts the respondents rights, which stand to be determined in the main dispute;

[11.3] it is defective and therefore vague in that it fails to limit the purpose of access to completing the SPL, which was the basis for seeking the order in the first place.

[12] The applicable legal principles for the review of arbitration awards are trite. I briefly state them below.

[13] The power of a court to review a consensual arbitration award is limited to the grounds listed in section 33(1). There are no residual common law grounds on which the court may review an arbitration award made in terms of the Act.[2] To succeed under section 33(1) (a) and (b) ,[3] the applicant ought to show that:

13.1 the arbitrator misconducted himself in relation to his duties as an arbitrator; or

13.2 the arbitrator has committed a gross irregularity in the conduct of the arbitration proceedings; or

13.3 the arbitrator exceeded his powers.

[14] A finding that the arbitrator committed a factual error leading him to a wrong conclusion is insufficient to render the arbitrator’s

award reviewable. Such an error only renders an award reviewable if it results from failure by the arbitrator to act in terms of his mandate.[4]

[15] The arbitrator determined the interim award on the basis of the parties’ written submissions. He specifically requested the parties to make submissions on whether he has jurisdiction in respect of the interim arbitration award sought by the applicant. The applicant contended that he did. The respondent contended that he did not. He ruled that he had jurisdiction and then proceeded to determine the interim reward.

[16] By ruling over this question, the arbitrator did not determine his own jurisdiction as contended on behalf of the respondents. If he lacked the competency to determine this question, it would mean that whenever a question in respect of the arbitrator’s jurisdiction arises in arbitration proceedings, only the High Court may rule over this issue. This will not only result in a multiplicity of proceedings, it is not consistent with authorities. The arbitrator ought to rule on this issue if it arises in proceedings before him. What he is precluded from doing, is to fix his own jurisdiction i.e. by expanding its scope.[5]

[17] The fact that access to the immovable property is not part of the relief sought in the arbitration agreement as contended on behalf of the respondents, does not follow that the relief is not interlocutory. In the main proceedings, the applicant asserts cancellation of the agreement and for that reason, it seeks an order evicting the respondents from the immovable properties. If the applicant succeeds, the respondents will have to vacate the property. The applicant will have access to it. Therefore allowing access to the immovable property as a temporary or interim measure, arises from the terms of the dispute the arbitrator is seized with.

[18] Therefore the arbitrator derives jurisdiction from three sources:

[18.1] Clause 11 of the arbitrator agreement which provides:

“11.1 Any and all disputes arising from or in connection with this Agreement shall be finally resolved in accordance with the rules of the Arbitration Foundation of South Africa by a single arbitration in Sandton, appointed by the Arbitration Foundation of South Africa, or its successor in title.

“11.2 The provisions of clause 11.2 shall not preclude any party from obtaining interim relief on an urgent basis from a court of competent jurisdiction pending the decision of the arbitrator.”

[18.2] the terms of the arbitration dispute as reasoned above;

[18.3] Rule 7 of the Arbitration Foundation of South Africa (“AFSA”) Expedited Rules which provides:

‘Interlocutory matters and temporary orders

Should the need arise for any party to seek interim or temporary relief before the arbitration is finalised, that party may apply to the ARBITRATOR to grant such interlocutory order or give the required temporary relief and the ARBITRATOR shall have the same power to do so as if the matter were one heard by a Judge of the High Court save that if by law such power or order cannot be exercised or given by an ARBITRATOR then, and then only, should the parties refer such matter to an appropriate Court.’

[19] Clause 11.2 which the respondents sought to rely on, is by virtue of the authority in Radon Projects (Pty) Ltd[6] inapplicable in the present circumstances. 11.2 does not exclude the jurisdiction of the arbitrator in urgent proceedings. It rather protects a party’s entitlement to seek urgent relief from a court. It is for the party who brings such proceedings to elect the forum for such proceedings. The applicants’ selection to seek interim relief from the arbitrator cannot be faulted in the present circumstances.

[20] By granting the applicant access to the immovable property, the arbitrator did not determine any issue in the main dispute. He did so on the basis of the applicant’s prevailing holdership of the mining rights and its consequential right to access the property over which the applicant holds the said rights in terms of section 5(3) of the Minerals Petroleum Resources Development Act[7] (“the MPRD Act”). The respondents’ right of occupation over the property and the sale agreement does not disturb

the applicant’s holdership and any right or obligations consequent thereon, until the holdership is transferred in terms of section 11 of the MPRD Act.

[21] In the interim award, the arbitrator made no pronouncement on whether the applicant is entitled to evict the respondents based on its cancellation of the sale agreement or whether the respondents are entitled to specific performance, alternatively damages. Pronouncing on the applicant’s holdership rights as a prima facie finding to determine the requirements for interim relief has no bearing on the issues the arbitrator is required to determine in the main dispute.

[22] It must then follow, that the arbitrator committed no irregularity as contended by the respondents because he did not take away the respondents’ procedural right to have the main issues determined at the appropriate hearing. Had he done so, his conduct would fall into the rubric of procedural irregularity as contemplated In Telcordia Technologies Inc v Telkom SA Ltd.[8] I find that the arbitrator did not commit the irregularity complained of.

[23] In the arbitration award, the arbitrator incorrectly refers to ownership of mining rights where he ought to have made reference to holdership of mining rights. It is trite that in terms of the MPRD Act, only the government is the owner of such rights. Private entities may only hold such rights. This error does not render the award reviewable as it is not procedural.

[24] The arbitrator also incorrectly referred to Transasia Minerals (Pty) Ltd in in the arbitration award. The correct entity is Transasia 1 (Pty) Ltd. The parties agree that this is a patent error that this court may correct in terms of section 31(2)[9] of the Arbitration Act.

[25] In the premises, the review application and the prayer for the stay of the arbitration award stands to be dismissed. The application to make the interim arbitration award an order of court stands to be granted.

[26] The applicants seek an order directing the third respondent to escort and assist them to enforce the court order as may be necessary. The respondent dispute this relief on spurious grounds. The prayer sought by the applicant falls within the duties of the third respondent. The third respondent does not oppose it. It therefore stands to be granted.

INTERDICTORY RELIEF

[26] In their papers, the respondents expressed an apprehension that the applicant intends selling the mining rights to a third party, hence it seeks access to the immovable property to determine the improvements the respondents have made thereon in order to determine its value. It cited numerous instances were Kunene, a presentative of the applicant, attempted to either obtain unauthorized access to the immovable property or information on the improvements made on the property. The respondents’ allegations regarding the intended sale of holding rights to a third party are bald, unsubstantiated and based on speculation. Therefore the respondents fail to meet the requirements in Plascon Evans to raise a rebuttal onus against the applicant. I find that the respondents make out no case for this relief.

[27] In the premises, the following order is made:

ORDER

APPLICATION TO MAKE THE AWARD AN ORDER OF COURT

1. The non-compliance with the Uniform Rules of Court with regard to service and time limits is condoned. This application is heard as one of urgency in terms of rule 6(12).

2. The application succeeds.

3. The arbitration award is corrected as follows:

“Transasia Minerals (Pty) Ltd” in the heading of the Arbitral Award is deleted and substituted by “Transasia 1 (Pty) Ltd”.

4. The arbitration award granted by the fourth respondent, dated 2 March 2019, as corrected above in terms of section 31 (2) of the Arbitration Act 42 of 1965, is made an order of court.

5. The third respondent is ordered to take such steps as may be necessary to escort and assist the applicant to gain access to the properties referred to in the arbitration award and in accordance with the provisions of the arbitration award.

6. The first and second respondent shall pay the costs of the application.

THE COUNTER APPLICATION

2. The application is dismissed.

3. The first and second respondent shall pay the costs of the application.

________________________

MADAM JUSTICE L T MODIBA

JUDGE OF THE HIGH COURT

GAUTENG LOCAL DIVISION, JOHANNESBURG

Counsel for applicant: Advocate A Milovanovic-Bitter

Attorney for applicant: Edward Nathan Sonnenbergs

Counsel for respondent: Advocate D Mpofu SC assisted by Advocate P Daniel

Attorney for respondent/s: Mabuza Inc

Date heard: 22 March 2019

Date of judgment: 29 March 2019

[1] 42 of 1965

[2] Amalgamated Clothing and Textile Workers Union of South Africa v Veldspun (Pty) Ltd [1993] ZASCA 158; 1994 (1) SA 162 (A); Telcordia Technologies Inc v Telkom SA Ltd [2006] ZASCA 112; [2007] 2 All SA 243 (SCA) (paragraph [51] at 259-260.

[3] Section 33 of the Arbitration Act provides as follows: “(1) Where – (a) any member of an arbitration tribunal has misconducted himself in relation to his duties as arbitrator or umpire; or (b) an arbitration tribunal has committed any gross irregularity in the conduct of the arbitration proceedings or has exceeded its powers; or … the court may, on the application of any party to the reference after due notice to the other party or parties, make an order setting the award aside.”

[3] Section 33 of the Arbitration Act provides as follows:

“(1) Where –

(a) any member of an arbitration tribunal has misconducted himself in relation to his duties as arbitrator or umpire; or

(b) an arbitration tribunal has committed any gross irregularity in the conduct of the arbitration proceedings or has exceeded its powers; or

…

the court may, on the application of any party to the reference after due notice to the other party or parties, make an order setting the award aside.”

[4] Stocks Civil Engineering (Pty) Ltd v Rip NO and Another [2002] 3 BLLR 189 (LAC).

[5] Radon Projects (Pty) Ltd v NV Properties (Pty) Ltd and Another 2013 (6) SA 345 (SCA) at paras 23, 28, 29 and 31.

[6] Supra.

[7] 28 of 2002

[8] Fn 2 above at paras 3 and 4 [9]31. Award may be made an order of court

[8] Fn 2 above at paras 3 and 4

[9]31. Award may be made an order of court

(2) The court to which application is so made, may, before making the award an order of court, correct in the award any clerical mistake or any patent error arising from any accidental slip or omission.