THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable

Case No: 752/2011

In the matter between:

FOIZE AFRICA (PTY) LTD

Appellant
v
FOIZE BEHEER BV

First Respondent
ALGEMEEN BEHEER NEDERLAND BV

Second Respondent
FOIZE SALES BV

Third Respondent
PAUL VAN OOSTVEEN

Fourth Respondent
LEONARDUS MARIA WINDER

Fifth Respondent
NORBERT WILMERING

Sixth Respondent
MERTECH TELECOMMUNICATIONS (PTY) LTD

Seventh Respondent
FOIZE EUROPE BV (FORMERLY FOIZE TRADING BV)
Eighth Respondent
NEW GENERATIONS SMS (PTY) LTD

Ninth Respondent

Neutral citation:
Foize Africa v Foize Beheer (752/2011) [2012] ZASCA 123 (20
September 2012)

Coram:
Mthiyane DP, Cloete, Heher, Shongwe and Leach JJA

Heard:
23 August 2012

Delivered:
20 September 2012

Summary:
Interdict against peregini ─ effectiveness thereof ─ effect of a
contractual provision that parties to a dispute would proceed to arbitration in Holland
and that Dutch law would apply to their dispute ─ such clauses not ousting the
jurisdiction of a South African court ─ discretion whether to stay South African
litigation by reason of such a clause ─ factors to be taken into account.

___________________________________________________________________

O R D E R
___________________________________________________________________

On appeal from:
North Gauteng High Court, Pretoria (Matojane J sitting as court
of first instance):
(a)
The appeal succeeds, with costs.
(b)
The order of the high court of 13 September 2011 is set aside and is
substituted with the following:
‘1.
That pending the final determination of an action to be instituted by the
applicant against the respondents for a final interdict and ancillary relief, an interim
order is issued in the following terms:
a. Interdicting and restraining the first to sixth and eighth respondents from being
involved whether directly or indirectly in granting a licence to the seventh or eighth
respondents or any third party from selling, marketing or distributing the product
commonly known as the Foize on Mobile software, more fully described in annexure
MV 3 to the founding affidavit, in South Africa from the date of this order to 6
December 2014.
b. Interdicting and restraining the first to the sixth and eighth respondents from
marketing, selling or distributing the said product in South Africa from the date of this
order up to and until 6 December 2014.
c. Interdicting and restraining the seventh and ninth respondents from entering into a
licensing agreement with the first to sixth and/or eighth respondents which purports
to grant any rights to the seventh or ninth respondents to market, distribute or sell
the said product in South Africa for any period prior to 7 December 2014.
d.  Costs of the application against the first to the sixth and eight respondents are to
be costs in the cause of the action to be instituted.
2.
The applicant is to institute an action against the respondents by 31 October
2012 seeking an order that the interim relief be made final.

3.
In the event that the applicant fails to bring an action against the respondents
as envisaged in paragraph 2 above,  then, unless this court grants an extension of
time on good cause shown, the interim relief will lapse.’
___________________________________________________________________

J U D G M E N T
__________________________________________________________________

LEACH
JA
(MTHIYANE
DP,
CLOETE,
HEHER
AND
SHONGWE
JJA
CONCURRING):

[1]   The appellant is a South African company incorporated with the specific
purpose of proceeding with a business venture arising from a written contract (‘the
licensing agreement’) concluded in Johannesburg in December 2009. The first,
second, third and eighth respondents are companies incorporated in the
Netherlands while the fourth, fifth and sixth respondents are Dutch businessmen.
The relationship between the respondents and the roles they are reputed to have
played in the events giving rise to these proceedings will become apparent in due
course.

[2]   The appellant concluded the licensing agreement with the third respondent,
represented at the time by the fourth and fifth respondents. It related to the sale and
distribution of the ‘Foize on Mobile platform’ (‘the product’) which consisted of certain
software and customised hardware, designed for use in the telecommunications
industry. The agreement also included the following terms relevant to the present
dispute:
(a)
The appellant was extended the exclusive right to sell, market and distribute
the product in certain specified geographical areas (referred to as the ‘Territory’),
including South Africa, for a period of five years until 6 December 2014.
(b)
The third respondent warranted that the use of the product would not infringe
on the intellectual property rights of any third parties and that it was fully authorised
to appoint the appellant as its exclusive licensee for the ‘Territory’.1

1  Clause 6.1.

(c)
In clause 9 the third respondent undertook to ensure that the first respondent
(described as being the holder of all intellectual property rights relating to the
product) was fully aware and consented to the terms of the licensing agreement, and
that:
‘If, for any reason, the agreement between [the first respondent] and [the third respondent] is
terminated the [third respondent] shall procure that its license agreement with [first
respondent] contains a provision that [first respondent] will honour the terms of this license
agreement and all the rights and obligations of the [third respondent] in terms of this
agreement shall then vest in [first respondent].’

[3]   The first respondent was a further signatory to the licensing agreement. Also
represented at the time by the fourth and fifth respondents who signed on its behalf,
it agreed to be bound by the terms and conditions therein contained, particularly
those in clause 9 of the agreement (quoted in para 2(c) above).

[4] Unfortunately, business relations between the parties soon soured. The
second respondent subsequently announced that it, and not the first respondent, in
fact held both the intellectual property rights and the marketing and distribution rights
to the product, and that it was going to market the product in South Africa through
two South African companies owned by a businessman, Mr Stephen van der Merwe
(these latter companies were cited as the seventh and ninth respondents in the court
a quo).

[5] This led to the appellant instituting proceedings in the North Gauteng High
Court in April 2011, seeking interim relief pending the final determination of an action
which it intended to institute against the respondents for a final interdict that would,
in effect, compel the respondents to honour the terms of the licensing agreement.
Essentially the appellant sought (a) an order piercing the corporate veil of the first
respondent and declaring that its sole director, the second respondent, was bound,
together with the first and third respondents, by the licensing agreement, and (b)
interdictory relief designed to protect its rights under the licensing agreement.  In
regard to the latter, the appellant cited not only the present respondents but also, as
seventh and ninth respondents,  Van der Merwe’s two South African companies,
alleging that the second respondent had purported to grant them the exclusive right

to market and distribute the product in South Africa. The precise relief relevant to the
present dispute was set out in the notice of motion in the following terms:
‘2. That pending the final determination of an action to be instituted by the applicant against
the respondents for a final interdict and ancillary relief an interim order be granted as
follows:
a. Declaring the first to third respondents as parties, in their capacities as licensors, to the
licensing agreement . . . .
b. Interdicting and restraining the first to sixth and eight respondents from being involved
whether directly or indirectly in granting a licence to the seventh or eighth respondents or
any third party from selling, marketing or distributing the product . . . in South Africa from the
date of this order to the 6 December 2014.
c. Interdicting and restraining the first to the sixth and eighth respondents from marketing,
selling or distributing the product . . . in South Africa from the date of this order up to and
until the 6 December 2014.
d. Interdicting and restraining the seventh and ninth respondents from entering into a
licensing agreement with the first to sixth and/or eighth respondents which purports to grant
any rights to the seventh or ninth respondents to market, distribute or sell the product . . . in
South Africa for any period prior to the 7 December 2014.
e.  Costs of the application against the first to the sixth and eighth respondents to be costs in
the cause of the action to be instituted.
f.
. . . .

3. The applicant is to institute an action against the respondents within a period of 30 days
from the date of this order seeking an order that the interim relief be final.
4. In the event that the applicant fails to bring an action against the respondents as
envisaged in paragraph 3 supra the interim relief will lapse.’

[6] Neither the seventh nor the ninth respondent (Van der Merwe’s two
companies) sought to oppose the application and, when the matter came before it
on 24 May 2011, the high court granted an interim interdict against them in terms of
prayer 2d of the notice of motion. The matter was then postponed and the remaining
respondents (ie the respondents in this appeal) were put on terms to file their
answering affidavits by 27 May 2011.

[7] This they failed to do. Instead, when the application was subsequently set
down, they sought to resist it by raising an objection in limine to the appellant's case.

We were informed from the bar that the respondents had in fact prepared an
opposing affidavit in which they outlined their objection in limine, but that it had not
been timeously filed. As the respondents were out of time, they did not seek
condonation and leave to file the affidavit; instead, they merely raised their objection
in argument.

[8] Although in the judgment of the court a quo it is stated that there were three
points in limine, the terms thereof were unfortunately not specifically recorded. But
however the points may have been framed, they were based squarely upon the
three parts of clause 10 of the licensing agreement which reads as follows:
’10.1
This agreement shall, for all intents and purposes, be governed by and executed
according to Dutch Law.
10.2
The parties irrevocably consent to the jurisdiction of the Courts of Holland for any
matter arising out of or in connection with this agreement.
10.3
Should any dispute arise out of or in connection with this agreement, that dispute
shall be referred to and finally decided by arbitration in accordance with the rules of the
International Chamber of Commerce on arbitration with the seat of the arbitration being
Amsterdam and the language of such arbitration shall be English.’

[9] The essence of the objection was, first, that the appellant, by submitting to the
courts of Holland, had waived its right to seek relief in the courts of this country in
respect of any matter arising out of or in connection with the licensing agreement
and, second, that the appellant was bound to proceed to arbitration in Holland in
respect of any such matter. Both these points were upheld and the appellant’s
application for interim relief was dismissed. With leave of the court a quo, the
appellant now appeals to this court.

[10] The decision to refuse the interim interdict, as I understand the judgment of
the court a quo, was based on a finding that by agreeing to the provisions of clause
10, the appellant had precluded the high court from exercising jurisdiction over the
respondents in the action the appellant intended to bring against them. In order to
consider the correctness of this conclusion, it is necessary to outline briefly the
background to the dispute and the relationship between the respondents.

[11] At all material times the fourth respondent was the sole director of the second
respondent which, in turn, was the sole director of the first respondent (presumably,
contrary to the position in this country,2 under the laws of Holland a company may
be a director of another company). The first respondent, in turn, held 80% of the
shares in the eighth respondent, which was the controlling body of the third
respondent. The appellant therefore alleged that the second respondent in fact
controlled the first, third and eighth respondents at the time the licensing agreement
was concluded – and that, as the fourth respondent was the sole director of the
second respondent, he, together with the fifth respondent (who held a third of the
shares in the second respondent and 25% of the shares in the first respondent) and
sixth respondent (who held 20% of the eighth respondent’s shares  and who was a
director of the third respondent) were the controlling minds behind the first, third and
eighth respondents at that time.

[12] The appellant alleged that the licensing agreement had been signed pursuant
to a representation that the first respondent owned the intellectual property rights to
the product, had given the third respondent the right to market and distribute it, and
had authorised the third respondent to enter into the licensing agreement. It alleged
further that if in fact the distribution and marketing rights to the product were vested
in the second respondent, the first, second  and third respondents must have known
at the time the licensing agreement was concluded that this representation was false
and were therefore parties to a fraud against it. The appellant therefore expressed
its intention to seek to pierce the corporate veil of the first respondent so as to hold
the second respondent, together with the first and third respondents, bound by the
licensing agreement; and to obtain an interdict restraining all three from acting in
breach of their contractual obligations. Moreover, as the appellant alleged that the
fourth, fifth, sixth and eighth respondents controlled the first, second and third
respondents, it contended that they were also parties to the fraud and should be
interdicted to prevent them from relying on their fraud to circumvent the licensing
agreement.

[13] For convenience I intend first to consider the position of the fourth, fifth, sixth
and eighth respondents. Relying on the decision in Atlas Organic Fertilizers (Pty Ltd

2 See s 69(7)(a) of the Companies Act 71 of 2008.

v Pikkewyn Ghwano (Pty) Ltd 1981 (2) SA 173 (T) and the authorities referred to in
that judgment, the appellant based its claim for relief against them on the allegation
that they were wrongfully interfering with the contractual obligations of the first and
third respondents arising from the licensing agreement. The claim to an interdict
against them arises from conduct of a delictual nature, brought against persons who
are not parties to the licensing agreement.  As the appellant does not (and cannot)
seek to enforce that contract in their case, they cannot seek to invoke the protection
of clause 10, to which they were not parties, to seek to avoid the high court
exercising  jurisdiction over them, nor was it suggested otherwise in argument. This
the court a quo appears not to have appreciated, its judgment having been based
solely upon the effect of the provisions of clause 10. Although this was specifically
raised in the application for leave to appeal, it was not dealt with in the judgment on
that application. The inference is irresistible that the learned judge overlooked the
fact that not all the respondents had been parties to the licensing agreement, and
clause 10 in particular, and exercised his discretion on an incorrect factual basis.

[14] Counsel for the respondents however sought to defend the court a quo’s
decision in regard to the fourth, fifth, sixth and eighth respondents by raising two
general contentions, of equal application to the remaining respondents, to justify the
decision not to grant an interim interdict. I shall deal with each seriatim.

[15] The first was that as the respondents are peregrini who have no presence in
this country, it would be futile to grant an interdict against them. The basis of this
argument was that, as the respondents are in Holland, it would not be possible to
ensure that they complied with an interdict granted by a court in this country as
contempt of court proceedings could not be brought against them. This is a
somewhat surprising argument as, historically, the courts of this country have as a
matter of course granted interdictory relief against peregrini3 and, presumably for
this reason, the argument was somewhat tentatively advanced. Such diffidence was
well founded. The issue is really one of effectiveness, and while I accept that a court
of this country should not grant an interdict against a peregrinus where the act

3 Some of the authorities are usefully collected in Zokufa v Compuscan (Credit Bureau) 2011 (1) SA
272 (ECM) ─ see also Lawsa (first re-issue) vol 11 para 305.

sought to be interdicted would take place outside its area of jurisdiction,4 this is not
such a case. This is a matter involving a contract concluded in this country, which is
to be performed in this country, which the respondents threaten to breach in this
country, and which the appellant, an incola, seeks to enforce in this country. In these
circumstances a court of this country will be able to enforce an interdict if granted,
even if contempt proceedings are not available (about which I express no opinion).

[16] The respondents’ second general objection to the issue of an interim interdict
against them was based on the interdict already granted against the seventh and
ninth respondents on 24 May 2011. In the light of that order, so it was argued, there
was no longer any threat of the licensing agreement being breached and thus an
interim interdict against them was not required. But the mere fact that an interdict
has been granted against certain persons does not mean that similar relief need not
be granted against others who have conducted themselves in a manner justifying
the grant of an interdict against them. Moreover, the grant of an interdict against the
seventh and ninth respondents would not operate to restrain the remaining
respondents from conducting themselves in such a way so as to frustrate the
appellant’s rights under the licensing agreement.

[17] There was therefore no reason for the high court not to have entertained the
appellant’s envisaged action against the fourth to ninth respondents, and the court
a quo erred in failing to appreciate that to be the case.

[18] That brings me to the position of the second respondent. As already
mentioned, the appellant’s papers foreshadow an argument that the corporate veil of
the first respondent should be pierced in order to hold its sole director, the second
respondent, bound by the licensing agreement. It is unnecessary to consider
whether the suggested piercing of the veil would be appropriate as, at the very least,
the second respondent, as sole director of the first respondent, would be responsible
for the first respondent’s decision not to honour the terms of the licensing
agreement. In these circumstances the appellant’s allegations concerning the
second respondent are equally capable of founding a claim for an interdict based on

4 Compare Ex parte Hay Management Consultants (Pty) Ltd 2000 (3) SA 501 (W) at 507H, [2000] 2
All SA 592 (W) at 599f-g and South Atlantic Islands Development Corporation Ltd v Buchan 1971 (1)
SA 234 (C).

its wrongful and intentional interference with the first respondent’s contractual
obligations under the licensing agreement, and in that regard it is in the same
position as the fourth to sixth and eighth respondents.5 That being so, on a parity of
reasoning with that already expressed in regard to those respondents, the high court
can exercise jurisdiction over the second respondent  irrespective of the provisions
of clause 10. This the court a quo does not appear to have appreciated, and it erred
in reaching the contrary conclusion that the high court could not interdict the second
respondent.

[19] I turn to consider the position of the first and third respondents who
successfully relied upon clause 10 to persuade the court a quo that it should not
entertain the matter against them. In their case it is necessary to consider the effect
of a foreign jurisdiction and arbitration clause upon the jurisdiction of a court which
would otherwise be able to deal with a dispute.

[20] It is clear from its judgment that the court a quo regarded the respondents'
objection in limine as relating to the high court's jurisdiction to entertain the dispute
between the parties. In upholding that objection it found that by reason of clause
10.2 of the licensing agreement ‘the only courts being possessed of jurisdiction are
the courts in the country of Holland’ and that under clause 10.3 the appellant was
bound by its agreement to proceed to arbitration. It therefore held that the high court
in fact had no jurisdiction in respect of the parties’ dispute.

[21] In doing so, the court quo erred. It can now be regarded as well settled that a
foreign jurisdiction or arbitration clause does not exclude the court’s jurisdiction.
Parties to a contract cannot exclude the jurisdiction of a court by their own
agreement, and where a party wishes to invoke the protection of a foreign
jurisdiction or arbitration clause, it should do so by way of a special or dilatory plea
seeking a stay of the proceedings.6 That having been done, the court will then be
called on to exercise its discretion whether or not to enforce the clause in question ─
see eg Commissioner for Inland Revenue and another v Isaacs NO 1960 (1) SA 126
(A) at 134B-H, Yorigami Maritime Construction Co Ltd v Nissho- Iwai Co Ltd 1977
(4) SA 682 (C), Butler  v Banimar Shipping Co SA 1978 (4) SA 753 (SE) and

5 Cf Genwest Batteries (Pty) Ltd v Van der Heyden & others 1991 (1) SA 727 (T) at 728G-729B.
6 Yorigami Maritime Construction Co Ltd v Nissho-Iwai Co Ltd 1977 (4) SA 682 (C) at 692H.

Universiteit van Stellenbosch v J A Louw (Edms) Bpk 1983 (4) SA 321 (A) at 333G-
H.7

[22] The court a quo should therefore have approached the objection in limine on
the basis that it enjoyed a discretion whether or not to enforce the clause, taking into
account all the relevant facts and circumstances. In concluding that clause 10
excluded the jurisdiction of the high court to adjudicate upon the parties’ dispute, it
clearly misunderstood the position.

[23] In seeking to meet this, counsel for the  respondents drew attention to the fact
that the court a quo, after reaching the conclusion already mentioned, had gone on
to refer to the decision in Butler  and had then purported to exercise its discretion
adverse to the appellant. A number of issues arise from this.

[24] First, in purporting to exercise its discretion, the court a quo did so by holding
‘that this court has no jurisdiction to hear this matter’. This, too, constituted a
misdirection on its part. It had no discretion to hold that the high court lacked
jurisdiction. Its discretion lay in deciding whether or not the exercise of that
jurisdiction should be stayed pending the outcome of foreign proceedings or
arbitration – something it had not been called upon to do.

[25] Secondly, it is necessary to consider whether it was appropriate for the court
quo to have purported to exercise its discretion at a time when all that was  before it
was a preliminary application for an interim interdict pending a decision on an action
still to be instituted. In Butler, where the court was asked to authorise an attachment
to found jurisdiction for a claim for damages which the respondent contended had to
be pursued in Greece by reason of a foreign jurisdiction clause, the court concluded
that it would be for the trial court to decide whether to enforce that clause.8 On the
other hand, in similar circumstances in Yorigami, the court held, albeit obiter, that
despite the existence of a clause in a charter requiring the dispute to be decided by
arbitration in Japan, the proceedings should not be stayed but determined by a Cape

7 See further Forsyth Private International Law 5 ed  (2012) at 218.
8 I should remark that the court misdirected itself in incorrectly finding at 761H that  it had been held in
Yorigami that it was not for the court hearing the attachment application to decide whether the trial
ought to be stayed and referred to arbitration under the arbitration clause.

Town court.9 Similarly in Polysius (Pty) Ltd v Transvaal Alloys (Pty) Ltd & another
1983 (2) SA 630 (T), in an application brought after the issue of summons but before
the trial, the court held that the hearing should be stayed by reason of the term in the
parties’ contract providing for the submission of their dispute to arbitration in Europe.

[26] The cases mentioned above show that no hard and fast rule can be laid down
as to the stage when a court should exercise its discretion to enforce a foreign
jurisdiction or arbitration clause. In each given case much will depend upon its own
particular facts and circumstances as well as the stage at which and the manner in
which the issue of enforcement of the clause in question is raised. Certainly the
mere fact that the respondents raised the issue when the appellant sought interim
relief as a precursor to the trial did not, in itself, preclude the court a quo from
exercising its discretion at that stage. But whether it was appropriate for it to
exercise its discretion in the light of the circumstances of the case and the way in
which the issue was raised, is another matter to which I now turn.

[27] Of course the factors relevant to the discretion a court is called on to exercise
are of importance. In the light of my view on the outcome of this appeal, it is
unnecessary to deal in detail with what factors appear at this stage to be relevant.
Indeed it would be premature and improper to do so without the parties having had
the opportunity to properly canvass the facts. Nevertheless it is of assistance to
consider in broad terms the factors which may be relevant. In The Eleftheria [1969] 2
All ER 641 (PDA), when considering whether an action should be stayed by reason
of a foreign jurisdiction clause, Brandon J stated:10
‘In particular . . . the following matters, where they arise, may properly be regarded: (a) In
what country the evidence on the issues of fact is situated, or more readily available, and
the effect of that on the relative convenience and expense of trial as between the (local) and
foreign courts; (b) Whether the law of the foreign court applies and, if so, whether it differs
from (local) law in any material respects; (c) With what country either party is connected,
and how closely; (d) Whether the defendants genuinely desire trial in the foreign country, or
are only seeking procedural advantages; (e) Whether the plaintiffs would be prejudiced by
having to sue in the foreign court because they would ─ (i) be deprived of security for that
claim, (ii) be unable to enforce any judgment obtained, (iii) be faced with a time-bar not

9 At 693F-694B.
10 At  645C-E.

applicable (locally), or (iv) for political, racial, religious or other reasons be unlikely to get a
fair trial.’

[28] These are not the only factors to which regard may be had. Others which may
be relevant include the following:
(a)
Flowing from the sanctity of contracts, it has often been said that a decision
not to enforce either an arbitration or foreign jurisdiction clause should only be made
where there is a very strong case made out for the parties not to be bound by their
agreement.11
(b)
It is desirable if at all possible to avoid a multiplicity of actions in different
courts with the associated potential complication of conflicting decisions.12 In the
present case this may well be a weighty factor bearing in mind that there is no
reason why the appellant’s claims in respect of all but the first and third respondents
cannot be determined in the high court and only those two respondents may seek to
invoke clause 10 to have their dispute with the appellant determined elsewhere.
(c)
Moreover, a single action has the undoubted advantage of saving time,
expense and costs when compared to a multiplicity of actions. This too may be a
weighty factor as the appellant’s claims that are capable of being determined in the
high court against most of the respondents will involve the same factual matrix and
the same witnesses as in the foreign proceedings against the first and third
respondents.
(d)
When considering the issue of costs, it should also be remembered, certainly
if the cost of litigation in England is any barometer,13 that the cost of litigation in
Europe may well be astronomical when compared to the cost of litigation in this
country. Sight must also not be lost of the likely fees and charges of the arbitrators
should an arbitration take place.
(e)
If the dispute involves questions of law rather than of fact, arbitration may well
prove to be both inconvenient and impractical. Consequently regard should be had
to whether the dispute is readily capable of being dealt with by way of arbitration. If
not, it would count heavily against the enforcement of an arbitration clause.

11 Polysius at 656D-E and Universiteit van Stellenbosch v J A Louw (Edms) Bpk at 333H-334A.
12 See for example Halifax Overseas Freighters Ltd v Rasno Export; Techno-Prominport; and Polskie
Minie Oceaniczne PPW (the ‘Pine Hill’) [1958] 2 Lloyd’s Law Reports 146 (QB) at 152 and El Amrid
[1981] 2 Lloyd’s Law Reports 119 (AC) AT 128.
13 See for comparison Motto & others v Trafigura Ltd & another [2011] EWCA Civ 1150; [2012] WLR
657 (CA); [2012] 2 ALL ER 181 (CA) and AB v Ministry of Defence [2012] 3 ALL ER 673 (SC): [2012]
UKSC 9.

[29] These are some of the relevant factors which spring readily to mind. The list
is certainly not intended to be exhaustive. Of course the discretion to be exercised is
fact specific in the sense that each case must be considered in the light of its own
discrete facts, with the various relevant factors being afforded whatever weight in the
scales is appropriate in the circumstances. Certainly no hard and fast rules can be
prescribed.

[30] The court a quo, in purporting to exercise its discretion, stated that it did so in
the light of ‘the attendant circumstances’ without in any way identifying what
circumstances it took into account. But as the respondents’ objection was merely
raised from the bar without any supporting affidavits, the only relevant circumstance
then known appears to have been the existence of the foreign jurisdiction and
arbitration clauses as most of the facts and circumstances as outlined above which
would have been relevant to the exercise of the court’s discretion had not been
canvassed in the papers. As already mentioned, a party wishing to raise an
arbitration or foreign jurisdiction clause as a reason to stay a court from exercising
jurisdiction, should do so by way of a dilatory plea. As in motion proceedings the
affidavits serve as both pleadings and evidence,14 in a case such as this it would be
necessary to place the relevant facts upon which reliance is placed before court by
way of affidavit. This the respondents failed to do. By the same token, the appellant
was not obliged to deal with a dilatory plea based on clause 10 until it had been
properly raised. In the light of this the court a quo was left in a position where, apart
from a few basic facts, it was not in a position to take an informed decision in
exercising its discretion.

[31] That being so, this was clearly a matter in which the court a quo ought not to
have taken a final decision at that stage on whether a South African court should
exercise jurisdiction in respect of appellant’s proposed action. It was a matter which
cried out for that issue to stand over for decision by the trial court. On the bare facts
then available it was, in truth, impossible to do justice to either side in regard to the
disputed questions flowing from clause 10 and the court a quo clearly erred on

14 Absa Bank Ltd v Kernsig 17 (Pty) Ltd 2011 (4) SA 492 (SCA) para 23.

deciding on the papers, as they were then, that the dispute was one in which the
arbitration and foreign jurisdiction clauses should be upheld against the appellant.

[32] On the other hand the appellant, whose factual allegations had not been
challenged, had clearly shown that its rights were being infringed. However, the
respondents submitted that the appellant had failed to establish that it was likely to
suffer irreparable harm or that it harboured a fear of such harm should the order it
sought not be granted. The simple answer to this latter contention is that by seeking
an interdict in this manner the appellant, in reality, was asking for an order of specific
performance of the licensing agreement. That being the case, the appellant was not
required to prove it would suffer harm if the interdict was not granted. All it had to
show was that the respondents were either breaching or threatening to breach the
licensing agreement, or were intentionally assisting or encouraging another to
breach such agreement.15 For the reasons already given, this the appellant
established.

[33] In these circumstances the court a quo erred in not granting the interim relief
and leaving it to the trial court, once the material facts and circumstances were
available, to determine whether the provisions of clause 10 should be enforced and
the action stayed.

[34] The appeal must therefore succeed and an interim interdict against the first to
sixth and eighth respondents granted. While I see no reason to include the
declarator in 2(a) of the notice of motion quoted in para 5 above as part of the
interim order, it was not suggested on behalf of the respondents that an interdict in
the terms sought would not be appropriate. However it is necessary to alter those
terms somewhat to reflect that the interdict relates only to the first to sixth and eighth
respondents (the seventh and ninth respondents already having been interdicted)
and to put the appellant on terms to institute its proposed action. As its notice of
motion envisaged the institution of such action within a month of the order granting
interim relief, and given the delays that have already occurred, it would in my view
be appropriate to direct that the anticipated action be instituted by the end of

15 Genwest Batteries (referred to in footnote 5) and Christie The Law of Contract in South Africa (6
ed) at 555.

October 2012. To allow for the possibility that the appellant may justifiably be unable
to meet that deadline, I intend to authorise it to seek an extension on good cause
shown. That will be reflected in the order below.

[35] The following order will therefore issue:
(a)
The appeal succeeds, with costs.
(b)
The order of the high court of 13 September 2011 is set aside and is
substituted with the following:
‘1.
That pending the final determination of an action to be instituted by the
applicant against the respondents for a final interdict and ancillary relief, an interim
order is issued in the following terms:
a. Interdicting and restraining the first to sixth and eighth respondents from being
involved whether directly or indirectly in granting a licence to the seventh or eighth
respondents or any third party from selling, marketing or distributing the product
commonly known as the Foize on Mobile software, more fully described in annexure
MV 3 to the founding affidavit, in South Africa from the date of this order to 6
December 2014.
b. Interdicting and restraining the first to the sixth and eighth respondents from
marketing, selling or distributing the said product in South Africa from the date of this
order up to and until  6 December 2014.
c. Interdicting and restraining the seventh and ninth respondents from entering into a
licensing agreement with the first to sixth and/or eighth respondents which purports
to grant any rights to the seventh or ninth respondents to market, distribute or sell
the said product in South Africa for any period prior to  7 December 2014.
d.  Costs of the application against the first to the sixth and eight respondents are to
be costs in the cause of the action to be instituted.
2.
The applicant is to institute an action against the respondents by 31 October
2012 seeking an order that the interim relief be made final.
3.
In the event that the applicant fails to bring an action against the respondents
as envisaged in paragraph 2 above,  then, unless this Court grants an extension of
time on good cause shown, the interim relief will lapse.’

______________________
L E Leach
Judge of Appeal

APPEARANCES:

For Appellant:

M Smit

Instructed by:

Kruger & Sharf Attorneys

Pretoria

Lovius Block, Bloemfontein

For Respondent:

M C Erasmus SC
Instructed by:
On behalf of 1st to 6th & 8th:
Geyser Attorneys, Pretoria

On behalf of 7th & 9th:

Kerron Edmunson Attorney, Johannesburg
The main application was not opposed on
behalf of 7th  & 8th respondents and they did
not take part in the appeal.

Honey Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

From:  The Registrar, Supreme Court of Appeal
Date:  20 September 2012
Status:  Immediate

Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal

Neutral citation: Foize Africa v Foize Beheer BV (752/2011) [2012] ZASCA 123 (20
September 2012)

The appellant instituted proceedings in the North Gauteng High Court, seeking an interim
interdict against the respondents to afford it relief pending a final decision on an action it
intended to bring against the respondents. The respondents are either Dutch companies or
Dutch businessmen, and the appellant’s action against them flowed from the terms of a
written licensing agreement concluded in Johannesburg.

The written agreement contained a foreign jurisdiction and arbitration clause, and the high
court dismissed the appellant’s application for interim relief on the basis that those clauses
ousted the jurisdiction of a South African court to adjudicate on the appellant’s proposed
action.

The Supreme Court of Appeal today set aside the high court’s order. It held that only the first
and third appellants could rely on the foreign jurisdiction and arbitration clauses, and that the
high court had erred in not recognising that to be so:  but that even in their cases the court
had a discretion not to enforce those provisions. However on the papers as they stood, it had

been premature to decide whether or not to exercise such discretion, and that issue should
stand over for decision by the trial court.

In addition the court held that there was no reason why an interim interdict could not be
granted and enforced in this country, despite the respondents being peregrini. The court
therefore set aside the high court’s order and granted an interim interdict.

---ends---