The legal tussle between billionaire businessman Dr Patrice Motsepe's companies and their former US and Tanzanian business partners over a US$195 million mining deal is set to continue in South African courts.
Image: Karen Sandison / Independent Newspapers
The battle between billionaire businessman Dr Patrice Motsepe’s African Rainbow Capital (ARC) and his former business partners, US-based company Pula Group, over a US$195 million (about R3.3 billion) mining deal appears far from being finalised.
On Friday, Pula Group and its Tanzanian subsidiary Pula Graphite Partners were granted leave to appeal Gauteng High Court, Johannesburg, Judge Leicester Adams’ April judgment in favour of ARC.
Judge Adams granted Pula Group and Pula Graphite Partners leave to appeal to the full court of the Gauteng division and indicated that he did not believe that the complexity of the legal issues raised in the matter is such that he should grant leave to appeal to the Supreme Court of Appeal.
Last month, Judge Adams ruled that if the Pula Group was able to prove a breach of the agreement and the damages arising from that breach, its contractual remedies are only against another of Motsepe’s companies, African Rainbow Minerals (ARM).
Pula Group and Pula Graphite Partners accuse ARM and its affiliates of acquiring confidential information from the Pula Group, which enabled them (ARM and its affiliates) to invest in an Australian company, Evolution Holdings, for a stake in the Chilalo Graphite Project, which is a direct competitor of Pula Group and Pula Graphite Partners in Tanzania.
In addition, Pula Group, which is chaired by former US ambassador to Tanzania, Charles R Stith, and Pula Graphite Partners, has described the move as a breach of confidentiality.
They have launched separate proceedings against Motsepe’s companies in the commercial division of the High Court of Tanzania, Dar es Salaam, where they are claiming damages based on the confidential agreement concluded in writing in Sandton/Hurlingham, Johannesburg, between Pula Group and ARM in October 2019.
In their application for leave to appeal Judge Adams’ April 14 judgment, Pula Group and Pula Graphite Partners stated that the court erred in that it misapplied the applicable common-law requirements for jurisdiction over peregrini (foreigners).
According to the companies, the judge erred in finding that an agreement on the governing law of a contract can and should, in the circumstances of the matter, amount to a submission to the jurisdiction of that country’s courts.
Pula Group and Pula Graphite Partners added that Judge Adams should not have found that the High Court has jurisdiction only because of the connecting factors referenced in his April judgment, notably the fact that the confidentiality agreement was concluded in Johannesburg and that it provided that its terms, application, and consequences are to be determined in accordance with the South African law.
“I am persuaded that the issues raised by the first and the second respondents (Pula Group and Pula Graphite Partners) in their application for leave to appeal, are issues in respect of which another court is likely to reach conclusions different to those reached by me,” the judge reasoned.
Judge Adams continued: “I therefore conclude that there are reasonable prospects of another court making factual findings and coming to legal conclusions at variance with my factual findings and legal conclusions. The appeal, therefore, in my view, does have a reasonable prospect of success.”
loyiso.sidimba@inl.co.za