On 30 September 2016, the Supreme Court of Appeal (“SCA”) dismissed an appeal brought by SITA against Gijima regarding the validity of an Agreement (Agreement) entered into between SITA and Gijima. Leading up to this judgment by the SCA are the following:
● Gijima instituted a claim against SITA for monies that it had been short paid in regard to services rendered by Gijima to SITA under the Agreement.
● The matter went to arbitration and in its plea, SITA raised as a defence that a proper procurement process had not been followed and that accordingly Section 217 of the Constitution had not been complied with. Accordingly the Agreement was to be declared void. The issue of whether or not the Arbitrator had jurisdiction to decide on the validity of the Agreement was argued and the arbitrator found that only a court could decide on the validity or otherwise.
●As a result, SITA brought an application to the High Court (North Gauteng) to set aside the Agreement on the grounds that it was constitutionally invalid. This matter was argued on 19 November 2014 and the Court ruled in Gijima’s favour, dismissing the application together with the costs of two counsel.
● SITA subsequently applied for leave to appeal against the judgment, which was granted on 22 June 2015.
● The matter was enrolled for argument before the Supreme Court of Appeal in Bloemfontein on 30 August 2016. The central issue of debate was whether the contract between SITA and Gijima fell within the definition of administrative action as contemplated in the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”) and consequently whether SITA was obliged to comply with PAJA in seeking to set aside the Agreement.
● In summary, the SCA found that PAJA applies when an organ of state seeks to set aside its administrative actions. When PAJA does apply, litigants are not entitled to bypass its provisions and rely directly on the constitutional principles of legality. It was further found that even if this case was approached as a legality review, SITA had failed to place facts before the court to overcome the hurdle of the unreasonable delay in commencing proceedings against Gijima.
● The SCA found in Gijima’s favour.
Gijima is relieved that the issue of the validity of the Agreement, has been resolved in its favour by the Supreme Court of Appeal. Gijima feels it is unfortunate and regrets that SITA, at the time, decided to litigate against Gijima when we were victims of SITA’s processes. For a few years, because of this unfortunate legal matter, Gijima suffered prejudice as many in the media wrote unfounded allegations of unlawful tender award to Gijima. We fully realise that the matter will now be returned to arbitration for final resolution, but we are hopeful that SITA and Gijima can find a way of closing this chapter of litigation to both parties’ satisfaction, within the foreseeable future.
Gijima has a long standing relationship with SITA as one of the founder service providers to SITA and we look forward to continue working closely with SITA’s new management in delivering quality services to SITA and its clients.