Jurisdiction fight over R3.3bn claim against Motsepe
US-based Pula Group, which has instituted a $195m (R3.3bn) lawsuit against Patrice Motsepe and three of his affiliated companies in Tanzania, argues a SA court has no jurisdiction to decide on the matter.
Motsepe’s investment firm, African Rainbow Capital (ARC), lodged an application in the Gauteng High Court (Johannesburg) last year seeking an order declaring that it cannot be held liable for the alleged breach of a confidentiality agreement on which Pula bases its $195m damages claim.
ARC says SA courts do have jurisdiction, and the High Court last August granted ARC leave to institute proceedings against Pula Group and Pula Graphite by edictal citation.
Pula Group’s legal representative, Les Morison, recently filed court papers arguing that the High Court has no jurisdiction over the foreign companies because they do not operate in SA.
Business Day says the case brings into focus SA courts' jurisdiction over multinational companies.
Morison argues in the edictal citation application that ARC had not pleaded a case that meets jurisdiction grounds.
‘The lack of jurisdiction point defeats the ex parte application for edictal citation and the application for a declarator,’ he contends.
‘The ex parte application for edictal citation could only competently have been granted if there was a ground of jurisdiction for the SA court to exercise its jurisdiction. There is no common law ground of jurisdiction in this matter.’
Pula Group filed a commercial lawsuit in Tanzania in 2023 against Motsepe, ARC, African Rainbow Minerals (ARM) and Arch Resources, alleging they breached a confidential 2019 agreement, notes Business Day.
The agreement was between ARM and Pula Group for a mining investment proposal in Tanzania.
The mining right for the project is now owned by Pula Graphite.
Although the confidentiality agreement at the centre of the litigation was signed in SA by ARM and Pula Group, Morison argues against SA jurisdiction, saying: ‘The defendants do not have a presence in SA; the cause of action against them did not arise here, nor have their assets been attached here. The fact that the confidentiality agreement was concluded in SA with another member of the African Rainbow group of companies (African Rainbow Minerals) does not mean that the cause of action arose within the jurisdiction.’
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
