-Court of Appeal dismisses Debswana's plea to reverse High Court decision
Debswana Diamond Company has expressed disappointment in a Court of Appeal decision which favoured Lift-Off Investments (Pty) ltd and is currently engaging their legal teams to bring the matter to a satisfactory resolution.
Debswana lost its appeal case against a High Court ruling handed down in favour of Lift-Off Investment. In or about October 2020, the Lift-Off Investments was contracted by Debswana for the construction of New Tailings Leg-golf at Plant 2 in Orapa at the contract sum of P40 914 308.12 exclusive of Value Added Tax.
Debswana Senior Corporate Affairs Manager- Brand and Stakeholders Relations, Matshidiso Kamona said as a responsible corporate citizen Debswana Diamond Company is committed to ensuring that they take the correct legal steps in response to the judgement and the matter as a whole. According to Kamona they are currently engaging their legal teams and will follow due legal process to bring the matter to a satisfactory resolution
Court of Appeal Judge Singh Walia stated that in the context of the contract between the parties in this appeal, a dispute arose in relation to the grasshopper and shuttle conveyor facilities. He said the general conditions applicable to the contract were those issued by the International Federation of Consulting Engineers (FIDIC) First Edition 1999. According to the judge the FIDIC conditions were amended by the parties in relation only to the dispute resolution provisions.
He stated that by agreement of the parties, Patrick Mung’ooo was appointed to the Dispute Adjudication Board (DAB) to adjudicate the dispute, as the sole dispute adjudication board member.
Justice Walia explained that in a fully reasoned decision, the DAB ordered Debswana to pay Lift-Off Investment P38 511 246.89, as the applicable payment for Lift-Off Investment’s interim Valuation No. 14 as submitted to the Engineer.
Justice Walia said it was also ordered that Debswana pay interest at the Bank of Botswana discount rate (3.75 percent) simple interest on the amount awarded, from 14th June 2021 to date of payment. The amounts awarded were ordered to be paid within ten days of 20th January 2023.
“The Appellant (Debswana Diamond Company) having refused or failed to comply with the DAB decision, the Respondent (Lift-Off Investments) lodged a notice of dissatisfaction in terms of clause 20.4 of the FIDIC conditions. Thereafter the parties engaged in amicable settlement discussions, which were also inconclusive,” he said.
On 21st March 2023 Lift-Off Investments filed notice of motion before the court seeking adjudjing and declaring that Debswana Diamond Company’s payment obligation arising from the Dispute Adjudication Board (DAB) decision granted in favour of Lift-Off Investments, as published by the Adjudicator Mung’ooo on 1st March 2023 is immediately enforceable against Debswana as a matter of contractual obligation; that accordingly, Debswana is
to pay the sum of P38 511 246.89 to Lift- Off Investment; and Debswana to pay interest at the Bank of Botswana discount rate (3.75 percent plus 3 percent simple interest).
Said Justice Walia, “I conclude therefore that in proper circumstances, DAB awards may be referred to the High Court for enforcement. To that, I must add the caveat that courts should, as a general rule, be slow to enforce such awards and that judicial interference should be resorted to in exceptional circumstances only, such as where the contractual imperatives relating to resolution of disputes are found wanting.”
He explained that in this case, the exceptional circumstances are glaringly obvious. According to Justice Walia the DAB award was made on 20 January 2023. There was no arbitrator in place, he said, adding that almost a year and a half later, no arbitrator has been agreed on, nor is there an application for the appointment of one.
“Add to this the inevitable delays likely to arise from application for appointment if it becomes necessary, having to be made in South Africa in terms of the amended FIDIC conditions of contract.
“Such delays serve to defeat the very purpose of prompt payment dictated by the contract. In these circumstances, application to the court for enforcement of the DAB award was not, in my view, ill- advised. I can therefore see no reason for interfering with the judgment of the court a quo,” Justice Walia ruled in his judgement.
Debswana lost its appeal case against a High Court ruling handed down in favour of Lift-Off Investment. In or about October 2020, the Lift-Off Investments was contracted by Debswana for the construction of New Tailings Leg-golf at Plant 2 in Orapa at the contract sum of P40 914 308.12 exclusive of Value Added Tax.
Debswana Senior Corporate Affairs Manager- Brand and Stakeholders Relations, Matshidiso Kamona said as a responsible corporate citizen Debswana Diamond Company is committed to ensuring that they take the correct legal steps in response to the judgement and the matter as a whole. According to Kamona they are currently engaging their legal teams and will follow due legal process to bring the matter to a satisfactory resolution
Court of Appeal Judge Singh Walia stated that in the context of the contract between the parties in this appeal, a dispute arose in relation to the grasshopper and shuttle conveyor facilities. He said the general conditions applicable to the contract were those issued by the International Federation of Consulting Engineers (FIDIC) First Edition 1999. According to the judge the FIDIC conditions were amended by the parties in relation only to the dispute resolution provisions.
He stated that by agreement of the parties, Patrick Mung’ooo was appointed to the Dispute Adjudication Board (DAB) to adjudicate the dispute, as the sole dispute adjudication board member.
Justice Walia explained that in a fully reasoned decision, the DAB ordered Debswana to pay Lift-Off Investment P38 511 246.89, as the applicable payment for Lift-Off Investment’s interim Valuation No. 14 as submitted to the Engineer.
Justice Walia said it was also ordered that Debswana pay interest at the Bank of Botswana discount rate (3.75 percent) simple interest on the amount awarded, from 14th June 2021 to date of payment. The amounts awarded were ordered to be paid within ten days of 20th January 2023.
“The Appellant (Debswana Diamond Company) having refused or failed to comply with the DAB decision, the Respondent (Lift-Off Investments) lodged a notice of dissatisfaction in terms of clause 20.4 of the FIDIC conditions. Thereafter the parties engaged in amicable settlement discussions, which were also inconclusive,” he said.
On 21st March 2023 Lift-Off Investments filed notice of motion before the court seeking adjudjing and declaring that Debswana Diamond Company’s payment obligation arising from the Dispute Adjudication Board (DAB) decision granted in favour of Lift-Off Investments, as published by the Adjudicator Mung’ooo on 1st March 2023 is immediately enforceable against Debswana as a matter of contractual obligation; that accordingly, Debswana is
to pay the sum of P38 511 246.89 to Lift- Off Investment; and Debswana to pay interest at the Bank of Botswana discount rate (3.75 percent plus 3 percent simple interest).
Said Justice Walia, “I conclude therefore that in proper circumstances, DAB awards may be referred to the High Court for enforcement. To that, I must add the caveat that courts should, as a general rule, be slow to enforce such awards and that judicial interference should be resorted to in exceptional circumstances only, such as where the contractual imperatives relating to resolution of disputes are found wanting.”
He explained that in this case, the exceptional circumstances are glaringly obvious. According to Justice Walia the DAB award was made on 20 January 2023. There was no arbitrator in place, he said, adding that almost a year and a half later, no arbitrator has been agreed on, nor is there an application for the appointment of one.
“Add to this the inevitable delays likely to arise from application for appointment if it becomes necessary, having to be made in South Africa in terms of the amended FIDIC conditions of contract.
“Such delays serve to defeat the very purpose of prompt payment dictated by the contract. In these circumstances, application to the court for enforcement of the DAB award was not, in my view, ill- advised. I can therefore see no reason for interfering with the judgment of the court a quo,” Justice Walia ruled in his judgement.
