Abstract
South African domestic law of jurisdiction informs the assumption of jurisdiction in cross-border commercial litigation. In regard to choice of court agreements, the fragmented nature of High Court jurisdiction and the common law rules relating to submission to jurisdiction present unique challenges. Two types of choice of court agreements can be identified in South African law: foreign exclusive choice of court agreements and optional choice of court agreements in favour of South African courts. It is submitted that the South African law relating to cross-border jurisdiction is in need of reform and this should be undertaken following an international and comparative approach, in keeping with the Constitution of the Republic of South Africa, 1996.
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Notes
- 1.
Hosten et al. (1997), pp. 337ff.
- 2.
See, in general, Pistorius (2017), Chapter 1.
- 3.
See, for e.g., Bid Industrial Holdings (Pty) Ltd v Strang and Another (Minister of Justice and Constitutional Development, Third Party) 2008 3 SA 355 (SCA), discussed below under Sect. 5.2.
- 4.
Its predecessor was the Supreme Court Act 59 of 1959.
- 5.
Cross-border commercial disputes are normally heard in a Division of the High Court, either at first instance or on appeal from a lower court. For the hierarchy of South African courts and the jurisdictional limits of each court, see http://www.justice.gov.za/about/sa-courts.html.
- 6.
See Veneta Mineraria Spa v Carolina Collieries (Pty) Ltd (In Liquidation) 1987 (4) SA 883 (A), 887I-J, dealing with s 19(1) of the Supreme Court Act 59 of 1959 (the predecessor of the Superior Courts Act 10 of 2013), which was almost identical to s 21(1).
- 7.
Forsyth (2012), p. 169.
- 8.
- 9.
See below Sect. 3.5.
- 10.
Currently there are 13 Divisions of the High Court: https://www.judiciary.org.za/index.php/the-south-african-judicial-system.
- 11.
A ‘party’ in this sense denotes a natural person (private individual) or a juristic person (e.g., a company).
- 12.
Forsyth (2012), p. 213.
- 13.
Forsyth (2012), p. 223.
- 14.
There is a presumption against legislative ouster or other interference with the jurisdiction of the High Court: Harms (2016), [23]. See also Pistorius (2017), p. 19; Astra Furnishers (Pty) Ltd v Arend and Another 1973 (1) SA 446 (C), 450B; Butler v Banimar Shipping Co SA 1978 (4) SA 753 (SE), 762A; Foize Africa (Pty) Ltd v Foize Beheer BV and Others 2013 (3) SA 91 (SCA), [21].
- 15.
Goldschmidt and Another v Folb and Another 1974 (1) SA 576 (T), 577A; Roodt and Esser (2006), p. 21.
- 16.
Nygh (1999), pp. 15, 37.
- 17.
See, e.g., Veneta Mineraria Spa v Carolina Collieries (Pty) Ltd (In Liquidation) 1987 (4) SA 883 (A), 893E, per Viljoen JA (Smallberger JA, Vivier JA, Boshoff AJA and M T Steyn AJA concurring): “A Court can only be said to have jurisdiction in a matter if it has the power not only of taking cognisance of the suit but also of giving effect to its judgment.” The rule that the plaintiff should sue the defendant in his place of domicile (actor sequitur forum rei) embodies the doctrine of effectiveness, since the court has effective control over a defendant in its area of jurisdiction with greater potential for the enforcement of the judgment.
- 18.
Hugo v Wessels 1987 (3) SA 837 (A), 849H-J; Bisonboard Ltd v K Braun Woodworking Machinery (Pty) Ltd 1991 (2) SA 482 (A), 499E-F; but see Pistorius Pollak on Jurisdiction (2017), 7: “The two-stage enquiry … does not mean … that the court must first decide whether it has jurisdiction and then whether it can enforce any order granted pursuant to that jurisdiction. The question is always whether the court has jurisdiction … in each case there is only one power, namely, not merely to give judgment but to give effective judgment.”
- 19.
- 20.
See Elscint (Pty) Ltd and Another v Mobile Medical Scanners (Pty) Ltd 1986 (4) SA 552 (W), 557I-558C, per Goldstone J: “The Courts of most, if not all, Western nations will recognise and enforce a judgment of our Courts sounding in money in cases where our Courts possess and exercise ‘international’ or ‘competent’ jurisdiction … The validity of a submission clause appears to be a well-recognised ground for confirming international or competent jurisdiction … It follows, in my opinion, that there are good juridical practical grounds for refusing to allow the attachment of a person or property ad confirmandam jurisdictionem where the Court, because of a submission or consent to jurisdiction, is already possessed of full and complete jurisdiction.” See also, in regard to submission as a recognised ground of international competence, Purser v Sales; Purser and Another v Sales and Another 2001 (3) SA 445 (SCA), [12]; Blanchard, Krasner & French v Evans 2002 (4) SA 144 (T), [3].
- 21.
The defendant’s property may be attached to found (ad fundandam jurisdictionem), or to confirm jurisdiction (ad confirmandam jurisdictionem) to comply with the doctrine of effectiveness. However, once a defendant has submitted to the jurisdiction of the court, attachment of property is no longer permitted (American Flag plc v Great African T-Shirt Corporation 2000 (1) SA 356 (W), 377F; Tsung v Industrial Development Corporation of SA Ltd 2006 (4) SA 177 (SCA), [6]) and, therefore, submission often serves the purpose of avoiding attachment of property: see Forsyth (2012), p. 233.
- 22.
Forsyth (2012), p. 230.
- 23.
See Yorigami Maritime Construction Co Ltd v Nissho-Iwai Co Ltd 1977 (4) SA 682 (C), 697E-G, per Friedman J: “The purpose of an attachment ad fundandam jurisdictionem is twofold: firstly, to found jurisdiction, and, secondly, to provide an asset in respect of which execution can be levied in the event of a judgment being granted in favour of the plaintiff. The fact that the value of the article attached is less than the amount claimed by the plaintiff in no way detracts from this principle. An attachment is necessary to render the Court’s jurisdiction effective, but the Court’s jurisdiction is not rendered ineffective if the value of the article attached is less than the amount of the claim in respect of which it is attached, nor even if the attached article has only a trifling value. The doctrine of effectiveness, from a jurisdictional point of view, does not require that the value of the property attached ad fundandam jurisdictionem should be such as would satisfy the judgment in full. In our law, all that is required, is that the article attached should have some value as that would enable the Court to give a judgment which has some effect, even though it cannot be satisfied in full.”
- 24.
Pistorius (2017), p. 5.
- 25.
See Bid Industrial Holdings (Pty) Ltd v Strang and Another (Minister of Justice and Constitutional Development, Third Party) 2008 3 SA 355 (SCA), [57], per Howie P (Nugent JA, Ponnan JA, Maya JA and Malan AJA concurring): “As to the principle of effectiveness, despite its having been described as ‘the basic principle of jurisdiction in our law’ it is clear that the importance and significance of attachment has been so eroded that the value of attached property has sometimes been ‘trifling’. However, as I have said, effectiveness is largely for the plaintiff to assess and to act accordingly.”
- 26.
See Sect. 3.4 below.
- 27.
See Sect. 3.5 below.
- 28.
Blanchard, Krasner & French v Evans 2002 (4) SA 144 (T), [9], per Cloete J.
- 29.
1991 (3) SA 803 (N), an admiralty case, 805H-I, per Shearer J (Howard JP agreeing and Booysen J concurring).
- 30.
1978 (4) SA 753 (SE), 760D-E, 762C-D. It is clear that the choice of court agreement was regarded as exclusive since, with reference to The Eleftheria [1969] 2 All ER 641 (PDA), Howie AJ said that the burden of proof was on the breaching party to show why the choice of court agreement should not be complied with.
- 31.
2013 (3) SA 91 (SCA), [8], [27]-[28]. Leach JA (Mthiyane DP, Cloete JA, Heher JA and Shongwe JA concurring) referred to The Eleftheria [1969] 2 All ER 641 (PDA) in regard to factors relevant to a stay of proceedings ([27]) and went on to hold that “a very strong case [must be] made out for the parties not to be bound by their agreement” ([28]).
- 32.
MV Spartan-Runner v Jotun-Henry Clark Ltd 1991 (3) SA 803 (N), 805H-I; Blanchard, Krasner & French v Evans 2002 (4) SA 144 (T), [9].
- 33.
Pistorius (2017), p. 20.
- 34.
MV Spartan-Runner v Jotun-Henry Clark Ltd 1991 (3) SA 803 (N), 806G-H, per Shearer J (Howard JP agreeing and Booysen J concurring). See also Blanchard, Krasner & French v Evans 2002 (4) SA 144 (T), [11].
- 35.
Foize Africa (Pty) Ltd v Foize Beheer BV and Others 2013 (3) SA 91 (SCA), where there was an agreement on choice of law (Dutch), choice of court (Dutch) and arbitration in The Netherlands, [28(a)], per Leach JA (Mthiyane DP, Cloete JA, Heher JA and Shongwe JA concurring).
- 36.
[1969] 2 All ER 641 (PDA), 645B-C, per Brandon J: “(I) Where plaintiffs sue in England in breach of an agreement to refer disputes to a foreign court, and the defendants apply for a stay, the English court, assuming the claim to be otherwise within its jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not. (II) The discretion should be exercised by granting a stay unless strong cause for not doing so is shown. (III) The burden of proving such strong cause is on the plaintiffs.”
- 37.
1978 (4) SA 753 (SE), 760C.
- 38.
1978 (4) SA 753 (SE), 760D.
- 39.
1978 (4) SA 753 (SE), 761G and 762D: “It … results in the party breaching it having to carry the onus of showing why the clause ought not to be complied with.”
- 40.
See also MV Achilleus v Thai United Insurance Co Ltd and Others 1992 (1) SA 324 (N), another admiralty case, where the contract contained a clause providing for jurisdiction in “the courts of Piraeus exclusively”, in which case the plaintiff bore the onus to prove why a stay of proceedings should not be granted to uphold the choice of court agreement.
- 41.
1991 (3) SA 803 (N), 804G.
- 42.
1991 (3) SA 803 (N), 805I-J.
- 43.
1991 (3) SA 803 (N), 806E-H.
- 44.
2008 (5) SA 434 (C), 442D.
- 45.
2008 (5) SA 434 (C), 442E.
- 46.
2013 (3) SA 91 (SCA), [8].
- 47.
2013 (3) SA 91 (SCA), [27]-[28].
- 48.
See Sect. 2 above.
- 49.
Pistorius (2017), p. 9. The common law grounds of jurisdiction are domicile (ratione domicilii); contract (ratione contractus); delict (ratione delicti commissi); ratione rei gestae; cohesion of causes (ratione causae continentia); location of property (ratione rei sitae); and jurisdiction based on attachment of property: Harms (2016), [26].
- 50.
Harms (2016), [33]. See also Benidai Trading Co Ltd v Gouws & Gouws (Pty) Ltd 1977 (3) SA 1020 (T), 1038H.
- 51.
- 52.
Veneta Mineraria Spa v Carolina Collieries (Pty) Ltd 1987 (4) SA 883 (A), 894A-B, per Viljoen JA (Smalberger JA, Vivier JA, Boshoff AJA and MT Steyn AJA concurring): “By prorogation a defendant subjects his person to the jurisdiction of the Court, but that is not enough. One or more of the traditional grounds of jurisdiction must also be present.” But see the earlier case of Negro v SAR 1911 TPD 979, 981, per De Villiers JP: “It is well-known that if a person consents to the jurisdiction of a court of a place where he is not domiciled that is a prorogation of jurisdiction which is allowed by our law, because it is a privilege granted to the defendant, to be sued in the court of his domicile, which he may renounce.”
- 53.
Pistorius (2017), p. 9.
- 54.
1964 (4) SA 264 (SR), 270D, deciding that “it is more probable that the choice of a domicilium citandi et executandi in Salisbury was for the purpose and with the intention of submitting to the jurisdiction of the Southern Rhodesian Court than that this choice was made merely in order to facilitate service if the Court otherwise had jurisdiction” (272G).
- 55.
2005 (2) SA 522 (SCA), [15].
- 56.
This case endorsed American Flag plc v Great African T-Shirt Corporation 2000 (1) SA 356 (W), where the plaintiff was an incola and the defendant a peregrinus—submission by the defendant could serve as a ground of jurisdiction. However, in Veneta Mineraria Spa v Carolina Collieries (Pty) Ltd (In Liquidation) 1987 (4) SA 883(A), involving a local peregrinus as defendant and a foreign peregrinus as plaintiff, with no contractual connections with the forum, Viljoen JA (Smalberger JA, Vivier JA, Boshoff AJA and M T Steyn AJA concurring) decided that written consent by the defendant did not suffice (894A-B)—a proper ratio jurisdictionis was required to establish jurisdiction.
- 57.
Standard Bank Ltd v Butlin 1981 (4) SA 158 (D), 165D. Didcott J distinguished (164G-H) the case of Beverley Building Society v De Courcy and Another 1964 (4) SA 264 (SR), and decided that it was “safe to view the address he selected as one furnished simply for the service of processes” (162H) and, therefore, did not amount to an intention to submit to the jurisdiction of the forum (165B-C). Where a domicilium citandi et executandi is selected in response to a court order, it also does not amount to submission to jurisdiction: JPS Nominees (Pty) Ltd v Binstock and Another 1993 (1) SA 341 (W), 346G-H, per Lazarus J.
- 58.
1981 (4) SA 158 (D), 161E-G.
- 59.
Forsyth (2012), p. 428.
- 60.
Forsyth (2012), p. 232: “[T]wo peregrines cannot agree that their disputes should be settled in the local courts. The point may be stressed: submission is not a ratio jurisdictionis, it is a substitute for attachment ad confirmandam.”
- 61.
This Act has now been repealed by the International Arbitration Act 15 of 2017.
- 62.
[1969] 2 All ER 641 (PDA).
- 63.
Intercontinental Export Company (Pty) Ltd v MV Dien Danielsen 1982 (3) SA 534 (N); Polysius (Pty) Ltd v Tvl Alloys (Pty) Ltd, Tvl Alloys (Pty) Ltd v Polysius (Pty) Ltd (1983 (2) SA 630 (W); MV Iran Dastghayb Islamic Republic of Iran Shipping Lines v Terramarine SA (2010 (6) SA 493 (SCA); Foize Africa (Pty) Ltd v Foize Beheer BV and Others (2013 (3) SA 91 (SCA).
- 64.
International Arbitration Act 15 of 2017, s 16(1); Article II(3) of the New York Convention; Art 8(1) of the UNCITRAL Model Law on International Commercial Arbitration.
- 65.
Constitution of the Republic of South Africa, 1996.
- 66.
See Sect. 4 above.
- 67.
“(1) The rights in the Bill of Rights may be limited only in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors, including— (a) the nature of the right; (b) the importance of the purpose of the limitation; (c) the nature and extent of the limitation; (d) the relation between the limitation and its purpose; and (e) less restrictive means to achieve the purpose. (2) Except as provided in subsection (1) or in any other provision of the Constitution, no law may limit any right entrenched in the Bill of Rights.”
- 68.
2008 (3) SA 355 (SCA), [50], per Howie P (Nugent JA, Ponnan JA, Maya JA and Malan AJA concurring): see further discussion under Sect. 5.2 below.
- 69.
See Sect. 3.4 above.
- 70.
See Sect. 3.5 above.
- 71.
Pistorius (2017), p. 9.
- 72.
Forsyth (2012), p. 232.
- 73.
See Elscint (Pty) Ltd and Another v Mobile Medical Scanners (Pty) Ltd 1986 (4) SA 552 (W), 557I-558C, per Goldstone J: “The Courts of most, if not all, Western nations will recognise and enforce a judgment of our Courts sounding in money in cases where our Courts possess and exercise ‘international’ or ‘competent’ jurisdiction … The validity of a submission clause appears to be a well-recognised ground for confirming international or competent jurisdiction …” See also, in regard to submission as a recognised ground of international competence, Purser v Sales; Purser and Another v Sales and Another 2001 (3) SA 445 (SCA), [12]; Blanchard, Krasner & French v Evans 2002 (4) SA 144 (T), [3].
- 74.
See Sect. 2 above.
- 75.
Roodt and Esser (2006), p. 21.
- 76.
[1969] 2 All ER 641 (PDA).
- 77.
See Sect. 3.4 above.
- 78.
Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (HL), where Lord Goff set out the parameters of the forum non conveniens doctrine. Significantly, the burden is on the defendant to prove that another competent court is clearly more appropriate (476D). This is different from the burden of proof in regard to exclusive foreign choice of court agreements, where the burden is on the plaintiff to prove why a stay should not be granted: The Eleftheria [1969] 2 All ER 641 (PDA), 645B-C.
- 79.
[1987] AC 460 (HL).
- 80.
MV Spartan-Runner v Jotun-Henry Clark Ltd 1991 (3) SA 803 (N), 807E-808E; Great River Shipping Inc v Sunnyface Marine Ltd 1992 (4) SA 313 (C), 316D-317I; MT Tigr Bouygues Offshore SA and Another v Owners of the MT Tigr and Another 1998 (4) SA 740 (C), 741H-742B.
- 81.
2008 (3) SA 355 (SCA).
- 82.
2008 (3) SA 355 (SCA), [59], per Howie P (Nugent JA, Ponnan JA, Maya JA and Malan AJA concurring).
- 83.
See Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (HL), 476D.
- 84.
2008 (3) SA 355 (SCA), [55].
- 85.
See, e.g., Multi-Links Telecommunications Ltd v Africa Prepaid Services Nigeria Ltd 2014 (3) SA 265 (GP), [17]-[19]. See also Forsyth (2012), pp. 184ff, for a thorough discussion of forum non conveniens in the South African jurisdictional context.
- 86.
See Sect. 3.5 above.
- 87.
Defined in Art 3.
- 88.
Art 1(1). Art 2 excludes certain matters and exclusive choice of court agreements from the scope of the Convention.
- 89.
Art 5.
- 90.
Art 6.
- 91.
Art 8. Art 9 contains grounds of refusal.
- 92.
Art II(3) of the New York Convention. This has now been reinforced by the adoption of the UNCITRAL Model Law on International Commercial Arbitration by the International Arbitration Act 15 of 2017: see Sect. 4 above.
- 93.
Since 1976.
- 94.
Schulze (2007), p. 149.
- 95.
See Sect. 2 above.
- 96.
See Sect. 3.4 above.
- 97.
See Sect. 3.5.
- 98.
See also Forsyth (2012), p. 231: “The judicial policy should not be ‘Peregrines go home’ but ‘Peregrines welcome’.”
- 99.
Section 173 of the Constitution.
- 100.
Section 39(2) of the Constitution.
References
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Cases
South Africa
American Flag plc v Great African T-Shirt Corporation 2000 (1) SA 356 (W)
Astra Furnishers (Pty) Ltd v Arend and Another 1973 (1) SA 446 (C)
Benidai Trading Co Ltd v Gouws & Gouws (Pty) Ltd 1977 (3) SA 1020 (T)
Beverley Building Society v De Courcy and Another 1964 (4) SA 264 (SR)
Bid Industrial Holdings (Pty) Ltd v Strang and Another (Minister of Justice and Constitutional Development, Third Party) 2008 3 SA 355 (SCA)
Bisonboard Ltd v K Braun Woodworking Machinery (Pty) Ltd 1991 (2) SA 482 (A)
Blanchard, Krasner & French v Evans 2002 (4) SA 144 (T)
Butler v Banimar Shipping Co SA 1978 (4) SA 753 (SE)
Elscint (Pty) Ltd and Another v Mobile Medical Scanners (Pty) Ltd 1986 (4) SA 552 (W)
Foize Africa (Pty) Ltd v Foize Beheer BV and Others 2013 (3) SA 91 (SCA)
Goldschmidt and Another v Folb and Another 1974 (1) SA 576 (T)
Great River Shipping Inc v Sunnyface Marine Ltd 1992 (4) SA 313 (C)
Intercontinental Export Company (Pty) Ltd v MV Dien Danielsen 1982 (3) SA 534 (N)
Hay Management Consultants (Pty) Ltd v P3 Management Consultants (Pty) Ltd 2005 3 All SA 119 (SCA); 2005 2 SA 522 (SCA)
Hugo v Wessels 1987 (3) SA 837 (A)
J P S Nominees (Pty) Ltd v Binstock and Another 1993 (1) SA 341 (W)
MV Achilleus v Thai United Insurance Co Ltd and Others 1992 (1) SA 324 (N)
Mt Fotiy Krylov v Owners of the Mt Ruby Deliverer 2008 (5) SA 434 (C)
MT Tigr Bouygues Offshore SA and Another v Owners of the MT Tigr and Another 1998 (4) SA 740 (C)
Multi-Links Telecommunications Ltd v Africa Prepaid Services Nigeria Ltd 2014 (3) SA 265 (GP)
MV Iran Dastghayb Islamic Republic of Iran Shipping Lines v Terramarine SA 2010 (6) SA 493 (SCA)
MV Spartan-Runner v Jotun-Henry Clark Ltd 1991 (3) SA 803 (N)
Negro v SAR 1911 TPD 979
Polysius (Pty) Ltd v Tvl Alloys (Pty) Ltd, Tvl Alloys (Pty) Ltd v Polysius (Pty) Ltd 1983 (2) SA 630 (W)
Purser v Sales; Purser and Another v Sales and Another 2001 (3) SA 445 (SCA)
Standard Bank Ltd v Butlin 1981 (4) SA 158 (D)
Tsung v Industrial Development Corporation of SA Ltd 2006 (4) SA 177 (SCA)
Veneta Mineraria Spa v Carolina Collieries (Pty) Ltd (In Liquidation) 1987 (4) SA 883 (A)
Yorigami Maritime Construction Co Ltd v Nissho-Iwai Co Ltd 1977 (4) SA 682 (C)
United Kingdom
The Eleftheria [1969] 2 All ER 641 (PDA)
Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (HL)
Legislation
Supreme Court Act 59 of 1959
Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977
Constitution of the Republic of South Africa, 1996 (Constitution)
Superior Courts Act 10 of 2013
International Arbitration Act 15 of 2017
Conventions
New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958)
Hague Convention on Choice of Court Agreements (2005)
Internet Resources
http://www.justice.gov.za/about/sa-courts.html (accessed 16 September 2018)
https://www.judiciary.org.za/index.php/the-south-african-judicial-system (accessed 16 September 2018)
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Schoeman, E. (2020). South Africa: Time for Reform. In: Keyes, M. (eds) Optional Choice of Court Agreements in Private International Law. Ius Comparatum - Global Studies in Comparative Law, vol 37. Springer, Cham. https://doi.org/10.1007/978-3-030-23914-5_15
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