|Case No.||Lower Court Judgments||Hearing Date||Judgment Date||Majority Author||Vote|
||North Gauteng High Court, 6 Jun. 2011
SCA, 20 Sep. 2012
| 28 Feb. 2013
||27 June 2013||Mogoeng CJ.||Unanimous|
By Duncan Wild and Ben Winks on 29 June 2013.
This case concerns the recognition and enforcement of two judgments by the Tribunal of the Southern African Development Community (“SADC“) against Zimbabwe, and the consequent attachment of immovable property owned by Zimbabwe in South Africa. As a sovereign state, Zimbabwe is generally immune from the jurisdiction of, and execution by, the domestic courts of other states.
The Constitutional Court found that Zimbabwe was not immune from the jurisdiction of the South African courts in respect of judgments of the SADC Tribunal, and that all the requirements for the recognition of a foreign judgement (the definition of which the Court extended to include international tribunals) had been met. Zimbabwe’s appeal was therefore dismissed with costs.
Background and Prior Judgments
In 2008, the SADC Tribunal declared Zimbabwe’s 2005 Amendment to its Constitution (which provided for a fast-track land reform programme) to be in breach of international human rights law, on the grounds that it indirectly discriminated against white farmers, deprived them of compensation, and denied them access to the courts. The Tribunal ordered Zimbabwe not to evict farmers from land expropriated under this programme, as well as to compensate farmers who had already been dispossessed of land under the programme.
Zimbabwe refused to comply with the order, arguing that the Tribunal had exceeded its jurisdiction. In 2009, the farmers again approached the Tribunal, and were granted an order declaring Zimbabwe to be in breach of the 2008 order and directing Zimbabwe to pay their legal costs. The farmers did not succeed in having these judgments enforced by the Zimbabwean courts, and thus some of the farmers applied to have the judgments enforced against Zimbabwe in the courts of South Africa, which is a SADC member state, and in which Zimbabwe owns immovable property.
The farmers first approached the Pretoria High Court for an order of edictal citation allowing service of founding papers in Harare, which was granted by Tuchten AJ after argument on whether the Court could exert jurisdiction over Zimbabwe, a sovereign state. The application was served accordingly, and the matter was set down for hearing in February 2010. Zimbabwe entered notice of intention to oppose the application, but subsequently withdrew it, without giving reasons. The Court (Rabie J) heard argument from the farmers on the question of jurisdiction and, on the same day, granted the order, on an unopposed basis, that the Tribunal’s 2008 and 2009 judgments were “declared to be registered, i.e. recognised and enforceable”. The farmers shortly issued a writ of execution against certain immovable properties owned by Zimbabwe in the Western Cape.
Zimbabwe brought three applications to the Pretoria High Court for the rescission of Tuchten AJ’s order of edictal citation, Rabie J’s order of registration, and the writ of execution issued pursuant to it. Challenging edictal citation, Zimbabwe argued that the Court had no jurisdiction, owing to its sovereign immunity, and that the farmers had not followed the procedures and time periods prescribed in the Foreign States Immunity Act 87 of 1981 (“the Immunity Act”) nor the Supreme Court Act 59 of 1969. However, the High Court (Claassen J) held that edictal citation is an interlocutory order, from which no substantive rights flow, and thus that it does not assume jurisdiction, which is still to be addressed at the hearing of the main matter. Moreover, it was held that the farmers’ failure to give Zimbabwe the prescribed period of time to oppose was immaterial, as Zimbabwe did in fact file notice to oppose, within a few days.
Challenging registration of the judgments, Zimbabwe argued, firstly, that it never ratified the SADC Protocol that created the Tribunal, and thus the Tribunal had no jurisdiction to deliver those judgments, and secondly that the SADC Treaty and Protocol were being reviewed by the SADC Summit, and so the judgments should not be enforced pending the finalisation of that process. The Court rejected the first argument on the grounds that Zimbabwe had participated in the proceedings before the Tribunal, had conceded during those proceedings that its decisions were binding on Zimbabwe, and had even nominated a judge for the Tribunal. The Court further held that the Protocol, despite not being ratified, became an integral part of the Treaty upon its adoption by the Summit.
Returning to the issue of immunity, the High Court considered that the Immunity Act must be interpreted to promote the spirit, purport and objects of the Bill of Rights, and that it is required to consider international law in terms of section 39(1)(b) of the Constitution. The Court stated that the old doctrine of absolute immunity had yielded to a restrictive doctrine, including in relation to human rights issues, but the Court did not elaborate on the significance of this for the present case. The Court found that section 3(2) of the Immunity Act provides for a waiver of immunity “by prior written agreement”, and that a treaty is indeed an agreement. Specifically, the SADC Treaty obliges Zimbabwe to ensure the effective implementation of the Treaty, with the result that Zimbabwe has “clearly waived its right to immunity”.
Accordingly, the High Court concluded that the edictal citation could not be challenged and that the registration order was granted with the necessary jurisdiction, while the writ of execution, once properly served, may be executed against at least one of the properties owned by Zimbabwe, which the Johannesburg High Court (per Lamont J) had found, in recent related proceedings, to be used for commercial purposes and thus not protected by sovereign immunity. All three applications were thus dismissed with costs.
On appeal, the Supreme Court of Appeal (per Nugent JA, with Van Heerden and Malan JJA and Southwood and Erasmus AJJA concurring) observed that, under section 3 of the Immunity Act, a foreign state forfeits immunity where it has expressly waived its immunity and that in the present case “it is clear that Zimbabwe forfeited such immunity as it might have had by expressly submitting itself to the SADC Treaty and the Protocol”.
As for the propriety of edictal citation, the SCA held that, although section 13 of the Immunity Act states, in peremptory terms, that processes for commencement of proceedings against a foreign state should be served through the Department of Foreign Affairs, the court is not precluded from directing a different manner of service. In any event, Zimbabwe indeed noted its intention to oppose, and thus, although it can still contest jurisdiction, it cannot object to the manner of service. Accordingly, the order of Tuchten AJ was upheld. This issue was not pursued in the Constitutional Court.
In respect of Rabie J’s registration order, the SCA found that there was “no question” that the SADC judgments satisfied all of the requirements for registration, apart from that of jurisdiction, about which there was some question. However, the SCA did dismiss Zimbabwe’s challenge to the Tribunal’s jurisdiction, on the basis that, upon its adoption, the Protocol became an integral part of the Treaty, which was binding on Zimbabwe. The SCA found further that the Protocol expressly provides that the Tribunal’s judgments shall be enforceable in the territories of all member states, and thus that Zimbabwe “clearly both waived any immunity it might otherwise have been entitled to claim from the jurisdiction of the courts of member states and agreed that orders of the Tribunal would be enforceable in those courts”.
While Zimbabwe contended that the judgments could not be enforced in South Africa because the SADC Treaty and Protocol had not been domesticated here, the SCA held that this missed the point, as the court would not be enforcing the treaties but only the judgments, where Zimbabwe had expressly submitted to their enforceability and to the jurisdiction of the South African courts over them. Finally, the SCA disposed of Zimbabwe’s argument that the judgments should not be enforced pending the Summit’s review, holding that there was no reason why the judgments should not be enforced in the meantime.
As for the writ of execution, the SCA found that, even if it had not been properly served on Zimbabwe, that would not affect its validity, but only entitle Zimbabwe to resist the sale. Accordingly, the SCA concluded that all three applications for rescission had been rightly refused by Claassen J, and thus the appeal was dismissed with costs.
The Constitutional Court’s Decision
The Constitutional Court, in a majority judgment authored by Chief Justice Mogoeng, and in which Deputy Chief Justice Moseneke and Justices Froneman, Khampepe, Nkabinde, Skweyiya and Zondo (in part), as well as Acting Justice Mhlantla concurred, held that the main issue for its determination was “whether South African courts have the jurisdiction to register and thus facilitate the enforcement of the costs order made by the Tribunal against Zimbabwe“. In determining this issue, the Constitutional Court stated it would have to determine the following sub-issues:
(b) the binding effect of South Africa of the Amended SADC Treaty (including the Tribunal Protocol);
(c) the immunity of foreign States from civil litigation in South Africa;
(d) the application of the Enforcement of Foreign Civil Judgments Act (“Foreign Judgments Act“); and
(e) the enforcement of foreign judgments in terms of the common law.
The Constitutional Court briefly dealt with the first two requirements, finding the key issue in determining whether to rescind the High Court orders was whether Zimbabwe had prospects of success in the matter. This the Constitutional Court found would depend on whether the Tribunal and High Court had jurisdiction over the matter.
Regarding the Treaty, the Constitutional Court noted that it was ratified by Zimbabwe in 1992 and South Africa acceded to it in 1994, it being approved by the Senate and National Assembly in 1995. The Treaty came into force in September 1993. The Tribunal was established under the Treaty, is compositions, powers and functions were set out in the Tribunal Protocol. Initially the coming into force of the Tribunal Protocol depended on its ratification by two-thirds of SADC Member States. This did not happen. However, the SADC Summit (the SADC supreme policy making body) that has the power to amend the Treaty, did so in August 2000, including the Tribunal Protocol in the Treaty itself (creating the Amended Treaty). This amendment came into force when the Amended Treaty was adopted by three-quarters of all Members of the Summit when it was signed by 14 Heads of State on 14 August 2001 (including the Zimbabwe and South Africa). At this stage Zimbabwe and South Africa were bound by the Amended Treaty, including the Tribunal Protocol.
Zimbabwe argued that the Amended Treaty was not part of South African law, but the Constitutional Court then found that as the South African Parliament had approved the Treaty in 1995, Treaty and the Amended Treaty are binding on South Africa, dismissing this argument.
Regarding the issue of sovereign immunity, the Constitutional Court found that Zimbabwe would ordinarily enjoy immunity from civil suits in South Africa section 2 of the Immunities Act. Section 3 of the Immunities Act, however, provides that immunity shall be forfeited in proceedings in respect of which immunity has been waived. Zimbabwe contended that no waiver had taken place, but the Constitutional Court rejected this argument. It pointed to Article 32 of the Tribunal Protocol (to which Zimbabwe has agreed to b bound) that obliges Member States to facilitate the enforcement of judgments of the Tribunal, and that decisions of the Tribunal are binding and enforceable “within the Territories of the States concerned”.
The Constitutional Court noted that although the Foreign Judgments Act had been enacted to make the enforcement of certain foreign judgments easier, it only applied to countries designated by the Minister, and to do date only Namibia is a designated country. As such the Foreign Judgments Act has no application to the present case.
The final and most important consideration for the Constitutional Court is the common law framework for the enforcement of foreign judgments, and whether this judgment will meet those requirements.
There are essentially six requirements in the common law that must be met before a foreign judgment will be recognised and enforced by South Africa courts. These are
(i) that the court which pronounced the judgment had jurisdiction to entertain the case according to the principles recognised by our law with reference to the jurisdiction of foreign courts (sometimes referred to as ‘international jurisdiction or competence’);
(ii) that the judgment is final and conclusive in its effect and has not become superannuated;
(iii) that the recognition and enforcement of the judgment by our Courts would not be contrary to public policy;
(iv) that the judgment was not obtained by fraudulent means;
(v) that the judgment does not involve the enforcement of a penal or revenue law of the foreign State; and
(vi) that enforcement of the judgment is not precluded by the provisions of the Protection of Business Act 99 of 1978, as amended.
There was no dispute that the order in question was final, was not obtained fraudulently, did not involve the enforcement of foreign revenue law and is not precluded by the Protection of Business Act.
The Constitutional Court held that the enforcement of the judgment would not be against South African public policy, as the Constitution, which embodies South African public policy, “promotes democracy, human rights and the rule of law”.
The questions for the Constitutional Court to consider then where whether the Tribunal had jurisdiction, and whether the Tribunal’s order was a “foreign judgment”.
Zimbabwe claimed that the Tribunal did have jurisdiction over it on the basis alleged failure of two-thirds of the SADC Member States to ratify the Tribunal Protocol and three quartes to adopt the Amending Agreement.
On this issue, the Constitutional Court considered whether Zimbabwe had objected to the jurisdiction of the Tribunal in the Tribunal itself. It found that it had not. The Constitutional Court found that Zimbabwe had objected to the Tribunal ruling specifically on its land reform as SADC did not have its own human rights standards or standards on agragrian reform that Zimbabwe’s actions could be measured, but not that the Tribunal had no jurisdiction in general to consider disputes brought against Zimbabwe. Also, Zimbabwe had submitted to the Tribunal’s jurisdiciton by participating in those proceedings.
The Constitutional Court then went on to develop the common law in a significant manner, finding that “the basis for objecting to the jurisdiction of a foreign court or tribunal whose order is sought to be enforced in a South African court must, in my view, be materially similar to the objections previously raised before the foreign court or tribunal that made the order to be enforced. Otherwise the objection should be dismissed.“
The Constitutional Court went on to state: “Barring exceptional circumstances, such as where the new basis for objection was not yet available to the objecting party to raise in a foreign court, grounds on which jurisdiction is objected to in a domestic court, must have been raised in a foreign or regional court. Otherwise, it should not be open to a party, which chose to confine itself to specific objections, to later shift to altogether new ones before another court whenever those previously raised have proved to be without merit.”
This is a potentially important development of the law in relation to the enforcement of foreign judgments in South African courts, and may well make it easier for such judgments to be enforced.
On the specific ground raised by Zimbabwe that the Tribunal did not have jurisdiction. The Constitutional Court found that Zimbabwe had acceded to the Treaty, and that the Amending Treaty, including the Tribunal Protocol, did not require ratification itself. Therefore the Tribunal had jurisdiction over Zimbabwe at the relevant time.
Having decided the the Tribunal had jurisdiction, the Constitutional Court turned to consider whether South African courts have jurisdiction to enforce an order of a regional or international tribunal under the common law.
The Constitutional Court looked at two of the jurisdictional requirements that “(i) a party who applies for the enforcement of a judgment sounding in money ‘must have been domiciled or resident within the State in which the foreign court exercised jurisdiction’ or ‘(ii) the one against whom the order is sought to be enforced must have submitted to the jurisdiction of the foreign court.'”
It appeared to the Court, from the above, that these requirements contemplate judgments made by foreign domestic courts, as it was hard to see how the requirement that the applicant be domiciled or resident “within the State in which the foreign court exercised jurisdiction” applied to international tribunals.
There was therefore a gap in the common law, and the Constitutional Court had to consider whether it should then be developed. The Constitutional Court found that that common law requirement should be developed for a number of reasons.
Generally, facilitating the recognition of foreign judgments is important because this is important for international trade and commerce, and to prevent people from avoiding legal accountability. Also, the principles of respect for other nations and the principle of reciprocity favoured a more inclusive recognition of foreign judgments.
The Constitution itself, in various provisions, encourages “alignment” of South African, foreign and international law.
Also, Article 32 of the Tribunal Protocol, which is binding on South Africa, requires Member States to “take forthwith all measures necessary to ensure execution of decisions of the Tribunal.”
On top of these grounds, the right of access to courts, that includes the right to an effective remedy, meant that in this situation, as the gap in the common law meant the farmers had no means to enforce the judgment they had obtained, the common law should be developed. The Constitutional Court emphasized that the need to develop the common law to ensure the farmers had access to an effective remedy was “even more pronounced since Zimbabwe, against which an order sanctioned by the Treaty was made by the Tribunal does, in terms of its Constitution, deny the aggrieved farmers access to domestic courts and compensation for expropriated land. Of importance also is the fact that a further resort to the Tribunal was necessitated by Zimbabwe’s refusal to comply with the decision of the Tribunal.”
These considerations listed above, meant that the common law should be developed to cover the Tribunal’s judgements, and the term “foreign courts” should be read to include international tribunals.
The Constitutional Court therefore concluded that Zimbabwe had failed to show the High Court lacked the jurisdiction to register the costs order for enforcement.
The appeal was dismissed with costs.
Justice Zondo wrote a brief concurring judgment in which he agreed with the result of the Chief Justice’s judgment, and the majority of the reasonsing, but stated that there was no need to make a finding that the only grounds of lack of jurisdiction that could be raised on enforcement were the ones raised before the original court or tribunal. Justice Zondo was of the view that it was sufficient that the Tribunal did in fact have jurisdiction over Zimbabwe.
Justice Jafta also wrote an opinion in which he found that it was not in the interest of justice to grant leave to appeal. In his opinion the “this matter is about rescission of the orders granted by the High Court with Zimbabwe’s deliberate indifference.” The matter was simply that Zimbabwe had not made out a case for rescission and the High Court dismissed it’s application, and the SCA confirmed that dismissal under the common law requirements for rescission. Under this test there were no propects of success on appeal, Zimbabwe had not given a satisfactor explanation for its failure to appear at the hearing (and as Jafta J stated “The lack of respect displayed by Zimbabwe to the High Court before the impugned order was granted is unfortunate and it is a weighty factor against the granting of leave.“)
Justice Jafta therefore thought that as a requirement for granting leave to appeal was that there be reasonable prospects of success that leave should be refused. In addition, in his opinion, the common law requirements for the recognition of judgments had already been extended to international tribunals by the SCA, and therefore there was no need for the Constitutional Court to do so.
The Constitutional Court will have to decide, firstly, whether the SCA was correct to hold that the SADC judgments satisfied all of the requirements for registration of a foreign judgment in South Africa. One of these requirements is that the judgment must not be in conflict with South Africa’s public policy. The Zimbabwean courts refused to register them on precisely the ground that they conflicted with Zimbabwe’s Constitution, the supreme articulation of its public policy. Strangely, however, Zimbabwe has not advanced the argument in this litigation that the SADC Tribunal judgments are in conflict with South Africa’s Constitution, and thus its public policy, to the extent that they declared that a redistributive land reform programme (and arguably affirmative action as such) amounted to racial discrimination and a breach of international law. This aspect of the Tribunal’s judgments has been criticized academically as being wholly inconsistent with South Africa’s jurisprudence on the right to equality, and it will be interesting to see how the Constitutional Court approaches the issue if it is raised.