Mafoko Security Patrols (Pty) Ltd and Others v Mjayeli Security (Pty) Ltd and Others

The SABC awarded a tender for security services to Mafoko Security Patrols (Pty) Ltd in June 2017, despite internal recommendations that the tender be awarded to Mjayeli Security (Pty) Ltd, which had scored highest on price and empowerment. Mjayeli sought to review and set aside the award. The SABC requested the SIU to investigate and obtained a court order allowing Mafoko to continue providing services pending finalisation. The SIU found the award unlawful and constituting financial misconduct under the PFMA. The High Court set aside the tender and ordered Mafoko, found to be an innocent tenderer, to disgorge its profits under a 'no loss, no gain' principle. Mafoko appealed only against the remedial orders, not the finding of unlawfulness.

The appeal was upheld. The High Court’s order was set aside. The matter was remitted to the High Court to determine appropriate orders under s 172(1)(a) and (b) of the Constitution after receiving further evidence and submissions. The SIU was ordered to pay the costs of the appeal. Costs in the High Court were reserved.

The case clarifies South African law on remedies following unlawful public procurement. It rejects a rigid application of the 'no loss, no gain' principle and affirms that courts retain a wide discretion under s 172(1)(b) to allow even profit retention by a blameless tenderer where justice and equity so require. It reinforces Phomella and provides important guidance on balancing public accountability with fairness to innocent contractors.