Samancor Holdings (Pty) Ltd and Others v Samancor Chrome Holdings (Pty) Ltd and Another

The parties concluded a sale of shares agreement in February 2005 whereby Samancor Chrome Holdings (Pty) Ltd (the purchaser) acquired the chrome business of Samancor Chrome Ltd from Samancor Holdings (Pty) Ltd (the seller). The agreement contained tax indemnities and an arbitration clause, as well as a time-bar clause requiring tax-related claims to be initiated within six years of the Effective Date (1 June 2005). In 2012 SARS issued an additional income tax assessment relating to the 2005 tax year, concerning excluded (non-chrome) assets, together with penalty tax and interest. Samancor Chrome paid SARS approximately R27.4 million. The respondents sought to enforce the tax indemnity against the appellants but only initiated arbitration proceedings in August 2013, after the contractual six-year time bar had expired. They accordingly applied to the High Court for an extension of time under s 8 of the Arbitration Act 42 of 1965. The High Court granted the extension. The appellants appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel, and the High Court’s order granting an extension of time under s 8 of the Arbitration Act was upheld.

The case provides authoritative guidance from the Supreme Court of Appeal on the proper interpretation and application of s 8 of the Arbitration Act 42 of 1965. It confirms that contractual arbitration time bars are subject to judicial extension where enforcement would cause undue hardship, clarifies that the discretion is not narrowly confined or exceptional, and affirms the relevance of constitutional values such as access to justice. The judgment also aligns South African law with established English jurisprudence on analogous provisions.