Seebed CC t/a Siyabonga Convenience Centre v Engen Petroleum Limited

Seebed CC, a licensed petroleum retailer, operated an Engen filling station on premises owned by Engen Petroleum Limited under a written lease agreement. The lease was initially fixed-term and later extended, ultimately expiring in July 2015. Seebed alleged that this truncation occurred pursuant to an oral undertaking by Engen that the lease would be extended to July 2020, despite the written lease containing a non-variation (whole contract) clause. A dispute arose after Engen introduced a Corner Bakery franchise at the premises; Seebed refused to sign the franchise agreement, alleging misrepresentation. Engen purported to cancel the lease and instituted eviction proceedings. The first eviction application was referred to trial due to factual disputes. Following concessions made by Seebed’s counsel that the lease subsisted on a month-to-month basis, Engen gave notice of termination and launched a second eviction application. Seebed sought to stay the second eviction proceedings pending a section 12B arbitration under the Petroleum Products Act, alleging unfair or unreasonable contractual practices. The High Court refused the stay and granted an eviction order. Leave to appeal was refused by the High Court, the Supreme Court of Appeal, and ultimately sought in the Constitutional Court.

Leave to appeal was refused. The applicant was ordered to pay the respondent’s costs in the Constitutional Court.

The case reinforces Constitutional Court jurisprudence on section 12B of the Petroleum Products Act, confirming that a section 12B arbitration referral does not automatically stay or preclude eviction proceedings in the High Court. It affirms that fairness and reasonableness are not free-standing principles permitting courts to override clear contractual rights and underscores the binding effect of factual concessions made in litigation. The judgment promotes legal certainty in petroleum franchise disputes.