Foize Africa (Pty) Ltd v Foize Beheer BV and Others

Foize Africa (Pty) Ltd, a South African company, concluded a licensing agreement in Johannesburg in December 2009 with Foize Sales BV (third respondent) for the exclusive right to market and distribute the 'Foize on Mobile' telecommunications software in South Africa and other territories until 6 December 2014. The agreement included warranties that the licensor was authorised and that the product did not infringe third-party intellectual property rights. The first respondent, Foize Beheer BV, also signed the agreement and undertook to be bound by its terms. After relations deteriorated, the second respondent claimed that it, not the first respondent, owned the intellectual property and distribution rights and purported to market the product in South Africa through other companies. Foize Africa sought interim interdictory relief in the North Gauteng High Court to prevent breaches of its exclusive rights, pending an action for final relief. The respondents raised an objection in limine relying on a contractual clause providing for Dutch law, Dutch court jurisdiction, and arbitration in Amsterdam. The High Court dismissed the application, holding that it lacked jurisdiction. Foize Africa appealed to the Supreme Court of Appeal.

The appeal succeeded with costs. The order of the North Gauteng High Court was set aside and replaced with an order granting an interim interdict restraining the respondents from licensing, marketing, selling or distributing the Foize on Mobile product in South Africa until 6 December 2014, pending the institution and final determination of an action for final relief. The appellant was ordered to institute the action by 31 October 2012, failing which the interim relief would lapse.

The case is an important authority in South African private international law and civil procedure. It reaffirms that foreign jurisdiction and arbitration clauses do not oust the jurisdiction of South African courts, but merely found a discretionary stay. It also clarifies that non‑parties to a contract cannot rely on such clauses and that interim interdicts may be granted against foreign respondents where effectiveness can be achieved. The judgment provides guidance on the proper approach to enforcing arbitration and jurisdiction clauses.