Termico (Pty) Ltd v SPX Technologies (Pty) Ltd & Others; SPX Technologies (Pty) Ltd v Termico (Pty) Ltd

SPX Technologies (Pty) Ltd (SPXT), a subsidiary of a US multinational, engaged Termico (Pty) Ltd as its BEE partner in DBT Technologies (Pty) Ltd. Termico acquired 25.1% of DBT shares, financed by a loan (Loan B) from SPXT, governed by a shareholders’ agreement. After a lock-in period, Termico exercised a contractual Put Option in June 2014 to sell its shares to SPXT at a price calculated per a formula in the agreement. Disputes arose regarding the validity of the Put Option, the applicable financial statements for valuation, and whether SPXT could instead exercise a Call Option. These disputes were referred to arbitration. The arbitrators upheld Termico’s Put Option, rejected SPXT’s Call Option, and determined the Put Price, but did not make a money award as the outstanding balance of Loan B had to be set off. SPXT applied to the High Court to set aside the award for alleged gross irregularity, while Termico counter-applied to have the award made an order of court and sought a money judgment. The High Court set aside the award and referred the matter to fresh arbitration. Termico appealed to the Supreme Court of Appeal.

Termico’s appeal was upheld. The High Court’s order setting aside the arbitration award was replaced with an order dismissing SPXT’s review application, granting Termico’s counter-application, making the arbitration award an order of court, and ordering SPXT to pay Termico R255 846 850.25 plus interest. SPXT’s repudiation appeal was dismissed with costs.

The case reaffirms the narrow scope of judicial interference with arbitration awards in South African law and clarifies that an arbitration award is not non-final merely because ancillary or consequential matters fall outside the arbitrators’ mandate. It also limits the application of the ‘hybrid order’ doctrine and strengthens the enforceability of arbitration awards under ss 31 and 33 of the Arbitration Act.