Central Energy Fund SOC Ltd and Another v Venus Rays Trade (Pty) Ltd and Others

The Central Energy Fund SOC Ltd (CEF) and its wholly owned subsidiary, the Strategic Fuel Fund Association NPC (SFF), brought review proceedings to set aside decisions taken in 2015–2016 concerning the rotation and sale of South Africa’s strategic crude oil reserves, amounting to approximately 10 million barrels. The sales were concluded through a series of sale, repurchase, storage and financing agreements with various private trading and financing entities, including Taleveras, Contango, Natixis and Vitol. The transactions were approved by the Minister of Energy but were later shown to have been procured through serious governance failures, misrepresentations and bribery by the SFF’s then CEO, Mr Sipho Gamede, with the acquiescence or negligence of senior SFF management, the SFF Board, the CEF and the Minister. After a substantial delay of more than two years, the appellants launched a self-review under the principle of legality and PAJA. The High Court reviewed and set aside the impugned decisions and contracts, but granted compensation for out-of-pocket expenses to innocent third-party contracting respondents. The appeal concerned the appropriateness of that remedial order.

The appeal against the High Court’s orders granting compensation for out-of-pocket expenses to Contango, Natixis and Vitol was dismissed with costs. The High Court’s declaration of invalidity and the compensatory relief awarded remained intact.

The case is significant for South African administrative and constitutional law as it affirms the breadth of courts’ remedial powers under s 172(1)(b) of the Constitution and PAJA. It clarifies that even where unlawful state conduct is tainted by corruption and serious governance failures, courts must still fashion remedies that are just and equitable, particularly where innocent third parties are involved. The judgment reinforces the principle that compensation for reliance losses, but not profits, may be appropriate when invalid contracts are set aside, and underscores accountability in public procurement and management of strategic national assets.