Industrial Development Corporation of South Africa Limited and Another v Kalagadi Manganese (Pty) Ltd and Others

Kalagadi Manganese (Pty) Ltd operated a manganese mine financed through loan facilities advanced by the Industrial Development Corporation of South Africa Limited (IDC) and the African Development Bank (AfDB) under a Common Terms Agreement concluded in 2017. The agreement contained a peremptory international arbitration clause requiring disputes to be resolved by ICC arbitration in London under English law. Kalagadi defaulted on its repayment obligations, and the lenders accelerated the debt exceeding R6 billion. IDC launched a business rescue application. In response, Kalagadi and its shareholders brought a High Court application seeking, inter alia, a court‑ordered restructuring of the debt and interdicts preventing enforcement of security. IDC and AfDB raised preliminary objections that the High Court lacked jurisdiction due to the arbitration agreement and AfDB’s immunity from legal process. The High Court dismissed these objections, leading to an appeal to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court’s order was set aside and replaced with an order staying the application against Kalagadi Manganese (Pty) Ltd pending final determination of the arbitration proceedings in terms of the Common Terms Agreement, and directing Kalagadi to pay the costs of the application.

The judgment affirms South Africa’s strong pro‑arbitration stance under the International Arbitration Act 15 of 2017 and reinforces the principle of minimal judicial interference in international commercial arbitration. It clarifies that related domestic proceedings, including business rescue applications, do not justify bypassing a peremptory arbitration clause. The case also provides authoritative confirmation that the African Development Bank enjoys immunity from South African court jurisdiction through the Diplomatic Privileges and Immunities Act, without further parliamentary incorporation.