Micaren Exel Petroleum Wholesaler (Pty) Ltd v Stella Quick Shop (Pty) Ltd and Another

Micaren Exel Petroleum Wholesaler (Pty) Ltd and Stella Quick Shop (Pty) Ltd concluded a fuel dealership agreement in July 2014. Under the agreement Micaren would supply fuel to Stella, install and retain ownership of underground tanks and pumps at Stella’s premises, and Stella was obliged to purchase fuel exclusively from Micaren and store only Micaren fuel in the tanks. From November 2016 Micaren ceased delivering fuel after Stella fell into arrears and acknowledged indebtedness exceeding R500 000 for prior fuel deliveries. Despite ongoing non-payment, Stella alleged that Micaren’s refusal to supply fuel and its alleged imposition of RAS levies amounted to repudiation of the agreement. In January 2017 Stella purported to accept the alleged repudiation, cancelled the agreement, and began purchasing fuel from Elegant Fuel (Pty) Ltd and storing it in the tanks. Micaren applied for a final interdict to restrain Stella from purchasing and storing fuel from third parties.

The appeal was upheld with costs. The high court order was set aside and replaced with an order interdicting Stella from purchasing and storing fuel at its premises unless purchased from Micaren, and directing Stella to pay the costs of the application.

The case restates and clarifies South African law on repudiation of contract, emphasising that repudiation must be assessed objectively and holistically with reference to all relevant conduct. It confirms that enforcing contractual rights, including withholding performance due to non-payment, does not amount to repudiation. The judgment also illustrates the use of a final interdict as a form of specific performance in exclusive supply agreements.