Twenty-Third Century Systems (Pty) Ltd and Another v SAP Africa Region (Pty) Ltd

Twenty-Third Century Systems (Pty) Ltd (Systems) and its wholly owned subsidiary Twenty-Third Century Systems Global (Pty) Ltd (Global) were SAP partners appointed to sell and service SAP products in parts of sub-Saharan Africa. On 30 May 2016, Global and SAP Africa Region (Pty) Ltd concluded a suite of three agreements (treated as one), including the SAP PartnerEdge terms. In July 2019 SAP purported to terminate the agreement for good cause. Global alleged that SAP’s conduct constituted repudiation, which Global accepted, bringing the agreement to an end. In November 2020, Systems instituted action claiming approximately US$68 million for loss of profits allegedly arising from SAP’s repudiation. The agreement contained a limitation of liability clause excluding damages for loss of profits and a time-bar clause requiring claims to be instituted within one year. SAP raised special pleas relying on these clauses. The High Court upheld the special pleas, finding that the clauses survived termination, and dismissed the claim.

The appeal was dismissed. The first appellant was ordered to pay the respondent’s costs, including the costs of two counsel.

The judgment affirms and clarifies South African contract law on the effect of repudiation and termination, particularly the survival of secondary contractual obligations such as limitation of liability and time-bar clauses. It reinforces the distinction between primary and secondary obligations and confirms that express survival clauses will be given effect, even where the terminating party is alleged to have repudiated the contract.