State Information Technology Agency SOC Limited v Gijima Holdings (Pty) Limited

SITA (State Information Technology Agency) provides IT services to State departments by contracting with private service providers. SITA and Gijima previously had a SAPS agreement concluded in 2006, which SITA terminated in January 2012. Gijima instituted urgent proceedings, and the parties entered into a settlement agreement on 6 February 2012 which appointed Gijima as the DSS service provider for the Department of Defence (DoD) from 1 April 2012 to 31 July 2012, to compensate Gijima for approximately R20 million loss from the terminated SAPS agreement. Throughout negotiations, Gijima expressed concerns about whether proper procurement processes had been followed. SITA repeatedly assured Gijima that it had complied with all relevant procurement procedures and even included a warranty clause in the DoD agreement. The DoD agreement was extended several times through addenda. A payment dispute arose with SITA owing Gijima approximately R9.5 million. During arbitration proceedings instituted by Gijima in September 2013, SITA raised for the first time that the DoD agreement was invalid due to non-compliance with section 217 of the Constitution. SITA then approached the High Court to set aside the DoD agreement and addenda, almost 22 months after the original agreement.

• Whether the Promotion of Administrative Justice Act (PAJA) applies when an organ of state seeks to review its own decision
• Whether an organ of state can invoke PAJA to review and set aside its own administrative action
• Whether the principle of legality provides an alternative route for an organ of state to review its own decision
• What constitutes 'administrative action' under section 33 of the Constitution and PAJA
• Whether the rights in section 33 of the Constitution extend to organs of state or are limited to private persons
• Whether delay in bringing legality review proceedings is fatal to an organ of state's application
• What constitutes a just and equitable remedy under section 172(1)(b) of the Constitution where a public contract is declared invalid

Leave to appeal was granted. The appeal was upheld in part. The High Court order was set aside and replaced with: (a) a declaration that SITA's decision to appoint Gijima as DSS service provider under the contract from 1 April 2012 to 31 July 2012 and all decisions extending the contract are constitutionally invalid; (b) the declaration of invalidity does not divest Gijima of any rights it would have been entitled to under the contract but for the declaration of invalidity. SITA was ordered to pay Gijima's costs, including costs of two counsel, in the High Court, Supreme Court of Appeal and Constitutional Court.

PAJA does not apply when an organ of state seeks to review its own administrative decision. The rights created by section 33 of the Constitution are enjoyed only by private persons, not by organs of state, and the State is the bearer of obligations under that section. PAJA, enacted pursuant to section 33(3) to give effect to section 33 rights, must be interpreted consistently with the Constitution, meaning 'administrative action' under PAJA has the same parameters as in section 33 of the Constitution. An organ of state cannot be both the beneficiary of rights under section 33 and the bearer of corresponding obligations to give effect to those rights. However, the principle of legality, as an incident of the rule of law and a founding constitutional value, provides a mechanism for organs of state to seek review of their own decisions where such decisions are inconsistent with the Constitution or law. Public power exercised contrary to the principle of legality is invalid under section 2 of the Constitution. Review proceedings under the principle of legality must be brought without undue delay, and unexplained delay may be fatal to such proceedings, though courts have discretion to overlook delay in appropriate circumstances. Under section 172(1)(b), courts have wide remedial powers to make any order that is just and equitable when declaring conduct constitutionally invalid.

The Court emphasized that its determination regarding PAJA not applying to organs of state reviewing their own decisions does not extend to scenarios where: (i) an organ of state in a position akin to a private person seeks to review another organ of state's decision, or (ii) an organ of state seeks review in the public interest under section 38 of the Constitution. The Court noted that the right to just administrative action has particular significance in the South African context, given that during apartheid administrative law was used as an instrument of oppression. The Court observed that South Africa's Bill of Rights may be more extensive than most bills of rights internationally, but all rights contained therein are fundamental rights regardless of whether universally recognized. The Court commented that in oral argument SITA's counsel conceded the delay was unexplained. The judgment noted (without definitively determining) that whether Gijima actually performed under the contract remained a contested issue in the arbitration proceedings whose merits were never determined. Cameron J's observations in Kirland regarding government's higher duty to respect law and procedural requirements were approved and quoted: government is not an indigent litigant to whom courts must extend procedural lifelines, but rather the Constitution's primary agent which must do right and do it properly.

This judgment authoritatively settles a fundamental question in South African administrative law: whether PAJA is available to organs of state seeking to review their own decisions. The Constitutional Court definitively held that PAJA does not apply in such circumstances, as the rights in section 33 of the Constitution are meant to protect private persons against the State, not to benefit the State itself. This is significant for understanding the boundaries of administrative law and the distinction between PAJA review and legality review. The judgment confirms that organs of state must use the principle of legality (not PAJA) to challenge their own decisions, and that such challenges remain subject to requirements of timely action and proper explanation for delay. The case also demonstrates the Constitutional Court's remedial discretion under section 172(1)(b), showing that even where state action is declared invalid, courts can craft remedies that prevent the state from benefiting from its own wrongdoing, particularly where it has given false assurances and delayed unreasonably. The judgment reinforces the higher duty on the state to respect the law and procedural requirements.