IGS Consulting Engineers CC and Another v Transnet SOC Limited

Transnet SOC Limited instituted a self-review to set aside five contracts concluded with IGS Consulting Engineers CC between 2015 and 2016 under its New Multi Product Pipeline Project, alleging non-compliance with s 217 of the Constitution due to corruption and procurement irregularities. Turnmill Proquip Engineering (Pty) Ltd was cited because it had entered into joint venture agreements with IGS in respect of two of the contracts (the second and fourth contracts). The High Court set aside all five contracts, declared them unlawful, and ordered disgorgement of profits, including joint and several liability between IGS and Turnmill in respect of the second contract. On appeal to the Supreme Court of Appeal, IGS withdrew its appeal. Turnmill persisted only because of the joint and several disgorgement order, although Transnet conceded during the appeal that it would abandon joint and several liability. The appeal thus largely concerned mootness and costs.

The appeal was dismissed as moot. The High Court order was varied to remove joint and several disgorgement liability and to require each respondent to disgorge only its own verified profits under the second contract. The first and second appellants were ordered to pay the costs of the appeal, including the costs of two counsel.

The case reinforces strict constitutional scrutiny of public procurement under s 217, confirms the duty of organs of state to approach courts on self-review where unlawful contracts are discovered, and clarifies the application of mootness and cost-only appeals under s 16(2)(a) of the Superior Courts Act. It also illustrates judicial caution in imposing disgorgement on parties not shown to have profited or acted unlawfully.