The appellant (Travelex Limited), a foreign peregrinus, and the respondents (Sean and Gillian Maloney), local peregrini of the Western Cape Division but incolae of South Africa, entered into a share sale agreement on 8 December 2010 for the sale of shares in FX Africa Foreign Exchange (Pty) Limited. The agreement was signed in Cape Town and Switzerland, with the purchase price payable in Cape Town. Following an alleged repudiation of the agreement, the respondents brought an urgent application in the Gauteng Division, Pretoria, on 19 November 2013 for attachment of the appellant's shares in FX Africa ad fundandam et confirmandam jurisdictionem. Without opposition but with the acquiescence of the appellant's counsel, the attachment order was granted on 6 February 2014. Two months later, the appellant launched a rescission application to set aside the initial order, alleging that the court lacked jurisdiction because (1) there was no ratio jurisdictionis and (2) the appellant had submitted to jurisdiction under the agreement.
The appeal was dismissed with costs, including costs of two counsel. The attachment order ad fundandam et confirmandam jurisdictionem was upheld, albeit for different reasons than those given by the court a quo.
1. Where both plaintiff and defendant are peregrini, jurisdiction requires both a recognized ratio jurisdictionis and an attachment ad confirmandam jurisdictionem. 2. A ratio jurisdictionis exists where the contract has a direct connection to the court's area of jurisdiction, which may be established through various connections including the location of the subject matter (shares), the place of performance of material obligations (delivery of shares, obtaining exchange control approval, certain payments), and the location of the company whose shares are being sold. 3. Submission to jurisdiction must be established on the cumulative effect of proved facts on a balance of probabilities. A clause submitting to a court's jurisdiction for the limited purpose of interim relief pending arbitration does not constitute an unreserved general submission to jurisdiction for all litigation purposes. 4. Interpretation of submission to jurisdiction clauses requires consideration of the entire agreement and the context, applying objective interpretation principles. The whole tenor and context of the arbitration clause must be considered.
The court made obiter observations regarding the procedural aspects of challenging orders for lack of jurisdiction. The court inclined to the view that judgments or orders granted by a court lacking jurisdiction are nullities that need not be formally set aside. However, the court agreed with the view in Erasmus Superior Court Practice that if parties dispute the status of the impugned judgment or order, it should be rescinded. The court noted that in such circumstances, the usual requirements for rescission applications in terms of common law or Uniform Rule 42 do not apply. The court also noted the paradox that while such orders are nullities that may be disregarded, procedurally they should be formally set aside when disputed, as this does not risk disorder or self-help but allows the court to assert the dividing line between what is lawful and unlawful.
This case is significant in South African civil procedure law for clarifying the requirements for jurisdiction over foreign peregrini where both plaintiff and defendant are peregrini. It confirms that (1) a recognized ratio jurisdictionis must exist in addition to attachment ad confirmandam jurisdictionem; (2) a "direct connection" to the court's area of jurisdiction is sufficient to establish ratio jurisdictionis, even where the contract was not concluded or the main payment was not due in that jurisdiction; and (3) submission to jurisdiction clauses in arbitration agreements must be interpreted in context and will not be read as general submissions to jurisdiction for all purposes where they are clearly limited to interim relief pending arbitration. The judgment also reinforces the principle that orders granted without jurisdiction are nullities but should be formally set aside when their validity is disputed.
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