THE executors of the estate of the late Sandi Majali, an African National Congress benefactor, are asking the high court to set aside an arbitrator’s decision to award ownership of a company to Mr Majali’s former business partner.
Mr Majali was arrested in 2010 in connection with the removal of the two directors of Kalahari Resources and their replacement on the Companies and Intellectual Property Registration Office database with eight people, including himself. The charges were withdrawn after his death.
The South Gauteng High Court heard on Monday that Mr Majali and his company, Imvume Resources, had agreed to refer to arbitration a dispute with his former business partner, Lindani Mthwa, over the ownership of Siyanda Chrome Investments, valued at about R500m.
Mr Majali and Mr Mthwa both claimed to hold all the shares in the company, which owns 26% of the chromite recovery business at Union Mine, which is owned by Anglo American Platinum.
Mr Majali had undertaken to pay $460,000 in bribes to Iraqis for access to a United Nations programme that allowed Iraq to alleviate sanctions imposed on it by trading oil for food. He also paid $60,000 from money one of his companies earned from selling an oil deal to South Africa’s Strategic Fuel Fund in dubious circumstances.
An arbitrator made an award in October 2010 that Mr Mthwa owned 100% of Siyanda Chrome Investments, without hearing representations from Mr Majali and Imvume. Mr Majali brought an application to set aside the award, but before it could be heard, he died in December 2010.
The South Gauteng High Court last year ordered that Mr Majali’s son and wife — Philip Majali and Alice Majali — replace Mr Majali as applicants in the case in their capacity as the executors of his estate. The Majali family argued that it was entitled to dividends from Siyanda Chrome Investments, amounting to millions of rand.
Dumisa Ntsebeza SC, for the executors, told Judge Colin Lamont on Monday that section 33 of the Arbitration Act gave a court the power to set aside an arbitrary award when an arbitrator was found to have engaged in misconduct. A court could also intervene when an arbitrator had committed a gross irregularity, exceeded his powers, or an award had been improperly obtained, he said.
Mr Ntsebeza said a clause in the arbitration agreement stated that if either party failed, within the prescribed time, to present a case, an arbitrator could proceed and make an award.
He said no written notice was given by the arbitrator to Mr Majali to explain his absence from the proceedings, which was required. Mr Ntsebeza said the crux of the argument was that Mr Majali, the original applicant, was denied the right to address the arbitrator on the evidence against him. There was no record or indication of any kind that such notice was given and received by Mr Majali. "On these grounds alone, it is submitted that the proceedings must be set aside," Mr Ntsebeza said.
The evidence in the arbitration proceedings centred on Mr Majali, who was absent, he said.
"If the court had been faced with a similar situation, the court would have ordered that he be present," Mr Ntsebeza said.
He said the issue at the arbitration proceedings was whether Mr Majali said he owned 100% of Imvume, which owned 100% of Siyanda Chrome Investments.
"How do you conclude an arbitration when a central party has not been heard?" Mr Ntsebeza asked the court.
He said the courts "meticulously" enforced the requirement that parties should be notified timeously of steps taken against them, and that they should be given an opportunity to reply to the case against them, and of placing their versions before the court.
Mr Ntsebeza said the arbitrator misconceived the "whole nature" of the inquiry, rendering the proceedings grossly irregular. The arbitrator had stated that the case was about contributions made, whereas it was a test to determine the lawfulness of a shareholding.
The hearing continues.