CIVIL PRACTICE – SPECIAL PLEA OF LACK OF JURISDICTION BASED ON FOREIGN JURISDICTION CLAUSE

CIVIL PRACTICE – SPECIAL PLEA OF LACK OF JURISDICTION BASED ON FOREIGN JURISDICTION CLAUSE

In an action brought by plaintiff, the the defendant averred that clause 19(k) of the agreement relied upon by the plaintiff provides as follows:

‘The contract and any other contract between the seller and the buyer shall be deemed in all respects as being performed and construed according to the laws of South Africa and the parties submit to the exclusive jurisdiction of the Western Cape High Court, Cape Town.’

The defendant thus asserted that given the fact that the parties agreed to the exclusive jurisdiction of the Western Cape High Court in Cape Town, this court has no jurisdiction to entertain any proceedings at the behest of the plaintiff. USIKU J had to determine the issue of whether the special plea of lack of jurisdiction raised by the defendant in his plea to the plaintiff’s particulars of claim, should be upheld.

It is a settled principle that a foreign jurisdiction clause in an agreement does not exclude this court’s jurisdiction. In other words, the parties to an agreement may not exclude the jurisdiction of the court, by their agreement. The court has discretion in deciding whether or not the exercise of that jurisdiction should be stayed pending the outcome of foreign proceedings (Foize Africa v Foize Beheer BV 2013 (3) SA 91 at 99 F-H).

In the matter of SWANU of Namibia v Katjivirue HC-MD-CIV-ACT-OTH-2021/03315 [2022] NAHCMD 98 (09 March 2022) the court set out the difference between exceptions and special pleas. It observed that an exception is confined to the four corners of the pleadings. An excipient must accept that the factual allegations contained in the pleading concerned are correct and may not introduce new evidence. On the other hand, a special plea does not appear ex facie the pleading. A special plea has to be established by the introduction of fresh evidence, outside the circumference of the pleading and those facts have to be established in the usual way. The court also observed that there are special pleas that are capable of being decided on the pleadings as they stand without a need to adduce evidence in support thereof. And there are special pleas that require evidence to be adduced.

In the present matter, the court was of the opinion that evidence was required to be led to establish why the court is being called upon to exercise its discretion and uphold the special plea, but there were no facts placed before court on which the special plea can be determined. In the absence of facts supporting the special plea, the special plea stands to be dismissed.

As regards the issue of costs the general rule that costs follow the result must find application. As a result, the defendant’ special plea was dismissed with costs.

ADDIDAS (South Africa) (Pty) Ltd v Jacobs NAHCMD 1 September 2022