REPORTABLE

CASE NO: A 24/2011

IN THE HIGH COURT OF
NAMIBIA

In the matter between:

PETRONEFT
INTERNATIONAL
…..................................................FIRST
APPLICANT

GLENCORE
ENERGY UK LIMITED ….......................................SECOND
APPLICANT

and

THE
MINISTER OF MINES AND ENERGY ….............................FIRST
RESPONDENT

THE
PERMANENT SECRETARY OF

MINES
AND ENERGY
….........................................................SECOND
RESPONDENT

THE
GOVERNMENT OF THE REPUBLIC

OF
NAMIBIA
…............................................................................THIRD
RESPONDENT

NATIONAL
PETROLEUM CORPORATION OF

NAMIBIA
(PROPRIETARY) LIMITED
….................................FOURTH RESPONDENT

NAMCOR
PETROLEUM TRADING &

DISTRIBUTION
(PTY) LTD CORPORATION

OF
NAMIBIA (PTY) LTD
…..........................................................FIFTH
RESPONDENT

NAMCOR
INTERNATIONAL TRADING

LIMITED
…...................................................................................SIXTH
RESPONDENT

NAMCOR
INTERNATIONAL LIMITED ….............................SEVENTH
RESPONDENT

CORAM: SMUTS, J

Heard on: 14 March 2011

Delivered on: 28 April
2011

JUDGMENT

Smuts, J
[1] At issue in this application is the legality of the decision by
the Cabinet of the third respondent, the Government of the Republic
of Namibia, to revoke the fourth respondent’s mandate (National
Petroleum Corporation of Namibia (Pty) Ltd (“Namcor”)) to
import 50% of Namibia’s annual required petroleum products. The
applicants have approached this Court in this application to review
that decision. In addition, the applicants apply for interim relief
on an urgent basis pending the outcome of the review to restore the
prior position.

[2] Given the corporate
structures of the different parties and their relevance to the
overall contractual scheme which I sketch below, I rather refer to
the parties by their names. I refer to the first applicant as
“Petroneft” and to the second applicant as “Glencore”.
They are oil international traders.

[3] The background facts
which have led to the present dispute – and indeed most of the
facts relevant to the issues raised in the application – are in
essence not in issue. I first refer to them and their statutory
context.

[4] During 2004, Namcor
(the fourth respondent) was granted the mandate by the Government of
Namibia to procure through importation 50% of the Namibia’s
annual required petroleum products. This was granted under Regulation
30(10) of the Petroleum Products Regulations, 2000 (“the
Regulations”) issued under the Petroleum Products and Energy
Act, 13 of 1990 (“the Act”). In terms of the Act and
Regulations, the Minister regulates the importation and distribution
of petroleum products in Namibia. Namcor is a parastatal (and a body
corporate) also tasked with advising the Minister on matters
concerning the importation and distribution of petroleum products in
Namibia. In pursuit of the statutory objective of securing the
reliable supply of petroleum products to Namibia, the Minister of
Mines and Energy (first respondent) granted the mandate to Namcor in
2004. When doing so, the Minister amended the wholesale licenses of
local oil companies by imposing a condition upon their licenses,
requiring them to procure 50% by volume of each of the petroleum
products, delivered by them annually under their licenses, from the
fifth respondent, Namcor Petroleum Trading & Distribution (Pty)
Ltd Corporation of Namibia (Pty) Ltd (“NPTD”). It is a
wholly owned subsidiary of Namcor and was utilized to give effect to
its mandate to import the 50% petroleum product needs of Namibia.

[5] To enable it to give
effect to the mandate, it is common cause that Namcor approached
Glencore, given the latter’s capitalization, expertise and
experience in the importation of oil and petroleum products
internationally. As a result of this approach, three inter related
contracts were then entered into. There is firstly a joint venture
agreement between Petroneft (Glencore’s subsidiary) and Namcor
dated November 2008. Secondly, a supply agreement was concluded
between Namcor and the joint venture company (established pursuant to
the joint venture), Namcor International Trading Ltd, the sixth
respondent. This contract was entered into on 13 March 2009. The
third contract is a tripartite deed of novation between Petroneft,
Namcor and another of Namcor’s subsidiaries, Namcor
International Ltd, the seventh respondent, incorporated in Mauritius.
It is referred to as “assignee”, by reason the terms of
this agreement.

[6] The joint venture
agreement between Petroneft and Namcor established the joint venture
company to source and sell petroleum products and crude oil pursuant
to Namcor’s mandate. Namcor and Petroneft are equal
shareholders in the joint venture company and are each entitled to
appoint two directors to its board.

[7] Pursuant to the joint
venture agreement, NPTD (delegated by Namcor to give effect to the
mandate) and the joint venture company entered into a supply
agreement to give effect to the joint venture. This it does by
providing for the supply of petroleum products exclusively by the
joint venture company to Namcor. It is common cause that it was the
corporate vehicle through which Glencore and Petroneft were to give
effect to the undertaking to Namcor to comply with the mandate.
Furthermore, Glencore is reflected as a guarantor in terms of clause
4.2 of the supply agreement for the joint venture company’s
performance in its obligations towards Namcor.

[8] Clause 9.2 of the
supply agreement, referred to extensively by both parties, provides
for the termination of the supply agreement 90 days after
notification by the Government in the event of the Government
revoking the supply mandate. It was this decision – on the part
of the Government to revoke the mandate – which is sought to be
reviewed in these proceedings.

[9] The third agreement
of relevance for present purposes is the deed of novation. It is
concluded between Namcor, Petroneft and the assignee. Under this
agreement, Namcor transferred its whole interest in the joint venture
company to the assignee and in terms of clause 2 guaranteed the
assignee’s performance under the joint venture agreement with
Petroneft.

[10] This contractual
scheme was described by the applicants (and not disputed by the
Governmental respondents opposing the application) as essentially
comprising a joint venture between Petroneft and the assignee in
terms of which Petroneft would be entitled to enforce Namcor’s
obligation in terms of clauses 6.6 and 6.7 of the joint venture
agreement against the assignee and against Namcor as guarantor of the
assignee. These terms relate to the obligation on the part of
Namcor’s assignee to use its best efforts to ensure the
satisfactory performance of the joint venture company’s
business in giving effect to the mandate. It is also not disputed
that the petroleum products which were supplied in satisfaction of
the contractual scheme were procured by Glencore which in turn
entered into supply contracts with the joint venture company.

[11] It was contended on
behalf of the applicants that, as a consequence of the contractual
matrix, they each have a direct and substantial legal interest in the
continuation of and compliance with the supply agreement and in
Namcor’s continued mandate granted by the Government. This
aspect is further discussed when dealing with the challenge by the
opposing respondents of the applicants’ standing in these
proceedings.

[12] It was also not
disputed between the parties that Glencore was not only approached
and involved in the establishment of the contractual scheme with the
consequential interdependent contractual relationships, but also
provided capital to fund the joint venture company and absorbed the
risks inherent in international petroleum procurement, given the lack
of experience and capitalization on the part of Namcor to do so.

[13] It is also common
cause between the parties that Namcor’s ability to perform its
mandate was adversely affected by the determination of the on sale
price of petroleum commonly referred to as the basic fuel price or
BFP formula. This formula was utilized within the Southern African
Customs Union (SACU) as an import parity price construct at a time
when South Africa served as the exclusive supplier of petroleum to
other SACU members. The applicants point out that it was no longer
apposite, given the fact that the mandate contemplated the
importation of petroleum products from other sources on an
intercontinental basis, thus including factors not contemplated
within the context of a import parity price construct within SACU,
such as freight charges, decreases in product density during
transport and currency fluctuations.

[14] The impact of these
charges resulted in Namcor operating at a loss. As a consequence, the
Minister was approached by Namcor and Glencore to determine the price
with reference to these market conditions and not the artificiality
of the BFP construct. Despite these approaches, the Minister declined
to revise the pricing methodology. Instead, the Cabinet in October
2010 proceeded to revoke Namcor’s mandate and the Minister
instructed the termination of the supply contract. This decision
making was preceded by a briefing document marked confidential and
dated 23 September 2010. It was attached to the applicants’
founding papers. The Governmental respondents challenge any reliance
upon this document on the basis of what they term the doctrine of
“dirty hands”. I deal with this aspect below. The
document in essence recommended in its conclusion that because it was
giving rise to debt on the part of the Government, the arrangement
with the applicants be terminated (by revoking Namcor’s
mandate).

[15] In a letter dated 21
October 2010 the Permanent Secretary of the Ministry (second
respondent) stated that the Cabinet “approved the revocation of
Namcor’s current mandate of importation of 50% of petroleum
products” and directed “Namcor to clear all its current
obligations and commitments with the supplier before 1 February
2011”. This letter was addressed to Namcor. It is the decision
set out in this letter which forms the subject matter of this
application. It is sought to be reviewed and set aside by the
applicants.

[16] On 28 October 2010
Namcor informed Glencore of the Ministry’s letter of 21 October
2010, notifying Namcor of the revocation of the mandate. After
receipt of this letter, Glencore’s London solicitors addressed
a letter to the Minister on 17 November 2010, seeking an undertaking
that the supply agreement be reinstated, failing which action would
be taken within 7 days. The Government Attorney responded to this
letter on 13 December 2010, pointing out that the Government of
Namibia was not party to the agreement in question and had no
contractual obligation to accede to Glencore’s call to
reinstate the agreement and indicated that any proceedings would be
defended.

[17] This application was
then launched on 23 February 2011. The main relief is to review and
set aside the revocation of Namcor’s mandate and the decision
to direct Namcor to terminate its contractual obligations under the
supply agreement. The applicants also seek declaratory orders that
Namcor remains authorized to procure 50% of the fuel import
requirement for Namibia and that the supply agreement is of full
force and effect and binding on NPTD. The application is two pronged.
Interim relief is sought pending the determination of these matters.
The interim relief is directed at restoring the status quo ante
in seeking to interdict and restrain the respondents from
implementing the Government’s decision to approve the
revocation of the mandate and the decision by the first respondent to
require Namcor to terminate its contractual obligations to the joint
venture company.

[18] The application for
the main (review and declaratory) relief is based upon nine grounds
raised in the founding affidavit. These are:

• 
  The lack of legal
  authority for the revocation and the directive, contending that
  these are ultra vires the Constitution and the relevant
  legislation;
  

  
  

• 
  The failure to provide
  an administratively fair procedure before revoking the mandate and
  directing the termination of the contract;
  

  
  

• 
  Contending that the
  decisions were unfair given the failure on the part of the authority
  is to disclose the gist of adverse information upon which the
  decisions are sought to be based;
  

  
  

• 
  The failure to provide
  reasons for the decisions;
  

  
  

• 
  The unreasonableness of
  the decisions, being based upon what is termed one-sided and
  misleading information;
  

  
  

• 
  The decisions were
  arbitrary and irrational;
  

  
  

• 
  The decisions were taken
  for an improper purpose by seeking to extricate Namcor or the State
  from binding contractual obligations by the exercise of public power
  on the part of the Government;
  

  
  

• 
  Mala fides or
  ulterior motives by seeking to oust Glencore in order to introduce
  alternative suppliers;
  

  
  

• 
  A reasonable
  apprehension of bias in contending that the relevant authorities did
  not act independently, impartially and objectively when making the
  impugned decisions.
  

  
  

[19] When the matter was
called, only the Minister, Permanent Secretary and the Government
(first, second and third respondents respectively) opposed the
application. Namcor’s Chairperson stated on its behalf that it
was not aggrieved by the decision and that sufficient and fair
consultation had taken place before the decision was taken and that
the termination of the supply agreement between the fifth and sixth
respondents “simply occurred ex contractu”.

[20] In their opposition,
the first to third respondents, through an affidavit by the Minister,
raised a number of preliminary points which I shall first deal with.
These relate to the questions of urgency, service on respondents
located outside Namibia, non-joinder of oil companies, a claim that
the applicants approached the Court with “dirty” hands,
the locus standi of the applicants and delay in bringing the
review application.

[21] In the answering
affidavits filed on behalf of the first, second and third
respondents, it is expressly stated that their answer is directed
against both interim and final relief. The affidavit was deposed to
by the Minister himself. No further time was sought by the
respondents to file further papers. Mr Gauntlett SC who appeared for
the applicants together with Mr F Pelser contended that no purpose
would be served by a two-phase hearing in the circumstances. When I
raised this with Mr Namandje, who appeared for the first to third
respondents, he did not agree with this submission. He instead
asserted that the applicants would at best be entitled to interim
relief and not to final relief at this stage. But upon my enquiry, he
was unable to point to any further aspect which the respondents would
want to cover to address the legality of the revocation on the basis
of authority, notice and the opportunity to be heard. These facts
were essentially common cause between the parties. Mr Gauntlett also
stated that the applicants would not rely upon the point of mala
fides relating to the decision to revoke the mandate.

[22] As the Minister’s
answering affidavit does make it clear that he answers to both the
application for interim and final relief and, given the conclusion I
reach on the basis of facts which are not in issue, it would not
serve any purpose to proceed with a two-phase hearing. I turn now to
the preliminary points raised by the respondents.

Urgency

[23] Mr Namandje pointed
out that Glencore through its London solicitors already on 17
November 2010 threatened legal proceedings within 7 days should the
supply agreement not be reinstated. He pointed out that no response
was given within 7 days and that the applicants should then have
commenced preparation of their application. This submission however
overlooks the fact that a response was provided to Glencore’s
solicitors by the Government Attorney on 13 December 2010. It would
in my view be prudent for the applicants to await such a response,
given the magnitude of
the matter. Mr Namandje further contends that the applicants’
delay in launching the application only on
23 February 2011 was
excessive in the circumstances and that the applicants have not made
out a sufficient case for urgency as is required by Rule 6(12). He
referred to a decision of the Full Bench of this Court in Mweb
Namibia (Pty) Ltd v Telecom Namibia and Others¹
and to Bergmann
v Commercial Bank of Namibia and Another²
and submitted that any
urgency was self created.

[24] Mr Gauntlett however
referred to paragraphs 78 and 79 of the applicants’ founding
affidavit which set out the steps taken by the applicants after being
apprised of the impugned decisions. The applicants first point out
that this constituted a “sudden development” which
required them to establish what had occurred and to conduct thorough
investigations in Windhoek. Glencore is based in London whilst
Petroneft is incorporated in the British Virgin Islands. The
applicants state that it became apparent by mid December that the
revocation and directive would not be withdrawn. Although not
expressly stated, this would have been with reference to the letter
by the Government Attorney of 13 December 2010. The applicants
confirm that they engaged London solicitors and thereafter identified
and instructed Namibian legal practitioners. They point out that the
offices of the Namibian legal practitioners were closed for some
three weeks over the Christmas period but that counsel were
instructed in late December 2010 for advice during the Christmas
vacation. It would appear that the advice was received in the last
week of January 2011 and instructions for the preparation of court
papers occurred in the first week of February 2011. Draft papers were
then prepared and considered by counsel, attorneys and solicitors.
Factual enquiries needed to be resolved and the papers thereafter
finalized in the second week of February 2011 and deposed to on 23
February 2011. The application launched immediately thereafter. The
applicants point out that the process of preparing the application
was difficult and that it entailed assembling the contractual
documentation, researching statutory and other material, establishing
the historical background and taking advice from legal practitioners
and thereafter consultations and finalizing papers between London,
Namibia and elsewhere.

[25] It is clear to me
that the statutory and contractual context and commercial setting of
the application would need to be thoroughly considered prior to
launching the application. This is quite apart from the magnitude of
the matter and its importance to the various parties. This process
would clearly entail thorough and detailed preparation, preceded by
research and consultation. These aspects are undoubtedly highly
relevant to the exercise of my discretion whether or not to condone
the non-compliance with the Rules of Court and hear the matter as one
of urgency.

[26] In exercising this
discretion, it is firstly important to note that there are varying
degrees of urgency as was stated in Luna
Meubel Vervaardigers (Edms) Bpk v Makin and another
1977(4) SA 135 (W)³
which has been cited with
approval by this Court and its constitutional predecessor. This is
also recognized in the Bergmann
matter, where it is
stressed that Rule 6(12) allows a deviation from the prescribed
procedures in urgent applications and that, as
far as practicable, parties
and practitioners should give effect to the objective of procedural
fairness when determining the procedure to be followed in such
instances to afford a respondent with reasonable time to oppose the
application.

[27] Mr Namandje argued
however that commercial issues would not give rise to urgency. But
this is not the case. This Court has frequently recognized that form
of urgency in following Twentieth
Century Fox Film Corporation and another v Anthony Black Films (Pty)
Ltd⁴
that the protection of a
commercial interest can also justify urgent relief under Rule 6(12).

“The
urgency of commercial interest, as in casu, may justify the
application of rule 6(12) no less than other interest and, for
purposes of deciding upon urgency, I must assume that the applicant’s
case is a good one and that it has a right to the relief which it
seeks.”

The above quoted portion
in the Twentieth Century Fox – matter is stated after
counsel submitted, as Mr Namandje did in these proceedings, that
there was no urgency in the absence of some threat to life or liberty
and that only commercial urgency was raised in that matter Goldstone,
J (as he then was) swept that approach aside in the previous passage
and added in that matter that:

“However,
due allowance must clearly be made in the case of a foreign company,
or foreign companies, and more especially in a case such as the
present, where the applicants have international interests which must
receive attention from its executives”.

[28] In commercial
matters there would thus be degrees of urgency and it would be
incumbent upon applicants to demonstrate with reference to the facts
of a specific matter that they are unable to receive redress in the
normal course and that the facts justify the urgency with which the
application has been brought. They must not however have created
their own urgency and would need to have afforded the respondents a
sufficient opportunity to deal with the matter raised. It would be a
question of fact to be determined in each case.

[29] Whilst it is clear
in this matter that the respondents were afforded a short period of
time to provide answering papers, they have not sought any
postponement and have in fact answered to both the interim and final
relief sought. The Minister does however point out that the
respondents are “massively prejudiced” by the short time
periods. He points out that certain officials were not available at
the time. The Minister furthermore does not in his affidavit point
out what further factual matter, relevant to the determination of the
issues would need to be placed before Court. Nor was Mr Namandje able
to do so in argument, particularly with regard to the legality of the
revocation of the mandate on the issues I have already referred to.
The parties were both able to file heads of argument and presented
detailed and thorough argument.

[30] Mr Namandje also
pointed out in argument that the respondents had not been able to
file the record in terms of Rule 53. This would ordinarily be a right
for the applicants to pursue which they have indicated they would
decline to exercise. Furthermore the applicants are not required to
follow Rule 53 if they seek to review decision making and can do so
under the common law.⁵

[31] Mr Gauntlett on the
other hand, pointed out that there would be an irretrievable loss to
the applicants if the status quo
ante were
not restored and further contended that the applicants were not
culpable with regard to the time taken in bringing the application.
In this regard he also referred to paragraph 81 of the founding
affidavit in which it was contended (and not squarely disputed) that
it would be extremely difficult for the applicants to compute the
loss of revenue and damages they would sustain and that there was not
a clear remedy for the recovery of damages of this nature so suffered
in Namibian law. He also referred to the logistical difficulties
faced by the applicants’ as foreign litigants in the
preparation of the application and submitted that it was prudent for
them to await the response on behalf of the Minister to the letter of
17 November 2010.

[32] There is in my view
much merit in these submissions. The importance of awaiting that
response, and then seeking advice, researching and the like are
clearly factors together with logistical difficulties caused by
distance and being in different jurisdictions should be taken into
account in the exercise of my discretion when considering whether to
grant condonation under Rule 6 (12). These factors were referred to
in this context in an unreported decision of this Court in The
Three Musketeers Properties (Pty) Ltd and Another v Ongopolo Mining
and Processing Ltd and Others⁶
where it was held that in
assessing urgency a Court could have regard to the factors enumerated
in Radebe
v Government of the Republic of South Africa and others⁷
when considering whether
there had been unreasonable delay in bringing a review. The following
was stated in the Ongopolo
matter with reference to
the factors listed in Radebe:

“I agree that
the factors listed, such as a reasonable time to be taken to take all
reasonable steps preceding an application including considering and
taking advice, attempts to negotiate, obtaining copies of relevant
documents and obtaining and preparing affidavits, should also be
taken into account, if these are fully and satisfactorily explained,
in considering whether an application should be heard as one of
urgency. In addition, I agree that in considering the time taken to
prepare the necessary papers, allowances should be made for
differences in skill and ability between practitioners practising as
attorneys and advocates, and that a party cannot be expected to act
over hastily, particularly in complex matters. In addition, in this
matter, both sets of parties are based in Tsumeb, some distance from
this court”.⁸

[33] Taking the factors
raised by the applicants (in their founding affidavit and especially
in paragraphs 78 and 79) into account, I cannot fault the applicants
for taking some time “to marshal their forces”, as was
found in Corium
(Pty) Ltd and Others v Myburgh Park Langebaan (Pty) Ltd and Others.⁹
I accordingly do not find
that their delay was culpable. I also take into account that the
respondents have not sought a postponement to place further matter
before this Court. Nor, as I have said, has any evidential matter
been identified by Mr Namandje which the respondents would still need
to address. I also take into account that the respondents themselves
have been on notice for some time that the applicants may take legal
action to challenge the decision making.

[34] In
the exercise of my discretion, I accordingly would grant condonation
to the applicants for bringing this application as one of urgency
under Rule 6(12).

Service:
non-compliance with Rule 5(1) and s 27 of the High Court Act

[35] The second
preliminary point taken by the first to third respondents was that
there had been no edictal citation as provided for in Rule 5 of the
Rules of this Court which preclude service of process outside the
jurisdiction of this Court without leave of this Court. The
respondents also took the point that the time allowed for entering an
appearance to defend is set in peremptory terms at being not less
than 21 days in s 24 of the High Court Act¹⁰
and that the application
was in direct conflict with this mandatory provision, in providing
for shorter periods.

[36] In the course of his
oral argument, Mr Namandje also pointed out that there was no
reference in paragraph 1 of the first part of the notice of motion
(seeking condonation) to Rule 5. He pointed out that there was only
reference to Rule 6(12). But the reference in Rule 6(12) is with a
view to secure condonation for non-compliance with the Rules of this
Court. Rule 5 concerning edictal citation is one such Rule. There is
thus an application for condonation for non-compliance with that
rule.

[37] He further pointed
out that s 24 of the High Court Act is peremptory and that the urgent
relief against foreign respondents would be precluded by virtue of
the operation of that section. It provides:

“The time
allowed for entering an appearance to a civil summons served outside
Namibia shall not be less than 21 days.”

[38] According to Mr
Namandje, this section would preclude even interim relief – not
final in nature or effect – from ever being granted against a
foreign respondent if the time limit in s 24 were not adhered to.

[39] On the other hand,
Mr Gauntlett submitted that the founding and replying affidavits made
out a proper case for non-complying with these formalities. He
further referred to the approach of the Supreme Court in Mahe
Construction (Pty) Ltd v Seasonaire¹¹
which he contended lent
support for the applicants’ application for condonation with
the Rule’s service requirements for foreign entities. He
contended that its underlying rationale demonstrated that in
commercial circumstances like this matter where foreign entities
operate in Namibia the transactions and interactions with them
leading to litigation are routed on Namibian soil, edictal citation
and associated procedural rules are not mandatory.

[40] The Supreme Court
held in Mahe
Construction that
a foreign entity with substantial operations in Namibia was
sufficiently subject to the jurisdiction of Namibian Courts and that
leave to sue by edictal citation was not required. In reaching this
conclusion, the Court cited Ochs
v Kolmanskop Diamond Mines Ltd¹²
with approval where it
was held that:

“great
inconveniences would arise and commercial dealings might, in
consequence, become restricted [if] … companies whose head
offices are in Berlin, but whose business is carried out in this
country … could not be sued in respect of transactions that
arose wholly in this jurisdiction, until their property had been
attached ad
fundandam jurisdictionem and
leave be granted to sue by edictal citation.”

[41] Although the Supreme
Court did not deal with the provisions of s 24 in Mahe
Construction,
the underlying approach of the Court would indicate that this Court
would have a discretion in granting non-compliance with Rule 5,
particularly where the foreign entities in question are the joint
venture company in which Namcor and Petroneft each have a 50% share
and the assignee registered in Mauritius is a wholly owned subsidiary
of Namcor. The contracts in question were concluded in Namibia and
fundamentally relate to the supply of petroleum products to Namibia
through the joint venture corporate vehicle.

[42] It would in my view
also be inconceivable for this Court never to be able to hear and
determine urgent relief without the need for edictal citation and for
adherence to the time period contained in s 24. I would certainly
consider that this Court has the inherent jurisdiction to grant
non-compliance with Rule 5 and in the exercise of my discretion I
would do so.

[43] As far as s 24 is
concerned, it would also be inconceivable for this Court never to be
able to grant urgent relief against a foreign entity without
requiring to compliance with the time limit in question. It would
seem to me that the urgent jurisdiction of this Court empowers it to
dispense with forms and service in terms of the Rules and that this
would also include the time period provided for in s 24. This accords
with the approach of the courts in South Africa which have held that
the urgent jurisdiction of superior courts empowers those courts to
dispense with formal service in terms of the rules which would
include s 27 of the then South African Supreme Court Act¹³.

[44] Due regard should
also be had for the purpose of edictal citation and s 24. A South
African Court stressed this in the context of a similar point being
taken, but
in circumstances where an appearance to defend was entered.

“It seems to me,
however, that once a defendant has entered appearance to defend as it
has done in the present matter, non-compliance of the rules as to
service and section 27 becomes irrelevant. The purpose of service in
terms of the rules is to bring the edictal citation to the attention
of the defendant and the purpose of section 27 is to ensure that such
defendant has sufficient time to defend if it so wishes. Both of
these objectives have been achieved and the particular statutory
provision and the rule had been exhausted”.

[45] It would also seem
to me that it is not a question of dispensing with the relevant
section but rather ruling that in sufficiently urgent circumstances,
the relevant section would not apply.

[46] It would also seem
to me that the period provided for in s 24 applies once a Court has
granted edictal citation. If a Court dispenses with a need for
edictal citation, then the application of this section and the time
period would not seem to arise.

[47] In this instance,
the seventh respondent has made an affidavit indicating that the time
for giving a notice to oppose and to file an answering affidavit had
passed by the time the papers were served. This respondent does not
however state that it wishes to oppose that relief. In the absence of
stating that, there would not be prejudice to that respondent as a
consequence. This issue has also not been raised by it, but by the
governmental respondents. Furthermore, its parent company, Namcor,
has further stated that it does not oppose the application.

[48] It follows that the
points taken by the first to third respondents concerning service and
s 24 do not avail them.

Non-joinder

[49] The Governmental
respondents also take the point of non-joinder of local oil
companies. They do so with reference to the new oil importation
arrangements which were made in January 2011 and which came into
force in February 2011. In terms of these arrangements, the licenses
of the local oil companies have been varied to supply 100% of their
market share of Namibia’s oil products.

[50] Mr Namandje
contended that the local oil companies would have a direct and
substantial interest in this application as a consequence and needed
to be joined.

[51] Mr Gauntlett on the
other hand countered that these companies do not have a direct and
substantial interest in the question as to whether the revocation of
the mandate and termination of the supply agreement was lawful. I
agree with that submission. During argument I enquired from Mr
Namandje whether the oil companies would have standing to review the
decision to revoke the mandate to Namcor and the directive relating
to the termination of the supply agreement. He did not have an answer
to this, and rightly so. In my view, they would not have the
requisite standing. Their interest is too remote.

[52] It would follow that
it was not necessary to join them to these proceedings.

Doctrine of “dirty
hands”

[53] I have already
referred to the use of this expression by the respondents. The
preliminary point raised by the respondents is that the applicants’
application substantially relied upon documentation illicitly
obtained by them, as is asserted in paragraphs 28 and 29 of the
Minister’s answering affidavit. In argument, Mr Namandje
expanded upon this by stating that the applicants had avoided
disclosing how they had obtained the briefing note. In the replying
affidavit, the applicants however squarely deny that they had
obtained or procured the document illegally. As I understood Mr
Namandje, the reliance upon this document and the application of this
doctrine would preclude the applicants from their obtaining relief.

[54] In response, Mr
Gauntlett pointed out that a doctrine of “dirty hands”
did not exist in Namibian law and that Namibian law only knows of a
defence of unclean hands. He is correct in this submission. The
Supreme Court in Minister
of Mines and Energy v Black Range Mining (Pty) Ltd¹⁴
accepted that this
doctrine applies “in circumstances where there was some or
other dishonesty on the part of the person who claimed protection for
his rights”,¹⁵
after a thorough survey
of authorities on the point. The Supreme Court concluded that:

“a Court does
not deny a person access thereto in respect of the enforcement of his
rights, or the protection thereof, if not contaminated by some or
other act of dishonesty or other impediment … To do otherwise
will run counter to the principle that the Court will not close its
doors to a litigant except in exceptional circumstances such as was,
inter
alia,
mentioned by the learned Judge. To do so in unjustifiable
circumstances will also run counter to Art. 12 of our Constitution
where that right is guaranteed.”

[55] In the answering
affidavits,¹⁶
the respondents made no
allegation of dishonesty, fraud or mala
fides
on the part of the applicants in relying upon the document. When I
raised this with Mr Namandje, he was unable to refer to any act of
dishonesty on the part of the applicants. Instead, he
countered that the document was inadmissible hearsay evidence. But I
pointed out to him that it was after all a document of the third
respondent and would thus not be inadmissible hearsay.

[56] Given the fact that
there was no suggestion or evidence of impropriety on the part of the
applicants, there can be no question of the application of the
doctrine of unclean hands to this application.

Locus standi

[57] Mr Namandje
contended that the interest of the applicants is merely a financial
and commercial interest in the continuation of the mandate and that
the applicants themselves were not the contracting parties and thus
would have no standing to seek the relief in this application. He
pointed out that the applicants acknowledge that they were not
themselves parties to the supply agreement but claimed an interest by
virtue of their holding in the joint venture company. He contended
that a mere financial and commercial interest has been held to be
insufficient by a Full Bench of this Court in Kerry
McNamara Architects Inc and Others v Minister of Works, Transport and
Communication and Others¹⁷
and the cases relied upon
in that judgment, being
United
Watch and Diamond Co (Pty) Ltd and Others v Disa Hotels Ltd and
Another¹⁸
and Wistyn
Enterprises (Pty) Ltd v Levi Strauss and Co and Another¹⁹

[58] In his argument, Mr
Gauntlett stressed that the starting point is that the Supreme Court
has found that a corporate entity could have standing to invoke a
Chapter 3 right, as was held in Africa
Personnel Services (Pty) Ltd v Government of the Republic of
Namibia.²⁰
In doing so, the Court
recognized that:

“behind the
‘corporate veil’ of juristic persons are their members;
behind the legal fiction of a separate legal entity are, ultimately
real people. They are financial beneficiaries of the corporate
structures which they have created”

[59] Mr Gauntlett
referred to the fact that the joint venture company, the contracting
party in the supply agreement, is 50% owned by Namcor, an entity
wholly owned by the decision-maker and that Namcor does not consider
itself aggrieved by the decision-making. The other 50% shareholding
is held by Petroneft. The joint venture company would thus be
paralysed in the circumstances and would not itself be able to
institute the review application and these proceedings by virtue of
its shareholding. Mr Gauntlett also referred to a decision of a Full
Bench of this Court in Oshuunda
CC v Blaauw²¹
which confirmed that
where a close corporation could not institute proceedings because a
majority decision to do so by its members could not be obtained, then
an individual member may do so. Although in a different context, this
underlying approach, firmly rooted in common sense, should in my view
find application in this matter.

[60] Mr Gauntlett further
submitted that the decision in United
Watch is
distinguishable as the applicants do not seek to exercise contractual
rights in these proceedings or rights which arise from a lease or by
virtue of a contract, but by reason of the exercise of a public law
power. It is correct that the decision sought to be reviewed was
after all not one made by the State as a contracting party but was
rather made by exercising a public law power (under statute) to
revoke Namcor’s mandate. Mr Gauntlett also pointed out that the
first applicant was furthermore throughout the development partner in
respect of the contractual scheme under which effect was given to the
public law mandate provided to Namcor. This was also how the
Government and Namcor regarded the position as is borne out by the
correspondence between the parties and the internal documentation of
both the Governmental and Namcor. In this regard Mr Gauntlett
referred to the factual averments contained in the founding affidavit
which were not put in issue by the respondents and correctly
submitted that the commercial reality was that the applicants had
been engaged to fulfil the Government’s commitment to ensure a
sustainable supply of petroleum products to Namibia.

[61] Mr Gauntlett
submitted that it would be artificial to disaggregate the identities
of the parties and then contend that only Namcor or the joint venture
company would have standing to challenge the revocation of the
mandate. He referred to the decision of this Court in Uffindell
t/a Aloe Hunting Safaris v Government of Namibia and Others²²
and contended that
standing – a procedural and not substantive issue –
should be viewed more widely in the context of constitutional
challenges. I agree with this fundamental approach, succinctly
summarised in two passages in that well reasoned judgment.

“[12] Under
common law, the question of standing (in the sense of an actionable
interest) has always been regarded as an incidence of procedural law.
The assessment of the concept as an aspect of procedural (rather than
substantive) law allows the court a greater measure of flexibility in
determining whether, given the facts of the particular matter, the
substance of the right or interest involved, and the relief being
sought, locus standi has been established. Moreover, although the
nature of the interest to be shown for standing is captured in the
clipped phrase 'direct and substantial', the scope and ambit thereof
are not capable of exact delineation by rules of general application
which are cast in stone. Whether a litigant's interest in the subject
matter of the litigation justifies engagement of the court's judicial
powers must be assessed with regard to the peculiar facts and
circumstances of each case. What will generally not suffice is
apparent from the illuminating judgment of Botha JA on the issue of
locus standi in Jacobs en 'n Ander v Waks en Andere 1992 (1) SA 521
(A) at 533J - 534C: an interest which is abstract, academic,
hypothetical or simply too remote. Considerations such as that the
interest is 'current', 'actual' and 'adequate' are vital in assessing
whether a litigant has standing in the circumstances of a case.

[13] These common-law
principles and the measure of flexibility they allow the court is an
important reference but not the true criteria for deciding standing
when litigants claim that their fundamental rights and freedoms
protected under the Constitution have been infringed, derogated from,
or diminished. Whilst it is accepted for purposes of this judgment on
the basis of the Dalrymple case that our law does not recognise
standing on the basis of a citizen's action to vindicate the public
interest, the court has relaxed the common-law criteria to establish
standing in appropriate circumstances.”

[62] The Court in
Uffindel
further followed the
approach of the South African Constitutional Court in Ferreira
v Levin N.O. and Others; Vryenhoek and Others v Powell N.O. and
Others²³
in dealing with standing
constitutional matters under the South African Constitution.

“Whilst it is
important that this Court should not be required to deal with
abstract or hypothetical issues, and should devote its scarce
resources to issues that are properly before it, I can see no good
reason for adopting a narrow approach to the issue of standing in
constitutional cases. On the contrary, it is my view that we should
rather adopt a broad approach to standing. This would be consistent
with the mandate given to this Court to uphold the Constitution and
would serve to ensure that constitutional rights enjoy the full
measure of the protection to which they are entitled. . . .”

[63] In that same matter
O’Reagan, J also stresses why a broader approach should be
adopted.²⁴

“This expanded
approach to standing is quite appropriate for constitutional
litigation. Existing common-law rules of standing have often
developed in the context of private litigation.”

[64] In applying this
approach, the Court in Uffindel stated the following:

“Even if the
phrase 'aggrieved persons' is not to be applied on the basis of a
subjective assessment - and I expressly refrain from finding that on
a purposive approach it may not be so understood - but falls to be
assessed by the more stringent standard of reasonableness, I am
satisfied that a reasonable person in the applicant's position would
have had cause to be aggrieved and to claim that his or her
fundamental rights have been infringed or threatened by the assumedly
unlawful decision of the second respondent. For these reasons the
applicant had adequate cause to be aggrieved and to claim enforcement
or protection of his fundamental rights as contemplated in art 25(2)
of the Constitution. It is on this premise that the court proceeded
to consider the merits of the application and make the order it did.”

[65] Mr Namandje on the
other hand submitted that only Namcor would have standing by reason
of the fact that the mandate is to it. But this narrow approach does
not take into account the full contractual setting which arose from
and was dependent upon the mandate. I agree with Mr Gauntlett that
this approach is untenable as it would effectively amount to the
Government being afforded the opportunity to contract out of the
Constitution by incorporating a parastatal which it controls and then
exercising statutory powers through it. It would also seem to me that
the position in the McNamara
matter is
distinguishable. That decision should be understood within its
factual context. It was in a tender context where an unsuccessful
tenderer had brought a review and then withdrew it. The Court held
that subcontractors of that unsuccessful tenderer would not have
standing to review the allocation of the tender.

[66] Plainly the joint
venture company would have standing to challenge the revocation
decision in the contractual scheme. If it cannot act by virture of
the equal shareholding between Namcor and Petroneft (where Namcor is
controlled by its sole shareholder, the decision maker) and thus
cannot act by reason of this paralysis, the question arises as to
which party would have standing. Applying the approach in Oshuunda
CC, it
should follow that Petroneft, as 50% shareholder in the joint venture
company would have standing. This would also accord with a broad and
purposive approach to standing in constitutional matters eloquently
set out in Uffindel
with which I respectfully
agree. I accordingly find that the applicants have sufficient
standing to bring this application.

Delay in bringing
the review application

[67] Mr Namandje
contended on behalf of the first to third respondents that the
applicants have unduly and unreasonably delayed in bringing their
review application and that it should be dismissed for this reason.
He submitted that the delay was inordinate, taking into account that
the decision had already been made in late October 2010 with the
application only being served in late February 2011 – a period
of some 4 months. Mr Namandje referred to a recent decision of this
Court in Purity
Manganese (Pty) Ltd v Minister of Mines and Energy and Others²⁵
where the Court held that
a period of beyond three months to bring a review would be
unreasonable in the context of that matter (where the review was
brought 10 months after the impugned decision). He also referred to
Radebe
matter²⁶,
which was followed by a Full Bench of this Court in Medical
Products (Pty) Ltd v The Tender Board of Namibia ²⁷.
What was stressed in the latter matter is that the time within which
to bring a review application would depend upon the merits of each
individual case.

[68] In this matter, it
was clearly reasonable for the applicants to address a letter to the
respondents and to await their response before launching their review
application. That response was only forthcoming on 13 December 2010.
The annual year end break, specifically referred to by the
applicants, thereafter followed. In taking into account the various
factors referred to in the Radebe matter, to which I have
already referred in addressing the question of urgency, it is clear
to me that there has not been an unreasonable delay in bringing this
review for the reasons I have given. This preliminary point
accordingly also fails.

[69] I now turn to the
merits of the application.

Revocation of
mandate

[70] I have already
referred to the grounds upon which the revocation of the mandate and
instruction to terminate the supply agreement are challenged.

[71] As I have also
indicated, much of the factual matter material to certain of the
grounds to which I refer has not been placed in issue. Mr Namandje
essentially argued that there was no need to provide the joint
venture company or the applicants of any notice prior to the
decisions being taken to revoke the mandate and instructing that the
supply agreement be terminated. He argued that the notice to Namcor
was sufficient and that the audi alteram partem rule is
flexible and that on this basis as well, the notice given to Namcor
would suffice.

[72] It is common cause
that no prior notice of the revocation was given to either the joint
venture company or to the applicants.

[73] Mr Namandje also
argued that the review grounds raised by the applicants would not
arise by virtue of the fact that the joint venture company and NPTD
were parties to the supply agreement. They had in that agreement
expressly agreed (in clause 9.2) that in the event of revocation of
the mandate, the agreement would terminate in 90 days. He submitted
that the termination of the agreement thus arose in terms of the
contract itself following upon the revocation of the mandate.

[74] These arguments
concern the application of Article 18 of the Constitution. It
provides for administrative justice and does so in these terms:

“Administrative
bodies and administrative officials shall act fairly and reasonably
and comply with the requirements imposed upon such bodies and
officials by common law and any relevant legislation, and persons
aggrieved by the exercise of such Acts and decisions shall have the
right to seek redress before a competent court or tribunal.”

[75] This constitutional
provision was recently explained by the Supreme Court in Permanent
Secretary of the Ministry of Finance v Ward²⁸:

“[27] The duty
of administrative bodies and administrative officials to act fairly
and reasonably when exercising these functions is, in terms of the
provisions of art 18, now constitutionally guaranteed.

[28] It was further
laid down by this court that the words which enjoin officials and
administrative bodies to 'act fairly and reasonably' are not
restricted to procedure only but also apply to the substance of the
decision. (See Minister of Health and Social Services supra para [25]
at 772.)”

[76] As to the
requirement of reasonableness, the Supreme Court has stated in
Mostert v Minister of Justice²⁹:

“The
word 'reasonable', according to The Concise Oxford English Dictionary
9th ed means:

'(H)aving sound
judgment; moderate; ready to listen to reason; not absurd; in
accordance with reason.'

Collectively one could
say, in my opinion, that the decision of the person or body vested
with the power, must be rationally justified. (See Mafongosi and
Others v United Democratic Movement and Others 2002 (5) SA 567 (TkH)
at 575A - E.)”

[77] Mr Gauntlett on the
other hand contended that the applicants had a vested interest in the
continuation of the mandate and supply agreement and thus had the
right to be afforded an opportunity to be heard in respect of the
decision to revoke the mandate to Namcor upon which the supply
agreement depended and was inextricably linked. He further contended
that the common cause facts also showed that the Government had
considered itself at large to interfere in the contractual relations
of others (being the parties to the supply and other agreements).
This would not only be unlawful in common law, but would also be
unlawful for it to apply its public law power to revoke the mandate
for the purpose of escaping what it considered to be an unprofitable
obligation. He contended that this had been done in an arbitrary and
a procedurally unfair manner and that it was accordingly unlawful.

[78] I understood Mr
Namandje to contend that the decision to revoke would not be
justiciable in that it did not constitute administrative action,
being of a policy nature. This Court in Open
Learning Group Namibia Finance CC v Permanent Secretary, Ministry of
Finance³⁰
held that the revocation
of the contract in question by Government gave rise to a remedy in
public law,uncluding under Article 18 of the Constitution, in
addition to one based on contract. In that matter, the specific
contractual power amounted to the exercise of what was essentially a
statutory power which had been set out in that contract. The Court
held that the Government was bound by Article 18 in exercising that
power and was obliged to afford an affected party the opportunity to
make representations before revoking that contract and to give
reasons for the revocation. In the Ward
matter, the Supreme Court
however held that the termination of the specific contract which
arose in that matter constituted a purely contractual commercial act
by reason of the fact that the Government had in those circumstances
merely exercised a contractual remedy open to it under that contract.

[79] In this matter,
the Government did not
exercise any contractual power at all in revoking the mandate, as
occurred in the Ward
matter. The fact that the
revocation gave rise to a consequence for the supply contract does
not negate the public law nature of the power exercised by the
Government in the revocation. The nature of the power exercised by
the Cabinet was not formulating policy but rather determinative of
rights and was thus administrative action. The source of the power
was also statutory, and would arise from the Act and its regulations
under which the mandate would be granted. The public law power, which
arose from the statutory power to grant such a mandate,
would in my view be
decisive of this issue. This is quite apart from Mr Gauntlett’s
submission that the termination by virtue of a revocation reflected
in clause 9.2 of the supply agreement would presuppose a lawful
revocation. He made this submission with reference to Kauluma
en Andere v Minister van Verdediging en andere.
³¹
I agree with that
submission. The revocation of the mandate contemplated in clause 9.2
would contemplate one lawfully done.

[80] The applicants are
clearly affected by the exercise of the public law power to revoke
Namcor’s mandate. At the very least, they would in my view have
enjoyed a legitimate expectation that their interest in the
continuation of the supply agreement would not be adversely affected
without being notified in advance and then being afforded the
opportunity to make representations. At the very minimum, the joint
venture company would have such an expectation and right. It received
no prior notice and was not afforded the opportunity to be heard in
relation to the decision.

[81] It would follow that
the Government or Ministry would be required to afford interested
parties such as the applicants (or joint venture company) the
opportunity to make representations. The failure to have done so,
which is common cause in these proceedings, would render the decision
to revoke the mandate invalid for this reason alone. This is quite
apart from the right to reasons for the decision to revoke the
mandate, is
inherent in a fair and reasonable procedure, to
which the applicants were also entitled – and did not receive.

[82] There is a further
basis upon which the decision to instruct the termination of the
supply agreement is to be set aside. This Court in S
v Carracelas (1)³²
held³³:

“The fact that
the Cabinet is the executive authority in the country does not take
the matter any further. The Cabinet must still act within the law and
cannot under the guise of the executive authority, for example, make
legislative decrees. The fact that the executive may have certain
prerogatives in the field of foreign policy, as pointed out by Mr
Small, cannot assist them in the matter under consideration. The
issuing of notices, etc, is also not relevant to the present
proceedings if considered in vacuo. These notices, etc, must in any
event be issued pursuant to the law and cannot, in the absence of a
law permitting them, be of any force or effect. The Cabinet as
Executive Authority must administer laws in terms of the law and not
contrary thereto.”

[83] The respondents have
not provided any statutory authority for the decision of the Cabinet
or Minister to instruct the termination of the supply agreement.
Given the purpose of the revocation of the mandate to achieve that
end, it would also follow that the decision to revoke the mandate
would need to be authorized and be subject to the constitutional
rights of affected parties to administrative justice and that the
decision to revoke be taken in accordance with the requisite
statutory provisions. The respondents have in this context raised no
legal authority for the revocation of the mandate and the instruction
to terminate the agreement. The lack of authority for the decisions
would also vitiate them.

[84] There would also in
my view be considerable support on the facts for the challenge by the
applicants upon the decision making on the grounds that it was not
reasonable or on the basis of irrationality or arbitrariness. The
main answer of the Governmental respondents to these challenges was
the ipse dixit of their deponents that the decision itself was
reasonable and rational. These are however self serving conclusions
without any factual matter raised to support them and cannot avail
the respondents in the face of the factual matter raised by the
applicants calling into question the reasonableness and rationality
of the decisions. Given the fact that the decision is vitiated by
failing to accord the applicants and the joint venture company the
right to be heard and thus acting in conflict with a fair procedure
as is required by Article 18, it is not necessary to further deal
with this and the other review grounds raised by the applicants.

Conclusion

[85] In the result, I am
satisfied that the applicants have established their entitlement to
the final relief sought in Part B of the notice of motion. Mr
Namandje rightly did not take issue with Mr Gauntlett’s
submission that an order for costs should include the costs of two
instructed counsel. The complexity of the legal issues and the
importance of the matter to the applicants would warrant such an
order. I accordingly grant the following order:

1. 
   Condoning the
   applicants’ non-compliance with the Rules of this Court and
   authorise that this application be heard as one of urgency in terms
   of Rule 6 (12).

   
   

2. 
   Reviewing and setting
   aside the decision by the third respondent, through the Cabinet of
   the Republic of Namibia on or about 21 October 2010 purporting to
   approve the revocation of the fourth respondents’ mandate to
   import 50% of petroleum products into Namibia.

   
   

3. 
   Reviewing and setting
   aside the decision by the first respondent, alternatively second
   respondent, on to about 21 October 2010 requiring the fourth
   respondent to terminate its contractual obligations to the sixth
   respondent.

   
   

4. 
   Declaring that:

   
   

1. 
   the fourth respondent
   remains authorised to procure by import into Namibia 50% by volume
   of each of the petroleum products required for delivery by local oil
   companies pursuant to their respective wholesale licences during
   each calendar year;

   
   

2. 
   the supply agreement
   entered into between the fifth respondent and sixth respondent on 13
   March 2009 remains valid, of full force and effect and binding.

   
   

5. 
   Directing the first,
   second and third respondents to pay the applicants’ costs,
   including the costs of two instructed and one instructing counsel,
   jointly and severally, the one paying the other to be absolved.
   

   
   

___________________________

SMUTS, J

ON BEHALF OF
APPLICANT:

Adv JJ Gauntlett SC

and with him

Mr F Pelser

Instructed by

LorentzAngula Inc

ON BEHALF OF 1^ST,
2^NDAND 3^RD
RESPONDENTS:

Mr S Namandje

Instructed by

The Government Attorney