Swissborough Diamond Mines (Pty) Ltd and Others v Government of the Republic of South Africa and Others

• Jurisdiction: South Africa
• Judge: Joffe J
• Judgment Date: 12 December 1997
• Counsel: C Edeling (with him Anton Katz) for the second plaintiff J Dugard for all three plaintiffs GL Grobler (with him RJ Raath and EN Keeton) for the defendants
• Date: 12 December 1997
• Docket Number: 18474/93
• Court: Transvaal Provincial Division
• Citation: 1999 (2) SA 279 (T)

Joffe J:

Introduction F

In 1986 the Government of the Republic of South Africa ('RSA') and the Government of the Kingdom of Lesotho ('GOL') concluded a treaty. The treaty provides for the Lesotho Highlands Water Project ('LHWP'). The LHWP is designed to effect the delivery of water by Lesotho to South Africa and, to utilise such delivery system, to generate hydro- electric power in Lesotho. G

First plaintiff alleges that, in the implementation of the LHWP, certain rights conferred upon it in terms of a mining lease were interfered with and infringed. This resulted in much litigation in the High Court of Lesotho, some of which is still in the process of determination and, ultimately, in respect of one of the disputes, an appeal to the H Lesotho Court of Appeal.

In 1993 the plaintiffs instituted an action against the first defendant in this Court. The action has, as its cause of action, some of the interferences and infringements relied upon in the Lesotho litigation. In 1994 a further action was instituted in this Court by the first plaintiff. The defendant therein is the Trans-Caledon Tunnel Authority I ('TCTA'). This action also arises out of some of the interferences and infringements aforementioned.

In all the litigation aforementioned first plaintiff was joined by other parties. For ease of reference, unless otherwise necessary, reference will only be made herein to the first plaintiff. Likewise, in the present action, J

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first defendant was cited together with other defendants. Unless otherwise necessary reference will only be made A to the first defendant. For ease of reference the parties will be referred to by their trial nomenclature irrespective of the nature of the proceedings.

In both actions instituted in South Africa first plaintiff has brought applications in terms of Rule 35(7) of the B Uniform Rules of Court. In these applications first plaintiff seeks inspection of certain documents.

In the ongoing Lesotho litigation, the first plaintiff caused subpoenas to be issued against, inter alia, the Minister of Water Affairs and Forestry of the RSA and various officials of that department. The Minister and the officials C have brought an application for the subpoenas to be set aside.

Argument was first heard in the application in terms of Rule 35(7) in the action against the first defendant. This judgment deals with that application and certain cost orders that were reserved for determination at the hearing thereof. The argument of the interlocutory application lasted 12 days. It involved excursions into international law, D mining law, the law of expropriation, constitutional law and many of the Rules of Court. It traversed a factual ambit of seemingly unending proportions. Eventually, despite the industry and perseverance of counsel, argument was concluded. Now, as always, judgment has to be delivered.

After the first application was heard counsel proceeded with the application in terms of Rule 35(7) in the TCTA E action. This argument only lasted one day. None of the factual and legal arguments that had been advanced in the first application were repeated.

Finally, the application to set aside the subpoenas was heard.

In giving judgment in this application all the relevant facts and arguments will be set out fully. The judgment in the F application against the TCTA and for the setting aside of the subpoenas will not regurgitate them.

In order to appreciate the issues between the parties and their respective arguments, it is necessary to set out the factual milieu against which they arise. In doing so reference is made to documents and facts, irrespective of their G source or admissibility, and mindful of the fact that the first defendant has brought two applications to strike out portions of the plaintiffs' papers, which applications still have to be determined in this judgment. To do otherwise would preclude a proper appreciation of the factual milieu. Counsel, likewise, argued the matter on this basis. H

In setting out the relevant facts reference will first be made to the so-called documentary background, thereafter to the litigation in Lesotho and, finally, to the litigation in South Africa.

The documentary background

The treaty I

On 24 October 1986 the RSA and GOL concluded a treaty on the LHWP. The purpose of the LHWP is to effect the delivery of specified quantities of water by Lesotho to the Vaal River system in South Africa and to utilise such delivery system to generate hydro electric power in Lesotho. The LHWP is to be implemented in various phases. In terms J

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of the treaty water deliveries to South Africa from subphase 1A were due to commence in January 1995. (This A delivery date was not achieved.)

Phase 1A comprised the building of the Katse Dam and a transfer tunnel from there to the hydro power works at the Muela Dam, all situated in Lesotho. In addition, the phase comprised the construction of a delivery tunnel, partly in Lesotho and partly in South Africa. As will appear hereinafter, when the terms of the treaty are analysed, B the RSA is liable for the cost of the LHWP in Lesotho in so far as it relates to water delivery.

The treaty provides that GOL and the RSA, respectively, shall have overall responsibility for that part of the LHWP situated in their respective countries and for the security thereof. C

To this end the treaty provides for the establishment by GOL of the Lesotho Highlands Development Authority ('LHDA'), as an autonomous statutory body under the laws of Lesotho, and for the establishment by the RSA of the TCTA, as an autonomous body under the laws of South Africa. Each party to the treaty undertakes, in respect D of its territory, to provide the LHDA and the TCTA respectively with all powers, authorisations, exemptions and rights necessary for the implementation, operation and maintenance of the LHWP, including the procurement of land and interest in land.

Articles 7 and 8 of the treaty relate to the LHDA and the TCTA respectively. For present purposes the one article E may be regarded as the mirror image of the other.

Both the LHDA and the TCTA have responsibility for the implementation, operation and maintenance of that part of the LHWP situated in Lesotho and South Africa respectively. The RSA is responsible for payment to the F LHDA and the TCTA, by way of cost-related payments, for the implementation, operation and maintenance of that part of the project relating to the delivery of water to South Africa. GOL has a similar obligation to the LHDA and the TCTA in respect of the generation of hydro-electric power in Lesotho. Article 10(3) of the treaty defines the costs for which the RSA is liable. In terms of art 10(3)(g) the RSA is liable for the cost of land or any interest G in land acquired for the purpose of the implementation, operation and maintenance of the LHWP.

In order to finance the LHWP, both the LHDA and TCTA are obliged, in terms of the treaty, to raise money by way of loans, credit facilities and other borrowings. The treaty provides that the RSA shall provide such H guarantees as the lenders of such loans, credit facilities or other borrowings may require, in so far as they relate to the delivery of water to South Africa. A similar provision applies to GOL in so far as the loans relate to the generation of hydro electric power in Lesotho. Article 11(10) provides that the LHDA or the TCTA, as the case I may be, shall, on the request of the RSA, allow it to pay all moneys due and payable as cost related payments directly to any creditor from whom any loans, credit facilities or other borrowings are procured for the implementation, operation and maintenance of that part of the LHWP relating to the delivery of water to South Africa. J

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Finally the treaty establishes, in art 6(6), the second defendant ('the JPTC'). The JPTC is composed of two A delegations, one from the RSA and the other from GOL. Each delegation consists of three members nominated by the RSA and GOL as the case may be. Decisions of the JPTC require the agreement of both delegations. If the delegations cannot reach agreement the matter is to be referred to the RSA and GOL. The JPTC has monitoring B and advisory powers relating to the activities of the LHDA, in so far as such activities may have an effect on the delivery of water to South Africa. Similarly, the JPTC has monitoring and advisory powers relating to the activities of the TCTA, in so far as such activities may have an effect on the generation of hydro-electric power in C Lesotho. Furthermore, the JPTC has the right to subject to management audit all those aspects of the management, organisation and accounts of the LHDA relating to the delivery of water to South Africa and all those aspects of the management, organisation and accounts of the TCTA relating to the generation of D hydro-electric power in Lesotho. Article 9(11) provides that the LHDA and the TCTA shall each consult with the JPTC on a continuous basis with regard to all aspects of the matters listed in the article and any decision of either the LHDA or the TCTA with regard to all aspects of such matters shall require the approval of the JPTC in order to take effect. Both the LHDA and the TCTA are obliged to provide the JPTC with all information, as and when E required, regarding all operational aspects of any phase of the LHWP implemented at that stage and to give their full co-operation to the JPTC. Finally, the treaty provides that the JPTC, its secretary and the persons nominated as representatives or alternates to the JPTC, shall enjoy such privileges and immunities as provided for in annexure F III of the treaty. In terms of clause 2 of annexure III the JPTC shall enjoy immunity...