Van Zyl and Others v Government of the Republic of South Africa and Others

• Jurisdiction: South Africa
• Judge: Harms ADP, Heher JA, Cachalia JA, Hurt AJA and Mhlantla AJA
• Judgment Date: 20 September 2007
• Docket Number: 170/2006
• Court: Supreme Court of Appeal
• Citation: 2008 (3) SA 294 (SCA)
• Counsel: First appellant in person. SA Redelinghuys (attorney) for the second to ninth appellants. GL Grobler SC (with RJ Raath SC and M Mphaga) for the respondents.
• Date: 20 September 2007

South Africa, High Court

Supreme Court of Appeal.

(Patel J)

(Harms ADP; Heher and Cachalia JJA; Hurt and Mhlantla AJJA)

Van Zyl and Others

and

Government of Republic of South Africa and Others1

Diplomatic relations Diplomatic protection Appellants requesting diplomatic protection from Government of South Africa against Government of Lesotho Whether State having obligation to provide diplomatic protection Position under international law Whether South Africa entitled to afford appellants diplomatic protection Whether appellants having right to diplomatic protection under South African law South African Constitution Responsibility of executive for conducting foreign relations Discretion of executive with respect to diplomatic relations Principle of equal sovereignty of States Policy considerations Lesotho cancelling and revoking mining leases without payment of compensation Whether international delict Whether violating international minimum standards Whether expropriation Nationality requirement Exhaustion of local remedies requirement Whether claim admissible before international tribunal

Nationality Diplomatic protection Nationality requirement for international delict Whether nationality rule disqualifying South African Government from affording diplomatic protection to appellants Continuous nationality rule

Claims Exhaustion of local remedies Diplomatic protection Exhaustion of local remedies rule for international delict Whether exhaustion of local remedies rule disqualifying South African Government from affording diplomatic protection to appellants Whether Lesotho courts rectifying wrongs

Relationship of international law and municipal law Conduct of foreign relations Whether justiciable in municipal court The law of South Africa

Summary: The facts:The appellants, Mr van Zyl, Mr and Mrs van Zyl in their capacity as trustees of two trusts, together with six diamond mining companies, requested diplomatic protection from the respondents, the Government of the Republic of South Africa, the President, the Minister of Foreign Affairs and the Deputy Minister, against the Government of Lesotho. The request arose from the alleged expropriation by the Government of Lesotho of the appellants' property rights in the execution of the Lesotho Highlands Water Project.2

The first appellant, Mr Josias van Zyl, and his wife were South African citizens. They were second and third appellants respectively in their capacity as trustees of two trusts, the Burmilla Trust and the Josias van Zyl Family Trust, both registered in South Africa. The six corporate appellants, most importantly Swissborough Diamond Mines (Pty) Ltd (Swissborough), were registered in Lesotho for the purpose of diamond mining. Mr van Zyl, the Burmilla Trust and the Family Trust owned 5, 90 and 5 per cent respectively of the issued shares in Swissborough. Swissborough and the Family Trust held 99 and 1 per cent respectively of the shares in the other companies. The directors of the companies were also South African citizens.

Following the commencement of construction work in the Rampai area, pursuant to the Lesotho Highlands Water Project, the Government of Lesotho and Swissborough concluded five mining leases. Four of those leases were subsequently cancelled and revoked by the Government of Lesotho without the payment of compensationacts found to be unlawful by Lesotho courts.

The appellants alleged that the Government of Lesotho had thereby committed an international delict in Lesotho. In various letters they requested diplomatic protection from the Government of South Africa, alleging inter alia expropriation of their property rights, violation of the international minimum standard, corruption in the Government of Lesotho and improper collusion with the South African Government and asserting a right to effective diplomatic protection under the South African Constitution. They argued that the Constitution obliged the respondents to remedy this violation of their property rights and entrenched the right to citizenship as a basic human right. The respondents refused the request maintaining that the appellants were not entitled to diplomatic protection in the circumstances. The appellants applied to have the respondents' decisions reviewed and set aside.

Held (by the High Court):The application was dismissed.

(1) The most fundamental aspect of diplomatic protection at an international level was the right for a State to bring a claim to an international tribunal on behalf of its nationals whose rights had been violated by another State. International law had not yet reached a point where States were under an international law duty to provide diplomatic protection to their nationals (paras. 1721).

(2) The appellants were not subjects of international law and could not have international law applied in any claims they had against the Kingdom of Lesotho. Since there was no internationalization of the mining leases, there was no possibility of the application of international law as between the contracting parties on any dispute in terms of the mining leases (paras. 229).

(3) The extent of diplomatic protection was completely within the discretion of the State of nationality. Given the importance of the principle of equal sovereignty of States, any form of diplomatic protection was only lawful if the preconditions were satisfied; otherwise unwarranted interference with the sovereignty of the host State would result (paras. 306).

(4) International minimum standards pertaining to expropriation of property were not to be equated with the international minimum norms pertaining to international human rights violations. There was, however, an international norm not to deprive anyone of property except in terms of general principles of property law.3 South Africa and Lesotho had ratified and were therefore bound by the Universal Declaration of Human Rights and the African Charter on Human and Peoples' Rights. The general rule of customary international law was that where the host State had expropriated specific property of a foreigner, then prompt, adequate and effective compensation must be paid. There was no international human right to the protection of property in international law. It was for States to protect by way of diplomatic protection the rights they enjoyed in respect of their nationals. Diplomatic protection was not a human right under international law (paras. 3743).

(5) The executive was responsible for conducting foreign relations;4 it had broad discretion with respect to diplomatic relations. The respondents' decisions were only reviewable on an extremely limited basis. The conduct of foreign relations, determined on sometimes sensitive policy considerations, could not be properly evaluated by the courts (paras. 4458).

(6) The respondents refused to afford diplomatic protection to the appellants as of right. This resulted from an informed and carefully considered policy decision, not from a perception that diplomatic protection did not exist in international law. Under international law, States had the right but not the obligation to protect their nationals beyond their borders. There was no claimable right under the Constitution. There was no infringement of the appellants' fundamental rights. The respondents considered applicable policy considerations and rationally determined that they could not accede to the appellants' request (paras. 5970).

(7) There was no international delict which would vest the right in South Africa to act against Lesotho on the basis of diplomatic protection for the appellants. For an international delictual claim, the wronged foreign person or company had to have South African nationality, the alleged expropriation had to violate international minimum standards and the national had to have exhausted all legal remedies available under Lesotho law. The mining leases, creating rights in property for Swissborough, were subject to Lesotho law; they were not internationalized and were not subject to South African law of which customary international law was a part under Section 232 of the Constitution. A breach of contract with no international element could not be elevated to an international wrong. There was no violation of minimum international standards and no expropriation. Since there was no indication that the parties to the leases intended to subject their concession agreements to international law, international law required that those agreements were subject to Lesotho law. Had Lesotho committed an international wrong, the nationality and exhaustion of local remedies requirements had not been satisfied for a claim to be admissible before an international tribunal (paras. 7193).

(8) The nationality requirement was not satisfied. South Africa had no right of diplomatic protection against Lesotho in respect of acts performed within its own territory against companies incorporated in Lesotho. Neither did the cession of rights to the second appellant after the alleged violation secure diplomatic protection for its State of nationality since the claim had to belong to a person continuously. The first and third appellants were not entitled to diplomatic protection from South Africa by virtue of their shareholding in companies incorporated in Lesotho since none of their shares had been expropriated. Companies did not have the same constitutional entitlement as citizens who were nationals to request diplomatic protection. The ambit of discretion was prescribed by customary international law; the executive had the duty to consider requests for diplomatic protection but to promote South African interests. The fourth to ninth appellants were not South African nationals even though South Africans held some of the shares in them. The South African shareholders were not entitled to diplomatic protection (paras. 94100).

(9) The appellants had not exhausted local remedies in Lesotho. The exhaustion of local remedies rule was...