Professor Dawid van Wyk, Independent Consultant, discusses recent developments in dispute resolution involving private parties in regional trade arrangements

It has been said that traders prefer to avoid courts of law. They would rather find other means of settling their disputes, especially with the authorities. At times, however, a final, binding ruling is needed and in a system where the rule of law prevails, that is the function of an independent court or tribunal. When litigation becomes inevitable, the traders’ first choice would be a domestic or national court: they know the rules and procedures, the law and the lawyers. Moreover, should they fail in the court of first instance and feel strong enough – financially and otherwise – to appeal, they can pursue their course to the highest domestic court.

This comfortable route becomes complicated when the issue in contention is a violation of rights linked to an international agreement. It is now generally accepted that international economic agreements may affect the rights of private parties. In most cases the agreements would provide for the judicial settlement of disputes, and it is not unusual to give private parties access to the dispute settlement mechanism to enforce their treaty rights. Yet, if the finding of a recent study of the East African Court of Justice is of wider application, traders are wary of regional courts.[1] The matter is even more acute when there is no functioning regional court, as in the case of SADC and SACU. The domestic court then remains saddled with the matter.

Two recent Namibian cases and a preceding one from Swaziland offer insights into how the domestic court could assist (or not) an aggrieved trader. The SACU Agreement of 2002 featured in all three, and the respective courts were invited to find that by their internal measures (ministerial regulations) the Governments of Namibia and Swaziland violated SACU obligations relating to quantitative restrictions and infant industry protection.

In Southern Trading Company (Pty) Ltd v Minister for Agriculture and Cooperatives,[2] the Swaziland Court of Appeal followed the conventional approach: the SACU Agreement has not been made part of the law of Swaziland as the Constitution requires; it can only be used as a guide to interpreting the Minister’s regulations; in effect, there is no international law to be breached.

The approach of the parties in the two Namibian cases is different. As in Swaziland, the Namibian Minister used domestic legislation and regulations to impose restrictions on the importation of certain dairy and poultry products. The aggrieved parties attacked the Minister’s regulations over a wide front, comprising almost the complete array of conventional review grounds of administrative action, as well as a violation of the Namibian Constitution and the SACU Agreement. In the one case, Matador Enterprises (Pty) Ltd v Minister of Trade and Industry,[3] the Namibian High Court found that the regulations were fatally flawed from a procedural point of view. It was therefore not necessary to consider arguments about the Constitution and the SACU Agreement. The Government was not satisfied with the result and appealed. Available information suggests that the appeal will be heard towards the end of 2016.

The other case – South African Poultry Association and others v Ministry of Trade and Industry[4] – in which a similar approach was followed by the applicants, hobbled through a number of preliminary issues and came to a standstill on 8 July 2016 when the High Court ruled that the review application was brought too late. It is not known whether the ruling will be appealed.

A noteworthy aspect of the two Namibian applications lies in their approach to the SACU Agreement. The Agreement is not incorporated into Namibian law and it is not settled whether it automatically forms part of Namibian law in terms of article 144 of the Namibian Constitution. If it is not part of the law of Namibia, it cannot be enforced in a Namibian court. However, the applicants argued that that would not render the Agreement irrelevant – on the contrary.

The argument goes like this: In order to take a valid decision – for example, to issue regulations restricting imports – the Minister is bound by the (administrative) law of Namibia to observe a number of requirements. One is that the decision must be authorised by statute, invariably an Act of Parliament. The flipside of this requirement is that only the person or body designated by the authorising provision may take the decision, not someone else. A further requirement is that the decision must be made for a proper purpose, unbiased and without an ulterior motive. Parties affected by the decision must be heard (the well-known audi alteram partem rule); and the decision-maker must apply his or mind to the issue at hand. This means that all relevant factors must be taken into account to arrive at a reasonable, rational decision.

In the two Namibian cases it was suggested that the last-mentioned requirement, namely the consideration of all relevant factors, would include the provisions of the SACU Agreement, whether the latter was part of Namibian law or not. Having signed and ratified the SACU Agreement, the Namibian Government is bound by it. That in itself makes it a relevant consideration to be taken into account when making a decision that may be touched by the Agreement. If it was not done, the decision becomes reviewable.

This is an attractive proposition that does not disturb the conventional relationship between national and unincorporated international law. The Minister is not required to ask: ‘Must I give effect to the SACU Agreement, regardless?’ That would amount to incorporating the Agreement into domestic or national law. What must be asked is: ‘If I take this decision in terms of the law of Namibia, how would it be affected by the SACU Agreement, which is binding on my Government?’ In other words, does the SACU Agreement guide me in my thinking, applying-my-mind to the decision I want to make? If so, to what extent does it do so? Should, or must, what I want to decide be in harmony with my Government’s obligations under the Agreement? Or, if after careful consideration I arrive at the conclusion that it will not be the case, what then? What is my relevant and rational reason to justify departure from the Agreement? How do I minimise the conflict? The questions can go on.

The point is: once bound by the international agreement, the decision-maker cannot escape considering it. As things go in courts, like water and electricity, the way of least resistance is preferred. In other words, if a matter can be resolved without finding a constitutional or international law violation, that route would be opted for. It thus might take more than Matador Enterprises of the South African Poultry Association to get a ruling on the issue discussed here, but it remains a point worth pursuing.

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