The State Security Agency (SSA) deliberately stayed away from an arbitration over a R18.9 million air-conditioning contract, then tried to overturn the resulting award when it was ordered to pay more than R14 million to the contractor.
The Gauteng High Court in Pretoria has dismissed the agency’s challenge and made the arbitration award an order of court, leaving it liable for R14,004,817.86, interest and legal costs. The judgment was delivered on 13 October 2026.
Judge Etienne Christoffel Labuschagne found that the SSA had wilfully refused to participate in the arbitration and could not use the courts to make arguments it had chosen not to present to the arbitrator.
“The SSA wilfully absented itself from the arbitration. It cannot now utilise the court as a backstop to do what it should have done during the arbitration,” Labuschagne said.
The dispute involves Amakhaza Moia (Pty) Ltd, which was contracted to design, supply, install and commission a chiller plant and associated heating, ventilation and air-conditioning systems at SSA offices in Pretoria.
The service-level agreement was signed in April 2022 for R18,877,100.04.
The project was delayed, with the parties blaming each other. The delays also affected the supply of the chiller plant, with the supplier demanding full payment before delivery.
Amakhaza Moia approached the SSA for an advance payment to secure the equipment.
Initially, the agency indicated that it was willing to consider the arrangement. In a letter dated 8 March 2024, it said it was “willing to consider the process of advance payment through a guarantee / (security) by a respective bank”.
On 10 April 2024, SSA official Khona Masuku emailed the contractor: “I received the bank guarantee on behalf of the CFO.”
But after the contractor had met the guarantee requirements, the agency changed its position and relied on a clause prohibiting advance payments.
The court found that the SSA had a change of heart after the contractor had complied with the requirements. When Amakhaza Moia proposed using an alternative supplier, the agency refused.
The contractor declared a dispute on 10 December 2024 and tried unsuccessfully to arrange meetings with the SSA to resolve it.
In May 2025, the Arbitration Foundation of Southern Africa appointed Advocate Johan Moorcroft SC as arbitrator.
On 20 May 2025, the SSA informed Moorcroft that it would not participate in the proceedings. The State Attorney said it had no mandate to represent the agency, which also refused to accept service of the arbitration papers.
The hearing proceeded without the SSA on 1 August 2025. Moorcroft issued his award on 13 August 2025.
The agency only approached the High Court in November 2025, outside the six-week period for bringing its challenge.
It argued that the arbitration clause had fallen away when the contract was cancelled. It also claimed that an earlier High Court case brought by the contractor was still pending.
However, that case had been withdrawn on 10 April 2025. Amakhaza Moia had attached proof of the withdrawal to its arbitration notice.
The judgment says it appeared that the State Attorney had not informed the SSA that the earlier case had been withdrawn.
Judge Labuschagne described the agency’s explanation for its late application as “weak, resting on erroneous propositions of fact and law”.
The judge nevertheless granted condonation because the contractor had not suffered prejudice from the delay.
But the SSA’s challenge to the award failed. The agency argued that the arbitrator had disregarded the contractual prohibition on advance payments, ignored the contractor’s alleged non-performance and awarded inflated amounts.
The court found that these arguments largely challenged the merits of the dispute rather than establishing grounds on which an arbitration award could legally be set aside.
Under the Arbitration Act, an award may be set aside on grounds including misconduct by the arbitrator, a gross irregularity in the proceedings or an award improperly obtained.
On the disputed amounts, the judge said the SSA had been given an opportunity to challenge the contractor’s figures but had deliberately declined to participate.
The agency maintained that it had already paid Amakhaza Moia more than R9 million and withheld the balance because the contractor had failed to deliver, install and commission the chiller plant.
But by refusing to participate in the arbitration, the SSA had forfeited the opportunity to present those arguments there, the court found.
The court ordered the agency to pay Amakhaza Moia R14,004,817.86, with interest at annual rates of 11.75% and 11.5%, depending on the amounts concerned. Some interest runs from May 2024.
The SSA must also pay the contractor’s arbitration costs and the costs of the court applications.
