Recovering the stolen billions — institutional independence of the Special Tribunal needs to be re-asserted
In the three years since being established, the Special Tribunal has made substantial efforts to recover public funds syphoned from the fiscus through corruption, fraud and illicit money flows.
During this short time, the Special Tribunal has granted orders monetarily valued at over R9-billion through preservation orders; interdicts; setting aside and reviewing unlawful and irregular contracts that were done in contravention of constitutional provisions. In particular, Section 172 of the Constitution makes provision for orders suspending the declaration of invalidity for any period and/or any condition and allows the competent authority to correct the defect.
The declarations of constitutional invalidities of contracts have, however, recently opened the floodgate of constitutional challenge for the Special Tribunal. At issue for the litigants is whether the Special Tribunal is a Court of law established in terms of Section 166 of the Constitution.
Despite it being presided over by a Judge of a high court, the challenge being raised is that the Special Tribunal is not a constitutionally recognised judicial forum and that it grants orders that do not fall within the scope of its jurisdiction.
On Monday (1 August), the Special Tribunal, at the last minute, postponed the multi-million-rand hearing into the alleged financial and procurement irregularities committed at Transnet. This relates to the awarding of the contract to several contractors, including CMI Emtateni Joint Venture (JV) for the reconstruction, deepening and lengthening of the Durban Container Terminal in 2018.
The Special Tribunal had earlier granted a preservation order interdicting the CMI Emtateni JV from disposing of their properties, movable and immovable, pending the finalisation of the review proceedings before it. In response, CMI Emtatemi JV brought a high court application, attacking several regulatory provisions in the Special Tribunal. In the application, the SIU, Special Tribunal, President Cyril Ramaphosa, Justice and Constitutional Development Minister Lamola, and Transnet SOC Limited have been cited as respondents. Proceedings are pending before the High Court in this respect.
The legal test posed in this case registered as CMI Infrastructures (Pty) Ltd and Others v SIU and Others is on the conferment of the jurisdiction of the Special Tribunal to adjudicate for civil proceedings for any relief for the recovery of any damages or losses and the prevention of potential damages or losses. Furthermore, at the conclusion of the proceedings and on final determination of the dispute, depending on the outcome, the Special Tribunal may make a final order for forfeiture to the State, of the property held under the preservation order or interdict.
It was on the basis of the above application that proceedings at the Special Tribunal were halted on Monday, pending the determination and disposal of the matter at the high court. The applicants contest Section 8(2)(a) of the Special Investigating Unit and Special Tribunals (SIU) Act on the basis that it does not confer power on the Special Tribunal to issue orders that interfere with the properties of affected parties.
The constitutional jurisdiction on the Special Tribunal’s judicial capacity to declare the invalidity of contracts in terms of Section 172 was first raised as a point of law in the case of SIU v Caledon River Properties (Pty) Ltd and Another. In this case, the respondents were implicated in the R40-million Beitbridge Border Fence procurement irregularities. When confronted with the recovery prospects, they challenged the constitutionality of the Special Tribunal to make declarations of constitutional invalidity.
The argument advanced was that the judicial system as provided for in the Constitution under Section 166(e) of the Constitution recognised:
- “the Constitutional Court;
- “the Supreme Court of Appeal (SCA);
- “the High Courts, and any high court of appeal that may be established by an Act of Parliament to hear appeals from any court of a status similar to the High Court of South Africa;
- “the Magistrates’ Courts; and
- “any other court established or recognised in terms of an Act of Parliament, including any court of a similar status to either the high court of South Africa or Magistrates’ Courts.
The Special Tribunal held that it formed part of the country’s judicial matrix and had such authority. In the judgment, Judge Lebogang Modiba held that the word “appoint” is actually a misnomer, as the power of the President of the Republic is to “designate” or “assign” judges, who have already taken an oath of office, to perform Special Tribunal duties.
Similarly, former Health Chief Financial Officer (CFO), Kabelo Lehloenya, raised the constitutional points on the eve of her trial and so did the respondents in the R431-million Gauteng Department of Education school decontamination contracts.
The much-anticipated Constitutional Court judgment in the Ledla Structural Development v SIU will put the matter to finality.
The hearing took place on the 23 May and the judgment is eagerly awaited. In it, Ledla appealed the Special Tribunal judgment ordering the forfeiture of ill-gotten finances to the State arising out of the R139-million PPE contracts. Ledla, having lost the appeal at the Special Tribunal and the Supreme Court of Appeal, petitioned the Constitutional Court. Ledla raises the constitutional jurisdiction of the Special Tribunal as a point of law.
The Special Tribunal is established in terms of an Act of Parliament — the Special Investigating Unit and the Special Tribunals Act 74 of 1996.
While the two are established in terms of a single Act, their institutional independence is miles apart. The Special Investigating Unit (SIU) is responsible for investigations and the Special Tribunal performs judicial functions and adjudicates upon those investigations and grants just and equitable remedies in adherence to the Constitution and the law.
These developments have given rise to a need to amend the legislation in order to strengthen and safeguard the investigating arm of the SIU and the judicial independence of the Special Tribunal.
While the constant raising of the constitutional challenges has the potential to delay the proceedings at the Special Tribunal, it is of importance, and urgent, that the amendment to the legislation be strengthened to capacitate this judicial body. It becomes a problem when the judicial body is itself cited as a respondent in the litigation process as it is the case in the Transnet matter because it is supposed to discharge its duties without fear, favour or prejudice.
The legislators need to look into this matter carefully and urgently as the quest to recover more looted funds intensifies.
A lot of financial recoveries occurred in the wake of procurement irregularities that arose during the Covid-19 pandemic. These include
- the infamous R10-million Eastern Cape scooter project;
- the R39-million Free State PPE contracts;
- the R40-million Beitbridge contract;
- the R4.5-million OR Tambo PPE contracts;
- the R500-million Ashante Group contracts;
- the R431-million schools decontamination tenders;
- the R158-million National Health Laboratory Services awarded to Hamilton Ndlovu;
- and the R150-million Digital Vibes contract at the National Department of Health.
Ndlovu, too, jumped the bandwagon and raised the constitutional challenge at the Special Tribunal in his latest attempt to appeal the judgment ordering him to repay R158-million of the monies paid to him and his associates. The six joined parties in the Digital Vibes contract are also opposing the order joining them to the review application and have launched a leave to appeal application.
It could be that the alleged offenders see a vacuum in the legislative gaps or are genuinely raising constitutional points, which if attended to, could go a long way in clearing the path for future halting and unnecessary postponements of hearings.
Constitutional points take precedence over hearings. The Judges are therefore expected to be on the safe side of constitutionally raised issues to avoid them being litigated upon.
Judge Soma Naidoo, presiding on the Transnet matter on Monday, impressed upon the parties to try to resolve the constitutional issues speedily so as not to put a spoke in the proceedings before the Special Tribunal.
The Transnet matter is expected to be heard on a semi-urgent basis once the pleadings have closed so as to give clarity and a way forward to the many pending cases before the Special Tribunal. Counsel for the SIU conceded that in the ensuing constitutional challenge, the Unit is not able to proceed with the review application at the Special Tribunal pending its finalisation.
Equally, the Constitutional Court judgment in the Ledla matter will further resolve this elephant in the room: what is the Special Tribunal: is it a court or what? DM/MC
Selby Makgotho is the Spokesperson of the Special Tribunal and a PhD Candidate in Public International Law at Unisa.