27 March 2020

The Minister of Environment, Forestry and Fisheries Ms Barbara Creecy, and the Department’s Director-General, Ms Nosipho Ngcaba, have launched an application in the Western Cape High Court for rescission of a court order granted on 20 September 2018.

The order had been granted pursuant to an application brought by the Department of Agriculture, Forestry and Fisheries and the National Prosecuting Authority, supported by an affidavit from the previous DAFF Minister, Senzani Zokwana. The Respondent parties were Arnold Bengis (who died subsequently) and two foreign entities – Pearl Investment Trading Limited and First Trust Managent AG.

The order related to settlement agreements concluded in relation to restitution that was ordered to be paid to the Government of South Africa by a USA court that convicted Hout Bay Fisheries Incorporated owner, Arnold Bengis and others. This was after they pleaded guilty to the unlawful export of West Coast Rock lobster from South Africa in April 2002.

Following protracted litigation, the United States Southern District Court of New York, on 22 September 2017, ordered Bengis to pay US$30 055 787.50 in restitution to South Africa for having unlawfully fished rock lobster from South African waters. A settlement was reached in 2018 and an amount of US$7 124 888 (approximately R99 million) was subsequently paid to South Africa. A rescission is sought of the order that, inter alia, make these agreements a court order in South Africa.

Some of the main reasons for seeking to have the court order set aside include that:

• The Constitutional Court has indicated on several occasions that parties contracting outside of the context of litigation cannot seek a court order to have an agreement made a court order, irrespective of whether a term of the agreement provides that the settlement be made a court order;
• In terms of the order the National Prosecuting Authority and Barnabas Xulu Incorporated are appointed as “implementing agents” for the settlement agreements, but these agreements are self-executing and do not require implementing agents;
• The funds recovered had to be paid into the Criminal Assets Recovery Account (CARA). This happened after receipt of the cheque from the US authorities. As such, the 2018 applicants had no legal authority to direct or seek a court order as to how these funds should be spent.
• The terms of the court order were wider than the terms of the actual agreements and beyond what was contemplated in the affidavit of Mr Zokwana.
• The parties to the agreement believed that they were each signing exactly the same agreement but it appears not to have been the case.

At the time the order was granted in 2018, there was no litigation which involved DAFF and/or the NPA related to this matter pending in the US, Jersey or South Africa.

Because the order granted by the court on 20 September 2018 was unlawful, the Minister and Director-General are duty-bound by the Constitutional principle of legality to ensure that it is set aside.

The actual settlement agreements remain subject to scrutiny, are not the subject of the rescission application.

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Albi Modise
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