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A South African court denied International Container Terminal Services Inc.’s bid to to appeal a ruling that temporarily halted its deal with Transnet to develop Durban Container Terminal Pier 2 in the Port of Durban
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The KwaZulu-Natal High Court in a decision on December 11 said it is “not in the interests of justice to permit an appeal,” adding that hearing of the case is just three months away in March 2025
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ICTSI said it is “disappointed” but that the denial of the right to appeal “was not wholly unexpected as Transnet unusually chose not to appeal” the October 2024 interdict
A South African court denied International Container Terminal Services Inc.’s (ICTSI) bid to appeal a ruling that temporarily halted its deal with Transnet SOC Ltd to develop Durban Container Terminal (DCT) Pier 2 in the Port of Durban.
The KwaZulu-Natal High Court in a decision on December 11 said it is “not in the interests of justice to permit an appeal,” adding that hearing of the case is just three months away in March 2025.
“…the duration of the interim interdict is not an unknown imponderable stretching into the distance, but dates have already been agreed to and fixed for the determination of the final relief. And those dates are but three months away. Also to be considered and weighed up when assessing the interests of justice is the fact that the first respondent [Transnet], which is the party interdicted and restrained by the order, has not itself sought leave to appeal,” the decision stated.
State-run Transnet in July 2023 declared ICTSI as the preferred bidder for the 25-year joint venture to develop and operate DCT 2. Transnet owns South Africa’s railway, ports and pipelines infrastructure.
Losing bidder APM Terminals, a subsidiary of Danish shipping giant Maersk, however, challenged the Transnet decision in court, claiming the solvency evaluation of ICTSI was irregular, which should have disqualified the Philippine-based company from the tender selection process.
The KwaZulu-Natal Division of the High Court of South Africa on October 9 ruled in favor of APM Terminals and issued an injunction against Transnet’s selection of ICTSI as operating partner. The court found “potentially flawed and … unfair to the other bidders” Transnet’s decision to award ICTSI the deal.
READ: Court blocks ICTSI-Transnet Durban port deal
APM Terminals claims its bid, about R2 billion ($114 million) less than ICTSI’s offer, should have afforded it the right to negotiate the contract with Transnet.
The judge has issued the injunction until the case is heard and resolved.
“Disappointed”
In a statement following the December 11 decision, ICTSI said it is “disappointed” but that the denial of the right to appeal “was not wholly unexpected as Transnet unusually chose not to appeal” the October 2024 interdict.
ICTSI noted that the October interdict was granted against Transnet, stopping the state-owned entity from implementing the private-public partnership pending a full court review next year, “making it challenging for ICTSI to be granted leave to appeal the interdict.”
“However, ICTSI felt it had no choice but to challenge the interdict because the legal judgment which led to the awarding of the interdict contained a number of legal errors that were damaging to ICTSI’s reputation.
“The agreement to operate the Durban Container Terminal Pier 2 was awarded to ICTSI after a rigorous, transparent, and fair bidding process in 2023 and was interdicted in March 2024,” it said, adding that is “a well-regarded publicly listed company successfully operating 32 terminals in 19 countries.”
ICTSI maintains that the reasoning underpinning the interdict “stems from a fundamental misunderstanding of the technical financial metrics at the heart of the matter, and the evidence provided by Transnet and ICTSI to the court was not considered.”
“ICTSI believes that the denial of leave to appeal represents a missed opportunity to rectify errors but will continue to vigorously defend its position when the main case is heard in March 2025,” it said.
Moreover, ICTSI said delays in setting up a private-public partnership “substantially weaken the South African economy and the sooner the country addresses weaknesses at the ports, the better.”
“It is unfortunate that arguing over a non-material and non-defined technicality will delay fixing the country’s main container terminal,” the port operator said.
“ICTSI adequately proved its financial capacity to perform on the terms of the contract during the bidding phase. Transnet and their auditors were satisfied with this when it took the decision in July 2023 and in a second independent review in 2024,” said Hans-Ole Madsen, ICTSI regional head for Europe and Middle East and Africa.
“We remain resolute in our belief that the main case will demonstrate the strength of our financial position,” Madsen added.
Despite losing the right to appeal the temporary interdict, ICTSI said it remains confident in the merits of its case and looks forward to fully presenting its arguments when the full review of the case is heard in March 2025.
The Durban concession was seen to have been ICTSI’s largest operation in Africa, with DCT 2 expected to handle 2.8 million twenty-equivalent units (TEUs) from the current 2.1 million TEUs.
ICTSI already manages four terminals in Africa: Onne Multipurpose Terminal in Nigeria, Kribi Multipurpose Terminal in Cameroon, Matadi Gateway Terminal in D.R. Congo, and Madagascar International Container Terminal.
DCT Pier 2 is Transnet’s largest container terminal. It handles 72% of the port’s throughput and 46% of South Africa’s port traffic. – Roumina Pablo
READ: ICTSI chief blasts Maersk for delaying Durban port privatization
