THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Reportable
Case No:  170/06
In the matter between:

Josias van Zyl

First Appellant
Josias van Zyl and Gail van Zyl NNO
(cited in their capacities as Trustees for the time being of
The Burmilla Trust NO TMP 4027)

Second Appellant
Josias van Zyl and Gail van Zyl NNO
(cited in their capacities as Trustees for the time being of
The Josias van Zyl FamilyTrust NO TMP 4028)
Third Appellant
Swissbourgh Diamond Mines (Pty) Ltd

Fourth Appellant
Patiseng Diamonds (Pty) Ltd

Fifth Appellant
Motete Diamonds (Pty) Ltd

Sixth Appellant
Rampai Diamonds (Pty) Ltd

Seventh Appellant
Matsoku Diamonds (Pty) Ltd

Eighth Appellant
Orange Diamonds (Pty) Ltd

Ninth Appellant

and

The Government of the Republic of South Africa                       First Respondent
The President of the Republic of South Africa
Second Respondent
The Minister of Foreign Affairs of the Republic
of South Africa

Third Respondent
The Deputy Minister of Foreign Affairs of the
Republic of South Africa

Fourth Respondent

Coram :
Harms ADP, Heher, Cachalia JJA, Hurt and Mhlantla AJJA
Heard :
21 and 22 August 2007

Delivered :  20 September 2007

Summary:    Public international law ─ diplomatic protection

Neutral Citation:
This judgment may be referred to as Van Zyl v Government of
RSA [2007] SCA 109 (RSA)

HARMS ADP

INTRODUCTION

[1] This appeal relates to a claim for diplomatic protection, i.e., action by
one state against another state in respect of an injury to the person or
property of a national of the former state that has been caused by an
international delict that is attributable to the latter state. Diplomatic protection
includes, in a broad sense, consular action, negotiation, mediation, judicial
and arbitral proceedings, reprisals, a retort, severance of diplomatic relations,
and economic pressures.1

[2] The appellants requested the Government of the RSA to provide them
with diplomatic protection against the Government of Lesotho. The
international delict on which they relied was the cancellation and revocation of
five mineral leases that had been granted by the Government of Lesotho.

[3] The President of the RSA was advised that the Government was under
no obligation to afford diplomatic protection to the appellants; that any
decision to intervene would involve a policy and not a legal decision; that the
decision is the sole prerogative of the Government; that the disputes between
the appellants and the Government of Lesotho had been decided by the
Lesotho courts; that mediation or intervention by the Government would imply
a lack of faith in the judicial system of a sovereign state; and that diplomatic
intervention would set an unhealthy precedent. The President in the result
refused to accede to the appellants’ request and they were informed that they
were not, in the circumstances of the case, entitled to diplomatic protection.

[4] Dissatisfied with this ruling, the appellants sought to review the
Government’s decision. They also applied for a mandamus directing the
Government ‘to take all steps necessary to vindicate the rights of the

1 Kaunda v President of the RSA 2004 (10) BCLR 1009 (CC), 2005 (4) SA 235 (CC) para 26-
27.

applicants, including but not limited to providing diplomatic protection.’ The
application was heard by Patel J in the Pretoria High Court. He dismissed the
application but granted leave to appeal to this Court.

[5] Courts should act with restraint when dealing with allegations of
unlawful conduct ascribed to sovereign states.2 Unfortunately, in order to
decide this case it is necessary to deal with the allegations made by the
appellants to determine whether or not Patel J was correct in dismissing their
application.

[6] This judgment holds that the appellants have no right under South
African law to diplomatic protection, especially not in respect of protection of a
particular kind. Nationals have a right to request Government to consider
diplomatic protection and Government has a duty to consider it rationally.
Government received the request, considered the matter properly and
decided to decline to act on rational grounds. This judgment further holds that
the Government is not entitled under international law to afford the appellants
diplomatic protection under the particular circumstances of the case.
Accordingly, the appeal stands to be dismissed.

THE PARTIES

[7] There are nine appellants but the driving force behind the litigation is
the first appellant, Mr Josias van Zyl. He and his wife are in their capacity as
trustees of two trusts, the Burmilla Trust and the Josias van Zyl Family Trust,
the second and third appellants respectively. Both trusts are registered in
South Africa. Mr and Mrs van Zyl are South African citizens.

[8] There are six corporate appellants, all companies incorporated and
registered in Lesotho. The important one is Swissbourgh Diamond Mines (Pty)
Ltd. The issued shares in Swissbourgh belong to Mr van Zyl (5%), Burmilla

2 Swissbourgh Diamond Mines (Pty) Ltd v Government of the RSA 1999 (2) SA 279 (T) at
330D and follows. Cf.Kuwait Airways Corp v Iraqi Airways Co [2002] UKHL 19, [2002] 3 All
ER 209 (HL) para 24-26.

Trust (90%) and the family trust (5%). Swissbourgh holds 99% of the shares
in the other companies and the family trust holds the remaining 1%. The
mineral leases were all held by Swissbourgh and the other appellant
companies derived their interests from Swissbourgh by means of tributary
agreements (effectively sub-leases). Because of this it will not be necessary to
distinguish between the appellant companies and references to Swissbourgh
will usually be in a generic sense to include a reference to all or most of the
appellants. All the directors are also South African citizens.

[9] The respondents are, respectively, the Government of the RSA, the
President, the Minister of Foreign Affairs and, last, the Deputy Minister. It is for
purposes of the judgment not important to distinguish between them and I
shall refer to them (unless the context requires otherwise) as the Government.
I also do not intend to distinguish between the State and the Government and
will use the terms interchangeably.

THE HISTORY

[10] This case has a long and convoluted history. The appellants displayed
an obsessive attention to peripheral facts and factoids and their affidavits
raise speculation to the level of fact and thereafter raise argument based on
the speculation.3 And as in the Kaunda case, this case has been complicated
by the appellants’ excessive demands and the form in which the notice of
motion was framed.4 In what follows I intend to limit myself to the salient facts.
They are briefly related at this juncture to set the stage for a more detailed
discussion where and when required.

[11] The RSA and the Kingdom of Lesotho concluded a treaty concerning
the Lesotho Highlands Project on 24 October 1986. The main purpose of the
project was to supply water to the Witwatersrand from a dam that had to be
built in Lesotho. Joffe J in previous proceedings between the appellants and

3 As happened in Swissbourgh Diamond Mines (Pty) Ltd v Government of the RSA 1999 (2)
SA 279 (T) at 315E-F per Joffe J.
4 Kaunda v President of the RSA 2004 (10) BCLR 1009 (CC), 2005 (4) SA 235 (CC) at para
128.

the Government dealt with the detail of the treaty and what he said need not
be repeated.5 During June 1988, construction operations by the Lesotho
Highlands Development Authority, a Lesotho statutory body established
pursuant to the treaty, began in the Rampai area.

[12] Shortly thereafter, on 4 August 1988, the Government of Lesotho and
Swissbourgh entered into five mining leases. One of these leases covered the
Rampai area in the basin of the proposed dam. The terms of the Rampai
lease are typical. The lease was entered into in Lesotho in terms of s 6 and 15
of the Lesotho Mining Rights Act, 1967. The Commissioner of Mines
represented the Basotho Nation and Mr van Zyl represented Swissbourgh.
Swissbourgh obtained the sole right to prospect for and mine and dispose of
precious stones within the Rampai area for a period of ten years with a right of
renewal for a further five years. Swissbourgh had to pay the Government of
Lesotho a yearly rental of R13 600 (R100 per square kilometre) and a royalty
of 14% on the value of the stones recovered. The agreement contained an
arbitration clause. The lease had to be registered in terms of the Mining
Rights Act, which happened soon thereafter. (For purposes of the rest of the
judgment a distinction will be drawn between the Rampai lease and the other
four because of subsequent events.)

[13] The Authority proceeded with its work on the dam project until July
1991 when Swissbourgh obtained an interim interdict against the Authority
preventing it from performing any work within the Rampai area. The rule was
subsequently discharged by agreement but the final determination of the
application was kept in abeyance pending settlement negotiations.

[14] Faced with the consequences of a grant of competing rights to
Swissbourgh and the Authority as well as a breach of its treaty obligations, the
Government of Lesotho took a number of steps which the Lesotho courts in

5 In particular, he found (at 327C and follows) that the appellants did not derive any rights
from the treaty.

due course found were unlawful.6 These acts form the crux of the appellants’
complaints against the Government of Lesotho.

[15] The first step was the cancellation by the Commissioner of Mines of all
the mining leases. This enabled the Authority to rely on the cancellation of the
Rampai lease as a defence to the interdict application. (The other leases did
not affect the construction activities.) However, on 20 November 1991, the
court, at the behest of Swissbourgh, on an interim basis set aside the
cancellation of the mining leases by the Commissioner. It also issued an
interim interdict preventing the Authority from proceeding with its dam
construction activities within the Rampai area. One may assume that this
order must have had a devastating effect on the construction activities of the
Authority.

[16] In another attempt to undo the mining leases the governing Military
Council issued the ‘Revocation of Specified Mining Leases Order’ of 20 March
1992.  This executive order revoked the five mining leases of Swissbourgh;
provided that no person would be entitled to compensation for loss or damage
as a result of the cancellation; and prohibited the institution of any legal
proceedings, including arbitration proceedings, resulting from or in connection
with the order or the cancellation of the leases.

[17] Another application to court followed immediately, this time for an order
setting aside the revocation order and for another interim interdict.7
Swissbourgh was successful and Cullinan CJ in his judgment of September
1994 had some harsh words about the actions of the Government of Lesotho,
especially for the disrespect for the Constitution and the negation of the rule of
law.

[18] The subsequent appeal was not successful. During January 1995 the
Court of Appeal held that the revocation order was in conflict with the

6 How it came about that the Government of Lesotho granted conflicting rights at that stage
has been the subject of much speculation in Lesotho but has never been explained.
7 The terms of the order are quoted at Swissbourgh Diamond Mines (Pty) Ltd v Government
of the RSA 1999 (2) SA 279 (T) 297E-I.

provisions of the Lesotho Human Rights Act and consequently void.8 The
appeal against the interim interdict, however, succeeded on the ground that
Cullinan CJ had not exercised a proper discretion. The balance of
convenience, the court found, did not favour Swissbourgh and that an award
of damages would compensate Swissbourgh adequately. Swissbourgh was
given time to do exploratory work in the Rampai area to quantify its damages.9

[19] During March 1995, the Government of Lesotho and the Authority
conceded that the cancellation of the mining leases by the Commissioner had
been invalid. The Authority nevertheless lodged a counter-application for a
declaration that the Rampai lease had been void ab initio because the
required formalities had not been followed. The court consequently set the
cancellation aside and referred the validity issue for oral evidence. This led to
a 58-day trial before the Chief Justice, Mr Justice Kheola.

[20] Kheola CJ found against Swissbourgh on 28 April 1999, holding that
the Rampai lease was void ab initio. Swissbourgh appealed to the Court of
Appeal but the appeal was dismissed on 6 October 2000.10 The reasons are
fairly basic. According to Lesotho customary law all land belongs to the
Basotho Nation; this principle is entrenched in the Lesotho Constitution; any
grant of rights in relation to land required the consent of the relevant Chiefs;
since its promulgation the Lesotho Mining Rights Act, 1967 (under which the
mineral leases were granted) required the Chiefs’ consent for the grant of
mineral rights; and the evidence established that no consent had been sought
or granted.11 The Rampai lease was accordingly void.

[21] Less than three weeks later the appellants made the initial request for
diplomatic protection, which led to these proceedings.

8 Attorney-General of Lesotho v Swissbourgh  Diamond Mines (Pty) Ltd 1997 (8) BCLR 1122
(L AC). The terms of the order are quoted in Swissbourgh Diamond Mines (Pty) Ltd v
Government of the RSA 1999 (2) SA 279 (T) 298A-D.
9 Attorney General v Swissbourgh Diamond Mines (Pty) Ltd 1995-1996 Lesotho LR 173.
10 Swissbourgh Diamond Mines (Pty) Ltd v LHDA 2000 Lesotho LR 432 (CA).
11 This explains why the lease purported to have been entered into by the Basotho Nation and
not by the Government of Lesotho.

[22] It is convenient to mention two intervening matters. The first relates to
the other four leases that were not involved in the Rampai appeal. Faced with
the revocation order, which denied it access to court, Swissbourgh decided to
regard the Government of Lesotho’s denial of the validity of these leases as a
repudiation of contract and to accept the repudiation, thereby bringing to an
end any contractual relationship between the parties. (Notably, probably for
tactical reasons, Swissbourgh did not cancel the Rampai lease.) On 25
October 1993, Swissbourgh instituted action claiming R 930m damages.
There was an additional claim of R 15m in respect of physical damage to plant
and equipment.

[23] On 16 September 1994, Swissbourgh ceded its rights in respect of the
pending action and the contractual and delictual damages claims to Burmilla
Trust. Although the rights were valued at R2 637m, the consideration was a
mere R1 000. Burmilla Trust has not yet been substituted as plaintiff and the
action has not been pursued. Another action relating to the same or similar
causes of action was instituted during May 1996 by Swissbourgh. This action
is also in limbo.

[24] Two years later Swissbourgh entered into another cession agreement
with Burmilla Trust in amplification of the first one. It ceded all Swissbourgh’s
claims against the Government of Lesotho in the event of a declaration that
any of the mining leases were invalid.

[25] The second set of intervening facts concerns the adoption of legislation
by the Government of Lesotho to place matters on a proper legal footing and
to comply with its national and, coincidentally, its international obligations
especially in relation to the treaty with the RSA. The Lesotho Act 5 of 1995,
which came into effect on 16 August 1995, provided for the expropriation by
the Authority of mineral rights for purposes of the water project. Thus far the
Authority had been entitled to take ‘land’ and pay compensation but the initial
legislation did not deal with mineral rights and did not have adequate
compensation provisions.  This Act, however, provided for full compensation,
properly determined, in respect of any such expropriation to a person in

whose favour a ‘duly granted and executed mineral right’ was registered.
Pursuant to this Act, the Authority purported to expropriate the Rampai lease
on 17 August 1995 but in the light of the Rampai judgment expropriation was
unnecessary because there was nothing to expropriate.

[26] On the same day another piece of legislation was promulgated, namely
Lesotho Act 6 of 1995. It validated certain dam construction activities of the
Authority ‘subject to any accrued or vested right to damages’. Again, as a
result of the Rampai judgment Swissbourgh had no accrued or vested rights,
at least not in relation to the Rampai lease.

THE REQUEST FOR DIPLOMATIC PROTECTION

[27] The first request for diplomatic protection was made per letter of 25
October 2000 to the Department of Foreign Affairs. It relied on the unlawful
revocation of the mineral leases during 1992 and the destruction and
confiscation of assets by the Government of Lesotho.12  The appellants also
complained about corruption ‘at the highest level’ in the Government of
Lesotho. In addition they alleged that Swissbourgh had suffered a miscarriage
of justice at the hand of the Lesotho courts. The appellants further said that
they had ‘no faith in the independence and impartiality’ of the Lesotho courts13
and they ‘rejected’ the Rampai judgment because the judges were ‘specially
appointed’ and their analysis of the evidence and their findings were ‘one-
sided and manifested bias.’

[28] The next letter of consequence was dated 8 December 2000. Before
dealing with its terms it is necessary to contextualise it. During 1993,
Swissbourgh instituted action against the Government of the RSA for
damages suffered as a result of the loss of their leases. The particulars of this
action (and a related action against a local statutory body) need not be
mentioned – they are to be found in the judgment of Joffe J. In summary,

12 In a letter of 10 April 2001 it is referred to as a confiscation through the cancellation of the
mineral leases.
13 The letter of 19 December 2000 repeated the statement.

Swissbourgh alleged that the Government of the RSA interfered unlawfully
with its mining rights, which caused it to suffer damages of R 945m.
Swissbourgh, in addition, claimed R 507,8m from the statutory body on similar
grounds. The unlawful interference, according to the particulars of claim, was
done with the improper motive of obtaining an unlawful advantage for the joint
water supply venture. The defendants in that case allegedly ‘procured’
(followed by ten alternatives) the unlawful interference with Swissbourgh’s
rights by the Government of Lesotho.

[29] The conspiracy issue also formed part of the case before Kheola CJ
and was the main reason for the length of the trial. He found that the
allegations were without any merit and made a special costs order against
Swissbourgh. The Court of Appeal did not consider the merits of the issue
because it became irrelevant in the light of the finding that the Rampai lease
was invalid.

[30] During 1995, Mr van Zyl approached the RSA Government with
settlement proposals. This elicited a letter from the State Attorney written on
the instructions of the Minister of Water Affairs (under whose jurisdiction the
dam project fell), dated 15 May 1995. It is necessary to quote from the letter:
3/136

•
‘The Minister is in principle not averse to endeavours aimed at settling legitimate
claims against the Government.’

•
‘The manner in which you have conducted the pursuit of your interests as you
perceive them, has, however, created the firm impression that you set out to coerce
the Republic of South Africa to meet a claim which you may or may not have against
the Government of the Kingdom of Lesotho and the Lesotho Highlands Development
Authority. This you set out to do inter alia by calling upon the international community
to take up your perceived cause against the Government of the Republic of South
Africa, by widely publicizing allegations of immoral collusion and improper conduct on
the part of the Government and by making similar allegations in respect of the present
Government in your recent correspondence to the Minister.’

•
‘You have indeed succeeded in creating a situation where you have offended the
dignity of the Republic of South Africa, not only under the previous Government, but
also under the present one. The dispute is thus no longer a simple commercial
dispute. Settlement of the actions with you may amount to an acknowledgement of
the veracity of your allegations and may compromise the credibility of the present
Government, not only in its international relations with the Kingdom of Lesotho, but
also with the other states and international institutions whose assistance you sought
to muster.’

•
‘As long as you persist in your allegations of improper collusion between the
Government of the Republic of South Africa and the independent and sovereign
Kingdom of Lesotho, no advances of settlement can be entertained.’

•
‘Should you withdraw the actions as well as the offensive allegations against the
Government of the Republic of South Africa unreservedly and publicly, my
Government may find itself in a position where it may consider attempts to facilitate
mediation of the various disputes between yourself and the Government of the
Kingdom of Lesotho and the Lesotho Highlands Development Authority.’

•
‘As matters presently stand this is, however, impossible without prejudicing the dignity
of the Government of the Republic of South Africa and its credibility in the
international community.’

[31] The appellants rejected the suggestion that they withdraw the
allegations; instead, as mentioned, they proceeded to conduct a lengthy trial
in order to prove the allegations of collusion and they harassed the
Government in the local litigation as appears from the judgment of Joffe J.
During July 1999 (shortly after the judgment of Kheola CJ), Mr van Zyl went
yet further: he submitted a voluminous request for an inspection by the World
Bank (a financier of the scheme) alleging that the Bank, the RSA Government,
the Government of Lesotho and the Authority were involved in the ‘patently
unlawful acts’ surrounding the water project and the leases.

[32] Having lost the Rampai appeal the appellants in the mentioned letter of
8 December 2001, rather cynically relied on the promises contained in the
State Attorney’s letter; they withdrew the South African actions and the

allegations ‘in respect of the ANC government’s involvement’ in an unlawful
conspiracy; and they released a press statement apologising to Government.

[33] The next letter of importance, dated 15 December 2000, argued the
existence of a ‘right to diplomatic protection’ under the Constitution at length
(an assertion repeated in later correspondence) and submitted that ‘the State
is under a constitutional obligation to provide diplomatic protection to its
citizens’.  The letter also requested the Government to ‘act in terms of its
undertaking’ contained in the letter of the State Attorney.

[34] The appellants insisted that Government should provide them with
diplomatic protection by mediating the dispute and convincing the
Government of Lesotho to pay a ‘settlement’ amount of R 85,4m with interest
within a given period. Otherwise Government had to institute legal
proceedings against the Government of Lesotho in an international court or
arbitration tribunal for payment of some R1 812,5m with interest on the
appellants’ behalf.

[35] In spite of its refusal to grant the request, the Government sent a Note
Verbale to the Government of Lesotho, informing that government of the
complaint. The Government of Lesotho did not respond but its view appears
forcefully from a letter dated 19 November 2001, by its attorneys to
Swissbourgh in response to a parallel paper campaign against the
Government of Lesotho. It rejected the allegations in no uncertain terms,
stating that a number of premises of the arguments put forward were, to the
knowledge of the claimants, fundamentally flawed; that the attacks on the
judiciary were scurrilous; and that there was no prospect of any settlement. (A
copy of the letter is annexed to this judgment.)  This six page letter drew a
reply of 138 pages from Mr van Zyl.  The Government of Lesotho responded
by reiterating that it would not submit to any form of arbitration, international or
otherwise.

THE COURT APPLICATION

[36] Review applications, in the ordinary course of events, have to be
brought under Uniform rule 53 (unless covered by the Promotion of
Administrative Justice Act 3 of 2000 – PAJA). This one was not, and the
failure to follow the rule caused much aggravation.

[37] The founding affidavit of Mr van Zyl set out the nature of the application
under a separate heading. He relied on a violation of the appellants’ rights by
the cancellation of the mining leases without payment of compensation (and
nothing more). This, he said, constituted an expropriation that did not comply
with minimum international standards. The Government of Lesotho was
accordingly obliged to pay the appellants some R 3 089m damages.

[38] Mr van Zyl proceeded to say, as foreshadowed in the correspondence,
that the appellants have ‘a constitutional right to diplomatic protection’ and
that the Government has ‘a corresponding obligation to provide such
protection’; the issue (he said) was the failure of Government to exercise its
power in a constitutionally permissible manner; the decision was irrational
because it was based on a wrong understanding of its legal obligation; and
that the merits of the disputes with the Government of Lesotho were not
directly in issue.

[39] Then followed 70 pages of ‘history and background’ interspersed with
legal argument. Two aspects need to be noted. The first concerns the Lesotho
courts. After alleging that the appellants had exhausted their local remedies,
Mr van Zyl proceeded to state (contrary to the line taken in the preceding
correspondence) that the application was not ‘a reflection on the integrity of
any of the judges in the Courts of Lesotho’ or on those courts.  The second is
a one-liner based on the State Attorney’s letter of 15 May 1995: this letter
allegedly gave the appellants a legitimate expectation that the Government

would afford them diplomatic protection should they withdraw their South
African litigation, something they had now done.14

[40] Attached to the founding affidavit are about 850 pages of exhibits. The
allegations contained in these annexures were not confirmed in the founding
affidavit and are therefore not evidence. Mr van Zyl and his legal advisers
knew that it is not open to a party merely to annex documentation to an
affidavit and during argument use its contents to establish a new case. A party
is obliged to identify those parts on which it intends to rely and must give an
indication of the case it seeks to make out on the strength thereof.15 The fact
that the appellants again have ignored the procedural rules dealt with by Joffe
J is probably due to Mr van Zyl’s belief, as he said during argument, that fifty
per cent of all court rules are unconstitutional and can be ignored.

[41] The main affidavit in answer was by the Deputy Minister, Mr Aziz
Pahad. It dealt in 91 pages with the appellants’ right to diplomatic protection
and with the decision of Government in response to the request. He added
that Mr van Zyl had failed to disclose five material facts. These facts,
according to the deponent, went to the heart of the application.

[42] This elicited a replying affidavit of about 550 pages and annexures of
some 1700 pages. The main ‘justification’ proffered was that Mr van Zyl
indeed had disclosed the five material facts in the founding affidavit. In other
words, this mass of material was required to underpin five common cause
facts. One illustration should suffice. Mr Pahad alleged that the cession of
Swissbourgh’s claims to Burmilla Trust was material and had not been stated
in the founding affidavit. Mr van Zyl took Mr Pahad to task because, he
pointed out, the fact of the cession appeared from a note on two of the
annexures to the founding affidavit. Instead of admitting the cession and
giving the reference, Mr van Zyl now sought to traverse new ground. In

14 I do not propose to deal with the legitimate expectation argument separately because the
facts are destructive of any such argument. The expectation was not legitimate or reasonable.
There is also something schizophrenic about the argument because, as will appear later, the
replying affidavit resurrected the abandoned conspiracy argument.
15 Swissbourgh Diamond Mines (Pty) Ltd v Government of the RSA 1999 (2) SA 279 (T)
323F-325C.

addition, Mr van Zyl resurrected the conspiracy case in the reply because, he
said, of the Government’s allegations concerning his failure to disclose
material facts. He also attacked the Government’s decision on new grounds.

[43] The Government applied for the striking out of major parts of the reply
as either new matter or as otherwise objectionable, namely being scandalous,
vexatious, irrelevant or inadmissible.

THE PROCEEDINGS IN THE TPD

[44] During the hearing before Patel J, the appellants were represented by
three counsel.  Patel J granted the Government’s striking out application and
dismissed the appellants’ application. His judgment dealt in great detail with
all the legal issues raised. As will appear in the course of this judgment, I
agree in general terms with his reasoning but I do not find it necessary to
decide all the issues he did.

[45] It is convenient to deal at this stage with the application to strike out.
Both sides filed lengthy heads dealing with each and every finding made by
Patel J. The learned judge, it should be noted, took great pains to analyse the
complaint. I do not think that a court of appeal could reasonably be asked to
redo an exercise concerning an interlocutory matter, especially in the
circumstances of this case. Schutz JA once made these pointed remarks:16

‘There is one other matter that I am compelled to mention – replying affidavits. In the great
majority of cases the replying affidavit should be by far the shortest. But in practice it is very
often by far the longest – and the most valueless. It was so in these reviews. The
respondents, who were the applicants below, filed replying affidavits of inordinate length.
Being forced to wade through their almost endless repetition when the pleading of the case is
all but over brings about irritation, not persuasion. It is time that the courts declare war on
unnecessarily prolix replying affidavits and upon those who inflate them.’

16 Minister of Environmental Affairs and Tourism v Phambili Fisheries (Pty) Ltd [2003] 2 All SA
616 (SCA), 2003 (6) SA 407 (SCA) at para 80.

[46] A reply in this form is an abuse of the court process and instead of
wasting judicial time in analysing it sentence by sentence and paragraph by
paragraph such affidavits should not only give rise to adverse costs orders but
should be struck out as a whole. Since I am of the view that Patel J should
have taken that route mero motu, I am not going to deal with those few
instances where he quoted a wrong paragraph number (one of the grounds,
as I understood from what Mr van Zyl volunteered during argument, that led to
a complaint to the Judicial Services Commission against the late judge) or
erred. I shall nevertheless have regard to the reply to the extent that it
contains relevant and admissible material that impacts on the merits of the
case.17

THE HEARING IN THE SCA

[47] It is unfortunately necessary to say something (but not all) about the
appeal hearing. Mr Redelinghuys, an attorney with the right of appearance,
appeared for all appellants excepting Mr van Zyl. Mr Redelinghuys knows the
case because he was Swissbourgh’s attorney in Lesotho. Mr van Zyl argued
in person but chose to follow Mr Redelinghuys.

[48] The heads of argument filed by the appellants ran to 530 pages. A few
days before the hearing, without explanation, another set of 325 pages was
filed.18 After a short and well prepared introductory argument, Mr
Redelinghuys proceeded to deal with the additional heads. His main point was
that the appellants had suffered a denial of justice at the hands of the Lesotho
courts. The nub of the argument was that ‘national legal systems can be
judged objectively for acts and omissions of its courts with respect to aliens’
and that ‘a state incurs international responsibility if it administers justice to
aliens in a fundamentally unfair way’. He relied on art 10 of the Universal
Declaration of Human Rights, which provides that

17 A party is in principle not entitled to rely on new matter, even if it has not been struck out:
Director of Hospital Services v Mistry 1979 (1) SA 626 (A) 635H-636B; Bowman NO v De
Souza Roldao 1988 (4) SA 326 (T).
18 At the end of argument, when Mr van Zyl was told he could file further argument in reply, he
immediately produced a third set of heads running to 65 pages that had nothing to do with the
reply. The appellants also filed 2 600 pages of authorities.

‘everyone is entitled in full equality to a fair and public hearing by an independent and
impartial tribunal, in the determination of his rights and obligations and of any criminal charge
against him.’

[49] Mr Redelinghuys was asked on what basis could he argue this point
since it did not form part of the case set out in the founding affidavit – indeed,
the case of the appellants was, as mentioned, that the application was no
reflection on the Lesotho courts – nor was it the case in the high court or in
the main heads of argument. He sought in response to rely on unsupported
allegations made against the judiciary in the attached correspondence to
which he added ex cathedra allegations. It was pointed out to Mr
Redelinghuys that he, as an officer of the court, could not make submissions
that do not have an evidential basis. Mr Redelinghuys subsequently retracted
and abandoned the point.

[50] This gave Mr van Zyl the opportunity to attack this Court for having
already decided the case; to lecture the Court about justice; and to renew the
attack on the Lesotho judiciary.19 Those courts, he said, were not only biased,
they were manipulated. Mr van Zyl was given more than one opportunity to
identify the passages in the record where the allegation of a denial of justice
had been made. He did not. I do not wish to belabour the point. Although the
failure of justice was raised in the preceding correspondence, the appellants
deliberately chose to omit it as a cause of complaint from the founding
affidavit and, apart from a generalised statement, also from the replying
affidavit. The appellants are not entitled in this manner to resurrect an
abandoned case.20

THE REVIEW

19 Mr van Zyl’s wrath was not limited to the judges of Lesotho. It spilled over to local judges
who had held against him and counsel who appeared against him. All were involved in a
Machiavellian plot. He even made snide remarks about a professor of law who, he said, was
in court and advised Government.
20 Relying on J Paulsson’s Denial of Justice in International Law (2005). The argument of a
denial of justice at the hand of the Government of Lesotho was just a variation of the
argument which will be dealt with later.

[51] The approach to Government and the Government’s response
occurred before the Constitutional Court delivered the Kaunda judgment,21
which brought some clarity on the issue of the right to diplomatic protection.
For purposes of this case the following principles there set out are relevant:
• Traditional international law acknowledges that states have the right to
protect their nationals beyond their borders but they are under no
obligation to do so (para 23).
• Diplomatic protection is not recognised by customary international law
as a human right and cannot be enforced as such and it remains the
prerogative of the state to exercise it at its discretion (para 29).
• It would be inconsistent with the principle of state sovereignty for South
Africa to assume an obligation that entitles its nationals to demand, and
obliges it to take action to ensure, that laws and conduct of a foreign
state and its officials meet not only the requirements of the foreign
state’s own laws, but also the rights that our nationals have under our
Constitution (para 44).
• Although there is no enforceable right to diplomatic protection, South
African citizens are entitled to request South Africa for protection under
international law against wrongful acts of a foreign state and the citizen
is entitled to have the request considered and responded to
appropriately (para 60).
• The entitlement to request diplomatic protection flows from citizenship
and is part of the constitutional guarantee given by s 3 of the
Constitution, which provides that all citizens are equally entitled to the
rights, privileges and benefits of citizenship (para 67, 178, 188, 236).
• The government has an obligation to consider the request and deal
with it consistently with the Constitution ( para 67, 192).
• There may be a duty on government, consistent with its obligations
under international law, to take action to protect one of its citizens
against a gross abuse of international human rights norms. A request
to the government for assistance in such circumstances where the

21 Kaunda and Others v President of the RSA 2004 (10) BCLR 1009 (CC), 2005 (4) SA 235
(CC).

evidence is clear would be difficult, and in extreme cases possibly
impossible to refuse (para 69, cf 242).
• A court cannot tell the government how to make diplomatic
interventions for the protection of its nationals (para 73).
• A decision as to whether, and if so, what protection should be given, is
an aspect of foreign policy that is essentially the function of the
executive (para 77).
• If government refuses to consider a legitimate request, or deals with it
in bad faith or irrationally, a court could require government to deal with
the matter properly (para 80, 193).  This does not mean that courts
could substitute their opinion for that of the government or order the
government to provide a particular form of diplomatic protection (para
79).

[52] The appellants’ request was premised on a ‘right’ to diplomatic
protection and not on a right to have a request considered. It was further
based on the duty of Government to provide a particular type of diplomatic
protection. These demands were, in the light of the Constitutional Court’s
judgment, ill-founded.22 A further demand (coupled with a threat of an urgent
court application) that Government should withhold all royalties due to the
Government of Lesotho under the treaty until the latter had agreed to mediate
or arbitrate was not only ill-founded but also presumptuous.

[53] I have at the outset of this judgment set out the advice given to the
President.23 From this (and further documentation attached to the answering
affidavit) it appears that the Government acted within the framework of the
principles of the Kaunda judgment: Government knew that the appellants did
not have a ‘right’ at international law; it recognised the fact that the
Constitution might impact on the matter; it recognised the appellants’ right to

22 The argument submitted at the end of the proceedings was that the appellants have an
unwritten constitutional right to diplomatic protection and that Government has an unwritten
duty to provide it. It is in conflict with the main submission that the appellants have a right to
submit a request and have a right that the request should be properly considered.
23 Because the President made the ultimate decision the preceding decisions were subsumed
and do not require separate consideration.

have a request considered; it was acutely aware of the appellants’ serious
attack on the Lesotho judiciary as evidenced by the first letter of request; and
it realised that it had to make a policy decision bearing in mind what it called
the sensitive relationship between the two countries. (Such decisions are
always political and the prime consideration remains the relationship with the
defendant state24 and the grounds for refusing to act may be unrelated to the
particular case.25) The Government obtained legal advice from different
persons; it held meetings with Mr van Zyl and his delegation of lawyers and
international legal experts; inter- and intra-departmental memoranda were
prepared; the Government considered the request carefully over a period of
time; and it made a policy decision – first by the Deputy Minister, then by the
Minister and, eventually, by the President himself who twice considered the
matter.

[54] Patel J dealt with the facts correctly and fairly there is no need to redo
a job done well.  Once again the appellants’ position shifted in the replying
affidavit. The justification for the new case was the fact that they did not have
the Government’s internal documents when the application was launched.
The answer to this is that had they bothered to follow Uniform rule 53, they
would have had the documents before the answering affidavit was filed; they
would have been entitled to amplify their founding affidavit; and the case
would have proceeded in an orderly manner and without complications.

[55] The appellants argue that the Government was not entitled to introduce
a ‘new’ reason during a judicial review, the new reason being the reliance on
policy considerations.  This reason was not mentioned to the appellants in the
preceding correspondence. The first answer is that had the appellants
followed rule 53, the Government would have disclosed the policy reason. The
second answer is that the case on which the appellants rely for the principle
that an organ of state is not entitled to raise new reasons for an administrative
decision in an answering affidavit was one where the new reasons were ex

24 Dugard International Law: A South African Perspective 3 ed at 290.
25 Kaunda v President of the RSA (2) 2004 (10) BCLR 1009 (CC) para 23.

post facto reasons and, accordingly, not the true reasons for the decision.26
The third answer is that the English line of cases27 on which the principle is
based applies where there is a statutory duty to give reasons (which is not the
case in this instance because the decision is not covered by PAJA). A court is
entitled to admit evidence that elucidates an administrative decision. In any
event, Government had sufficient reason for not disclosing the policy
considerations: international relations by their very nature are confidential.

[56] There are a number of subsidiary points that have no merit. For
instance, it is said that the evidence of Mr Pahad that the President received
and accepted advice amounts to hearsay. Then there are ‘new’ points, some
raised in the reply and others in the heads. These include allegations of mala
fides, a denial that the relations between the two countries are indeed
sensitive, complaints of unequal treatment and the violation of the right to
equal provision of diplomatic protection.

THE MANDAMUS SOUGHT

[57] The prayer for an order requiring Government to afford the appellants
diplomatic protection appears to be an independent prayer, and not
conditional on the success of the review application. Whether this relief could
be sought independently is an issue that need not be decided. At this stage of
the judgment I merely wish to mention that the founding affidavit did not spell
out what is required of Government although, as stated, the appellants
insisted in the correspondence that Government had to mediate or litigate in
international fora. The replying affidavit dealt with the matter in some detail. It
was no longer a matter of diplomatic protection – the appellants sought
‘effective’ diplomatic protection in line with the demand set out in the
correspondence.

26 Jicama 17 (Pty) Ltd v West Coast District Municipality 2006 (1) SA 116 (C) at para 12. The
court nevertheless dealt with the additional reasons and found them bad.
27 Discussed in R v Westminster City Council, ex parte Ermakov [1996] 2 All ER 302 (CA), a
case quoted in Jicama (supra).

[58] The notice of appeal filed in this Court recited the relief sought in the
notice of motion and, once again, gave no indication of what order was
sought. Appellants’ heads of argument were, however, of a different order.
Government must be ordered to ‘demand’ the payment of compensation.
Should this demand not be met, Government must ‘require’ of the
Government of Lesotho to submit to international arbitration or to adjudication
before the International Court of Justice. And, finally, if adequate
compensation is not paid within 90 days, the Government of the RSA must
pay these claims as constitutional damages.

[59] The order now sought is procedurally out of order (the claim for
constitutional damages was not anticipated in nor does it reasonably arise
from the founding affidavit); it flies in the face of the Kaunda principle that a
court cannot tell the Government how to conduct foreign affairs and make
diplomatic interventions; and it ignores the fact that the Government of
Lesotho has stated repeatedly and explicitly that it will not engage in
international dispute settlement (its consent is required for both arbitration and
engaging the International Court of Justice).

THE INTERFACE BETWEEN NATIONAL AND INTERNATIONAL LAW

[60] A major problem with the appellants’ case is the way they seamlessly
move between national and international law, depending on what is
convenient at any particular moment. They recognise that their application is
based on South African municipal law because international law does not
recognise a right of a national to diplomatic protection. However, when
arguing their entitlement under local law, they rely on international law
principles that deal with the power of states to provide diplomatic protection.
Although customary international law is part of our law,28 it is conceptually
difficult to understand how an international law rule dealing with one
relationship (state : state) can be transformed into a local rule regulating
another relationship (citizen : state).

28 Constitution s 232.

[61] One example suffices. The right to ask for diplomatic protection derives
from s 3 of the Constitution as an aspect of citizenship – and nothing else.29
How then can the Lesotho companies claim diplomatic protection from
Government? The appellants seek the answer in a proposal of the
International Law Commission30 that the state of nationality of shareholders
(the RSA) in a corporation is entitled to exercise protection ‘on behalf of’ such
shareholders (Mr van Zyl and the two Trusts) in the case of an injury to the
corporation (Swissbourgh) if the corporation had, at the time of the injury, the
nationality of the delinquent state (Lesotho) and incorporation under the ‘law’
of Lesotho was required as a precondition of doing business there. Even if
one accepts that this is a rule of international and, therefore, South African
law, I fail to see how this ‘rule’ can determine the corporate appellants’
entitlement to diplomatic protection under municipal law.

[62] Having said this, it remains necessary to consider whether Government
is entitled in terms of international law to grant the appellants diplomatic
protection. Unless the appellants are able to establish such a right vesting in
Government their application has to fail for this further reason, both in relation
to the review and the mandamus.

[63] The appellants argue that they only have to make out a prima facie
case of entitlement but this understates the position. An applicant must make
out a clear case for a mandamus or a review. Whether an applicant has a
right is a matter of substantive law and whether that right is clear depends on
evidence. But the test is not really germane for present purposes. In this case
the material and admissible facts are mainly common cause and the general
principle applies that in motion proceedings the case has to be determined on
the respondent’s version.

29 Gerhard Erasmus and Lyle Davidson ‘Do South African have a right to diplomatic
protection?’ (2000) 25 SAYIL 113 at 130.
30 ‘Seventh Report on Diplomatic Protection’ by John Dugard, Special Rapporteur (7 March
2006). The appellants laid great score on this report as setting out international law in spite of
the fact that it has not yet been adopted. In what follows I shall assume in favour of the
appellants the correctness of the supposition.

[64] It is necessary to state a number of trite international law principles in
order to understand the debate that follows.
• The appellants are not subjects at international law and have,
accordingly, no rights at international law.31
• Aliens in a foreign country are subject to the laws of that country to the
same extent as the nationals of that country.
• Property rights are determined by municipal law. The questions
whether any rights have been granted, exist or whether they have
terminated are all questions that have to be determined according to
local law:
‘In principle, the property rights and the contractual rights of individuals depend in
every State on municipal law and fall therefore more particularly within the jurisdiction
of municipal tribunals.’32
• There is no universally acceptable concept of property rights because
the Western concept based on Roman law principles does not apply
everywhere. According to African customary law, as expressed in the
Lesotho Constitution, land belongs to the nation, in this case the
Basotho Nation, and all interests in land are granted by the nation,
represented by the King and the Chiefs. Chinese law, for instance, has
its own complexities.33 The finding by Patel J that there is no support
for the thesis that international law recognises the protection of
property (at least in the Roman-Dutch legal sense) as a basic human
right  appears to have merit.34
• Contracts concluded between states and aliens, are also governed by
municipal law. 35
• Contracts between states and aliens may be ‘internationalised’, i.e., the
contracts may be made subject to international law principles and

31 Dugard International Law: A South African Perspective 3 ed and Booysen Principles of
International Trade Law as a Monistic System deal with most of the propositions that follow.
32 Panevezys-Saldutoskis Railway case (Estonia v Lithuania) 1939 PCIJ Reports Series A/B
no 76 at 18.
33 Cf International Marine Transport SA v MV ‘Le Cong’ and Guangzhou Ocean Shipping Co
(Case 080/05) unreported SCA judgment of 23 November 2005 at para 9.
34 Cf Annemarieke Vermeer-Künzli ‘A Matter of Interest: Diplomatic Protection and State
Responsibility Erga Omnes’ 46 (2007) International & Comparative Law Quarterly 550.
35 Serbian and Brazilian Loans Case [1929] PCIJ Series A No 20/21 at 41.

international adjudication by agreement, expressly or by necessary
implication. 36
• Aliens are entitled to request the country of their nationality to protect
them against a breach of international minimum standards such as the
breach of a basic human right. These basic rights are defined in
international human rights instruments:
‘It is an elementary principle of international law that a State is entitled to protect its
subject, when injured by acts contrary to international law committed by another
State, from which they have been unable to obtain satisfaction through ordinary
channels. By taking up the case of one of its subjects and by resorting to diplomatic
protection or international judicial proceedings on his behalf, a State is in reality
asserting its own rights ─ its rights to ensure, in the person of its subject, respect for
the rules of international law.’ 37
• A sending state that is willing to afford diplomatic protection can only do
so if: (a) the victim has the nationality of the sending state; (b) the
victim has exhausted local remedies in the errant jurisdiction; and (c)
an international delict whereby the victim has been injured by an
unlawful act imputable to the other state has been committed.38
• An international delict presupposes the existence of a right because
without a right there cannot be a wrong.39
• A state may confiscate or expropriate the property of an alien provided
it is in accordance with a law of general application, in the public
interest and prompt and adequate compensation is paid.
• The responsible state is under an obligation to make full reparation for
the injury caused by an internationally wrongful act.

INTERNATIONAL RIGHTS AND WRONGS

36 Revere Copper and Brass Inc v Overseas Private Investment Corp (1978) 56 ILR 258 at
275.
37 Mavrommatis Palestine Concessions 1924 PCIJ Series A No 2.
38 ‘Seventh Report on Diplomatic Protection’ art 1; Gerhard Erasmus and Lyle Davidson ‘Do
South African have a right to diplomatic protection?’ (2000) 25 SAYIL 113 at 130.
39 ‘Draft Articles on State Responsibility’ provisionally adopted by the International Law
Commission.

[65] Before there can be an international wrong there must be an
international right. In this case the appellants have to show that the Rampai
mineral lease was subject to international law, i.e., that it had been
internationalised. (Although I am limiting this part of the discussion to the
Rampai lease, what follows applies equally to the other four leases save for
the fact that their invalidity has not yet been determined by the Lesotho
courts.)

[66] As Patel J held, and is apparent from the terms of the lease discussed
earlier, the Rampai lease was entered into in Lesotho by the Government of
Lesotho with a Lesotho company under the Lesotho mining laws in respect of
Lesotho diamond rights. Therefore, its validity had to be determined under
Lesotho law by Lesotho courts.

[67] It is important to emphasise that this is not a case of expropriation or
confiscation of existing rights. The issue is whether rights had come into
existence according to local law that requires compliance with prescribed
formalities. All the authorities quoted by the appellants, and there were many,
deal with a situation where a state that had agreed not to amend its laws in
order to undo an international contract (so-called stabilisation clauses),
reneges on its undertaking. This is not such a case. A state is as much bound
by its own laws as are its citizens and I do not know of a principle whereby a
state, when entering into contract with a corporation with alien shareholders,
can ignore municipal law that governs that type of contract.40

[68] For the sake of completeness I proceed to consider whether the
Government of Lesotho had otherwise agreed to internationalise the
agreement, i.e., agreed that its validity would be determined according to
international law and by an international tribunal. This depends on an
interpretation of the lease, i.e., whether there are any tacit terms to that effect.

40 Cf the approach of the arbitrator, Sir Herbert Sisnett in the Shufeldt Claim (United States of
America v Guatemala II RIAA 1080.

[69] The appellants argue that the lease was not covered by the general
principle that agreements between governments and aliens are governed by
one or other municipal law41 because (they submit) these leases were long-
term international economic agreements or bi-lateral investment treaties.42
Such leases may by virtue of their ‘character’ import international law by
implication. In this regard they rely on the opinion of Prof Dupuy referred to in
the Revere Copper case.43

‘In this latter respect he refers to such characteristics of these agreements as their broad
subject matter, their introduction into developing countries of investments and technical
assistance, their importance in the development of the country concerned, their long duration
implying “close cooperation between the State and the contracting party” and “requiring
permanent installations as well as the acceptance of exclusive responsibilities by the
investor”, and the close association of the foreign contractor “with the realization of the
economic and social progress of the host country”. Because of the required cooperation
between the contracting party and the State “and the magnitude of the investments to which it
agreed”, the contractual nature of the legal relation “is intended to bring about an equilibrium
between the goal of the general interest sought by such relation and the profitability which is
necessary for the pursuit of the task entrusted to the private enterprise”.’

[70] The appellants’ argument is opportunistic. The lease had hardly any of
the characteristics referred to in the cited passage.  Apart from the fact that
the lease was of a relatively long duration, there was no ‘required cooperation’
between the parties; there was no obligation to introduce any foreign
investment (unless the R13 000 per annum can be regarded as foreign
investment) or technical assistance; there is no evidence that the lease was
important for the development of Lesotho; and there was no requirement of
permanent installations or the acceptance of exclusive responsibilities by
Swissbourgh.

41 Serbian and Brazilian Loans Case [1929] PCIJ Series A No 20/21 at 41.
42 See in general Wenhau Shan ‘Is Calvo Dead?’ 55 (2007) American Journal of Comparative
Law 123. The appellants have mentioned concessions as another exception. Exactly what
must be understood under a concession is unclear. It may refer to a unilateral administrative
grant, which is not the case in this instance: Amco-Asia Corp v Republic of Indonesia 1985
(24) ILM 1022 at 1034.
43 Revere Copper and Brass Inc v Overseas Private Investment Corp (1978) 56 ILR 258 at
275.

[71] Because the Rampai lease was invalid ab initio,44 whatever the
Government of Lesotho did by cancellation or revocation to undo the putative
lease was without effect because there was nothing to undo.  The acts of the
Government of Lesotho at the time may have been wrong in the moral sense
but they were not wrongful (at least not with full knowledge of the facts).

[72] The appellants furthermore rely on the arbitration clause in the lease.
According to the argument the clause, in spite of its minimalist terms, has far-
reaching consequences: because it does not say that Lesotho law applies and
because it does not say that the arbitration was to be a local one, it follows
from the fact that Swissbourgh had foreign shareholders that international law
applied and that the arbitration had to be an international one. The argument
need merely be stated to be rejected.

[73] A related argument concerns the Convention on the Settlement of
Investment Disputes between States and Nationals of other States (the
Washington Convention of 18 March 1965), referred to as ICSID. The
Government of Lesotho acceded to this Convention and enacted the
Arbitration (International Investment Disputes) Act 23 of 1974. The appellants
argue that because of this the Government of Lesotho is bound to submit the
dispute to ICSID arbitration. The Convention (art 25) provides that the
jurisdiction of this arbitral court ‘extends to any legal dispute arising directly
out of an investment, between a Contracting State . . . and a national of
another Contracting State, which the parties to the dispute consent in writing
to submit to the Centre’.

[74] Without delving any deeper into this murky argument it suffices to state
that South Africa is not ‘another contracting party’ to the Convention;45 that the
lease was not an investment contract; that Swissbourgh was not a South

44 Swissbourgh Diamond Mines (Pty) Ltd v LHDA 2000 Lesotho LR 432 (CA).
45 The ‘failure’ of Government to accede to the Convention became another bone of
contention. The appellants argue that this violates their right to access to courts or other
tribunals under s 34 of the Constitution. Apart from the fact that the respondents were never
called upon to justify this neglect the argument has no merit. The appellants had their days in
court. They lost. Now they want another court. That is not what the Constitution guarantees.

African national; and that the parties did not agree – in writing or otherwise –
to submit to this form of arbitration.

[75] There remains the issue concerning the so-called extension leases.
According to Mr van Zyl, the Government of Lesotho undertook to extend the
terms of the four leases in settlement of their dispute. He, in turn, agreed to
cancel the Rampai lease. The extension leases were also to be subject to the
provisions of the Minerals Rights Act and required the same formalities as the
original leases. The extension leases were never signed. The Government of
Lesotho did not sign, why is irrelevant. Mr van Zyl says that he refused to sign
because someone demanded a bribe in spite of an anti-corruption clause in
the draft agreement. His refusal was noble but how this entitles him to relief in
relation to non-existent leases is not understood. A promise to contract is not
a contract.46

[76] I accordingly conclude that the appellants did not establish that they
had any rights and, accordingly, that no international wrong could have been
committed against them which would have entitled the Government to afford
diplomatic protection. It is, however, necessary to say something about the
appellants’ subtext. Their real complaint is that the Rampai judgment
amounted to an expropriation without compensation committed by an organ of
state (the courts) for which the Government of Lesotho was responsible; and
this was an international wrong because of a denial of justice by the Lesotho
courts.

[77] I have already shown that this was not part of the appellants’ case and
that the underlying requirement of the existence of an international right is
absent. As the appellants correctly accept, they have to show a fundamental
failure of justice.47 The main thrust of the argument was, however, directed at
the merits of the judgment and because the appellants believe that the courts
have reached a wrong conclusion they assume that the courts must have

46 Cf Ondombo Beleggings (Edms) Bpk v Minister of Mineral and Energy Affairs 1991 (4) SA
718 (A).
47 Loewen v USA (ICSID case ARB (AF)/98/3) (2003) 42 ILM 811.

been biased, another fanciful proposition. But there are other attacks, which I
shall mention briefly to illustrate the lack of merit of the appellants’ case.

[78] They allege that the Court of Appeal was manipulated because it
consisted of acting judges and the permanent judges of the court did not sit in
the matter.48 Because this issue was not raised on the papers it was not
possible for Government to respond with evidence. Nevertheless, the
appellants knew (according to Mr van Zyl) a month in advance, of the
composition of the bench. They did not complain. If they had a ground for
complaint they were obliged to raise it then. They chose not to do so, maybe
because four of the five judges were retired South African judges. (The fifth,
according to the published report, was a permanent Lesotho appeal judge.)
As far as the permanent judges are concerned, we know that Mr van Zyl was
of the view that the President of the court was disqualified to hear the
matter.49 Another member of the court (as appears from the law reports) acted
as counsel for the Government of Lesotho in the revocation appeal and was
therefore disqualified to sit.50  There may have been similar explanations why
the other two judges did not sit.

[79] The appellants also complain about the amount of security they had to
provide for the Rampai appeal and say that it was many times higher than the
amount set for the revocation appeal. We do not know what evidence was
before that court in relation to both matters but one could guess that security
for an appeal on a 58-day trial and one for an appeal on an application could
differ materially. In any event, the determination of security did not lead to a

48 The Court of Appeal judges are mostly part-time judges drawn from the ranks of retired
South African judges and practicing advocates. On the appointment of acting judges to hear
specific cases see Morné Olivier ‘The Appointment of Acting Judges in South Africa and
Lesotho’ 27 (2006) Obiter 554.
49 This is based on the allegation that the President, when he sat on the revocation appeal,
was a director of the Development Bank of SA. The complaint is that he wrote the judgment
dealing with the interdict (where Swissbourgh was not successful) but there is no complaint
about him concurring with the favourable judgment on the invalidity of the revocation order.
Swissbourgh had a local remedy which was not pursued: R v Bow Street Metropolitan
Stipendiary Magistrate, ex parte Pinochet Ugarte (no 2) [1999] 1 All ER 577 (HL).
50 This illustrates the importance of procedural rules and the danger of relying on Mr van Zyl’s
assertions, whether on affidavit, in the annexed documents or during argument.

denial of justice because the appellants were able to provide and did provide
security.

[80] The third point under this heading relates to the fact that the appellants
allege that they discovered new evidence after judgment. They wrote a letter
to the President of the court, insisting that he revoke the judgment. His refusal
is said to be yet further evidence of the bias of the Lesotho courts.

NATIONALITY51

[81] I have therefore found that Government is not entitled to intervene on
behalf of the appellants because no international delict had been committed.
The claim of the corporate appellants and the trusts has to fail on an
additional ground, namely the issue of nationality or citizenship52

[82] It is necessary to distinguish between an international wrongful act that
causes ‘direct injury to the rights of shareholders as such’ (in which event the
state of nationality of the shareholders is entitled to exercise diplomatic
protection in respect of its nationals) in contradistinction to injury to the rights
‘of the corporation itself’ (where that state is not entitled to act on behalf of its
national shareholders). This case concerns a delict against the companies
and not one against the shareholders ‘as such’.53

[83] As mentioned earlier, the appellants rely on draft art 11 contained in
the International Law Commission report.  It bears quoting:

‘The State of nationality of the shareholders in a corporation shall not be entitled to exercise
diplomatic protection on behalf of such shareholders in the case of an injury to the corporation
unless:

(a)
. . .

51 Cf Nottebohm case (Liechtenstein v Guatemala) (1955) 22 ILR 349 (ICJ).
52 ‘Seventh Report on Diplomatic Protection’ art 3 and 9. FS Dunn The Protection of
Nationals: A Study in the Application of International Law (1932) 27-28.
53 ‘Seventh Report on Diplomatic Protection’ art 12. See also Standard Oil Co Tanker (1926)
2 RIAA 781 at 782 and Agrotexim v Greece [1996] 21 ECRR 250 (ECHR).

(b)
The corporation had, at the time of the injury, the nationality of the State alleged to be
responsible for causing injury, and incorporation under the law of the latter State was required
by it as a precondition for doing business there.’

[84] The shareholder appellants rely on art 11 because the Government of
Lesotho required the incorporation of Swissbourgh in Lesotho as a
precondition for entering into the mining leases. Patel J, however, found that
art 11 does not reflect customary international law – it is but a
recommendation that awaits acceptance by the international community. I
tend to agree with his reasoning, which is partly based on the Barcelona
Traction case,54 but do not find it necessary to decide the issue because the
shareholders’ claim fails for reasons stated and that follow.

[85] The corporate appellants cannot rely on the rule as formulated. The
rule is expressed in favour of shareholders who are nationals of the sending
state, and not in favour of the corporation itself. Article 11 is not and does not
purport to be an exception to the nationality rule (art 3). (It is different with
stateless persons and refugees; they are expressly stated to be exceptions to
art 3.)

[86] Another aspect of the nationality rule is the continuing nationality rule.
According to the amended proposal of the International Law Commission, a
state is only entitled to exercise diplomatic protection in respect of a person
who was a national of that state continuously from the date of the injury to
date of claim.55 As Patel J held, the cession by the corporate appellants to
Burmilla Trust disqualified both the corporate appellants and the Trust from
diplomatic protection.56  The whole object of diplomatic protection is to protect

54 The Barcelona Traction, Light and Power Co Ltd (Belgium v Spain) 1970 ICJ 3 to which
must now be added Case concerning Ahmadou Sadio Diallo (Republic of Guinea v
Democratic Republic of the Congo) Preliminary Objections 2007 ICJ General List no 103.
55 ‘Seventh Report on Diplomatic Protection’ art 5 comments. Loewen v USA (ICSID case no
ARB(AF)/98/3) (2003) 42 ILM 811.
56 The appellants rely on a report of the International Law Association (2006) according to
which the rule may be dispensed with ‘in the context of global and financial markets’. Why this
possible exception is mentioned I fail to understand. The appellants also argue that the rule

a national against a wrong committed against that national. Someone who has
not been wronged cannot, by virtue of a cession, become a victim. The
cessionary may be entitled to the proceeds of any claim but that does not
transform the cessionary into a victim. Likewise, a cedent cannot be entitled to
diplomatic protection in relation to a right which that person no longer holds. It
follows from this that the nationality rule disqualified the Government from
affording any diplomatic protection to all the appellants save, possibly, Mr van
Zyl and the family trust.

EXHAUSTION OF LOCAL REMEDIES

[87] There is yet another reason why Government is not entitled to grant the
appellants diplomatic protection. A state may not bring a claim for diplomatic
protection before the injured person has exhausted all local legal remedies
unless these do not provide a reasonable effective redress or there is undue
delay attributable to the state concerned.57.

[88] The wrong, as defined in the founding affidavit, was the cancellation
and revocation of the mining leases without payment of compensation: initially
the Commissioner of Mines cancelled the leases and they were then
cancelled by means of the revocation order. (The Rampai judgment did not
cancel any lease; it merely held that the Rampai lease was void from the
beginning.)

[89] It is common cause that these two acts were wrongful. This the
Lesotho courts have held and the Government of Lesotho conceded in
relation to the acts of the Commissioner and accepted by abiding by the
revocation judgment. It means that the Lesotho courts have rectified the
wrongs by declaring the acts void and without effect. One of the reasons for
the existence of the ‘local remedy’ rule is that it is necessary

does not apply to a continuing wrong. There was no continuing wrong in this case although
there may have been a series of wrongs.
57 ‘Seventh Report on Diplomatic Protection’ arts 14 and 16. The other exceptions are not
relevant. Panevezys-Saldutoskis Railway case (Estonia v Lithuania) 1939 PCIJ Reports
Series A/B no 76. This rule presupposes the existence of an international delict and
compliance with the nationality rule.

‘that the State where the violation occurred should have an opportunity to redress it by its own
means, within the framework of its own domestic legal system.’58

If this principle is applied the violation by the Government of Lesotho has been
redressed within the framework of its domestic legal system. The appellants
are not entitled to hark back, resurrect the past and ignore the supervening
facts.

[90] If the cancellation and revocation of the four leases was illegal,
Swissbourgh would in principle be entitled to damages. As mentioned,
Swissbourgh cancelled these leases and instituted action for breach of
contract against the Government of Lesotho but the action has not been
pursued by Swissbourgh.

[91] The appellants argue that their acceptance of the repudiation must be
discounted because they were forced by the actions of the Government of
Lesotho to cancel the four leases. The argument is disingenuous because if
that were the case they would also have had to cancel the Rampai lease,
something they studiously avoided doing. Their second argument is that they
cannot succeed in the case because of the Court of Appeal judgment on the
Rampai lease. The argument lacks substance: that judgment is not res
judicata in respect of the four leases and the appellants are entitled to use the
‘new’ evidence, which they say they have since uncovered, to show that the
Rampai judgment was wrongly decided. Furthermore, if they never had any
valid mineral rights (on the supposition that Rampai was decided correctly)
they can hardly have any cause of complaint.

[92] Another claim to which their request relates is the claim for damages
for the loss and destruction of Swissbourgh’s plant. The cause of this is said
(without any evidence) to have been unlawful acts committed by servants or

58 Interhandel Case (Switzerland v United States) 1959 ICJ 6 at 27 quoted with approval in
the Case concerning Ahmadou Sadio Diallo (Republic of Guinea v Democratic Republic of the
Congo) Preliminary Objections 2007 ICJ General List no 103 at para 42.

agents of the Government of Lesotho. This cause of action, as mentioned,
forms part of the litigation, which has been pending in Lesotho for more than
ten years. There is no valid explanation why these actions have not been
pursued and local remedies exhausted.

CONCLUSION

[93] The conclusion is therefore that the appeal must be dismissed with
costs.  The employment by the respondents of three counsel was fully
justified.

[94] ORDER: The appeal is dismissed with costs, including the costs
consequent on the employment of three counsel.

__________________________
L T C HARMS
ACTING DEPUTY PRESIDENT

AGREE:

HEHER JA
CACHALIA JA
HURT AJA
MHLANTLA AJA

ANNEX:
Letter from the attorneys of the Government of Lesotho to the attorneys of the
appellants dated 19 November 2001.

Dear Sir,

Re:
SETTLEMENT OFFER IN THE MATTER BETWEEN THE STATE OF LESOTHO
AND THE SWISSBOURGH GROUP, JOSIAS VAN ZYL, THE JOSIAS VAN ZYL
FAMILY TRUST AND THE BURMILLA TRUST

1.
Introduction

We have now had an opportunity to study the voluminous documents in which your
clients’ offer of settlement has been set out and motivated and to consult with our client in that
regard. The documents occupy some 1600 pages in all and range from the two-page
document left by your clients’ counsel, Mr H Louw, with the Deputy Attorney-General, Mr K R
K Tampi, on or about 2 May, 2001, in which payment of M300 000,00 plus costs, coupled with
some conditions is called for;  to the “Financial Claims against the Kingdom of Lesotho and
Claims in respect of the Extension Leases” handed to Mr Tampi on  3 May, 2001, and five
volumes of attachments thereto subsequently received;  the “Proposed All in Settlement”,
dated 21 May 2001 and signed by Mr Louw, claiming M79 941 943,00, plus interest thereon;
and, finally, the Supplementary Memorandum of 6 August 2001, explaining why the dispute
must be settled, ─ or adjudicated upon if settlement is not reached, ─ according to the rules of
Public International Law.

No useful purpose will be served, in view of the decision on the offer which has been
reached by our client, in debating the various arguments advanced on behalf of your clients
as to their entitlement to compensation. But there are a number of premises put forward for
such arguments which are, to the knowledge of your clients, so fundamentally inaccurate that
we can only believe that they are intended for readers who do not have knowledge of the
facts, and must be corrected:

2.
Expropriation without compensation

The oft repeated justification for the claims made on behalf of your clients is that
their rights were expropriated without the payment of compensation. The
following are the facts in this regard:

It is correct that the Revocation of Specified Mining Leases Order, No 7 of 1992,
purported to deprive SDM and its associated companies, without compensation, of their rights
in the mining leases they held. That legislation was passed by the military government which
succeeded the military government of General Justin Lekhanya which had granted the leases.
However, that legislation was struck down as unlawful by the High Court of Lesotho whose
judgment was confirmed by the Lesotho Court of Appeal on 13 January, 1995.

By the time the courts’ judgments were delivered SDM and its subsidiaries, (save for
Rampai Diamonds (Pty) Limited) had already, on 15 March, 1993, cancelled four of the
mining lease agreements pertaining to them on the grounds that the Government of Lesotho
(“GOL”) had unlawfully repudiated its obligations under such agreements, inter alia, by
passing the Revocation Order aforementioned.

Consequently, as far as four of the five leases in question are concerned there is no
longer any question of expropriation without compensation. Expropriation by the Revocation
Order was declared unlawful and there has been no subsequent expropriation. It is SDM and
its subsidiary companies who terminated the leases by electing to cancel them and claim
damages (as to which, see paragraph 3 below).

As to the Rampai lease, this was indeed, subsequent to the Revocation Order,
expropriated. It lies largely in the catchment area of the Katse Dam and was expropriated
under provisions providing for expropriation against payment of full compensation, appearing
in the Lesotho Highlands Development Authority (Amendment) Act, No 5 of 1995. (It was to
the introduction of this legislation that the Minister of Natural Resources was referring in the
Memorandum to Cabinet quoted at pp 18/19 of your clients’ memorandum dated 6 August
2001).

However, that Act provides for compensation (by LHDA) only to the holder of a “duly
granted and executed mineral right registered in terms of the Deeds Registry Act, 1967”.
Consequently the finding of the High Court and the Court of Appeal that the Rampai lease
was not lawfully granted prevents SDM and Rampai from claiming compensation from LHDA.
But it is not without remedy (see paragraph 4.3 below).

3.
Claimants have exhausted their remedies in the courts of Lesotho

In paragraph 3.8 of your clients’ Supplementary Memorandum of 6 August 2001 it
is said:

“This also demonstrates that all judicial remedies have been exhausted. This
requirement for diplomatic protection to be exercised has been met.”

The averment that Claimants have exhausted their remedies in the courts of
Lesotho is exactly contrary to the facts.

3.1
As to the Motsoku, Patisang, Orange and Motete lease areas, under Case
No CIV/T/213/96, SDM and the four subsidiaries just mentioned instituted
action against the Government of Lesotho for damages amounting, in all, to
M958 702 281,00 on 20 May 1996.

3.2
Further particulars to the claim were requested and supplied, and a Plea
was filed on behalf of Defendant on 9 October, 1996. The pleadings have
been closed and the matter is ripe for hearing.

4.
As to the Rampai lease:

On 23 July, 1996, SDM and Rampai filed a claim for compensation under the provisions
of section 46A of the LHDA Order, as amended by Act 6 of 1995, in the amount of M521 846
548,00.

As pointed out in paragraph 2.5 above the provision for compensation by LHDA applies
only to a lease duly granted an records have held that the lease in question was not lawfully
granted to SDM or Rampai.

However, there is nothing to prevent SDM and Rampai from instituting action against
GOL in the courts of Lesotho, claiming such damages as are alleged to have been suffered.

5.
Loss of confidence in the courts of Lesotho

It is the courts of Lesotho which struck down, at the instance of your clients, the
legislation which is repeatedly invoked as justification for turning to other fora for
assistance, namely the Revocation of Specified Mining Leases Order, No 7 of
1992.

In a memorandum submitted to the Government of South Africa by SDM (before the
result of its application to strike down the Revocation Order was known) and quoted in your
clients’ Supplementary Memorandum on settlement of 6 August 2001 it is said that:

“SDM has not yet exhausted the available judicial remedies in
Lesotho. As the Lesotho Court of Appeal has a high reputation both
for competence and independence it cannot seriously be suggested
that if the application pending before Cullinan, CJ, fails, it would be
“obviously futile” to appeal against such decision.”

Of course, not only were your clients successful before Cullinan, CJ, but
the Court of Appeal upheld his judgment.

Now that a judgment goes the other way, it is said by your clients that the Judges of
Appeal were biased and their findings one-sided. In correspondence Mr Van Zyl has gone
further, insulting the President of the Court of Appeal and the present Chief Justice, who set
aside the Rampai lease and whose decision was confirmed on appeal.

There is no foundation to these scurrilous remarks. The five judges who sat on the
appeal, four of whom have held high judicial office in other Southern African countries and do
not live in Lesotho, behaved throughout with perfect propriety. The distasteful accusations
which you have seen fit to forward in this regard are rejected.

6.
The settlement offer

Our client has carefully considered the settlement offer presented to it and has
decided that it is not prepared to accept it. Naturally, the factual distortions dealt
with above have contributed to that decision. Some additional considerations are
mentioned below.

The financial averments upon which the offer is based:

Fundamental to the offer of settlement is that your clients have spent in the
region of M18 million in developing the lease areas. Examination of the
figures put forward in that regard, and knowledge of what occurred in the
lease areas, gives rise to what appears to our client to be a well-founded
suspicion that they are fabricated. No original vouchers bearing witness to
the expenditure allegedly incurred have ever been presented. The figures
are all taken from financial statements prepared in respect of each
company by a firm of chartered accountants, Messrs Glutz and Hlasa,
practising in Maseru.

However, it is not Messrs Glutz and Hlasa who substantiate the correctness
of the statements, but a Mr A N Walker, a chartered accountant conducting
a one-man practice in the town of Potchefstroom in the Republic of South
Africa. Mr Walker states that he has verified your clients’ not expenditure
“from the audited accounts prepared by Messrs Glutz and Hlasa”. That, in
our
client’s
respectful
view,
hardly
constitutes
reliable
impartial
substantiation of the claim.

The reliability of Mr J van Zyl, the chief source of information for the claim:

The impression is created throughout the submissions made on behalf of
your clients that one is dealing here with people and bodies of substance
who have contributed very large amounts of money to mining development
in Lesotho. That is misleading.

The driving and controlling force behind all the Plaintiffs is Mr Josias van
Zyl. In the papers opposing the application for an interdict by SDM some
idea of the chequered career of Mr Van Zyl is provided, together with
details of the trail of debt which his enterprises have left. Our clients have
reason to doubt that the millions of Maloti it is claimed were spent were
indeed either spent or, to the extent that expenditure may have been
incurred, paid for by any of the Claimants. Mr Van Zyl’s word is not
considered acceptable and it is felt that the only way to test the essentially
unsupported contentions about expenditure upon which your clients’ claims
rest is by reference to proper documentary proof through the process of
discovery for which the Court Rules provide, and by cross-examination of
the witnesses who are called to substantiate them, chief of whom must be
Mr Van Zyl.

Defences to the claim:

The submissions motivating the settlement are based on the premise that
no defence exists to the claims. That is not so. On the contrary, the latest
information regarding the cession of the claims to the Burmilla Trust give
rise to a further defence which will be raised in an amendment to the Plea
in the aforementioned action instituted by SDM and four of its subsidiaries.

Government’s resistance to corruption:

This elected Government has demonstrated, by word and deed, that it is
implacably opposed to corruption. The manner in which the leases giving
rise to your clients’ claims were awarded, especially that in the Rampai
area, by the Military Government of General Lekhanya give rise to grave
suspicion of impropriety. Not only were none of the area chiefs consulted
(the reason why the lease was set aside) but General Lekhanya did not
provide a satisfactory explanation, when called as your clients’ witness, as
to how his government came to award a mining lease for, effectively, 15

years, in an area which was to be flooded in five years’ time. On the
information available to Government, no mining was done in that area until
work on the Katse dam was well advanced, when there was an attempt to
hold Government to ransom by a court interdict.

By the same token, while huge amounts are claimed for expenses and lost
profits, no cent was ever paid by way of royalties to Government by any of
your clients, who alleged that no profit had been made and, indeed, that the
leases granted to them could not be viably mined without further rights to
large tracts of land.

It is true that Government is not in possession of hard proof of corruption.
But it is felt that the circumstances giving rise to these claims are such that
they should be resisted and thoroughly tested. And it is Government’s view
that the best way to test them is by subjecting them to scrutiny in open
court.

7.
We have dealt herein with only the most glaring examples of misinformation
contained in the documents put forward and some of the reasons for rejecting the
proposals therein. As part of settlement negotiations, what is contained in that
offer and this response is privileged from disclosure in further proceedings. But in
case your clients should not abide by that rule of law we record that apart from
what is set out herein, none of the averments made on your clients’ behalf in the
documents in which the settlement offer is contained are admitted.

8.
Finally, as to the contention that the claims will be pursued in other fora, we are
instructed to advise you that if that should occur our client will resist any such
attempt to the extent that it may be advised that that is necessary. It is denied
that any other forum has jurisdiction in the disputes which exist. Your clients’
remedies lie in pursuing the claims already instituted and, if so advised, instituting
fresh claims in the courts of Lesotho. (Subject, of course, to our client’s right to
raise whatever defences are available to it.)
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:  The Registrar, Supreme Court of Appeal
Date:  20 September 2007
Status: Immediate

Please note that the media summary is intended for the benefit of the media and does not form
part of the judgment of the Supreme Court of Appeal

J VAN ZYL AND OTHERS v THE GOVERNMENT OF THE RSA
The appeal related to a claim for diplomatic protection, i.e., action by one state against another
state in respect of an injury to the person or property of a national of the former state that has
been caused by an international delict that is attributable to the latter state.

The appellants requested the Government of the RSA to provide them with diplomatic
protection against the Government of Lesotho. The international delict on which they relied was
the cancellation and revocation of five mineral leases that had been granted by the Government
of Lesotho.

The President of the RSA was advised that the Government was under no obligation to afford
diplomatic protection to the appellants; that any decision to intervene would involve a policy and
not a legal decision; that the decision is the sole prerogative of the Government; that the
disputes between the appellants and the Government of Lesotho had been decided by the
Lesotho courts; that mediation or intervention by the Government would imply a lack of faith in
the judicial system of a sovereign state; and that diplomatic intervention would set an unhealthy
precedent. The President in the result refused to accede to the appellants’ request and they
were informed that they were not, in the circumstances of the case, entitled to diplomatic
protection.

Dissatisfied with this ruling, the appellants sought to review the Government’s decision. They
also applied for an order directing the Government ‘to take all steps necessary to vindicate the
rights of the applicants, including but not limited to providing diplomatic protection.’ The
application was heard by Patel J in the Pretoria High Court. He dismissed the application.

The judgment holds that the appellants have no right under South African law to diplomatic
protection, especially not in respect of protection of a particular kind. Nationals have a right to
request Government to consider diplomatic protection and Government has a duty to consider it
rationally. Government received the request, considered the matter properly and decided to
decline to act on rational grounds. The judgment further holds that the Government was not
entitled under international law to afford the appellants diplomatic protection under the particular
circumstances of the case. Accordingly, the appeal was dismissed with costs.
---ends---