The owner of Cape Town-based Redline, Nicolaas van den Bergh, a manufacturer of breathalysers, is suing the French government for nearly R250m excluding interest for losses suffered by the company after the European economic powerhouse withdrew a decree that would have seen the group sell millions of its product in the country.
The French government issued a decree in 2012 making it mandatory for every motor vehicle driver in the country to possess an unused portable testing device capable of analysing a person’s breath to determine his/her blood alcohol level, as part of its efforts to clamp down on drink-driving.
The government then sought to secure suppliers of the testing, with Redline coming into the picture as it was one of only two producers in the world of the sort of breathalysers that were required by the French government.
Redline and French government officials then, according to the company, entered into an agreement that it would supply at least 55-million breathalysers in the 2012 calendar year to be sold in France.
When the decree faced resistance from the French public and the government failed to fine non-compliant drivers, sales of the breathalysers plunged as the government announced an indefinite postponement of payment of a fine for not having unused breathalysers in a vehicle while driving.
Van den Bergh has told the Western Cape High Court that due to the actions of the French government, Redline lost R244m, made up of loss of profits, the personal liabilities he incurred having stood as surety for Redline, and the loss of dividends he suffered given the demise of Redline.
The French government told the high court that the enactment and implementation (or lack thereof) of the decree by the government is an exercise of sovereign authority and is immune from the jurisdiction of a SA court because the government was exercising its sovereign authority.
The judge agreed, saying the French government has immunity and the court does not have jurisdiction to entertain Van den Bergh’s claim against it.
“It seems to me that, in essence, what the plaintiff is claiming is that it supplied breathalysers to the defendant for which it was paid but that defendant reneged on its obligation to ensure that the decree would remain in force and contain a penalty provision for noncompliance in perpetuity,” the judgment reads.
“Plaintiff has not expressly categorised the type of commercial transaction that he seeks to enforce but, in my view, even if what he has set out in his particulars of claim could be construed as some sort of supply and/or distribution agreement, the transaction as pleaded by plaintiff is substantially, and predominantly, political or governmental in character. It is not a ‘commercial transaction’ even though it may incorporate, or possibly incorporate, some elements of commercial activity.”
The court gave Van Den Bergh two weeks to amend his pleadings “should he be able to establish any facts upon which this court could find that there is an exception to the immunity of the defendant in terms of section 4 of the Foreign States Immunities Act 87 of 1991”.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.