AfGTI Case Alert 6 : Wina Njalo(RF) Proprietary Limited v Minister of Trade, Industry and Competition and Others (2025/039592) [2025] ZAGPPHC 517 (21 May 2025)
The facts
The focus of this case summary is on the international trade aspects. The applicant, Wina Njalo (RF) Proprietary [Wina Njalo] sought relief on an urgent basis against the Minister of Trade, Industry and Competition, to declare unconstitutional, unlawful and invalid, and to review and set aside the failure of the Minister to decide to announce the successful applicant of the National Lottery. Furthermore, the court was asked to declare unconstitutional, unlawful, and invalid, and review and set aside the Minister’s decisions to extend the bid validity period for a further 12 months and to issue a Request for Proposal [RFP] to operate the National Lottery on a temporary licence for 12 months. The Minister was also required to announce the successful applicant by 9 May 2025, negotiate and conclude a License Agreement with the successful Applicant, and issue the Fourth National Lottery Licence to the successful Applicant by no later than 31 May 2025.
It was undisputed that Ithuba Holdings was the current licence holder with its licence to expire on 31 May 2025. A new licence [the Fourth Licence] needed to be issued, and to speed up the process, the previous Minister, in two newspapers in early August, called on interested parties to apply in writing for a copy of the RFP and invitation to a briefing session. The RFP was made available for purchase on 31 August 2023.
The bid evaluation, adjudication, and independent auditing had to be concluded by 31 August 2024. The Minister would then announce the successful bidder by 2 September 2024. The licence agreement was to be signed by 13 December 2024, and the handover period from Ithuba Holdings would run from 1 June 2025.
On 3 February 2024, the NLC received eight applications in response to the RFP. On 18 September 2024, the Evaluation Committee’s report was submitted to the NLC. The NLC Board completed its adjudication and reported to the Minister only on 11 October 2024. On the same day, the Minister appointed a Quality Assessment Committee [QAC]. On 22 and 25 November 2024, the Minister consulted with the NLC Board in respect of the Fourth License process. On 20 December 2024, the Minister consulted with the Board of the NLC and stated that he had not made up his mind in respect of the successful applicant. He also asked for wisdom on the best mechanism to ensure the continued provisional running of the National Lottery and the plan to complete the licensing process.
On 21 December 2024, the Minister issued a media statement that stated he was aware that the country and the applicants for the licence were keenly awaiting his decision, but “he was mindful of the complexity and gravity of the issues that must be considered”. On 10 February 2025, the NLC addressed a letter to the Minister, explaining that its advisors had concluded that the period remaining between January 2025 and June 2025 was inadequate to allow for the proper selection of a successful applicant, the negotiation and finalisation of a license agreement, and the necessary transitional arrangements for the new operator to assume responsibility for the National Lottery by 1 June 2025. Thus, the NLC advised the Minister of numerous avenues available to him, identifying the issuance of a temporary license as the best option and inevitable under the circumstances. The NLC also needed direction from the Minister in respect of the anticipated timing of his decision on the award of the Fourth Lottery License and recommended an extension of the bid validity period for the Fourth License by one year, until 31 May 2026, to allow for the proper finalisation of the licensing process.
On 19 February 2025, the Minister notified the parties that he intended to extend the bid validity period and wanted Wina Njalo’s consent to the extension. On 24 February 2025, Wina Njalo informed the Minister to make an informed decision; it needed clarity on the Minister’s reasons for the proposed extension. The Minister responded on 4 March 2024 that he had several issues of concern and that it would be “inappropriate to disclose these issues now as disclosure would prejudice the proper adjudication of the bids.” On the same day, 4 March 2024, the temporary licence RFP was published.
On 5 March 2025, Wina Njalo again wrote to the Minister, taking note of his failure to provide reasons, and argued that the temporary licence RFP’s terms afforded only the current licence holder, Ithuba Holdings, the opportunity to be a successful bidder. The Minister responded to this letter on 11 March 2025, explaining that the reasons for his decision were those written in the earlier letter of 4 March 2025, and these constituted his full reasons for seeking an extension of 12 months. The Minister stated that he would consider Wina Njalo’s concerns before any decision is made regarding the temporary licence RFP.
On 27 March 2025, the Minister indicated that he would announce a successful applicant by “a target date” of 25 May 2025, subject to successful negotiations on the terms of the agreement. On 30 March 2025, Wina Njalo proposed a consent order to formalise the Minister’s new target date to avoid the urgent hearing. On 1 April 2025, the Minister responded to Wina Njalo, stating that he could not provide an unequivocal undertaking. On 24 March 2025, Wina Njalo launched the urgent application.
Findings of the court
The court found that in terms of section 1 of PAJA, declining to issue a licence, or to make an award, or refusing to decide, all constitute administrative action. In terms of the empowering Act and the Constitution, the Minister must award the Fourth Lottery; if he fails to do so within the time frames of the RFP, he would be violating his constitutional duty and, at the very least, he is required to provide reasons for this delay. He did not. The reason for this was that such information was confidential.
The court then explained that the Minister did not explain that if confidentiality were crucial, why a confidentiality regime could not be adopted. This practice has become commonplace as shown by the Supreme Court of Appeal in Caxton and CTP Publishers and Printers Limited v Novus Holdings Limited [2022] 2 All SA 299 (SCA). Allowing the production of confidential documents subject to proper limits is now an established principle in our law. As held by the court in Tetra Mobile Radio (Pty) Ltd v Member of the Executive Council of the Department of Works, a ‘fair balance could be achieved between the appellant’s right of access to documentation necessary for prosecuting its appeal, on the one hand, and the third respondent’s right to confidentiality, on the other.’ In the international trade context, the decision of this court in Bridon International Gmbh v International Trade Administration Commission endorsed the adoption of the confidentiality regime. The Minister did not avail justifiable reasons for the delay in awarding the licence and the Minister was required to set out “full and frank explanations” that would enable a court to review their adequacy as a facet of reasonableness.
The court explained that the Minister has a constitutional mandate to exercise his powers rationally and with a proper legal basis. The lack of reasons violates the Constitution’s requirements of arbitrary action and established arbitrariness. The Minister is also bound by the values set out in section 195 of the Constitution of transparency and accountability. The Minister also contravened section 237 of the Constitution in that he has not diligently and without delay performed his constitutional obligations.
Thus, the court held that the delay in the non-award decision and the failure to provide reasons meant that the Minister violated the PAJA. The same facts lead to the conclusion that the Minister did not comply with his constitutional duty. On either basis, the failure to decide must under s172(1)(a) of the Constitution, must be declared to be invalid. On this finding, Wina Njalo has rights that are affected, and it could bring this review.