Tanzania’s Pula Graphite Partners, which is embroiled in a $195m (R3.2bn) lawsuit with companies linked to billionaire Patrice Motsepe, has raised concerns about their view that only South African courts have jurisdiction and are best-placed to consider the matter.
Pula Graphite, a subsidiary of the Pula Group, chaired by former US ambassador to Tanzania Charles Stith, took legal action against Motsepe, African Rainbow Capital (ARC), African Rainbow Minerals (ARM) and ARCH Sustainable Resources in 2023 for breaching a non-disclosure and non-compete agreement regarding a proposed joint graphite project in Tanzania.
At the heart of the dispute is Pula’s allegation that ARC, ARCH and ARM shared confidential information that was used in breach of the non-disclosure agreement (NDA) to acquire a stake in Australia’s Evolution Energy, a competitor of Pula, in Tanzania.
Pula alleges the breach resulted in commercial damage and undermined its ability to attract investors for its project in the East African nation.
ARM maintains it did not breach the NDA, while ARC and ARCH say that at no time did they have Pula’s confidential information or any influence in the ARCH Fund’s decision to invest in Evolution Energy.
ARC’s legal representative was also advised by law firm Webber Wentzel that Pula’s damages claim has no merit since the exploration right to which Pula’s purported loss relates could not be renewed.
Pula Graphite also believes ARC’s delisting could jeopardise its ability to engage in a meaningful mediation process or the recovery of any damages.
Stith told Business Times this week it was “illogical” for courts in Tanzania to relinquish authority in a case involving a local entity and resource to another jurisdiction in another country.
“To try and involve the South African court in this way, we don’t think it will be successful; but were it to be successful, it will reflect negatively on South Africa and South African courts. How can you breach an agreement in one country, where you violated the non-compete clause, and then seek refuge in South Africa?”
Stith said ARC turned to the South African courts on an ex parte basis, meaning without notice or participation by the Pula Group. He described the application as a “court shopping” exercise to look for another court that might render another opinion.
“Every court system has rules around issues like court shopping; that is why it is regrettable that they would compromise the South African judicial system.”
Every court system has rules around issues like court shopping; that is why it is regrettable that they would compromise the South African judicial system.
However, ARC said it applied to the court by way of an ex parte application for declaratory orders to be served by way of an “edictal citation” on Pula as being foreigners with no offices in South Africa. The court granted the order in August 2025, and the papers were subsequently served on Pula.
It said the court application in South Africa was for declaratory orders that, among others, “the NDA was concluded between Pula and ARM and, therefore, ARC has no obligations arising from and cannot be in breach of the NDA and ... cannot be held liable for contractual damages flowing from a breach of the agreement”.
ARC said Pula had responded to the application and filed its answering affidavit, to which ARC has responded with a replying affidavit.
It said Pula had, however, failed to file its heads of argument within the time allowed in terms of the court rules, and ARC has applied to the deputy judge president for an expedited hearing date.
ARC spokesperson Garry Ramaru said the firm disputes that the Tanzanian court has jurisdiction over the defendants. He said the NDA, which is central to Pula’s case, was governed by South African law, and the majority of the defendants are based in South Africa.
“None of the defendants are based in Tanzania. ARC is accordingly of the view that only the South African courts have jurisdiction and are best-placed to consider the matter.”
Graphite is a critical mineral in battery technology and among those used to produce battery anodes. According to the British Geological Society, Tanzania has the world’s fifth-biggest graphite resources, amounting to about 18-million tonnes recoverable as graphite concentrate.
In 2024, output from the country was 25,000 tonnes of graphite concentrate.
Stith also alleged that acting judge Ntebo Nkoenyane, who is to hear the matter, is a practising attorney, and in her private capacity serves as remuneration committee chair, as well as an investment committee member at the Mineworkers Investment Company. She is also a director of Hlapane Attorneys, a law firm that lists mining as one of its key industry sectors.
“Against this backdrop, legal analysts say the central issue is not whether any improper influence exists, but whether potential conflicts were disclosed,” Stith said. “While no allegation of actual bias is made, the code of judicial conduct sets a clear standard.”
However, ARC said that in the ex parte application Nkoenyane was asked to authorise the issue and service of proceedings on Pula by edictal citation. “It has no bearing on mining issues, and the relief was procedural in nature. There’s simply no conflict of interest,” said Ramaru.
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