A Cape Town breathalyser manufacturer is suing the French government for more than R244m after it failed to enforce a decree that all drivers in that country carry unused portable testing devices — despite placing an order for millions.
Sobering details of the “agreement” surfaced in the high court in Cape Town as Nicholaas van der Bergh and the French government — entangled in a financial impasse since 2019 — faced off.
The French government issued a decree in 2012 that all drivers, with few exceptions, had to carry an unused breathalyser in their vehicle as part of the country's ongoing campaign against drunk-driving. The device could be used if necessary to test the driver's breath to determine their blood alcohol level.
This effectively meant two breathalysers were required per vehicle to ensure there was always a spare if the other was used. The government authorised officials to procure them from qualified manufacturers.
Van der Bergh said French officials assured him, orally, there would be no limit to the number of breathalysers needed in the country as long as the decree remained enforceable with penalties for noncompliance. Van der Bergh, who oversaw breathalyser production in Cape Town through Redline Products , told judge Matthew Francis that, to his knowledge, his company was one of only two global producers at the time of the required type of breathalyser.
The French government lodged an exception to his claim and contended that the high court lacked jurisdiction due to the immunity it held as a foreign state. The government argued that Van der Bergh's claim was legally flawed, asserting that he failed to provide facts proving the government was not immune to the court's jurisdiction.
“During November 2011, [Van der Bergh and the French] duly authorised representative concluded an oral agreement that in the event of the decree being enacted, [he] would supply at least 55-million breathalysers for the period January 1 2012 to December 31 2012 to be sold in France and, thereafter, the number of breathalysers required would be agreed annually,” the judgment reads.
The effect of the indefinite postponement of the penalty provision in the decree meant that while the decree remained a law in France for the following eight years, drivers faced no consequences for not complying with it.
“The aforesaid agreement was conditional on the decree being enacted and the defendant confirming the number of breathalysers to be agreed upon on an annual basis.”
The judgment, handed down on Monday, said on February 28 2012, the decree was enacted, and an authorised French official later confirmed the agreement orally, requesting Van der Bergh to supply at least 40-million breathalysers annually at a reasonable or market-related rate for sale in France.
“Acting in terms of the agreement and the aforesaid representations by [France’s] duly authorised official, [Van der Bergh] took steps to have Redline produce the breathalysers on his behalf and deliver them to [the French government], the French public, and foreign drivers in France,” the judgment reads.
“To comply with the agreement and based on representation that the fine for noncompliance with the decree was imminent, [Van der Bergh] and Redline incurred substantial liabilities and expenses gearing up for the anticipated supply of the breathalysers,” the judgment reads.
“The decree was enacted, but it initially granted drivers a four-month grace period delaying the enforcement of the fine from July 1 to November 1 2012 to enable an increase in the supply of breathalysers. [Van der Bergh] supplied breathalysers to [the French government] the French population, and foreign drivers to the value of R202,155,930 from January 1 2012 to February 28 2013.”
After further delays, on February 15 2013, the French prime minister announced the indefinite postponement of fines for noncompliance with the decree. This was formalised a few days later with the enactment of another decree confirming the indefinite suspension of penalties for failing to carry an unused breathalyser in a vehicle.
“The effect of the indefinite postponement of the penalty provision in the decree meant that while the decree remained a law in France for the following eight years, drivers faced no consequences for not complying with it,” the judgment reads.
“After [the second decree] was enacted, the demand for, and sale of, breathalysers collapsed. Since there were no consequences for the breach of the decree, [the government], distributors, and customers refused to take any further deliveries from [Van der Bergh]. This, according to [him], amounted to [the government] repudiating its contract with [him].”
Due to the government’s “repudiation of the contract”, Van der Bergh claimed he suffered losses of at least R244.76m. These stemmed from lost profits, personal liabilities such as Redline’s surety, and the loss of dividends after the collapse of Redline.
A foreign state is not immune from the jurisdiction of South African courts in respect of some claims, which include those arising from a “commercial transaction” entered into by the foreign state.
Francis, however, said while the transaction could be seen as a supply agreement, it was primarily political or governmental in nature, rather than purely commercial.
“Having regard to the alleged agreement as a whole, with reference to the context in which it was apparently made, the transaction has insufficient character of commerciality,” Francis said in the judgment.
Francis ruled that the exception should succeed. He said the French government had immunity and the high court lacked jurisdiction to hear Van der Bergh's claim against it. Van der Bergh has to shoulder the legal costs.
Francis did, however, grant Van der Bergh 14 days to amend his pleadings, should he be able to present facts that could establish an exception to the French government's immunity.
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