Beleaguered SA Express gears up for yet another legal battle

With the dust from its failed bid to avoid business rescue barely settled, SA Express is already gearing up for another legal battle – this time over more than R4.7 million which global baggage services company Bagport says it is owed by the ailing state-owned airline.

The two are set to face off in the Supreme Court of Appeal (SCA), in Bloemfontein, on Monday, to argue the validity of a 2017 settlement agreement – in terms of which SA Express agreed to pay up within three days and which was in 2018 made an order of the court.

SA Express says the settlement agreement is invalid and therefore unenforceable.

But according to Bagport – and a judge of the High Court in Johannesburg – this is not the case.

SA Express and Bagport have been at loggerheads over the money – which relates to baggage wrapping services provided in September and October 2014 – for several years now.

Bagport first approached the court to try and recoup the money in 2016 but before the matter could be heard, the parties met and agreed to settle, with a settlement agreement being wrapped up early the following year.

Three months later, though, with payment still outstanding, Bagport once again turned to the court and asked for the settlement agreement to be made an order of the court.

SA Express opposed the action but after hearing submissions from both sides, the judge in 2018 ruled in favour of Bagport and granted the order.

SA Express is now appealing this decision in the SCA.

The airline’s case, in part, is that the settlement agreement was signed “under dubious circumstances”.

It argued in the high court that the relevant signatures were not obtained; that the former chief executive “was not authorised or did not acquire the required approval and/or authority to bind [SA Express] by concluding the settlement agreement”; and that the agreement breached the Public Finance Management Act.

In 2018, then newly appointed Finance Minister Tito Mboweni announced a R1.2 billion bailout for SA Express.

Then last September, Mboweni announced the carrier would receive an additional R300 million from government and, just last month, it was reported that it would be allocated another R164 million for the 2020/2021 financial year.

Earlier this month, SA Express was finally placed in court-mandated business rescue, following an urgent application launched by another one of its contractors – transport and logistics company Ziegler – over R11 million in unpaid bills.

The airline said in a statement at the time that “the court went over and above what it was required and granted orders not sought by the applicant” as well as that it intended appealing.

Spokesperson for SA Express Mpho Majatladi yesterday declined to comment on the Bagport matter, saying it was sub judice.

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