Johannesburg – The Constitutional Court upheld Bodacom's appeal against the Court of Appeals' decision that the telephone company should pay billions of rands of compensation for inventor nkosinathi makate.
Last year, the Supreme Court of Appeals held that Vodacom should pay Makate.
Some calculations using these percentages will result in compensation of approximately R9.4 billion.
However, Vodacom, which previously showed that it was ready to pay R47 million, took the issue of appeal to the Constitutional Court.
In explaining how it reached its ruling, the Constitutional Court detailed the progress of the long-term case through the court system that began in 2008.
On Thursday, July 31, 2025, the Constitutional Court received an unanimous judgment written by Madranga ADCJ in an appeal leave application for the Supreme Court of Appeals ruling taken over on February 6, 2024.
“This application was another example of a never-ending litigation between Vodacom (Pty) Limited: Mr. Nkosana Kenneth Makate, the applicant and the first respondent who is a former Vodacom employee,” the Apex Court said.
The suit, which spans less than 20 years, involved the compensation Vodacom had to pay Makate because of the idea of “Please Me” (PCM).
The first round of the lawsuit came to a ruling that the Constitutional Court ruled in 2016.
(a) Regarding the idea of PCM, it was declared bound by an agreement concluded by Makate and Phillip Geissler, then Director of Product Development and Management at Vodacom. (b) ordered Vodacom and Makate to negotiate in good faith in order to determine reasonable compensation paid to Makate from a contractual standpoint. (c) required that the second respondent, Vodacom CEO, be able to break deadlocks and decide such compensation.
The second, current round of lawsuits was launched as follows:
The negotiations between Makate and Vodacom failed, and the issue was introduced to the CEO.
“After a thorough process, the CEO has determined that R47 million is reasonable compensation for Mr. Makate,” the Constitutional Court said.
Frustrated, Mcate took the decision to review the CEOs with the Gauten Division in Pretoria, the South African High Court.
The High Court ordered the transfer of the decision to the CEO, which was found in Mcate's support and is subject to certain parameters.
“Vodacom appealed to the Supreme Court of Appeals, dismissed the appeal and replaced the High Court's order with its own,” the Apex Court explained.
The related section of the order reads: “Mr. Macate was entitled to 5%-7.5% of the total revenues of PCM products along with MORA interest, in terms of the stipulated interest Act 55 of 1975.
In this court, Vodacom's main arguments regarding the Court of Appeals' decision were two.
First, Vodacom submitted that the Supreme Court of Appeal acted beyond jurisdiction by replacing the Supreme Court's order with the High Court's order on behalf of the High Court's order.
The Supreme Court of Appeals therefore decided on the issue of breaching the rule of law and violating the right to a fair hearing protected by Article 34 of the Constitution.
Secondly, Vodacom has asserted that there are some seriously challenged issues with this issue. The scope of evidence was added in this regard, and written and verbal arguments were presented.
Vodacom argued that the Court of Appeals violated the rule of law and ignored the real issue before it constituted a complete failure of justice that violated Vodacom's constitutional right to a fair hearing.
Macate retorted that the court was not even general constitutional jurisdiction to hear the matter, as he was inherently concerned about a dispute of fact.
McEte argued that the Supreme Court of Appeal did not exceed jurisdiction as the alternative matter was sued in the High Court and was related to the suit before the Supreme Court of Appeal.
As a result, the appropriateness of its alternative was fully ventilated by the parties before the Supreme Court of Appeal.
Furthermore, Mcate argued that the Supreme Court of Appeals did not disregard or misunderstand any prior evidence or facts.
In reviewing the Court of Appeals' decision, the Constitutional Court acknowledged that the exercise includes an assessment of the facts of the matter.
This analysis revealed how it differs from those with purely de facto conflict, such as the SV Boesak (2000) Zacc 25 and the Mbatha V University of Zululand (2013) Zacc 43.
However, in this case, the Constitutional Court explained that the purpose of its analysis is to determine, among other concerns, whether the Supreme Court of Appeal decides whether, among other concerns, whether the evidence has failed justice in violation of the rules of the law, and whether the correct hearing of justice is protected in Section 34 of the Constitution.
This was established under the rule of law and a fair hearing right, and the court concluded that constitutional jurisdiction was involved.
In evaluating the Court of Appeal's decision, the Court of Constitutional formulated a new constitutional standard, the “obligation of appropriate consideration,” which recognized it as an integral component of its constitutional right to a fair hearing.
In terms of the rule of law and the constitutional right to a fair hearing, the court should consider all important evidence and all important submissions relating to the prior matter.
Although not exclusive, the court can demonstrate that it has exempted it from its obligation to consider when it provided the appropriate grounds for a decision that the Constitutional Court called its “obligation to provide reasons.”
The “obligation to provide reasons” relates to whether the court has fully explained how it reached its final conclusion.
This depends on the complexity or other aspects of each case.
Ultimately, the appropriate reasoning requires that each of the main issues in this case be addressed by identifying such issues, explaining how the court resolved a significant factual dispute in a particular way, and explaining how the court explained the outcome of applying the law to the facts and how it applied it.
South African jurisprudence did not directly support the position that the court violated its constitutional right to a fair hearing if it failed to fulfill its obligation to consider appropriately.
However, for assistance, the Constitutional Court referred to international and foreign authorities that recognize the obligation to appropriate consideration, and did not mention it so, but referenced the obligation to give reason, and relied on foreign authorities.
This included jurisprudence from the European Court of Human Rights. This recognized the obligation to appropriately consider and provide essential reasons for the right to a fair hearing included in the European Convention on Human Rights.
The Constitutional Court warned that inadequate or false reasoning and flaws in the judgment are not necessarily equivalent to failure to exempt the obligation to consider appropriately.
“The obligation to consider appropriately relates to the content of the judgment that can be viewed comprehensively,” the Constitutional Court said.
In short, the court fails to give reason for the decision if it fails its constitutional obligation to consider appropriately and does not include appropriate reasons to prove the appropriate and appropriate consideration in the court's decision.
“The flaws in the assessment during the arbitration process, which are so fundamental and broad that it undermines the court's decision, constitute a failure of justice and therefore constitute a violation of the rule of law and a violation of a fair hearing guaranteed by Article 34 of the Constitution.”
The Constitutional Court subsequently considered whether the decision of the Supreme Court of Appeal violated its obligation to consider, as assessed through its obligation to provide appropriate reasons.
Having evaluated the Court of Appeal's decision and identified a particular important example therein, the Constitutional Court held that the Supreme Court of Appeal:
(a) could not provide an appropriate reason for that decision. (b) they ignored or were unaware of any particular important fact or issue that preceded it. (c) Sometimes not only did they simply emphasize the parties' discussions on the central issues, but did not engage in those discussions in any meaningful way. (d) The evidence submitted by the parties could not be evaluated, but it should have been evaluated. (e) It was readily accepted without explaining why Mr. Macate did so.
Judgment fully demonstrates all this.
Based on these possessions, the Constitutional Court concluded that the Supreme Court of Appeals did not escape the obligation to properly consider.
The Constitutional Court held that the failure violated the rule of law and the Vodacom's right to a constitutional fair hearing.
The Constitutional Court further held that “without mutual appeal by Mr. Macete against the orders of the High Court, the Supreme Court would not have jurisdiction to substitute its own order in place of the orders of the High Court.”
Vodacom has raised the basis for other appeals.
The Constitutional Court ruled that it would not need to dispose of two issues discussed and address these other grounds.
The Constitutional Court therefore upheld the appeal at cost and sent the Supreme Court of Appeal to the appeals court to be heard before a panel with different grades.
Complete judgment: here
