Sacks ordered to pay Swedish agency R130m

Sacks Packaging, a leading SA packaging manufacturer, will have to pay the Swedish Export Credit Agency more than R130m.

The high court in Durban endorsed the decision by the International Court of Arbitration of the International Chamber of Commerce that the company settle the bill for the goods it procured from a Swedish group.

The International Chamber of Commerce found that the Durban-based company, which counts blue-chip companies Tiger Brands, Pioneer Foods, Afrisam, PPC and Sasol among its clients, should pay its Swedish service provider €5.9m (R115m) plus interest for goods bought between October 2016 and April 2019 that and were not paid for.

The International Chamber of Commerce also said Sacks must pay the Swedish Export Credit Agency $343,000 (R6.4m) for its costs in the arbitration and a further R10.6m plus interest for the agency’s legal costs.

The Swedish Export Credit Agency insures Swedish companies against the risk of not being paid by exporters such as Sacks Packaging, which formerly belonged to the Nampak stable.

The agency got in the picture after Sacks’ supplier Forpac International, a global paper trading company, ceded its rights to the agency to pursue the debt.

Sacks placed 30 orders of sack kraft paper manufactured in Russia from a Sweden-based entity, Forpac International. The claim arose after it was alleged that the respondent had failed to pay for 22 of these orders, totalling €5.9m.

Sacks tried unsuccessfully to argue that the high court could not conclude that the International Chamber of Commerce had jurisdiction to determine the matter, and that the application to make the chamber’s findings a court order should be refused.

“All of these challenges, however, constitute argument rather than fact,” the court ruled in a judgment handed down in December. “Apart from a bare denial, there is nothing to suggest or argue why this was not agreed to by the furnishing of further orders, by the acceptance of goods under such order, or why quasi-mutual assent would not be applicable. Nor is there any explanation as to why the several years of purchase orders and invoices containing the same proviso could be ignored,” it ruled.

Originally a division of Nampak, the business was acquired in 2015 by Sacks Packaging. That was after Nampak concluded the sale of the Nampak Sacks division to Sacks Packaging, selling the company to an entrepreneur with the support of the Industrial Development Corporation of SA.

The company is one of Southern Africa’s leading suppliers of multi-wall paper sacks, self-opening bags and highgloss sacks and bags.