Business owners who hold leases for hospitality suites at FNB Stadium outside Soweto are gunning for Stadium Management South Africa (SMSA) and its hospitality management company, SAIL Consulting, as well as the City of Johannesburg, challenging the terms set for the use of their suites during Rugby’s Greatest Rivalry match between South Africa and New Zealand, scheduled for September 5.
The 13 suite holders have now roped in top law firm Edward Nathan Sonnenbergs (ENS) to take on SMSA, City of Johannesburg and SAIL, challenging those terms and insisting that they have legal-standing leases with SMSA.
ENS is acting on behalf of Greener Pastures, Alurode, Fumba Productions, Sizinikele Assets, The Nobes Power, Umthombowethu Enterprises, Absolve Investment, Mampudi, Copper Leaf, Tshiamelo Holdings, Innerman, Njabuyethu Projects, and Bohlokwa Security, who are some of the leaseholders at FNB Stadium.
Even though the leases are signed with SMSA, SAIL Consulting is the hospitality company that provides food, beverages, and other services to suite holders, while the city is implicated as the owner of the stadium, which SMSA manages on its behalf.
Last month, Sunday World reported on the complaints of the suite holders, who alleged that the South African Rugby Union (Saru), which has secured the exclusive use of the venue on the day and all the rights to branding, advertising, and hospitality suites, was acting in bad faith with the terms presented to them.
Although the rugby union gave the suite holders first preference as per the lease agreements, its offer came with stringent conditions outlined in its Rugby’s Greatest Rivalry tournament document, which has upset the predominantly black group of leaseholders, who believe they are being deliberately marginalised.
Saru gave the business owners who lease hospitality suites at the 159-suite venue an ultimatum to pay between R8 000 and R11 000 per ticket, excluding VAT, for hospitality packages within two weeks or forfeit their suites on match day.
In a letter addressed to SMSA, SAIL and the city, dated April 9, ENS highlights several points that it argues violate the conditions of the lease agreements.
The first point is the ultimatum, which the suite holders consider irrational and detrimental to their interests and possessory rights in light of the lease agreements. The suite holders are adamant that the 14-day payment period is not only unreasonable but also significantly interferes with their contractual rights to use and enjoy the suites. The business owners have also taken exception to the decision to unilaterally negotiate a new price for the suites outside of their leasing agreements with Saru.
“Our clients further dispute that their refusal to pay the unilaterally imposed price entitles the lessor to usurp, forfeit or in any manner interfere with our clients’ contractual and possessory rights to their suites.”
The letter further states that threats to lock out suite holders who do not comply with the terms and conditions set forth for the Boks match constitute “unlawful self-help” and contravene “the established principle that possession may not be interfered with without a court order”.
According to the law firm, SMSA and SAIL must immediately stop any actions that significantly and negatively impact the rights of suite holders under the lease agreements. “…our clients hereby demand that, in the event that the lessor and/or SAIL elects to utilise the suites for its own commercial purposes, such use shall be conditional upon the payment of fair and reasonable compensation to our clients,” said ENS.
The law firm has threatened to approach the courts should SMSA and SAIL embark on any actions to exclude their clients from the suites by changing the locks or transferring them to a third party for the Boks match.
In response to Sunday World’s enquiry, SMSA CEO Bertie Grobbelaar said they would no longer respond directly as the matter is now formally within a legal framework. He added that SMSA’s and SAIL’s positions remain consistent with prior communications issued to suite holders.
“SMSA and SAIL remain open to exploring commercially reasonable solutions…” he said.
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- Thirteen hospitality suite leaseholders at FNB Stadium are legally challenging Stadium Management South Africa (SMSA), SAIL Consulting, and the City of Johannesburg over new restrictive terms for the Rugby’s Greatest Rivalry match on September 5.
- The leaseholders, represented by law firm Edward Nathan Sonnenbergs (ENS), dispute an ultimatum by the South African Rugby Union (Saru) demanding steep ticket payments within two weeks or forfeiture of suite use, arguing this violates their legal lease agreements.
- The leaseholders claim the imposed payment terms are unreasonable and that threats to lock them out without a court order are unlawful, demanding that any commercial use of their suites by SMSA or SAIL must include fair compensation.
- Saru has exclusive rights for the event and controls branding, advertising, and hospitality, but the suite holders feel marginalized by stringent conditions despite their leases that guarantee first preference to suite use.
- SMSA has declined further direct comment due to the legal proceedings but stated they remain open to commercially reasonable solutions.
Business owners who hold leases for hospitality suites at FNB Stadium outside Soweto are gunning for Stadium Management
ENS is acting on behalf of Greener Pastures, Alurode,
Even though the leases are signed with SMSA, SAIL
Last month,
Saru gave the business owners who lease hospitality suites at the 159-suite venue an ultimatum to pay between R8 000 and R11 000 per ticket, excluding VAT, for hospitality packages within two weeks or forfeit their suites on match day.
In a letter addressed to SMSA, SAIL and the city, dated April 9, ENS highlights several points that it argues violate the conditions of the lease agreements.
“Our clients further dispute that their refusal to pay the unilaterally imposed price entitles the lessor to usurp, forfeit or in any manner interfere with our clients’ contractual and possessory rights to their suites.”
In response to
“SMSA and SAIL remain open to exploring commercially reasonable solutions…” he said.
Visit SW YouTube Channel for our video content
