The Gauteng High Court has ruled that African Rainbow Capital (ARC), linked to billionaire Patrice Motsepe, cannot be held responsible for a $195 million (R3.2 billion) lawsuit filed by U.S.-based Pula Group concerning an alleged breach of a confidentiality agreement tied to a Tanzanian graphite project.
Delivering judgment on April 15, Judge Leicester Adams concluded that Pula Group and its subsidiary, Pula Graphite Partners, failed to prove a valid contractual breach against ARC.
The court further established that the non-disclosure agreement at the centre of the dispute was originally executed in 2019 between African Rainbow Minerals (ARM) and Pula Group, rather than ARC itself, meaning ARC was not a signatory and therefore bore no legal responsibility under the agreement. Any contractual claims, the ruling noted, would instead be directed at ARM.
Although the decision represents a major legal victory for Motsepe’s investment firm, the wider dispute is still ongoing. Related proceedings in Tanzania continue, with ARC remaining the only Motsepe-linked entity actively defending the case.
Motsepe, along with ARM and ARCH Sustainable Resources, previously lost procedural standing in Tanzania after failing to attend a hearing in December 2023, and a default judgment application against them is still under consideration.
The dispute originates from a 2019 confidentiality agreement between ARM and Pula Group relating to a proposed graphite mining venture in Tanzania’s Chilalo region, which ultimately did not proceed.
In 2022, Pula alleged that sensitive information shared during those discussions was later used to back a competing project after ARCH invested in Evolution Energy Minerals, which operates in a nearby area. The company argues this move weakened its commercial position and reduced the value of its exploration rights.
By 2023, Pula had initiated a damages case in Tanzania targeting Motsepe, ARC, ARM, and ARCH. Motsepe has rejected the allegations as unfounded, while ARC has maintained it had no obligations under the NDA in question.
The dispute has also involved jurisdictional disagreements, with Pula accusing the Motsepe-linked parties of “forum shopping” after ARC approached South African courts following unfavourable developments in Tanzania. ARC, however, maintained that South African courts were the appropriate venue since the NDA was signed and governed under South African lawa position upheld by the court.
While ARC has now been cleared in South Africa, the broader $195 million claim involving other defendants remains unresolved.