Claim against Spur in dispute with GPS Food increases to R233m

The claim against JSE-listed Spur Corporation by a South African subsidiary of the global GPS Food Group has increased to R233 million, plus interest.

This was disclosed by Spur, the multi-brand restaurant franchisor, on Thursday when it released its interim financial results for the six months to end-December 2025.

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Spur’s share price rose 1.72% on Thursday to close at R40.70 per share.

Alternative claims

A summons was issued against two companies within the Spur Group on 24 December 2019, containing two alternative claims, which were subsequently amended.

Claim A was for R167 million from these two companies for allegedly breaching a joint venture (JV) agreement relating to the acquisition and operation of a rib manufacturing facility.

The alternative Claim B was for R95.8 million against the group and the late former group chief executive officer Pierre van Tonder based on alleged misrepresentation pertaining to a JV agreement.

Van Tonder served as MD and CEO of the group for 24 years and retired in December 2020. He subsequently shot himself at his home in Cape Town.

At issue

Spur Group said its defence in respect of the contractual claim is based, among other things, on the facts that were common cause that any JV was subject to approval by the company’s board of directors, and that such approval had not been obtained.

The group previously confirmed it had engaged with GPS over several years regarding product supply, and that it also engaged GPS regarding the prospects of concluding a JV to establish and acquire a rib processing facility.

It claims that “no written agreement was ever executed with GPS”.

GPS Food Group however alleges that an oral agreement was concluded between GPS and two Spur companies.

In terms of this agreement the parties would, among other things, establish a JV to acquire, develop and manage a rib processing facility.

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GPS further alleges that, over a period, Spur repudiated the alleged oral agreement, thereby giving rise to a breach of contract and a claim for damages.

GPS alternatively alleges that, if it is found that the Spur companies were not bound by the oral JV agreement, their conduct represented that they considered themselves bound by it. GPS argues that it relied on these representations and proceeded with its contribution to the alleged joint venture, thereby giving rise to a delictual claim for damages.

Arbitrator rules, appeals planned

The parties agreed to refer the matter to a private arbitration process, which commenced on 23 October 2023 and concluded on 9 December 2024.

The arbitrator, in an award on the merits of the contractual claim dated 26 August 2025, found that the Spur Group was liable to GPS, in terms of Claim A, for damages for breach of the JV agreement.

Spur said at the time that it intended to lodge an appeal, in terms of its rights under the arbitration agreement, within 30 days of the 28 August 2025 award.

The group on Thursday said it is still waiting for the award on quantum, and the award on the alternate Claim B.

However, it confirmed for the first time on Thursday that the arbitrator on 27 October 2025 issued directions that both parties’ experts carry out calculations necessary to determine the quantum of the contractual claim.

Spur said the arbitrator has granted both GPS and the group permission to reopen their cases “because of the significant discrepancies in the experts’ calculations”.

“GPS now claims the sum of R233 million as at 27 October 2025, plus interest, whereas the group’s expert determines the quantum of GPS’s claim to be R116 million, alternatively R126 million.

“The expert witnesses will present evidence on 10 April 2026, with closing oral submissions by the parties in May 2026. Thereafter, the arbitrator will issue an award on quantum and will also issue an award dealing with the alternate delictual claim.

“This will assist the appeal panel in due course,” it said.

Spur Group added that, apart from its intention to appeal the contractual claim merits award, which it has an automatic right to do, it may also lodge appeals against any subsequent award/s.

It said the appeal panel’s decision will be final and binding on the parties, but the timeline of the appeal process is currently uncertain.

“The group’s attorneys, together with senior counsel, have expressed the view that it is more likely than not that the group will succeed on appeal against the contractual claim merits award issued against it.

“No liability has accordingly been raised at the reporting date regarding the matter,” it said.

GPS rib facility

GPS Food Group established a rib supply and processing facility in South Africa in about 2017 after acquiring premises in Cape Town.

It is believed the intention was that the facility would be an exclusive supplier to Spur Corporation and its franchised outlets.

The facility stopped production in 2020, with the premises and the assets subsequently sold and the remaining staff retrenched.

The facility is believed to have employed up to 100 people in peak season.

Spur Corporation on Thursday reported a 14.5% increase in diluted headline earnings per share to 197.15 cents, with cash generated from operations increasing by 21.1% to R217.5 million compared to the previous corresponding period.

The group declared an interim dividend of 120 cents per share, 13.2% higher than in the prior corresponding period.

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