A Reflective Assessment of Selected Problematic Aspects of South Africa’s Appraisal Remedy Regime Against the Backdrop of Cilliers v La Concorde Holdings Ltd
Authors: J Mudzamiri & PC Osode
Affiliations: LLD candidate, Nelson R Mandela School of Law, University of Fort Hare; Professor of Commercial Law and Regulation, Nelson R Mandela School of Law, University of Fort Hare
Source: South African Mercantile Law Journal, Volume 32 Issue 3, 2020, p. 389 – 406
Several policy rationales have been offered as justifications for the new appraisal remedy, including its functioning as a credible exit vehicle for disgruntled shareholders upon receipt of payment of a ‘fair value’ for their shares. However, against the backdrop of the High Court decision in Cilliers v LA Concorde Holdings Ltd, this article explores two problematic issues regarding the practical application of the appraisal remedy. The first issue relates to who may access the remedy, while the second relates to the complexity, costs, and rigidity of the procedure that must be followed to access successfully the inherent benefits of the appraisal remedy. The paper argues, in the first instance, that the court’s decision in Cilliers to allow disgruntled shareholders in a holding company to access appraisal rights in relation to a subsidiary is salutary; and, secondly, that the complexity, costs, and rigidity of the appraisal procedure can be alleviated through the revision of some of the underlying statutory provisions.