Unfettered discretion is paramount: the governance relationship between the private equity firm and the underlying portfolio investee company

by | Aug 9, 2020 | SLR, SLR V31 I1

Unfettered discretion is paramount: the governance relationship between the private equity firm and the underlying portfolio investee company

Author Wentzel Oaker

ISSN: 1996-2193
Affiliations: BA LLB LLM LLD Post-Doctoral Law Fellow, Stellenbosch University, Visiting Post-Doctoral Law Fellow, Duke University
Source: Stellenbosch Law Review, Volume 31 Issue 1, 2020, p. 158 – 176

Abstract

One of the features of private equity investing is the private equity firm appointing individual(s) to serve on the board of directors of the underlying portfolio investee companies to manage the interest of the private equity fund and ultimately to act in the best interests of the fund’s investors. This article discusses the statutory and common-law duties of a director, including the specific issues related to the interrelation between private equity firms and the portfolio companies in which they invest. However, in the context of a private equity fund, this expectation can often be problematic because directors must exercise their duties with unfettered discretion. Directors cannot, without the consent of the company, fetter their discretion in relation to the exercise of their powers, and cannot bind themselves to vote in a particular way at future board meetings. Therefore, a director who is appointed to represent certain shareholders (albeit a private equity fund(s)), is still obliged to exercise his or her discretion and must act positively to protect the interests of the company even if they conflict with those of the people who elected him or her.

Tyrannical masters no more? Promissory insurance warranties after Viking Inshore Fishing (PTY) LTD v Mutual & Federal Insurance Co LTD

by | Aug 9, 2020 | SLR, SLR V30 I3

Tyrannical masters no more? Promissory insurance warranties after Viking Inshore Fishing (PTY) LTD v Mutual & Federal Insurance Co LTD

Author Graham Glover

ISSN: 1996-2193
Affiliations: BA LLB PhD, Associate Professor, Faculty of Law, Rhodes University
Source: Stellenbosch Law Review, Volume 30 Issue 3, 2019, p. 333 – 360

Abstract

In this article, the implications of the decision of the Supreme Court of Appeal (“SCA”)in Viking Inshore Fishing (Pty) Ltd v Mutual & Federal Insurance Co Ltd for the law on promissory insurance warranties are considered. The article begins with an overview of the traditional position, which has been that such warranties are to be strictly interpreted and enforced, no matter the harshness of the result. Thereafter, the article discusses the contrasting decisions in Viking Inshore Fishing (Pty) Ltd v Mutual & Federal Insurance Co Ltd in the Western Cape High Court and the SCA. Wallis JA suggested on appeal that the strict traditional approach to promissory warranties was no longer appropriate, but without having to decide the point. The article next considers the implications of an obiter dictum of the SCA, in a matter relating to a court exercising admiralty jurisdiction, on insurance law in general. Thereafter, the article proposes that Wallis JA’s comments indicate an important change to our law on promissory warranties, specifically in relation to the need for there to be a causal link between the insured’s breach of the warranty and the loss suffered, before an insurer may exercise the power to repudiate the contract. Although others have made the causal-link argument before, this article tries to explain and situate this development in two doctrinal contexts: the modern law on contractual interpretation; and the doctrine of public policy. A supplementary argument relates to the drawing together of the law on promissory warranties with the rules relating to cancellation for major breach, in cases where an insurer pursues that remedy.

Reconsidering the state’s liability for harm arising from crime: the potential development of the law of delict

by | Aug 9, 2020 | SLR, SLR V30 I3

Reconsidering the state’s liability for harm arising from crime: the potential development of the law of delict

Author Bernard Wessels

ISSN: 1996-2193
Affiliations: BA (Hons) LLB (Stell) BCL (Oxon) LLD (Stell), Lecturer in Private Law, Stellenbosch University
Source: Stellenbosch Law Review, Volume 30 Issue 3, 2019, p. 361 – 391

Abstract

This article evaluates the compensatory relief South African law currently provides to crime victims. To obtain compensation for harm arising from crime, a victim may institute a common-law delictual claim against the perpetrator of the crime. Because the perpetrator is unlikely to be in a financial position to compensate, crime victims have had to develop an alternative strategy. Essentially, they have argued that it is the state, rather than the perpetrator, that should be held delictually liable for harm arising from crime. More specifically, they have argued that the state should be held vicariously liable in delict on the basis that its employees culpably and wrongfully caused the victim’s harm, either by action or inaction. This article evaluates this development of the common law and argues that the expanding delictual liability of the state for harm arising from crime is undesirable. The common-law delictual claim is not the crime victim’s only option for compensation. The Criminal Procedure Act 51 of 1977 provides crime victims with a degree of procedural assistance in claiming compensation from the perpetrator and the Prevention of Organised Crime Act 121 of 1998 seeks to introduce measures to combat organised crime activities and provides for the recovery of the proceeds of unlawful activities. The article analyses the existing statutory mechanisms to claim compensation for harm arising from crime and finds that it is unsatisfactory from a crime victim compensation perspective. Against this background, the article suggests that it may be sensible to consider an alternative method to secure compensation for crime victims. From a comparative legal perspective, the most popular alternative solution appears to be the enactment of a statutory crime victim compensation scheme. The article examines some of the theoretical concerns that require consideration, if such a proposal were to be taken seriously by the legislature.

Making a case for recognition of women’s contribution in the legal framework for environmental conservation (in Uganda)

by | Aug 9, 2020 | SLR, SLR V30 I3

Making a case for recognition of women’s contribution in the legal framework for environmental conservation (in Uganda)

Authors Charlotte Kabaseke and Emma Charlene Lubaale

ISSN: 1996-2193
Affiliations: LLB LLM, Doctoral researcher, Research Institute of Environmental Law, School of Law, Wuhan University, Wuhan 430072, China; LLB LLM LLD, Senior Lecturer, School of Law, University of Venda
Source: Stellenbosch Law Review, Volume 30 Issue 3, 2019, p. 392 – 414

Abstract

Environmental degradation negatively impacts both women and men. However, it is an indisputable fact that women experience its adverse effects more than men. This is based on women’s socially constructed roles which make them more dependent on natural resources like forests, lakes and land. This responsibility enables women to interact more closely with the environment than men, thus, giving them an opportunity to contribute to environmental conservation. Despite the relationship that women have with the environment and the contribution they make towards environmental protection and conservation, it remains largely unclear if their contribution is adequately recognised and implemented. This article examines the contribution of women in environmental conservation and the extent to which existing environmental conservation laws and policies at international, regional and national levels recognise this. It is concluded that some instruments at the international, regional and national levels scantily recognise the role of women in environmental conservation. However, these scanty provisions are met with discriminatory practices against women at the national level which makes it close to impossible for these instruments to advance the role of women in environmental conservation.