ISSN: 1996-2177
Affiliations: University of the Western Cape
Source: South African Law Journal, Volume 143 Issue 2, p. 421-425
https://doi.org/10.47348/SALJ/v143/i2a9
None
ISSN: 2521-2575
Affiliations: Associate Professor, Department of Commercial and Industrial Law, University of Lagos, Lagos, Nigeria
Source: Journal of Corporate and Commercial Law & Practice, Volume 10 Issue 2, 2024, p. 1-28
https://doi.org/10.47348/JCCL/V10/i2a1
This study is a comparative legal analysis of the legal regime for modern corporate rescue mechanisms in Nigeria and the United Kingdom (UK). For the purpose of this paper, modern rescue mechanisms are Company Voluntary Arrangements (CVA) and administration orders. They are described here as ‘modern’ because corporate rescue, in general, is not entirely new. However, the CVA and administration orders have recently emerged in the insolvency space in Nigeria. Interestingly, Nigeria’s modern rescue regime was modelled after UK Insolvency Act 1986. This study, therefore, comparatively examines the nature and dynamics of the modern corporate rescue in Nigeria and the UK. The primary goals are to determine the adequacy, or otherwise, of Nigeria’s legal regime, and to comparatively interrogate UK policy lessons and judicial experiences for Nigeria. It argues that the introduction of the CVA and administration order under the Companies and Allied Matters Act 2020 is laudable. It is laudable because, at last, Nigeria has watered down the focus on liquidation of companies in financial distress. Instead, companies in financial distress now have an option to be revived and given the opportunity to operate as a going concern. However, beyond a lack of in-depth literature, the new regime is faced with some legal challenges that are capable of defeating the benefits of modern corporate rescue procedures in Nigeria. Consequently, this study examines some of these legal challenges and proffers recommendations for the reform of modern corporate rescue procedure in Nigeria.
ISSN: 2521-2575
Affiliations: Senior Lecturer, Department of Commercial Law, University of Cape Town
Source: Journal of Corporate and Commercial Law & Practice, Volume 10 Issue 2, 2024, p. 29-47
https://doi.org/10.47348/JCCL/V10/i2a2
Interesting scenarios occur whenever a company commences business rescue proceedings — leading to tensions between those involved. One such interesting scenario is the interpretation and application of s 136(1)(a) of the Companies Act 71 of 2008. This provision impacts employment contracts that existed immediately prior to the commencement of business rescue proceedings. This provision allows those contracts to continue on the same terms and conditions, except to the extent that changes occur in the ordinary course of attrition, or the employees and the company, in accordance with applicable labour laws, agree to different terms and conditions. With the exception in place — tensions may occur between a business rescue practitioner whose duty is to rescue a financially distressed company and employees whose interests are to continue to be employed on the same terms and conditions. It, therefore, becomes crucial to balance the interests of both parties so that the company can be rescued without any delays. This paper aims to critically analyse s 136(1)(a) and its application during business rescue proceedings. The idea is to give a critical understanding of the provision so that those who intend to invoke s 136(1)(a) know how it applies.
ISSN: 2521-2575
Affiliations: Adjunct Professor, School of Law, Walter Sisulu University, South Africa; Associate Professor, School of Law, University of Namibia; and Adjunct, Associate Professor, School of Law, Walter Sisulu University, South Africa
Source: Journal of Corporate and Commercial Law & Practice, Volume 10 Issue 2, 2024, p. 48 – 78
https://doi.org/10.47348/JCCL/V10/i2a3
Where corruption festers through South Africa’s body politic, nondisclosure agreements (NDAs) function as instruments of silence that shield wrongdoing from public scrutiny. This article examines NDAs as a legal device that organs of state weaponise to conceal corruption, anatomising how a contractual stratagem born of commercial necessity became a kleptocratic shield. Against a backdrop of R22 billion in wasteful expenditure flagged by the Auditor-General and whistleblowers who have paid with their lives – Babita Deokaran among them – the problem is that NDAs gag whistleblower human rights defenders where exposure matters most. South Africa should endorse the efficient breach doctrine in NDA cases involving public-sector corruption. By lowering or eliminating the liability, damages, and other costs that whistleblowers would otherwise incur, Parliament and the judiciary would incentivise breaches that uplift society. NDAs become unconstitutional when they subvert effective, transparent, and accountable government. Most scholarship on NDAs derives from business disciplines focused on commercial benefits; this article has the largely untilled angle of public-sector corruption. The authors deploy a mixedmethods strategy integrating comparative legal analysis – drawing from the USA, UK, India, and Namibia – with law and economics methodology rooted in Birmingham’s seminal work on efficient breach, framed as a Creswell and Poth transformative inquiry. The article lays bare the nexus between NDAs, public-sector transparency, and the efficient breach doctrine; dissects the nature, scope, and accountability question surrounding NDAs; and interrogates their legality and constitutionality while proposing remedies – a dedicated chamber within the proposed anti-corruption body and a reverse-onus rule modelled on Singaporean precedent – to dismantle these enforced silences.
ISSN: 2521-2575
Affiliations: Associate Professor, School of Law, University of KwaZulu-Natal
Source: Journal of Corporate and Commercial Law & Practice, Volume 10 Issue 2, 2024, p. 79 – 100
https://doi.org/10.47348/JCCL/V10/i2a4
The merger or amalgamation is a popular option for companies when they want to increase their market share and expand their business operations. This may be good for the company in the long run, but it hurts workers, as they normally get retrenched as a result of the duplication of posts. Once the companies have merged, more than one employee could likely occupy or compete for positions that they occupied before and which carry over from the old company to the newly formed company. Merging companies must prepare a merger agreement setting out the conditions of the merger, including non-dismissal of employees for reasons related to the merger. The Competition Act also prohibits the dismissal of employees if it is merger-specific. The Labour Relations Act labels it an automatically unfair dismissal if the reason is related to the merger of companies. Despite an undertaking not to retrench or dismiss after the merger, companies fail to honour this undertaking and dismiss workers or change workers’ conditions of work, creating hostile work relations with workers. The paper is informed by the conduct of two companies: Clover SA and Central Bottling Company (Israel company). After the merger of these two companies, employees were retrenched, while others had their salaries reduced immediately after the merger. The author investigates the remedies available to employees affected by these developments and whether a merger can be reversed if it is found to be hostile to workers and their job security. The author argues that the dismissal of employees after the merger or the threat of reducing their wages causes unhappiness and frustration among workers, compelling them to embark on a strike to force the employer to adhere to the conditions specified in the merger agreement.