Opinion: Will the African continental free trade area’s dispute settlement protocol be adequate to ensure compliance?

by | Dec 4, 2020 | JCLA, JCLA V7 I1 2020

Opinion: Will the African continental free trade area’s dispute settlement protocol be adequate to ensure compliance?

Author Yakubu Nagu

ISSN: 2521-2605
Affiliations: PhD candidate and researcher, Centre for Comparative Law in Africa, Faculty of Law, University of Cape Town

Source: Journal of Comparative Law in Africa, Volume 7 Issue 1, p. 120 – 134

Abstract

The success of any regional integration or development initiative depends on  actors within that initiative operating smoothly and with some degree of efficiency.  A dispute settlement framework guarantees efficiency by providing a means by  which friction between actors can be reduced. African integration initiatives always  provide for a framework for conflict management. The African Continental Free  Trade Area (‘AfCFTA’) initiative is no different as it provides a mechanism  by which disputes arising in the course of deepening integration under the free  trade initiative can be resolved. The agreement creating the AfCFTA includes a  Protocol on Rules and Procedures on the Settlement of Disputes. While the broad  importance of this protocol to the initiative cannot be over-emphasised, how the  dispute settlement system that it creates will function, as well as the potential of  its successful operation, appears to be riddled with ambiguity and shrouded in  doubt respectively. This is especially because the efficacy of other regional dispute  settlement systems in Africa has been undermined by myriad issues ranging from  technical inefficiencies to the absence of political will, often manifesting in outright  non-compliance. This article primarily appraises the AfCFTA’s Protocol on Rules  and Procedures on the Settlement of Disputes and comments on the adequacy of  certain provisions. 

A discussion of the requirements of a trial of a serious question of consequence and the best interests of the company as contemplated in section 165(5)(b) of the Companies Act 71 of 2008

by | Nov 28, 2020 | JCCL, JCCL V6 I1

A discussion of the requirements of a trial of a serious question of consequence and the best interests of the company as contemplated in section 165(5)(b) of the Companies Act 71 of 2008

Authors Darren Subramanien

ISSN: 2521-2575
Affiliations: Lecturer School of Law (PMB), University of KwaZulu Natal
Source: Journal of Corporate and Commercial Law & Practice, Volume 6 Issue 1, 2020, p. 1 – 23

Abstract

The requirements for judicial discretion to grant leave for a derivative  action are located in s 165(5)(b) of the Companies Act 71 of 2008. The  discretion of the court must be exercised to prevent time-consuming  and costly actions that are deemed to be frivolous, vexatious or  without merit. In terms of s 165(5)(b) the court must be satisfied that  the applicant is acting in good faith, that the proceedings involve the  trial of a serious question of material consequence to the company,  and that it is in the best interests of the company that the applicant  be granted leave. It would therefore be open to the courts to provide  an interpretation of the words in s 165(5)(b) regarding the good faith  requirement, to find that the proceedings involve a serious question  of material consequence to the company, and to find that it is in the  best interests of the company that the applicant be granted leave.  This article discusses the requirements of ‘a trial of a serious question  of consequence’ and the ‘best interests of the company’ in s 165(5)(b)  of the Act. The interpretation of these words and phrases in s 165(5)(b)  will ultimately determine the success or failure of the new statutory  derivative action as an adequate remedy for aggrieved applicants  who seek redress on the company’s behalf if the company or those in  control of it improperly fail or refuse to do so. This article will refer  to the relevant sections in the law of the United Kingdom to provide further clarity about the interpretation of the relevant provisions in  s 165(5)(b) of the Companies Act 71 of 2008. 

Board autonomy and recourse to the courts in south africa

by | Nov 28, 2020 | JCCL, JCCL V6 I1

Board autonomy and recourse to the courts in south africa

Authors Genevieve Paige Wagener

ISSN: 2521-2575
Affiliations: Attorney of the High Court of South Africa
Source: Journal of Corporate and Commercial Law & Practice, Volume 6 Issue 1, 2020, p. 24 – 39

Abstract

In the aftermath of the recent comments made by the chairperson  of the Old Mutual Ltd board that the board cannot be dictated to by  the court on matters of corporate governance, it must be clarified  that the Constitution still grants anyone the right to have a legal  dispute settled by a court or other independent and impartial forum  or tribunal if the legal dispute is justiciable and if the party has legal  standing in relation to such dispute. 

Possible manipulation of the ‘solvency and liquidity’ test under the Companies Act makes the test an ineffective alternative to the ‘maintenance of capital’ principle

by | Nov 28, 2020 | JCCL, JCCL V6 I1

Possible manipulation of the ‘solvency and liquidity’ test under the Companies Act makes the test an ineffective alternative to the ‘maintenance of capital’ principle

Authors Joshua Sasha Kadish

ISSN: 2521-2575
Affiliations: Attorney at Fluxmans Inc
Source: Journal of Corporate and Commercial Law & Practice, Volume 6 Issue 1, 2020, p. 40– 53

Abstract

This article argues that although great strides have been made with the  abolition of the maintenance of capital principle and its replacement  by the solvency and liquidity test, the possible manipulation of the  latter test raises questions about whether it is an adequate alternative  to the maintenance of capital principle. 

The continued relevance of the Turquand Rule under the current company law regime in South Africa

by | Nov 28, 2020 | JCCL, JCCL V6 I1

The continued relevance of the Turquand Rule under the current company law regime in South Africa

Authors Jacquiline Mujulizi

ISSN: 2521-2575
Affiliations: Advocate of the High Court of Tanzania
Source: Journal of Corporate and Commercial Law & Practice, Volume 6 Issue 1, 2020, p. 54 – 65

Abstract

The statutory enactment of the Turquand rule in s 20(7) of the  Companies Act 71 of 2008 raises questions about the continued  relevance of the common-law Turquand rule in South African law. As  the common-law rule addresses aspects of the accepted presumption  that can, legitimately, be made by third parties on the company’s  compliance with procedural or administrative requirements, its  continued relevance and application can hardly be questioned, as  argued in this article. 

Good corporate governance affirms the board (led by the chairperson) as the focal point of governance and the courts have no mandate to undermine this principle

by | Nov 27, 2020 | JCCL, JCCL V6 I1

Good corporate governance affirms the board (led by the chairperson) as the focal point of governance and the courts have no mandate to undermine this principle

Authors Tsepiso Mofokeng

ISSN: 2521-2575
Affiliations: Executive Chairman, Mofisto Investments (Pty) Ltd
Source: Journal of Corporate and Commercial Law & Practice, Volume 6 Issue 1, 2020, p. 66 – 79

Abstract

Corporate governance has long been endorsed globally as a key  factor in the survival or success of every corporation. The failure  of international companies like Arthur Anderson and Enron serves  to reinforce the argument that the courts have a role to play in  circumstances where the board has failed to carry out its functions.  This will be argued by referring to the importance of the prescribed  legislation and the King Codes, and more specifically, King IV as a  watchdog of good governance, often cited in court decisions where  governance is in issue. Reference will also be made to relevant case  law to emphasise the role of the courts in this regard. 

Befriending the bogeyman: Direct horizontal application in AB v Pridwin

by | Nov 27, 2020 | SALJ, SALJ V137 I4 2020

Befriending the bogeyman: Direct horizontal application in AB v Pridwin

Author Meghan Finn

ISSN: 1996-2177
Affiliations: Lecturer in Public Law, University of Johannesburg
Source: South African Law Journal, Volume 137 Issue 4, p. 591-607

Abstract

In AB v Pridwin Preparatory School 2020 (5) SA 327 (CC), the Constitutional  Court held (in four judgments) that independent schools are subject to constitutional  scrutiny and bear duties to the learners enrolled in them. For this reason, the court  declared invalid a school’s decision to terminate a contract without affording any  opportunity to make representations. By rejecting the idea that the independent  schooling sector is insulated from constitutional duties, the Constitutional Court’s  judgment achieves a vital outcome. However, while the court’s outcome is welcome,  its reasoning rests on shaky foundations. The court’s majority, which favoured direct  horizontal application, inadvertently perpetuates the idea that there are parallel  systems of law. Further, the court has a great appetite for making sweeping legal  pronouncements, and then purportedly limiting their precedential effects by claiming  that judgments turn on context-specific inquiries. This cuts against the court’s stated  commitment that horizontal application must progressively transform the law. 

‘When legality and certainty collide’: Magnificent Mile Trading 30 (Pty) Ltd v Celliers NO & others

by | Nov 27, 2020 | SALJ, SALJ V137 I4 2020

‘When legality and certainty collide’: Magnificent Mile Trading 30 (Pty) Ltd v Celliers NO & others

Author D M Pretorius

ISSN: 1996-2177
Affiliations: Bowmans, Johannesburg
Source: South African Law Journal, Volume 137 Issue 4, p. 608-624

Abstract

Magnificent Mile Trading 30 (Pty) Ltd v Celliers NO & others 2020 (4)  SA 375 (CC) is the latest in a line of cases in which the Constitutional Court has  had to consider the effect of the decision in Oudekraal Estates (Pty) Ltd v City of  Cape Town 2004 (6) SA 222 (SCA). The Oudekraal case has been construed,  and is frequently invoked, as authority for a broad proposition that defective and  apparently unlawful administrative acts remain effective unless and until set aside on  judicial review. In several matters, the Constitutional Court bench has been split on  the impact of Oudekraal, and has expressed itself in abstruse terms. The resultant  confusion has created uncertainty. The Magnificent Mile decision provides a degree  of clarification. However, aspects of Oudekraal and its implications remain shrouded  in uncertainty. Cases decided in the Oudekraal context would benefit from closer  scrutiny of the enabling legislation of the administrative actors concerned. 

Caveat subscriptor, the consumer-friendly approach: An analysis of Van Wyk v UPS SCS South Africa (Pty) Ltd

by | Nov 27, 2020 | SALJ, SALJ V137 I4 2020

Caveat subscriptor, the consumer-friendly approach: An analysis of Van Wyk v UPS SCS South Africa (Pty) Ltd

Author Tshepiso Scott

ISSN: 1996-2177
Affiliations: Lecturer, Department of Mercantile Law, University of Pretoria
Source: South African Law Journal, Volume 137 Issue 4, p. 625-640

Abstract

Prior to the Consumer Protection Act 68 of 2008 (‘CPA’), the consumer in South  Africa was without substantive protection when concluding contracts with suppliers.  This case note explores how the CPA has changed this position by the introduction  of information-disclosure requirements in terms of s 49 of the Act (‘notice required  for certain terms and conditions’) and the important link to s 22 of the Act, which  affords the consumer the right to information in plain and understandable language.  The recent judgment in Van Wyk v UPS SCS (Pty) Ltd [2020] 1 All SA 857  (WCC) is a long-awaited decision that provides clarity on aspects of the disclosure  requirements that have been prescribed by the Act. 

Beadica 231 CC: An end to the trilogy?

by | Nov 27, 2020 | SALJ, SALJ V137 I4 2020

Beadica 231 CC: An end to the trilogy?

Author Simon Thompson

ISSN: 1996-2177
Affiliations: Teaching Assistant, Department of Private Law, University of Cape Town
Source: South African Law Journal, Volume 137 Issue 4, p. 641-658

Abstract

In this note, I consider the path of the Beadica case through the South African court  system. After traversing the relevant law and facts, I focus on the Constitutional  Court’s judgment in Beadica 231 CC v Trustees for the time being of the  Oregon Trust 2020 (5) SA 247 (CC). I conclude that the majority judgment  deserves praise for its pronouncements on several pertinent issues in the law of contract,  namely: the ambit of the Constitutional Court’s judgment in Botha v Rich NO  2014 (4) SA 124 (CC), the importance of the doctrine of precedent, the role of  concepts such as good faith, reasonableness, fairness and ubuntu in the public policy  enquiry, the perceived divergence in approach between the SCA and CC on this  issue, and the court’s application of the law to the facts.