The appraisal remedy and the oppression remedy under the Companies Act of 2008, and the overlap between them
Authors Maleka Femida Cassim
Affiliations: Associate Professor, Mercantile Law Department, University of Pretoria; Attorney and Notary Public of the High Court of South Africa.
Source: South African Mercantile Law Journal, Volume 29 Issue 2, 2017, p. 305 – 324
The appraisal right of dissenting shareholders is a new remedy introduced to South African corporate law by the Companies Act 71 of 2008, which is aimed at maintaining the equilibrium between minority shareholders and controlling shareholders. The fundamental question must thus arise whether there is an overlap between the appraisal remedy and the oppression remedy, or whether the two remedies are mutually exclusive. Are minority shareholders entitled to rely on both remedies, or should a minority shareholder’s exercise of the appraisal right preclude his or her recourse to the oppression remedy? This burning question is the focus of this article, and is discussed with reference to both Canadian and United States law, as well as the South African case of Juspoint Nominees (Pty) Ltd v Sovereign Food Investments Ltd in which the High Court recently had the opportunity to consider this issue. Other important and related aspects of the appraisal remedy and the oppression remedy are also discussed in this article.