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- Volume 25, Issue 2, 2014
Stellenbosch Law Review = Stellenbosch Regstydskrif - Volume 25, Issue 2, 2014
Volume 25, Issue 2, 2014
Author Andreas Van WykSource: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 243 –246 (2014)More Less
David William Butler joined Stellenbosch University's Department of Commercial Law in January 1979 and worked there as its guiding spirit until December 2010 when he retired. He remains involved with the Department in his capacity as professor emeritus.
David was not only an excellent teacher and researcher during those 32 years. For the twenty years from his appointment as professor in July 1989 he was synonymous with Handelsreg. And in that period he transformed the stepchild of the Faculty of Law into a centre of excellence in its field.
Source: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 247 –264 (2014)More Less
This tribute provides an overview of the role of the courts in the review of awards made as a result of domestic arbitration undertaken voluntarily. Our courts have over the years performed a balancing act between non-intervention and constant intervention. Immediately prior to colonial legislation, our common law had come to rest approximately halfway between the early Roman law extreme of non-intervention and the Roman Dutch extreme of effectively permitting an appeal against an award. An overview of our subsequent jurisprudence reveals that this balance has not since been upset, even in response to the more interventionist approach adopted by the English courts in the early 1900s on the basis of identically worded legislation. Nor did it occur after the adoption of the Arbitration Act 42 of 1965 or, more recently, the South African Constitution of the Republic of South Africa, 1996. South African legislation governing the review of arbitration awards has been underpinned and applied so as to provide only narrow grounds for review and these have in turn been restrictively interpreted. In the result, while the courts have demonstrated a willingness to assist parties deprived of a fair hearing by procedural wrongs, they have limited their reviews to these alone and have refused jurisdiction in cases that requested their review of the arbitrator's legitimate exercise of discretion. The courts have therefore maintained their lack of jurisdiction to enquire into the correctness of the conclusion arrived at by arbitrators on the evidence before them. In the result, the integrity of the arbitration process is preserved save for in cases where the arbitrator himself has discredited it through mala fides, gross irregularity or the exercise of powers not conferred upon him. Our approach has in fact pre-empted many of the international developments in modern arbitration law. Nevertheless, the South African Law Reform Commission has recommended material changes to the dispensation brought about by the 1965 Arbitration Act. This paper aims to show that the grounds for review of an arbitral award outlined in the Arbitration Act 1965, and their application in our courts, do not call for legislative intervention in any material way. The fear is that such intervention would not only be unnecessary, but could create uncertainty and upset the delicate balance that has been struck and so successfully maintained over the years.
Deregistrasie sonder likwidasie van maatskappye en beslote korporasies ingevolge die 2008 MaatskappywetSource: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 265 –307 (2014)More Less
It is practically desirable that inactive companies are removed from the companies register. This should also be the main reason for the deregistration of companies that have not gone through winding-up. However, procedures should be in place to ensure that active companies are not subject to this form of deregistration. The legislation provides that companies (and close corporations) can be deregistered as a result of a failure to submit annual returns and pay annual prescribed fees. This leads to the deregistration of numerous active companies. The consequence is that third parties and specifically creditors are prejudiced. This authority to deregister companies should therefore be carefully limited to situations where the non-submission of returns is an indication that they are not active.
Moreover, it is imperative that the law should provide for effective remedies to place deregistered companies, which are still active, back on the register. The Companies Act 71 of 2008 ("2008 Act") provides for the reinstatement of the registration of a company by the Companies and Intellectual Property Commission ("Commission"). However this remedy is practically speaking not available to creditors as the Regulations to the Companies Act only allow for reinstatement of registration if the outstanding annual returns are submitted and the annual fees are paid. Creditors are just not in the position to submit such documents.
The question therefore arises as to whether creditors can make use of section 83(4)(a) of the 2008 Act, which provides that the dissolution of a company can be declared void, in order to obtain a restoration of the company on the register. The courts have reached conflicting decisions in this regard. The view that section 83(4)(a) is available in these circumstances is preferred as it offers protection to creditors and other third parties. However, this view does not give effect to the central role which the 2008 Act ascribes to the Commission as the custodian of the register of companies. It would in addition entail that an aggrieved creditor will have to incur the substantial cost of approaching the court for restoration.
It seems impossible to find solutions to these problems in the existing legislation. It is therefore proposed that the Regulations should be amended to provide that creditors and other third parties can apply to the Commission for the reinstatement of the registration of a company, without submitting the outstanding returns or paying the outstanding fees.
Finally, the question whether restoration of registration is retrospective, is considered. In order to protect creditors and other third parties sufficiently, it is preferable that restoration operates retrospectively, but to make it subject to judicial supervision. Again it is explained that the 2008 Act is incapable of achieving these objectives and that amendments to the legislation are required.
Source: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 308 –327 (2014)More Less
Use of international arbitration in Africa is on the rise, with more African States acceding to international arbitration-related conventions, modernising their arbitration legislation and supporting active regional arbitral institutes. This article asks whether a positive role can be played by institutions from outside the African continent in supporting the establishment of regulatory frameworks and appropriate fora for the resolution of cross-border disputes. The article reviews the role and African case docket of the Permanent Court of Arbitration ("PCA") in The Hague, examining the historic and modern use of PCA arbitration to resolve political (boundary) conflicts, mass claims, law of the sea disputes and investor-State disputes, as well as the PCA's structural engagement with African institutions and practitioners through its programme of Host Country Agreements, contribution to the Mauritian arbitration project and the training and exchange of ideas with judges, academics and practitioners. The article concludes that the role played by the PCA in African cross-border dispute settlement over three decades suggests that international organisations providing specialised services can make a valuable contribution to the growth of indigenous dispute resolution processes on the African continent.
Author Jacqueline YeatsSource: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 328 –342 (2014)More Less
Appraisal rights were included in the Companies Act 71 of 2008 in accordance with the Department of Trade and Industry's stated objectives of enhanced protection for minority shareholders and development of the Act in line with international company law trends. However, appraisal rights are traditionally underutilised in other jurisdictions where they have existed for many years, most notably the United States and Canada. The reason for this is that they can be complex, expensive and time-consuming to enforce. Furthermore, as a result of the often uncertain outcome of appraisal rights litigation, there is an argument to be made that the enforcement of these rights is open to abuse and that they may be used to stifle legitimate deal activity. Given the challenges and complexity of appraisal rights enforcement, South African courts (and legal practitioners) will have to look to foreign jurisdictions for guidance as to how to interpret and apply this novel, foreign concept. Fortunately it seems that the Act does allow for this. Recently there has been a spate of appraisal rights litigation amidst renewed levels of merger activity in the United States which poses some interesting questions around the proper use of appraisal rights and the attitude of the courts in this regard. Although South African courts have not yet heard any appraisal rights disputes it seems clear that, because this remedy is so complex and internationally relevant, we should keep abreast of legal developments in foreign jurisdictions which may ultimately impact on the understanding, interpretation and application of appraisal rights in the South African context.
Source: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 343 –360 (2014)More Less
The "joint-action rule" in South African trust law entails that all trustees must act jointly in order to bind the trust. Non-compliance with the rule will most often lead to the invalidity of a contract between the trustees and an outsider. Hence, in the context of business trusts, the application of the rule may be particularly problematic. We submit that the main reason why the business trust remains a useful institution is that the trust brings with it, through the importation of certain standard features, important advantages that need not be specifically bargained for. However, normal rules of trust law, such as the joint-action rule, must also be complied with. Hence, mechanisms to ameliorate some of the problematical effects of this rule can be put in place, such as provisions stipulating that decisions can be taken by a majority of the trustees, or that the trustees can delegate certain defined duties or powers. It is clear, however, that difficulties remain and that South African courts are still facing challenges in developing this area of trust law. But South Africa is not the only trust jurisdiction where the joint-action rule applies and where mechanisms have been developed to address the difficulties experienced with this rule. Comparing the position in South Africa to that in England, Scotland and Canada (including Québec), a remarkable degree of similarity between South Africa, on the one hand, and the other jurisdictions, on the other, as far as the basic application of the joint-action rule is concerned, can be noted. However, there are a number of differences as well. In many of the other jurisdictions legislation generally plays a much bigger role than in South Africa and it may provide a rich source of ideas for the development of this area of South African trust law.
The fundamental transactions under the Companies Act : a report back from practice after the first few yearsAuthor Johan LatskySource: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 361 –384 (2014)More Less
The new regime relating to fundamental transactions and takeover law in the Companies Act 71 of 2008 ("the Act") has, in practice, presented a number of legal questions, the answers to which are not readily apparent from the Act itself. In my experience numerous views and practices have developed in the implementation of the Act. Whether a ratification of a disposal under section 112 is permissible, is unclear, although the deletion by the legislature of the express possibility of ratification from the initial version of the Act strongly suggests that ratification is now not possible. Regarding the time at which a "disposal" is deemed to occur under section 112, the stronger view is that this occurs when there is an unconditional obligation to transfer the property. The consequences of non-compliance with section 112 are not expressed in the Act; but it is fairly arguable that the view expressed in Stand 242 Hendrik Potgieter Road Ruimsig (Pty) Ltd v Göbel NO and Others 2011 5 SA 1 (SCA) is still valid, namely that the disposal is not void but is unenforceable. With regard to schemes of arrangement under section 114 of the Act, the question is whether the requirement of an independent expert's report may be waived for share repurchases under section 48(8). Applying general principles on the waiver of statutory rights, it is arguable that such a waiver is competent. For amalgamations and mergers, questions arise as to the interpretation of "creditors" in section 116, the effect of mergers on anti-assignment clauses in contracts, and difficulties around the implementation of statutory mergers in wholly-owned group companies. The takeover laws present some practical considerations in the context of "shelf" companies. An important issue in practice is whether a share repurchase under section 48(8)(b) of the Act is in fact a scheme of arrangement, which determines whether the takeover laws apply in instances where the repurchasing company is a "regulated company".
Source: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 385 –407 (2014)More Less
This contribution in honour of David Butler surveys the various policy options for the resolution of disputes in community schemes. The options are internal mechanisms, co-regulation, government regulation, a simplified procedure in ordinary courts, the establishment of specialised strata title tribunals and the establishment of a specialised sectional title ombud service. The basic characteristics of each policy option are explained and each option is subjected to critical assessment. Illustrations of self-regulation are the neighbourhood committees of Colombia in South America and the meetings convened by the President (chairperson) of Catalan condominium schemes to attempt dispute resolution. Instances of co-regulation are provided by the Ontario Condominium Act of 1998, the British Columbia Strata Property Act SBC 1998, the Florida Civil Rights statute on Condominiums (Florida Civil Rights 2013 FlaStat XL Ch 718 Condominiums) and the English Commonhold and Leasehold Reform Act of 2002. These statutes oblige strata owners to resort to mediation and arbitration before approaching the courts. Similar dispute resolution mechanisms are encountered in Catalonia and the Basque Region of Spain and in the Dutch Model Bylaws for apartment ownership schemes. Under the heading government regulation the functions of the Singaporean Commissioner of Buildings and the Sri Lankan Condominium Management Authority are explained. After a brief discussion of the simplified court proceedings practised in Germany and the streamlined dispute resolution proceedings before a Justice of the Peace in Portugal, the role of specialised tribunals in dispute resolution in Singapore and New South Wales is attended to. The article is concluded with a survey of the special ombudsman service in Nevada and Florida in the United States and the South African ombud service in terms of the newly promulgated Community Schemes Ombud Service Act 9 of 2011. The latter mechanism is hailed as one of the most advanced dispute resolution systems in the world.
Author S. KarjikerSource: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 408 –424 (2014)More Less
Following ICANN's decision to permit new top-level domains pursuant to its New gTLD Program, and the likely explosion in the number of top-level domains ("TLDs"), it was anticipated that there would be competing claims to register new TLDs, particular by trade mark owners. Given the success of ICANN's earlier alternative dispute resolution system - the Uniform Dispute Resolution Policy ("UDRP") - ICANN decided to again make use of an alternative dispute resolution mechanism. To this end, the New gTLD Dispute Resolution Procedure (the "Procedure") was introduced to resolve disputes relating to applications for new TLDs. There are different dispute resolution mechanisms within the Procedure for each of the four enumerated grounds of opposition, and the Legal Rights Objection ("LRO") is the dispute resolution mechanism for trade mark disputes. A number of trade mark disputes have now been determined under the LRO, which has provided some insights into how disputes are likely to be determined under it. From a trade mark perspective, there does appear to be a concern that not all trade marks are being given equal recognition. There appears to be a tendency to give greater weight to trade marks from certain jurisdictions. Hopefully, this concern is more apparent than real, because, if that is not the case, the credibility of the LRO as a dispute resolution mechanism may be undermined.
Alternative measures to reduce trial cases, private autonomy and "public interest" : some observations with specific reference to plea bargaining and economic crimesAuthor Gerhard KempSource: Stellenbosch Law Review = Stellenbosch Regstydskrif 25, pp 425 –436 (2014)More Less
This note considers alternative measures to reduce trial cases as a strategy to enhance the effectiveness of the criminal justice system. The emphasis falls on economic crime. It is noted that alternative measures, particularly formal and informal plea bargaining, can be beneficial and are also manifestations of individual autonomy. It is, however, warned that insofar as institutionalised alternative measures become part of a cost-benefit, economic analysis (which seems to be a real risk in the context of economic crime) and insofar as criminal trials for major or complex crimes serve public, didactic roles, alternative measures should not be opted for without careful consideration of the public interest in the broadest sense.