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Arbitration clauses usually do not survive termination of contract for fraud

An arbitration or similar adjudication clause, contained in an agreement that is found to have been induced by fraud, does not survive the avoidance of the agreement. That would be offensive to justice. The position can only change if the parties specifically make provision in their contract for a dispute regarding fraud, misrepresentation or concealment … Continue reading

Interventions to facilitate the raising of capital on the JSE

There have been calls for the JSE to amend its Listings Requirements to allow listed companies to issue shares more quickly in times of crisis ‘without interference from shareholders’. The JSE’s regulatory framework already provides listed companies with various capital raising methods, including some expedited methods. Having to obtain shareholder approval is an important element … Continue reading

Skills and training Conduct Standard for pension fund trustees

On 10 July 2020, the Financial Sector Conduct Authority (FSCA) published the awaited Conduct Standard prescribing the minimum skills and training requirements for members of the board of trustees of pension funds as contemplated in section 7A(3)(a) of the Pension Funds Act 1956, effective from date of publication. Section 7A(3)(a) requires the trustees of pension … Continue reading

Methods of raising capital on the JSE

The JSE has amended its Listings Requirements in the past few years by introducing alternative methods of raising capital and measures aimed at expediting traditional methods. The JSE is aware that, in times of crisis, listed companies may need to raise capital at short notice. Delays in the raising of capital, particularly those caused by … Continue reading

Jurisdiction of the Financial Services Tribunal: medical scheme matters

A medical scheme aggrieved by a decision of the Registrar for Medical Schemes must appeal to the Council for Medical Schemes and not the Financial Services Tribunal, even if the decision relates, broadly, to financial sector laws. In Medihelp Medical Scheme v The Registrar for Medical Schemes and Another, the Council for Medical Schemes, instituted … Continue reading

Tender award to unlawfully preferred bidder set aside

Tender processes require fairness and transparency. In order to ensure fairness and transparency, an organ of state must adopt a proper evaluation process when considering and awarding tenders. An organ of state cannot rely on its selection of a preferred bidder in circumstances where the process for a preferred bid is not followed. When the … Continue reading

POPI compliance – have you considered your existing data protection measures?

The majority of the Protection of Personal Information Act 2013 (POPI) effectively commenced on 1 July 2020. The sections that commenced deal with how personal information (which is any information that can identify and infringe the privacy rights of a natural or juristic person) may be processed in South Africa or transferred across borders. As POPI … Continue reading

Courts will rarely refuse to enforce contracts on grounds of public policy

Contracting parties cannot escape the enforcement of a contract on the basis of the terms being contrary to public policy unless they can prove that the terms are so unfair, unreasonable or unjust in the circumstances that a court should intervene. The Constitutional Court reaffirmed that although constitutional values such as Ubuntu, reasonableness and fairness … Continue reading

Progressive changes for the retirement fund industry in FSCA draft Conduct Standards

On 8 June 2020, the Financial Sector Conduct Authority published three draft conduct standards for public comment to be made by 31 July 2020. The purpose of the draft conduct standards is to regulate the: conditions for living annuities in an annuity strategy; communication of benefit projections to members of pension funds; and conditions for … Continue reading

Supplementary budget 2020

South Africa’s Finance Minister Tito Mboweni delivered a supplementary budget on Wednesday 24 June 2020, highlighting that business confidence will remain near historic lows, with investment and employment remaining constrained. This emergency budget comes only four months after the National Budget which has been left defunct in the wake of COVID-19 and a three-month lockdown … Continue reading

Mediate before you litigate

An amendment to the High Court Rules (Rule 41A) which came into effect from 9 March 2020 has made it mandatory for parties to consider mediation at the outset of any contemplated litigation. There are a number of judgments where the courts have censured the parties’ and their representatives’ failure to consider alternative dispute resolution … Continue reading

South African Data Privacy laws finally come into force

On 22 June 2020, the effective commencement of the Protection of Personal Information Act 2013 (POPI) was gazetted as 1 July 2020. Anyone processing personal information in South Africa will have a 12 month grace period to ensure that they comply with the requirements of POPI. After 1 July 2021, any non-compliance with POPI will … Continue reading

Must a union hold a secret ballot before calling a strike?

An attempt to stop NUMSA from calling a strike because it had not held a secret ballot failed. In the matters between NUMSA and Mahle Behr and NUMSA and Foskor with AMCU as amicus curiae the Labour Appeal Court had to determine whether in the absence of compliance with the transitional provisions of the Labour … Continue reading

Obligations of independent schools before expelling a pupil

On 17 June 2020 the Constitutional Court handed down a landmark judgment which pronounced on a child’s own right to take part in due process or hearings concerning the termination of the contract between independent schools and their parents. The judgment concerns the constitutionality of a decision by an independent school to expel two scholars … Continue reading

What does data privacy mean for due diligence investigations?

Given many entities’ proactive compliance with the provisions of the Protection of Personal Information Act despite it not being enforceable, companies should be considering the impact of POPI (or data privacy laws with wide reach) when they carry out due diligence investigations. Depending on the nature of the transaction, the due diligence process can involve … Continue reading

External companies cannot have prescribed officers

An external company is not a company as defined in the Companies Act, and it cannot therefore have prescribed officers with the obligations and liabilities imposed by the Act. Prescribed officers are employees or other persons who, although they are not directors, exercise executive control over a significant part of a company’s business or participate … Continue reading

No more secrets – political party funding now in the open

Political parties will soon be required to make private funding information public when the May 2020 law in this regard comes into force. The Promotion of Access to Information Act 2000 (PAIA) gives effect to the constitutional right of access to information. PAIA recognises that the pre-1994 government system resulted in a secretive and unresponsive … Continue reading

Balancing employee religious rights and the need for protective equipment

The COVID-19 pandemic has brought to the fore the rights of an employer to insist on the wearing of personal protective equipment (PPE) despite religious objections. For COVID-19 protection, such equipment may include masks, gloves, goggles, face shields, and other forms of protective gear. Ordinarily, the failure to adhere to an employers’ reasonable PPE requirements … Continue reading

Cancellation for breach of contract: 10 things to know

Cancellation as a remedy for breach of contract is only available where the parties have incorporated a right to cancel in their contract, or where the breach is of a sufficiently serious nature to justify cancellation. The contract may expressly state that if one of the parties breaches terms of the contract or fails to … Continue reading

Competition laws require online platforms in the ‘gig economy’ to protect SME and black suppliers

The Competition Act was amended in February 2020 to introduce new rules to protect small, medium and black-owned suppliers in specific sectors (the buyer power provisions). These include the e-commerce and online services sectors (the gig economy). On 18 May 2020 the Competition Commission issued its guidelines on the buyer power provisions. These guidelines set … Continue reading

Entering into a compromise with creditors – ten things to consider

Companies may attempt to rearrange their financial affairs to minimise the financial impact of the pandemic (or for any other reason). Section 155 of the Companies Act provides an informal mechanism of restructuring a company’s obligations to creditors. Here are 10 things to consider when entering into a compromise with creditors: A compromise is an … Continue reading
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