When facing disputes pertaining to Company Law, individuals or companies generally tend to seek relief from our courts. While this process mostly does provide the relief sought, it is invariably lengthy and expensive.
In recognizing the need for an alternative forum to resolve Company Law related disputes quickly, the Department of Trade Industry and Competition, by introducing the Companies Act No. 71 of 2008 (the “Act”), established the statutory body known as the Companies Tribunal (the “Tribunal”). The Tribunal specifically presides over matters falling under the jurisdiction of the Act including disputes related to Company Law.
The Tribunal derives its mandate from section 195 of the Act and exercises jurisdiction throughout the country. Its hearings are governed by Sections 180 – 184 of the Act. Unfortunately, many of those seeking Company Law-related relief appear to have no knowledge of this alternative option for dispute resolution.
The Tribunal primarily uses and encourages ADR (Alternative Dispute Resolution) processes to resolve disputes and is further able to facilitate these processes by, for example, providing the venue for mediation free of charge. Should the ADR process fail to resolve the parties’ dispute, the matter is referred for argument before the Tribunal. Here the parties are permitted to have legal representation and may also lead oral evidence, as they would in court.
A decision made by the Presiding Member of the Tribunal is binding and enforceable. However, should they wish to do so, the Act also allows the parties to file the decision at the High Court, making it an order of court. Any party that feels dissatisfied with the decision and the reasons provided may take it on review to the High Court.
Just as in the High Court, an Applicant may also bring a matter before the Tribunal on an urgent basis. This was confirmed in the recent decision of Michael Motaung v Peter Rameno Motia re: Directorship Dispute of “European Safety Action (Pty) Ltd”, where the Applicant alleged that the Respondent had neglected his duties as a Director of the company and should therefore, be removed. Whilst the Applicant’s urgent application was not successful due to lack of grounds for an urgent hearing, the matter confirmed that one may approach the Tribunal for urgent relief.
In Brenda Rawlines v Diederich Johannes Smit re: Directorship Dispute of “Ben Swart Slaghuis (Pty) Ltd”, the Applicant alleged that the Respondent, a director of Ben Swart Slaghuis (Pty) Ltd (“Ben Swart”), had used the company’s resources to establish his own company in direct competition with Ben Swart and therefore, had abused his position as director. The Applicant successfully obtained the relief sought on a default basis, as the Respondent had failed to timeously file his opposing papers.
These cases are just two examples of the effectiveness of the Tribunal in providing the relief sought by Applicants.
In addition, the CIPC and Takeover Regulation Panel also refers matters for hearing before the Tribunal.
One area of law where the Tribunal has been especially effective is the adjudication of company name objections. Companies and SME’s in particular do not always have the necessary resources to pursue a High Court application to protect the distinctiveness of their company names and trademarks by preventing the registration of a confusingly similar company name. Fortunately, the Tribunal has created a platform where even the smallest of companies can be afforded an opportunity to do so efficiently. Disputes of this nature are usually attributable to the fact that even though the CIPC administers both the company’s register and the trade mark’s register, they are two distinct registers. Therefore, registration of a company name does not automatically vest that company with statutory trade mark rights in the name nor does it guarantee that the use of the company name will not infringe a registered trade mark. Clients are encouraged to check both registers before adopting a company name or trade mark.
In addition to being expeditious and inexpensive, another significant benefit of utilizing the Tribunal is that the proceedings are private (except in circumstances where the public may have a substantial interest in the matter) which often results in the parties avoiding unnecessary exposure, thereby helping them maintain their business relationship.
During these uncertain times of Covid-19, the Tribunal presents an efficient way of not only alleviating the pressure in our already congested court rolls but also providing speedy resolutions to disputes arising from the Act.
MacRobert Attorneys houses corporate lawyers who are well versed in the field of Corporate Commercial Law and who are able to provide legal assistance in matters pertaining to the Act and the Tribunal.