In Pacific King Shipping Pte Ltd & Anor v Glory Wealth Shipping Pte Ltd, one of the key issues which the Singapore High Court had to consider was whether the defendant was precluded from commencing winding up proceedings against the plaintiffs via section 254(2)(a) read with section 254(1)(e) of the Companies Act (the “CA”) on the basis of a debt that was founded on a foreign arbitration award which had not been enforced.

Introduction

When a company enters liquidation, the appointed liquidator often needs approval from the Court or a liquidation committee before she can perform certain acts on the company’s behalf. The English High Court case of Gresham International Ltd v Moonie [2009] EWHC 1093 (Ch) established that even where the liquidator has failed to obtain such approval before acting, the Court has the general discretion to grant retrospective approval.

Somewhere close to Sandton – Africa’s richest square mile – lies the suburb of Parkmore in the Gauteng Province. This is the principal place of business of a debtor that cannot pay its debts, and is facing the barrel of an application for its winding-up. The debtor’s registered address is in Mbombela within the province of Mpumalanga – close to Africa’s Big Five game. Two court options come into play.

It has become a common phenomenon that applications are brought to put into business rescue, companies which are already in liquidation – sometimes long after the liquidation commenced.

This raises some interesting questions about whether employees and trade unions remain affected persons for the purposes of such a business rescue application, given that in terms of section 38 of the Insolvency Act (24 of 1936), all employment contracts are deemed to be cancelled within 45 days after the appointment of a final liquidator.

Section 131(6)

It’s an open secret that the commendable goals envisaged by the legislature with the introduction of the business rescue proceedings in Chapter 6 of our Companies Act are being hampered as a result of poorly drafted statutory provisions that govern the business rescue process. Section 141(2)(a)(ii) is however not one of these vague provisions.

The Supreme Court of Appeal provided clarity in Diener N.O. v Minister of Justice & Others (926/2016) regarding the ranking of the business rescue practitioner’s (BRP) claim for remuneration and expenses. The SCA also clarified whether such claim was conferred a “super preference” over all creditors, secured and unsecured in subsequent liquidation proceedings.

Dead Horses

When is a dead horse really a dead horse? Given that ‘insolvency’ opens the door to various procedures for creditors and others, it should (in theory) be fairly easy to define. In practice, however, it is not.

It has already been five years since the South African legislature introduced business rescue, a corporate restructuring procedure, which given the current economic climate is a concept that most corporates should now be familiar with. Despite its progressive intentions and increasing popularity, business rescue is often abused, usually by directors and stakeholders who have in-depth knowledge of the affairs of the company, the causes and consequences of the financial demise of the company, and who are often the initiators of the process.

Prescription is one word which every creditor (and attorney) dread. Prescription extinguishes a debt and there is very little a creditor can do once that proverbial ship has sailed.

The Prescription Act, No 68 of 1969 (Prescription Act), on a good day, has its challenges, but the situation is even more uncertain when an insolvent estate is concerned.

Rogers J, with Nuku J concurring, in the recent judgment of Van Deventer and Another v Nedbank Ltd 2016 (3) SA 622 (WCC) shed some very needed light on this issue.

On 11 October 2018, the Supreme Court (Court) vide its judgment in B.K. Educational Services Private Limited v Parag Gupta and Associates (Civil Appeal No. 23988 of 2017) clarified the applicability of Limitation Act, 1963 (Limitation Act) to the Insolvency and Bankruptcy Code, 2016 (Code). 

Background