Ferrostaal Gmb and Another Transnet SOC Limited t/a Transnet National Ports Authority and Another (13342/2019) [2019] ZAWCHC 112; [2019] 4 All SA 409 (WCC) ; 2019 (6) SA 490 (WCC) (29 August 2019)

Ferrostaal Gmb and Another Transnet SOC Limited t/a Transnet National Ports Authority and Another (13342/2019) [2019] ZAWCHC 112; [2019] 4 All SA 409 (WCC) ; 2019 (6) SA 490 (WCC) (29 August 2019)

The court found that the revised business rescue plan failed to provide adequate certainty and protection for TNPA's interests, particularly regarding the repayment of substantial arrear rentals and future rental obligations. The plan deferred repayment of arrears for three years and made it contingent on uncertain future negotiations for a lease extension, with no security or guarantees provided. The court noted that compelling TNPA to approve a sub-lease would require it to exercise contractual rights in a manner directed by the court, which has far-reaching implications. The applicants' assertions regarding job creation and the necessity of FMA's involvement with ArcelorMittal were not...

Citation
[2019] ZAWCHC 112
Parties
Applicant: Ferrostaal Gmb; Applicant: Atlantis Marine Projects Proprietary Limited; Respondent: Transnet SOC Limited t/a Transnet National Ports Authority; Respondent: Ferromarine Africa Proprietary Limited (in business rescue)
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
29 August 2019
Case Number
13342/2019
Procedural Posture
Urgent Application / Application to Set Aside Vote Against Revised Business Rescue Plan Under Section 153(1)(b)(bb) of the Companies Act
Outcome
Application dismissed with costs, including costs of two counsel.
Judges
Bozalek
Legal Topics
Business Rescue, Companies Act Section 153, Creditor Rights, Lease Agreements, Liquidation Dividend
Commercial and Corporate Civil Procedure Business Rescue Companies Act Section 153 Creditor Rights Lease Agreements Liquidation Dividend

Case Brief

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Parties

Ferrostaal Gmb

Applicant

Atlantis Marine Projects Proprietary Limited

Applicant

Transnet SOC Limited t/a Transnet National Ports Authority

Respondent

Ferromarine Africa Proprietary Limited (in business rescue)

Respondent

Procedural Posture

Urgent Application / Application to Set Aside Vote Against Revised Business Rescue Plan Under Section 153(1)(b)(bb) of the Companies Act

Legal Issues

  1. 1 Whether the vote by Transnet SOC Limited against the revised business rescue plan for Ferromarine Africa was inappropriate under section 153(1)(b)(bb) of the Companies Act.
  2. 2 Whether it is reasonable and just to set aside the result of the vote, having regard to the interests of the parties, the provisions of the plan, and the estimated return on liquidation.
  3. 3 Whether the revised business rescue plan adequately protects the interests of the major creditor, TNPA, especially regarding arrear rentals and future rental obligations.

Ratio Decidendi

The court found that the revised business rescue plan failed to provide adequate certainty and protection for TNPA's interests, particularly regarding the repayment of substantial arrear rentals and future rental obligations. The plan deferred repayment of arrears for three years and made it contingent on uncertain future negotiations for a lease extension, with no security or guarantees provided. The court noted that compelling TNPA to approve a sub-lease would require it to exercise contractual rights in a manner directed by the court, which has far-reaching implications. The applicants' assertions regarding job creation and the necessity of FMA's involvement with ArcelorMittal were not...

Court Disposition

Application dismissed with costs, including costs of two counsel.

Orders

  • The application is dismissed with costs, including the costs of two counsel.