Ferrostaal GmbH and Another v Transnet Soc Ltd t/a Transnet National Ports Authority and Another (1194/2019) [2021] ZASCA 62; 2021 (5) SA 493 (SCA); [2021] 4 All SA 330 (SCA) (25 May 2021)

Ferrostaal GmbH and Another v Transnet Soc Ltd t/a Transnet National Ports Authority and Another (1194/2019) [2021] ZASCA 62; 2021 (5) SA 493 (SCA); [2021] 4 All SA 330 (SCA) (25 May 2021)

The Supreme Court of Appeal held that Transnet's vote against the adoption of the revised business rescue plan was not inappropriate. The plan failed to provide for payment of substantial arrear rental during the lease period, deferred repayment to a future extension that was not guaranteed, and relied on uncertain future events and undisclosed financial details. The plan did not adequately protect Transnet's interests as the major creditor and would have required Transnet to exercise its contractual rights in a predetermined manner, which was unreasonable. The statutory procurement requirements further precluded a private treaty renewal of the lease. The high court correctly exercised...

Citation
[2021] ZASCA 62
Parties
Appellant: Ferrostaal GmbH; Appellant: Atlantis Marine Projects (Pty) Ltd; Respondent: Transnet Soc Ltd t/a Transnet National Ports Authority; Respondent: Ferromarine Africa (Pty) Ltd (in business rescue)
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
25 May 2021
Case Number
1194/2019
Procedural Posture
Civil Appeal / Appeal From Western Cape Division of the High Court, Cape Town
Outcome
Appeal dismissed with costs, including costs occasioned by the employment of two counsel.
Judges
Dambuza, Molemela, Mbatha, Gorven, Goosen
Legal Topics
Business Rescue, Creditor Voting Rights, Companies Act 71 of 2008, Public Procurement, Lease Agreement, Judicial Discretion
Commercial and Corporate Civil Procedure Business Rescue Creditor Voting Rights Companies Act 71 of 2008 Public Procurement Lease Agreement Judicial Discretion

Case Brief

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Parties

Ferrostaal GmbH

Appellant

Atlantis Marine Projects (Pty) Ltd

Appellant

Transnet Soc Ltd t/a Transnet National Ports Authority

Respondent

Ferromarine Africa (Pty) Ltd (in business rescue)

Respondent

Procedural Posture

Civil Appeal / Appeal From Western Cape Division of the High Court, Cape Town

Legal Issues

  1. 1 Whether it was reasonable and just to set aside Transnet's vote against the adoption of the revised business rescue plan on the ground that it was inappropriate.
  2. 2 Whether the revised business rescue plan adequately protected Transnet's interests as the major creditor.
  3. 3 Whether the high court correctly exercised its discretion in refusing to set aside the rejection vote.

Ratio Decidendi

The Supreme Court of Appeal held that Transnet's vote against the adoption of the revised business rescue plan was not inappropriate. The plan failed to provide for payment of substantial arrear rental during the lease period, deferred repayment to a future extension that was not guaranteed, and relied on uncertain future events and undisclosed financial details. The plan did not adequately protect Transnet's interests as the major creditor and would have required Transnet to exercise its contractual rights in a predetermined manner, which was unreasonable. The statutory procurement requirements further precluded a private treaty renewal of the lease. The high court correctly exercised...

Court Disposition

Appeal dismissed with costs, including costs occasioned by the employment of two counsel.

Orders

  • The appeal is dismissed with costs, which costs shall include the costs occasioned by the employment of two counsel.