Benefits of using Companies Tribunal’s services for legal practitioners
The Companies Tribunal (the Tribunal) was established to provide speedy and cost-effective mechanism of resolving company disputes. This ensures everyone access to justice. Although it is not mandatory for parties to be legally represented, there are added benefits and opportunities for legal practitioners in utilising Tribunal’s services when resolving company or corporate governance disputes on behalf of their clients.
The Tribunal is assigned by section 166 of the Companies Act (the Act) the function of resolving disputes/matters which are referred to it by any person who would be entitled to apply for relief or file a complaint in terms of the Act as an alternative to applying for a relief to a Court or filing a complaint with the Commission. This means that it is not mandatory for parties to utilise the services of lawyers when applying for company dispute resolution or to be represented by lawyers during the hearings.
However, even though Tribunal members who preside over cases ensure that the adjudication process is simply, one cannot deny the fact that the Act is a complex piece of legislation that requires legal expertise which can be difficult for non-legal practitioners. For instance, Section 142 (3) of Companies Regulations, 2011 (the Regulations), state that when filing with the Tribunal an applicant must indicate the basis of the application, stating the section of the Act or regulations in terms of which the application is made. It can be difficult for non-legal practitioners to cite the relevant Section on which the application is based, and this can have negative bearing on the case. Section 144 (2) of the Regulations further states that when filing a Reply, it must be in an affidavit form, setting out in numbered paragraphs; an admission or denial of each new ground or material fact raised in the Answer and the position of the replying party on any point of law raised in the Answer. These are examples of where legal practitioners can assist their clients. It does not mean that having legal representation at the Tribunal gives one an advantage, but it does simplify the application process.
Legal practitioners can also assist on matters that are referred to the Tribunal for alternative dispute resolution (ADR) in terms of advising their clients on specifying which section of the Act has been breached and conduct which has resulted in the breach. They can also advise whether to opt for mediation, conciliation or arbitration. They can also assist in instances where some clients are not technologically savvy or have access to technology to be able to file online through the case management system. Or in instances where clients don’t have time to refer a matter to the Tribunal.
The Tribunal does receive a handful of applications from lawyers and they do represent their clients as was observed in the Duduzile Cynthia Myeni (applicant) versus CIPC (respondent) case. The applicant filed an application to the Tribunal on 16 March 2017 to review the compliance notice issued by the respondent in terms of Section 172(1) of the Act and to: Condone the late filing of the application; cancel the compliance notice in terms of Section 172(2) of the Act; cancel the finding of a contravention of the Act; and have the respondent pay the costs of the application. After examining the merits of this case, the Tribunal dismissed this application with costs. This demonstrates that having legal representation doesn’t guarantee success, the Tribunal adjudicates impartially without fear or favour.
With CIPC registering thousands of companies every month, there’s bound to be company disputes ranging from amongst others, name registration, removal of directors, extension of AGMs etc. The Tribunal is empowered to serve as an Appeal and Review Forum for the variety of decisions or compliance notices issued by CIPC to companies. Companies may apply to the Tribunal in terms of section 172 (1) for the compliance notice to be reviewed, after considering the representations made, the Tribunal may in terms of section 172 (2) confirm, modify or cancel all or part of the compliance notice. These disputes can be a gold mine for legal practitioners because the Tribunal provides quick resolution of company disputes at no cost. The legal practitioner or law firm can benefit a lot in terms of positive reputation and referral from clients, thus saving on marketing costs.
The resolution of the corporate governance disputes is one of the fast growing and lucrative areas of law in South Africa that legal practitioners should embrace which will place them on progressive trajectory of development and growth. Corporate governance disputes, in terms of their nature are complex, require the legal expertise of Attorneys, Advocates and or Arbitrators. Non legal practitioners are assisted by the office of the Registrar regarding the relevant sections of the act and with regulations to make a process of filing easier. Members of the Tribunal also conduct proceedings in less formal way.