Chetty v Hart

The appellant, Shamla Chetty trading as Nationwide Electrical, and TBP Building and Civils (Pty) Ltd were parties to a subcontract for electrical installation works. A dispute arose following cancellation of the subcontract, which the parties referred to arbitration. While the arbitration was nearing completion, TBP was placed under business rescue in terms of the Companies Act 71 of 2008. Neither the appellant nor the arbitrator was aware of the business rescue proceedings, and no consent was obtained from the business rescue practitioner as contemplated by s 133(1). The arbitrator nonetheless delivered an award granting relief to both parties, resulting in a net liability in favour of TBP. After TBP was later placed in liquidation, its liquidator opposed the appellant’s application to set aside the arbitration award on the basis that it was precluded by the statutory moratorium.

The appeal was dismissed with costs, including the costs of two counsel.

This judgment is a leading authority on the interpretation of s 133 of the Companies Act 71 of 2008. It clarifies that arbitration proceedings fall within the general moratorium on legal proceedings during business rescue, but that non-compliance with the consent requirement does not automatically render such proceedings void. The case provides important guidance on statutory interpretation and the operation of business rescue in relation to private dispute resolution mechanisms.