LSA UK Ltd (formerly Curtainz Ltd) and Others v Impala Platinum Holdings Ltd and Others

The case concerned a dispute between major shareholders in a mining company structured through amended articles of association that allocated management powers between the board of directors and a management company, Lonrho Management Services (Pty) Ltd (LMS). Lonrho, holding a dominant shareholding, effectively controlled LMS. A deadlock arose between the chief executives of the two shareholder groups regarding whether the company should institute or defend legal proceedings. The question arose as to whether the board of directors had the power, under the amended articles, to decide to institute or resist litigation, or whether that power vested in LMS or the shareholders in general meeting.

Marais JA would have allowed the appeal with costs, holding that the board’s decision was ultra vires. However, this was a dissenting judgment and did not represent the final order of the court.

The case is significant for South African company law because it addresses the limits of board authority, the legal status of management companies empowered by articles of association, and the relationship between shareholders’ agreements and company constitutions. It highlights that corporate power must be found in the articles themselves and cannot be assumed from general notions of board authority.