Is an Arbitration a legal proceeding for the purposes of the moratorium in Business Rescue proceedings

Sep 15, 2015 | 2015, News

Once a company is placed into business rescue, legislation provides for a general moratorium on the institution of, and continuation of legal proceedings against the company or its property. This moratorium has some exceptions. For example, one may proceed against the company with the consent of the business rescue practitioner, or with the leave of the court.

The question raised in the case was whether or not an arbitration falls within the definition of a  ‘legal proceeding’.  The Supreme Court of Appeal decided the question in the affirmative, making reference to the principles of international law –in jurisdictions that have similar company rescue provisions.  This decision will no doubt be welcomed in this country, where the rising trend is to arbitrate rather than litigate.

Read the judgment here: