Got this from Business Day this morning
ILIMA Group, a black economic empowerment (BEE) partner to construction giant Group Five , yesterday argued in the high court in Johannesburg that the courts could treat BEE transactions differently from those not underpinned by public policy.
ILima’s counsel, Vuyani Ngalwana, drawing from constitutional case law, said the government had a constitutional mandate to transform the economy, and BEE was one of the ways it had chosen to do so.
He said if strict enforcement of a clause in a contract could result in unfairness or unreasonableness to the BEE partner, a court should not enforce it — even where neither party was an organ of state.
What our esteemed advocate is suggesting is that a BEE partner should have more rights than the other party in the transaction because it is contributing to the transformation of the country.
Does this sound like rubbish to you? Do you not think that this little pronouncement is a complete and utter waste of the court's time?
ILima has even gone to Rob Davies to moan about this. And Rob has asked Group 5 to respond within 30 days as to why the DTI should not get involved in this case. What a crock. Running to the DTI and crying because you can't get your way.
I remember in the early days of BEE when I was offering BEE courses that didn't prescribe ownership I asked a delegate in Cape Town (Henry Shields of the Marimba restaurant fame) whether a contract could be canceled because it came to light later that empowerment status was significant to the other party. Henry's answer was in the negative and he spoke of the "sanctity of contract".
Surely the court will reject this argument because of the implications - viz
- Messes with the sanctity of contract
- It's a waste of the court's time
- It will end all BEE deals because companies won't conclude them because of the potential prejudice
- It's a monumental waste of the court's time
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