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Section 365 of The Companies Act No. 17 of 2015: Power of the Court to grant relief

    

(1) This section applies in relation to liability under section 360(2), 362(3) or (4) or 366 as it applies in relation to a contravention of those sections.
(2) A person who—
(a) is subject to any such liability to a company in relation to payment in respect of shares in the company; or
(b) is subject to any such liability to a company because of an undertaking given to it in, or in connection with, payment for shares in the company, may apply to the Court to be exempted in whole or in part from the liability.
(3) In the case of a liability within subsection (2)(a), the Court may exempt the applicant from the liability only if, and to the extent that, it appears to the Court just and equitable to do so having regard to—
(a) whether the applicant has paid, or is liable to pay, any amount in respect of—
(i) any other liability arising in relation to those shares under any provision of this Division or Division 6; or
(ii) any liability arising because of any undertaking given in or in connection with payment for those shares;
(b) whether any person other than the applicant has paid or is likely to pay, whether in accordance with any order of the Court or otherwise, any such amount;
(c) whether the applicant or any other person—
(i) has performed in whole or in part, or is likely so to perform any such undertaking; or
(ii) has done or is likely to do any other thing in payment or part payment for the shares.
(4) In the case of a liability within subsection (2)(b), the Court may exempt the applicant from the liability only if and to the extent that it appears to the Court just and equitable to do so having regard to—
(a) whether the applicant has paid or is liable to pay any amount in respect of liability arising in relation to the shares under any provision of this Division or Division 6;
(b) whether any person other than the applicant has paid or is likely to pay (whether in accordance with any order of the Court or otherwise) any such amount.
(5) In determining whether the applicant should be exempted wholly or partly from any liability, the Court shall give effect to the following overriding principles-
(a) a company that has allotted shares should receive money or money's worth at least equal in value to the aggregate of the nominal value of those shares and the whole of any premium or, if the case so requires, so much of that aggregate as is treated as paid up;
(b) subject to paragraph (a), if a company would, if the Court did not grant the exemption, have more than one remedy against a particular person, it should be for the company to decide which remedy it wishes to pursue.
(6) If a person brings proceedings against another person for a contribution in respect of liability to a company arising under any provision of this Division or Division 6 and it appears to the Court that the other person is liable to make such a contribution, the Court may (if and to the extent that it appears to it just and equitable to do so having regard to the respective culpability for the liability to the company of the other person and the person bringing the proceedings)—
(a) exempt the other person wholly or partly from liability to make such a contribution; or
(b) order the other person to make a larger contribution than that which, but for this subsection, that person would be liable to make.

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Disclaimer: This document is not to be taken as legal advise.

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