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Section 381 of The Companies Act No. 17 of 2015: Power of Court to grant relief

    

(1) A person who—
(a) is liable to a company under a provision of this Division make a payment for shares in the company; or
(b) is liable to a company because of an undertaking given to it in; or in connection with, a payment for shares in the company, may apply to the Court to be exempted from the liability (either wholly or in part).
(2) In the case of a liability within subsection (1)(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 a provision of this Division or Division 5; 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 an order of the Court or otherwise) any such amount;
(c) whether the applicant or any other person—
(i) has performed, or is likely so to perform, any such undertaking in whole or in part; or
(ii) has done or is likely to do any other thing in payment or part payment for the shares.
(3) In the case of a liability within subsection (1)(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 a provision of this Division or Division 5; and
(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.
(4) In determining whether it should exempt the applicant in whole or in part from any liability, the Court shall have regard to the following overriding principles—
(a) that 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), that if such 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 should remain entitled to pursue.
(5) Subsection (6) applies if—
(a) a person brings proceedings against another person for a contribution in respect of liability to a company arising under a provision of this Division or Division 5; and
(b) it appears to the Court that the contributor is liable to make such a contribution.
(6) When this subsection applies, the Court may, if and to the extent that itappears to it, just and equitable to do so having regard to the respective culpability (in respect of the liability to the company) of the contributor and the person bringing the proceedings—
(a) exempt the contributor in whole or in part from liability to make such a contribution; or
(b) order the contributor to make a larger contribution than, but for this subsection, the person would be liable to make.
(7) If a person is liable to a company under section 380(1), the Court may, onapplication, exempt the person in whole or in part from that liability if and to the extent that it appears to the Court to be just and equitable to do so having regard to any benefit accruing to the company because of anything done by the person towards the carrying out of the agreement mentioned in that subsection.

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

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