Legal Anatomy – a South African Act on the dissecting table

Have you ever wondered whether there was something like a legal anatomy of an Act allowing us to study its structure, position and interrelation of its various parts? A detailed and empirical analysis similar to a human body’s dissection for the purpose of judging functionality, expedience and performance quality?

In their latest book “G&A Methodology to Business Rescue and Compromises” South Africans Karl Gribnitz, former senior business rescue practitioner, and Robert Appelbaum, partner at law firm Webber Wentzel, have developed a ground-breaking methodology and dissected Chapter 6 of the South African Companies Act 2008 with an exclusive focus on business rescue proceedings and compromise offers (http://www.gnacompass.co.za/ga-methodology-business-rescue-and-compromises-1st-edition). 

The exemplary features of Chapter 6 listed below serve to illustrate the “burning platform” that drove Gribnitz and Appelbaum’s innovation:

  • The skeleton of Chapter 6 consists of 28 sections, which have 127 subsections and 131 sentences, which are made up of 10,383 words. The longest sentence is 154 words and the shortest sentence is 45 words. The average is 79 words.

  • For Business Rescue, within 25 days, 354 obligations have to be addressed including 323 related to the Company, directors and practitioners.

  • 163 rights exist.

  • The affected parties have collectively 895 implied rights and 28 obligations. Out of those, 99 are direct and common rights, which means that those rights are described in the Act. The remaining 796 rights arise from the 353 conditions and the 326 obligations, which must be met by other parties. If a condition is not met, even in case of all obligations being fulfilled, the affected party can still approach to have the business rescue set aside.

  • The Act contained 289 cross references (of all descriptions), of which 278 related to Business Rescue and 11 related to Compromise offers. 

Ignaz Fuesgen, Senior Advisor to the EU Chamber, has taken a closer look at this new methodology. His article can be found here