Trade-based illicit financial flows and their impact on fair trade: Will the African Continental Free Trade Area succeed?

by | Nov 8, 2025 | JCLA, JCLA V12 SE

Trade-based illicit financial flows and their impact on fair trade: Will the African Continental Free Trade Area succeed?

Author: Tapiwa Victor Warikandwa

ISSN: 2521-2605
Affiliations: LLB, LLM, LLD (UFH). Adjunct Professor, University of Venda, South Africa. Senior Lecturer, Department of Law, University of Botswana
Source: Journal of Comparative Law in Africa, Volume 12 Special Edition, p. 234–266
https://doi.org/10.47348/JCLA/v12/2025-SEa9

Abstract

The African Continental Free Trade Area Agreement and the adoption of the African Continental Free Trade Area (AfCFTA) have brought significant hope of growing foreign direct investment and intra-African trade on the African continent. The AfCFTA sets the basis for sustained belief in African countries’ ability to grow investments, realise sustainable development and eradicate poverty. However, trade-based illicit financial flows (IFFs) could potentially derail any hopes of realising fair trade, sustainable development and ultimately AfCFTA’s success. Trade practices in African countries are often characterised by corruption, trade-based money laundering, bribery, and a general lack of good governance. The AfCFTA Agreement does not address financial crime risks and/or issues. This article discusses how trade-based IFFs will undermine the potential gains of the AfCFTA. It emphasises that a lack of integrity in trade will frustrate the realisation of the AfCFTA Agreement’s key objectives. The article advocates for harmonised AfCFTA rules to curb IFFs to ensure that the AfCFTA succeeds. Stringent trade rules must be adopted to ensure that trade-based IFFs do not undermine foreign direct investments and intra-African trade. The article relies on the Financial Action Task Force guidelines on how to curb trade-based IFFs.

The jurisdiction of competition authorities over Peregrini respondent firms in South African competition law: Revisiting the foreign currency cartel case

by | Nov 8, 2025 | JCLA, JCLA V12 SE

The jurisdiction of competition authorities over Peregrini respondent firms in South African competition law: Revisiting the foreign currency cartel case

Author: Precious Nonhlanhla Ndlovu

ISSN: 2521-2605
Affiliations: LLB (UFH), LLM (UWC), LLD. Senior Lecturer, Mercantile & Labour Law, University of the Western Cape
Source: Journal of Comparative Law in Africa, Volume 12 Special Edition, p. 267–297
https://doi.org/10.47348/JCLA/v12/2025-SEa10

Abstract

As it currently stands, the Competition Act 89 of 1998 only explicitly addresses subject-matter jurisdiction in s 3(1) by stipulating that its provisions apply “to all economic activities within or having an effect within” South Africa. When it comes to personal jurisdiction, the Act is silent. This means that the common law principles on personal jurisdiction must be applied. To that end, the forex cartel litigation served to clarify that personal jurisdiction is a mandatory requirement in South African competition law litigation involving peregrini respondent firms, on par with subject-matter jurisdiction. Because the Competition Act does not address the question of personal jurisdiction, the forex cartel litigation provided an opportunity to develop the common law on personal jurisdiction in competition law proceedings. The outcome of the forex cartel case is that personal jurisdiction can be satisfied if the Competition Commission, as prosecutor, can show that there are connecting factors between the prohibited conduct allegedly committed by peregrini respondents, and the Competition Tribunal, as the court of first instance. Considering the difficulties that the Competition Commission faced in establishing personal jurisdiction utilising common principles of personal jurisdiction in the forex cartel case, the legislature ought to consider amending the Competition Act to explicitly make provision for personal jurisdiction, in the way that subject-matter jurisdiction is statutorily defined. That said, the actual enforcement of these judgments against peregrini firms remains an issue to be determined in terms of the individual jurisdictions where such enforcement is sought.

The lessor’s hypothec – for rent?

by | Nov 8, 2025 | SLR, SLR V36 I1

The lessor’s hypothec – for rent?

Author: Graham Glover

ISSN: 1996-2193
Affiliations: BA LLB PhD, Professor, Faculty of Law, Rhodes University
Source: Stellenbosch Law Review, Volume 36 Issue 1, 2025, p. 1-15
https://doi.org/10.47348/SLR/2025/i1a1

Abstract

The lessor’s hypothec is a form of real security that has been recognised since the Republican period in Roman law. The hypothec, as it is traditionally understood, allows a lessor to attach and to sell in execution the property on the leased premises to set off arrear rent that the tenant owes. This contribution investigates two questions that have received little attention in the case law and literature. The first is how the concept of rent should be interpreted and understood in a modern world where lease contracts may describe the tenant’s financial obligations in various ways. The second is whether the hypothec should apply to any claims beyond the obligation to pay rent. An argument is made for an expanded approach to the traditional understanding of the application of the hypothec with respect to both questions. Nevertheless, reasons are given as to why this will not unduly stretch the range of application of the hypothec in any significant practical way.

Bwanya, EB and contexts of structural inequality in contracts

by | Nov 8, 2025 | SLR, SLR V36 I1

Bwanya, EB and contexts of structural inequality in contracts

Author: Elsje Bonthuys

ISSN: 1996-2193
Affiliations: BA, LLB, LLM (Stell) PhD (Cantab), Professor, University of the Witwatersrand
Source: Stellenbosch Law Review, Volume 36 Issue 1, 2025, p. 16-38
https://doi.org/10.47348/SLR/2025/i1a2

Abstract

Two recent Constitutional Court cases have modified the reasoning about contractual autonomy expressed in the court’s earlier judgment in Volks v Robinson. In Volks, the court held that people who choose not to marry cannot expect to benefit from the rights afforded to spouses – generally called the choice argument. This article examines the effects of these judgments for party autonomy in contracts in general. Bwanya v The Master acknowledges that structural forms of inequality, like gender inequality, can impede parties’ abilities to freely contract, but it is ambiguous on the question whether a right to support will be afforded to unmarried partners on the basis of contract or a familial relationship, or both. This creates uncertainty about the basis of future claims for rights to support in such relationships and opens the door for contractual defences to future claims. EB v ER considered the role of the choice argument in contracts which had turned out to be detrimental to one party. It confirmed the central role of pacta sunt servanda in public policy on contracts, but decided the matter on the basis of the unfair discrimination test in Harksen v Lane. Together, the cases create a chink in the armour of pacta sunt servanda and the choice argument for broader reconsideration of autonomy and fairness in contract law.

Learners resolving conflict: integrating mandatory peer mediation in South African public high schools to address issues of discipline

by | Nov 8, 2025 | SLR, SLR V36 I1

Learners resolving conflict: integrating mandatory peer mediation in South African public high schools to address issues of discipline

Authors: Monique Carels and Muofhe Tshifularo

ISSN: 1996-2193
Affiliations: LLB, LLM (Dispute Resolution), LLM (Labour Law), Lecturer, University of Cape Town; LLB, LLM (Dispute Resolution), Admitted Attorney
Source: Stellenbosch Law Review, Volume 36 Issue 1, 2025, p. 39-60
https://doi.org/10.47348/SLR/2025/i1a3

 Abstract

Disputes are a natural part of school life, and unfortunately, bullying, harassment, victimisation, and assaults have become all too common in South African public high schools. Schools face significant disciplinary challenges, with issues of ill-discipline on the rise in schools across the country. However, the current school disciplinary procedures adopted by most public high schools fail to address the root causes of these problems and do not provide concrete solutions.
This article aims to explore the idea of implementing mandatory peer mediation in South African public high schools as a way to resolve conflicts and address issues of discipline. It will begin by briefly examining the school disciplinary procedure, before discussing its shortcomings. Next, it will examine the concept of peer mediation and compare it to the disciplinary hearing process. To gain a deeper understanding of how peer mediation could be integrated into the school environment, we will look at the experience in New Zealand. Finally, the article will discuss the practicalities of implementing mandatory peer mediation in South African high schools.

Relationship-centred lawyering and its impact on legal practice

by | Nov 8, 2025 | SLR, SLR V36 I1

Relationship-centred lawyering and its impact on legal practice

Author: Jonathan Campbell

ISSN: 1996-2193
Affiliations: BA LLB (UCT) LLM, Associate Professor, Faculty of Law, Rhodes University
Source: Stellenbosch Law Review, Volume 36 Issue 1, 2025, p. 61-78
https://doi.org/10.47348/SLR/2025/i1a4

 Abstract

This contribution emphasises the human factor in the relationship between lawyer and client. It submits that traditional “client-centred lawyering”, which foregrounds the paramount interests of the client, has considerable value but does not go far enough. “Relationship-centred lawyering” (or “relational lawyering”) extends the focus beyond the interests of the client to the relationship between lawyer and client. According to this approach the building of trust and rapport is foundational to a successful professional relationship.
Four key characteristics define relational lawyering: (i) the background contexts of both the client and the lawyer, and the personalities, values, preferences (and more) that each brings into the interactions between them; (ii) the importance of non-legal issues that can determine (in whole or in part) the strategy adopted and even the preferred outcome; (iii) a partnership between lawyer and client that allows for collaborative problem-solving, since the client knows best the facts of the case but also her needs and preferences, with the emphasis on the importance of client autonomy in decision-making; and (iv) a range of psychological matters, including interpersonal literacy, emotional intelligence and empathy in the lawyer-client relationship.
A range of skills and values are required to practice relational lawyering, known as “relational competencies”. These competencies are not widely practiced or understood by lawyers, and usually they are not explicitly included in law curricula. This contribution argues that there is a need for relational skills and values to be taught in law schools so that these valued competencies can aid graduates in serving the best interests of their clients in their future careers.

Perfecting entitlement before filing: patent revocation and the right to apply

by | Nov 8, 2025 | SLR, SLR V36 I1

Perfecting entitlement before filing: patent revocation and the right to apply

Author: Joel Morrison

ISSN: 1996-2193
Affiliations: LLB LLM, LLD Candidate, University of South Africa
Source: Stellenbosch Law Review, Volume 36 Issue 1, 2025, p. 79-92
https://doi.org/10.47348/SLR/2025/i1a5

 Abstract

This case comment examines the recent judgment in Regents of the University of California and Others v Eurolab (Pty) Ltd and Others. The dispute centred on the validity of a South African patent for a pharmaceutical compound marketed by the Regents of the University of California (“UC”) under the brand name Xtandi for certain forms of prostate cancer. Eurolab (Pty) Ltd launched a generic version of the same drug, Enzutrix, which Dis-Chem Pharmacies distributes. When UC pursued an interim interdict, Eurolab and Dis-Chem challenged the patent’s validity on two primary grounds: (1) the patentee’s lack of entitlement to apply for the patent under section 27 of the Patents Act 57 of 1978 and (2) alleged misrepresentations concerning priority. The Commissioner held that, where the applicant for a patent is not the inventor, that applicant must have acquired the right to apply from the inventor before filing. On the facts, certain co-inventors had pre-assigned their rights to a research institution, and no complete re-assignment was furnished to the patentee before the filing date. As a result, the patentee was not “a person entitled under section 27” at the critical date, rendering the patent invalid and liable to revocation. This judgment reinforces the strict requirement that the chain of title must be perfected before filing, underscoring the importance of complete and timely assignments for patent validity. It also clarifies that a post-filing agreement to assign cannot cure an applicant’s lack of initial entitlement. For prospective patent holders, the decision highlights the practical necessity of sound contractual arrangements with inventors (and any third-party research sponsors) before proceeding with a national or international patent filing.

Navigating the VAT Maze: Input Tax Deductibility for Holding Companies and Private Equity Structures in the Post-Woolworths Era

by | Oct 18, 2025 | BTCLQ, BTCLQ V16 I3

Navigating the VAT Maze: Input Tax Deductibility for Holding Companies and Private Equity Structures in the Post-Woolworths Era

Authors: Joon Chong and Des Kruger

ISSN: 2219-1585
Affiliations: Partner, Webber Wentzel; Consultant, Webber Wentzel
Source: Business Tax & Company Law Quarterly, Volume 16 Issue 3, 2025, p. 1 – 14

Abstract

This article provides a comprehensive analysis of the evolving legal landscape governing value-added tax (VAT) input tax deductibility for holding companies in South Africa, as well as for private equity structures. It examines the seminal judgments in Commissioner for the South African Revenue Service (CSARS) v De Beers Consolidated Mines Ltd, the recent landmark case of CSARS v Woolworths Holdings Limited, and the corroborating Tax Court decision in IT 76795. The analysis reveals a fundamental jurisprudential shift away from the restrictive, transaction-focused approach established in De Beers towards the holistic, purpose-driven framework solidified in Woolworths. This evolution presents both significant opportunities and new compliance imperatives for corporate structures, particularly within the private equity (PE) sector.
The central principle emerging from this body of case law is the critical importance for a holding company to defi ne, structure, and evidence its status as an ‘active investment holding company’. To successfully claim input VAT on acquisition, capital-raising, and other strategic expenses, a holding company must demonstrate that its core enterprise involves the continuous and regular provision of taxable supplies – such as management, financial, or administrative services – to its underlying portfolio companies for a fee. The mere passive holding of shares and receipt of dividends or interest is insufficient to constitute a VAT enterprise for the purposes of deducting input tax on associated costs.
The core thesis of this article is that the test for deductibility has evolved. The question is no longer whether an expense has a ‘direct and immediate link’ to a specific operational transaction, but rather whether it has a clear ‘functional link’ to the company’s overall, continuous enterprise. The Woolworths judgment has affirmed that costs incurred in furtherance of strategic expansion, such as capital-raising fees, are deductible if they serve to enhance and grow an active investment management enterprise.
For the PE industry specifically, this represents a pivotal moment. The strategic imperative is clear: PE holding companies must proactively structure their operations to align with the principles of the Woolworths judgment. This involves establishing formal management service agreements, charging market-related fees, and maintaining meticulous records that evidence active strategic involvement in portfolio companies. By doing so, they can create a defensible basis for claiming input VAT on a wide range of transaction costs, thereby mitigating tax leakage and enhancing overall fund returns.

The Conflict Between Director Reliance in the Companies Act and Director Liability in the JSE Listings Requirements

by | Oct 18, 2025 | BTCLQ, BTCLQ V16 I3

The Conflict Between Director Reliance in the Companies Act and Director Liability in the JSE Listings Requirements

Author: Siyabonga Nyezi

ISSN: 2219-1585
Affiliations: BCom (UCT), LLB (Unisa), Attorney of the High Court of South Africa
Source: Business Tax & Company Law Quarterly, Volume 16 Issue 3, 2025, p. 15 – 22

Abstract

In the film The Pursuit of Happyness, the protagonist, Chris Gardner, juggles the challenges of fatherhood on the one hand, with his failing attempts at an entrepreneurial breakthrough on the other. Throughout the film, each keeps getting in the way of the other, almost as if they cannot coexist. A missive on a film about a struggling entrepreneur and father is perhaps not the most conventional way to start an article on delegation and reliance in company law; but the purpose of the anecdote is to emphasise the concept of two attempts at doing the right thing getting in the way of each other – a central theme in this article’s analysis of the Financial Service Tribunal ruling in Munro v Johannesburg Stock Exchange (JSE2/2023) [2024] ZAFST 36. More specifically, this article examines the incongruence between the reliance provisions in section 76(5) of the Companies Act 71 of 2008, and the provisions relating to director liability in the JSE Listings Requirements (‘Listings Requirements’).
In Munro, the Financial Services Tribunal (‘Tribunal’) had to determine, inter alia, whether a (financial) director was liable to be sanctioned for a contravention of the Listings Requirements, resulting from misstatements in the company’s financial statements, where the director relied on information provided to him by other employees of the company. This article asserts that the provisions of the Companies Act and the Listings Requirements result in parallel and conflicting treatment of reliant director conduct. The article further argues that there are instances where the JSE Listings Requirements may unduly impose liability on directors who have, in line with section 76(5), relied on information provided to them by other employees.

Equity Equivalent Programmes: A Tax Analysis

by | Oct 18, 2025 | BTCLQ, BTCLQ V16 I3

Equity Equivalent Programmes: A Tax Analysis

Author: Michael Rudnicki

ISSN: 2219-1585
Affiliations: Tax Executive, Bowman’s Attorneys
Source: Business Tax & Company Law Quarterly, Volume 16 Issue 3, 2025, p. 23 – 29

Abstract

The concept of ‘Equity Equivalents’ in the context of BEE ownership rules and regulations is rearing its head once more. Foreign organisations seeking investable presence in South Africa are cautious about giving up true equity. Ownership points play a key role in the ‘BEE score card’ table. The Department of Trade, Industry and Competition has historically accepted an alternative basis to transfer equity to black owned small and medium organisations. The alternative is referred to as an ‘Equity Equivalent’ programme.
The programme typically envisages a percentage of turnover over a period of time (typically seven to ten years) to be deployed in qualifying beneficiaries or participants in categories of investment such as supplier development, training and research.
This article considers the tax deductibility of the EE expenditure in terms of section 11(a) of the Income Tax Act (’the Act’).
It is submitted that expenditure is ‘actually incurred’ not at the time of signing the framework agreement with the DTIC, but when the contractual obligation to pay beneficiaries arises.
The ‘in the production of income’ test focuses primarily on the act giving rise to expenditure. In the Warner Lambert case (see below for detail), the court concluded that expenditure incurred in respect of social responsibility obligations meets the ‘in the production of income’ test. It is submitted that BEE related expenditure incurred to retain and grow market share meets this test. So too, it is submitted, does expenditure incurred in respect of the EE programme meet this test. The purpose of concluding this programme is to maximise earnings covering existing and new markets.
The more sensitive issue in respect of EE related expenditure is the capital versus revenue nature of the expense. Generally, expenditure incurred in performing the income-earning operations of a business is revenue in nature. Expenditure incurred as part of the cost of establishing or enhancing or adding to the income-earning structure is capital in nature. Supplementary tests are the ‘once and for all test’ and the ‘enduring benefit’ test.
Warner Lambert, supra, considered the social responsibility expenditure in the context of capital and revenue. It concluded that the taxpayer’s income-earning structure had been erected long ago. The expenditure it incurred was to protect its earnings. Accordingly, the judgment concluded that the expenditure was revenue in nature. In the case of companies having erected their income-earning structure long ago, the EE related expenditure does not create an additional structure. Ownerships points are but one of the elements of the BEE scorecard. But the key feature of the expenditure is to maintain and improve market share, thereby protecting the entity’s earnings. As a result, it is submitted, such expenditure is not of a capital nature. The same conclusion should prevail, it is submitted, where a foreign organisation establishes presence in South Africa for the first time and seeks to maximise its market share. Using this income-earning structure to seek profitable business and as a result incur EE related expenditure, does not, it is submitted, label such expenditure capital in nature.