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Coronavirus (COVID-19) | legal update
issue 6 | 19 May 2020

dispute resolution

South Africa: Interpretation of contracts and impossibility of performance

On 23 April 2020, in Kooij v Middleground Trading 251 CC, the Supreme Court of Appeal (“SCA”) handed down judgment in connection with a “rent and rental agreement” between the Daleen Kruger Trust (the “Trust”) and Middleground Trading 251 CC (“Middleground”). The agreement entitled Middelground to mine and harvest peat from a portion of the Trust’s farm. The monthly consideration payable by Middleground to the Trust was ZAR15 000 plus ZAR25 per m3 for any additional extraction of peat in excess of 600m3. The Department of Environmental Affairs issued a compliance notice requiring Middleground to cease its peat extraction operations. The SCA held that the compliance notice constituted a supervening impossibility of a permanent nature which was not due to Middleground’s own fault. Consequently, Middleground was discharged from performing its contractual obligations under the agreement (ie, payment of monthly consideration). The case is of interest because it addresses the law on supervening impossibility, which has gained increased significance since the start of the Coronavirus (COVID-19) pandemic. Click here to read the full case summary written by Aslam Moosajee and Joshua Davis (ENSafrica | Dispute Resolution).

South Africa: Afriforum and Solidarity have lost their legal challenge to declare the Department of Tourisms empowerment based criterion for COVID-19 relief unlawful
The Pretoria High Court has found that the Department of Tourism’s decision to be guided by the Broad-based black economic empowerment (“B-BBEE”) codes of good practice in determining how to allocate relief under the COVID-19 tourism fund is not unlawful. In dismissing Afriforum and Solidatory’s application, the court said that the decision to establish the tourism fund constitutes executive policy making and not administrative action, and is thus not subject to review under the Promotion of Administrative Justice Act, 2000. On this basis, there is a rational connection between the objectives of the eligibility criteria of the fund and the objectives of the department in dealing with the effects of COVID-19 and the imperatives of empowerment. Afriforum and Solidarity then attempted to appeal the decision directly to the Constitutional Court, but their application to appeal was also dismissed. Click here to read the full case summary, written by Aslam Moosajee and Joshua Davis (ENSafrica | Dispute Resolution).


South Africa: Flexible working is here to stay

As businesses resume operations during level 4 of lockdown, one thing is for certain – it is not and will not be business as usual. Both the level 4 lockdown regulations, as well as the new set of occupational health and safety directions issued by the Minister of Employment and Labour, have presented employers with an opportunity to formalise flexible working arrangements. In this commentary, Lauren Salt and Jessie Moore (ENSafrica | Employment) are of the view that, if done right, in the long term this may be highly advantageous for everyone involved.

natural resources and environment

South Africa: Will COVID-19 usher in a new chapter in state sovereignty over natural resources?

The exploration and exploitation of natural resources in the world have often mirrored social and political events of the day. Prior to decolonisation, much of the resource-rich developing world did not share equitably in the benefits from development of their resources. However, the development of the “sovereignty principle” (which provides that all states exercise permanent sovereignty over their natural resources) in the aftermath of the second world war, proved to be a watershed moment for mineral regulation and prevailing mineral agreements between states and companies. Ntsiki Adonisi-Kgame and Edwin Berman (ENSafrica | Natural Resources and Environment) consider whether COVID-19 will usher in a new chapter in the development of the “sovereignty principle”.

regulatory update

Uganda: Ministry of Health issued additional COVID-19 rules

Click here for a summary of the key aspects of these new rules which amend the Public Health (Control of COVID-19) No. 2 Rules, 2020.