Menu Search through site content What are you looking for?
Menu

Fast-tracking Commercial Litigation in the South African High Court

  • Market Insight 01 February 2021 01 February 2021
  • Africa

  • Commercial Disputes

The establishment of the Commercial Court, as part of the High Court of South Africa, has provided litigants with a specialised forum to promote the efficient conduct of litigation and to resolve disputes quickly, cheaply and fairly. In this article, we examine the purpose of the Commercial Court, its unique characteristics and other important practical considerations.

Fast-tracking Commercial Litigation in the South African High Court

The economic reality of resolving commercial disputes through litigation has always been an important consideration for parties in dispute, but even more so in these challenging and unprecedented times.

The establishment of the Commercial Court, as part of the High Court of South Africa, has provided litigants with a specialised forum whose stated objective is to promote the efficient conduct of litigation and to resolve disputes quickly, cheaply and fairly. 

The Commercial Court is regulated by the Commercial Court Practice Directive. The Directive provides for a number of unique features. Parties who are considering the referral of a matter to the Commercial Court will need to carefully consider the strategic implications of conducting litigation in the Commercial Court. In this article, we briefly examine the purpose behind the Commercial Court, its unique characteristics and various other important practical considerations.

What is a Commercial Court case?

Schedule 1 to the Directive provides that a Commercial Court case is ordinarily a substantial case that has as its foundation a broadly commercial transaction or commercial relationship.

Schedule 1 sets out a list of examples, which might depending on their particular facts or legal aspects, qualify as a Commercial Court case. These include any claim arising of the transaction of trade and commerce and includes any claim relating to, inter alia:

  • The export and import of goods
  • The carriage of goods by land, sea, air or pipeline
  • Insurance and reinsurance
  • Banking and financial services
  • The operation of markets and exchanges
  • The purchase and sale of commodities
  • Commercial matters arising out of business rescue and insolvency cases
  • All commercial matters affecting companies arising out of the Companies Act 2008 and its interpretation
  • Delictual cases that take place in a commercial context e.g. unlawful competition cases
  • Generally, appropriate contractual matters
  • Intellectual property cases

It is important to note that this is not a closed list and it is possible for other commercial matters to fall within the ambit of the Directive.

The Commercial Court is also empowered to adjudicate both actions and applications, including applications brought on an urgent basis.

When and how can you refer a matter to the Commercial Court?

The Directive provides that at any time after a summons has been issued out of the High Court, any party to the suit may apply to have the case allocated to the Commercial Court. The mechanism for such a request is fairly simple and an application is made by delivering a letter to the Judge President or Deputy Judge President setting out a broad description of the case and motivating why the case is a commercial case or should be considered as such, warranting treatment under the Directive.

Practically, the parties to the dispute can prepare a joint agreed letter, or one party may apply and in so doing must copy in all the other parties to the suit.

A party who receives such a letter from another party, and who wishes to make representations, may do so by sending a letter of reply to the Judge President or the Deputy Judge President within 5 days of receiving the letter requesting that the case be allocated to the Commercial Court.

The Judge President or the Deputy Judge President will determine whether the case should be allocated to the Commercial Court and will inform the parties in writing. If the case is allocated, a Judge or two Judges will be allocated to manage the case and ordinarily that Judge or Judges will deal with all interlocutory matters and will also hear the trial of the matter.

What happens next?

As soon as reasonably possible after the matter has been allocated as a Commercial Court case, a first Case Management Conference must be held before the Judge or Judges allocated to hear the matter.

At the first Case Management Conference, the following general matters must be canvassed:

  • A general sense of what the matter is about
  • What needs to be done to bring the matter to trial
  • A timetable for getting the matter expeditiously to trial
  • A potential trial date
  • The number of witnesses likely to be called, including expert witnesses
  • The probable length of the trial

The Judge or Judges will then, absent agreement, determine the timetable to bring the matter to trial.

From a strategic perspective, the first Case Management Meeting is important and provides the litigants with some immediate benefits.

It serves to offer an insight into the issues in dispute between the parties and allows each party to gain a more meaningful sense of the other party’s case. This, of course, may ultimately facilitate the early resolution of the matter.

Secondly, the formation of a court agreed timetable, to which the parties are obliged to comply, facilitates the speedy and efficient progress of the matter to trial.

The timetable provides certainty regarding the various milestones that need to be met, and this will also assist the parties in determining what work needs to be done and at what cost in getting the matter to trial.

A party that comes to the Case Management Meeting fully prepared and ready to advance the legal proceedings to trial, will be able to make submissions for a timetable that provides for a relatively swift period up to and including the agreed trial date.

The unique aspects of the Commercial Court

The Directive provides that matters heard in the Commercial Court will be dealt with in line with broad principles of fairness, efficiency and cost-effectiveness.

This is an attractive proposition for litigants, but in deciding whether a matter is appropriate for the Commercial Court, a party will have to carefully consider the strategic implications in respect of the various unique aspects of the Commercial Court as provided for by the Directive.

Inter alia, the party must consider the following: 

  • The Directive provides that the plaintiff must file a statement of case containing its cause of action and relief claimed, and the defendant must file a responsive statement of case containing its defence and any counterclaim, and the parties in doing so must also provide the essential documents and a summary of the evidence that they intend to rely on.
  • No request for further particulars may be sought in the Commercial Court.
  • A second Case Management Conference must be held at which the parties will present either an agreed list of triable issues or, absent agreement, each party’s identification of the triable issues.
  • At the second Case Management Conference the dates for filing of full witness statements by the parties will be fixed, it being understood that the witness statements will constitute, save with the leave of the court, the evidence in chief of the particular witness.
  • No general discovery is required in Commercial Court cases. Instead, at the second Case Management Conference the court may allow for the targeted disclosure of documents. If permitted, a request for disclosure may be made concerning specific documents or classes of documents that are relevant to the issues in dispute between the parties.

The manner in which the Commercial Court operates enables the parties to quickly drill down into and consider the essential legal and factual features of the case. Early disclosure of the essential documents and the evidence that the parties intend to rely upon will also allow the parties to assess the likely prospects of success at a far earlier stage in the proceedings.

The process of targeted discovery may also lead to the less burdensome and more cost effective exchange of documents.

A party may be wary of disclosing in full its witness evidence upfront, in the form of a written witness statement, but this must be weighed against the opportunity of reviewing the other party’s witness evidence and that the trial itself will likely be shortened by the fact that witness statements have already been exchanged. Legal advice will need to be taken on the implications of filing witness statements and the content thereof.

If the matter requires expert evidence, the experts are also required to meet and to file expert reports and joint minutes setting out the issues of agreement and disagreement, and the court may convene a meeting with the experts to narrow the issues to be determined at trial.

Conclusion

A careful decision will need to be made in determining whether a matter is appropriate for the Commercial Court, having regard to the particular legal issues and facts in dispute between the parties.

Whilst it is not necessarily a case that one size fits all, there are a number of commercial matters that generally speaking will benefit from the unique features that the Commercial Court has to offer.

Of course, in these challenging times, faced with the economic reality of litigation and the practical challenges in conducting business within a global pandemic, the ability to fast-track commercial disputes to an early and cost effective resolution is to be welcomed.

For any assistance with a commercial matter, or for further insight into the Commercial Court, please contact the Clyde & Co Litigation Team.

End

Stay up to date with Clyde & Co

Sign up to receive email updates straight to your inbox!