Section 163 of the Companies Act 71 of 2008 provides shareholders and directors with a statutory remedy where the affairs of a company are conducted in a manner that is oppressive, unfairly prejudicial, or that unfairly disregards their interests. The provision is deliberately broad and confers wide remedial powers on the courts.
However, recent case law makes it clear that while Section 163 is a powerful mechanism, it is not a catch-all solution for shareholder dissatisfaction or management deadlock. Courts continue to approach the remedy with caution, grounding their intervention firmly in objective evidence and the specific facts of each case.
Statutory Basis for Relief
Section 163(1) allows a shareholder or director to approach the court where:
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An act or omission of the company or a related person has resulted in conduct that is oppressive, unfairly prejudicial, or that unfairly disregards the applicant’s interests;
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The business of the company or a related person is being conducted in such a manner; or
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The powers of directors, prescribed officers, or related persons are being exercised in such a manner.
Once jurisdiction is established, Section 163(2) empowers the court to grant any order it considers appropriate, including restraining conduct, amending constitutional documents, regulating company affairs, or awarding compensation.
Importantly, the provision:
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Is not limited to minority shareholders
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Does not require proof of a breach of fiduciary duty
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Extends to directors, including those with equal or majority control
Despite this breadth, the courts have consistently emphasised restraint.
Judicial Approach: Caution Over Intervention
South African courts have made it clear that Section 163 does not entitle litigants to invite judicial oversight of ordinary commercial decisions or to re-engineer company arrangements simply because relationships have deteriorated.
This principle was reaffirmed by the Supreme Court of Appeal of South Africa in several recent decisions.
Parry v Dunn-Blatch and Others: Equal Shareholders, No Automatic Relief
In Parry v Dunn-Blatch and Others (394/2022) [2024] ZASCA 19, the Supreme Court of Appeal considered the application of Section 163 in the context of a breakdown between two equal shareholders and directors of TRADSA (Pty) Ltd.
Ms Parry alleged that her co-director’s conduct relating to the use of the company’s intellectual property by a related non-profit entity amounted to oppression and unfair prejudice. Although relief was initially granted in the High Court, that decision was overturned on appeal.
The SCA held that:
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Section 163 is available to equal shareholders and directors, but
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It is not a mechanism for resolving every commercial dispute or personal conflict
The court emphasised that the conduct complained of must objectively meet the statutory threshold. Allegations of commercial unfairness, loss of trust, or personality clashes are insufficient without clear evidence of abusive or prejudicial conduct. Section 163 does not permit courts to override contractual arrangements or restructure governance simply because relations have soured.
Consistent Themes in Subsequent Case Law
Later decisions have reinforced and refined these principles:
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In Technology Corporate Management (Pty) Ltd and Others v De Sousa and Another (613/2017) [2024] ZASCA 29, the SCA confirmed that Section 163 is not designed to address routine internal disputes or director fallouts. The removal of a director following proper procedures did not amount to oppressive or unfairly prejudicial conduct.
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In Edery N.O v Brands 2 Africa (Pty) Ltd and Others (2021/58016) [2023] ZAGPJHC 85, the court dismissed a Section 163 application due to insufficient evidence, reiterating that dissatisfaction with business or board decisions does not justify judicial intervention.
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In Bey v Constantia Metering Services (Pty) Ltd and Others (31250/2022) [2025] ZAGPPHC 81, the court again stressed the requirement for objective proof of both conduct and prejudice before discretionary relief will be granted.
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In Khawa v Littlefish App (Pty) Ltd and Others (2024/069982) [2025] ZAGPJHC 418, the Gauteng High Court clarified the territorial limits of Section 163, holding that it does not apply to foreign entities that are not domesticated in South Africa.
Practical Implications for Shareholders and Directors
The emerging jurisprudence highlights several critical considerations:
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High threshold: The conduct must materially and objectively prejudice the applicant’s interests. Subjective perceptions of unfairness carry little weight.
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Evidentiary burden: Applicants must present concrete, factual evidence. Bare allegations or speculative harm will not suffice.
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Judicial restraint: Despite the wide wording of Section 163, courts remain reluctant to interfere with commercial strategy or internal management unless there is clear abuse.
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Wide standing, narrow outcomes: While many parties may invoke Section 163, relief will only be granted where the statutory requirements are clearly met.
Conclusion
Section 163 remains one of the most flexible remedies in South African company law, but it is also one of the most carefully guarded. Its purpose is not to police commercial disagreements, but to prevent genuine oppression and unfair prejudice.
For shareholders and directors considering reliance on Section 163, the message from the courts is clear:
the conduct complained of must go beyond mere disagreement or commercial disappointment and must justify judicial intervention on objective grounds.
Need Advice on Shareholder Oppression or Disputes?
At O’Reilly Law Inc, we advise shareholders and directors on Section 163 applications, shareholder disputes, and corporate litigation strategy. If you are considering relief under the Companies Act—or defending such a claim—early, informed legal advice is essential.
Contact our litigation team to assess your position.