Judgment: Aviation Co-ordination Services v Mango Airlines

20 June 2025

Dear Member

The attached judgment was delivered in the Specialised Insolvency Court. The Court dealt with a compulsory cession and section 154(2) and declared that a business rescue plan cannot lawfully compel the cession of creditor claims without their consent, reaffirming a well-established principle of South African law: cession requires agreement. The respondents attempted to rely on section 154(2) of the Companies Act 71 of 2008, arguing that since dissenting creditors’ claims were rendered unenforceable by the plan, a cession could follow. This interpretation was firmly rejected.

In summary:

• Section 154(1) permits discharge of debt only with creditor accession.
• Section 154(2) limits enforcement of claims against the company - it does not authorise the transfer or extinguishing of claims, nor override the requirement of consent for cession.
• The business rescue plan was declared incapable of lawful implementation.

The judgment and summary kindly sent to us by Gareth Cremen of Cox Yeats.

Have a lovely weekend.

Take care,

René Bekker
Chief Operating Officer

  Judgment: Aviation Co-ordination Services v Mango Airlines. Case No:2022/058326