When a company hits financial turbulence, every extra week of uncertainty is another week of eroding value. South Africa's business-rescue regime is designed to give distressed companies a fighting chance – but only if disputes over creditors' claims don't bog the process down. That is where the AFSA-SARIPA Rules for the Resolution of Disputes in Business Rescue Proceedings step in, offering a purpose-built arbitration track that can turn courtroom gridlock into a streamlined pit stop.
Our seasoned litigation team has steered more than a few restructurings through choppy waters. Below, we unpack why every Business Rescue Practitioner (BRP), creditor and investor should treat the AFSA-SARIPA arbitration route as essential kit – not optional extras – when drafting, voting on or implementing a rescue plan.
Arbitration isn't a luxury add on – it is the rescue plan's safety valve
Chapter 6 of the Companies Act imposes a legal moratorium on ordinary litigation during business rescue, yet disagreements over the validity or quantum of claims can still derail the timetable. The AFSA-SARIPA framework plugs that gap by letting any "affected person" file an Appendix A Request for Arbitration with the AFSA Secretariat and, crucially, by interrupting prescription the moment the request lands on the Secretariat's desk.
Unlike conventional court battles, the timetable is brutally tight:
- the BRP must answer within ten business days (Appendix B);
- parties have four days to agree on an arbitrator, failing which the Secretariat appoints one from a specialist panel;
- the arbitrator has wide powers to set an expedited timetable and deliver an award within 30 days of final submissions.
Result? Disputes are quarantined, resolved, and the rescue plan keeps moving.
Proving claims: speed without sacrificing due process
Creditors still have to prove their claims under Sections 145 and 150 of the Act, but the arbitration rules push the evidence exchange up-front. Written statements and document packs are the default, with oral argument reserved for genuinely complex points of law or valuation.
Because the arbitrator may admit, reject or re-rank a claim – and can even convert a settlement into a binding award – creditors gain finality while the company preserves precious runway to implement the plan. Punitive cost orders await any party who uses delay tactics or withholds payment of the modest R15 000 administration fee.
Built-in flexibility for the plan drafter
At Barnard we recommend that drafters bake a short, surgical dispute-resolution clause straight into the rescue plan:
"Any disputed claim, ranking, or BRP decision shall be referred to AFSA-SARIPA arbitration within 20 business days of notification. The arbitrator's award shall be final, with costs following the event."
That single paragraph does three things:
- Locks in jurisdiction – no forum shopping, no satellite litigation.
- Protects the voting timeline – unresolved claims can no longer hold the 75 % vote hostage.
- Signals certainty to financiers – post-commencement lenders know disagreements won't destroy cash-flow forecasts.
Practical tips from the coalface
- Front-load your evidence. A spreadsheet of invoices beats a shoebox of paperwork dumped at the hearing.
- Watch the calendar. Miss the Secretariat's payment or filing deadlines and you risk exclusion from the process – and a reputational black eye.
- Use mediation first if emotions run high. The Secretariat can divert the dispute to mediation on short notice; that alone may save thousands in professional fees.
Why this matters now
South Africa logged a 40 % year-on-year rise in business-rescue filings in 2024. With interest rates stubbornly high and loadshedding still biting, 2025 will test the regime's ability to deliver real turnarounds instead of slow-motion liquidations. Fast, final dispute resolution isn't a nice-to-have. It is the oxygen that lets viable companies breathe long enough to restructure.
Barnard's restructuring and dispute-resolution team has already leveraged AFSA-SARIPA arbitration in sectors ranging from manufacturing to tech. If your board is weighing a rescue filing – or if you are a creditor facing a rejected claim – speak to our team about designing a plan (or a response strategy) that keeps disputes on the fast track, not the back burner.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
