1. The legislation landscape of Botswana has been changing over the years to create a conducive business environment to assist Botswana in moving to greater heights in economic development, and this ranges from changes in tax laws, data protection laws, changes in laws relating to economic zones, and to laws relating to the sale of land. These are all interesting changes to businessmen exploring business opportunities in various sectors of the economy of Botswana. Alongside these commendable strides, there has been for a while, pressure mounted on Botswana to also consider laws to empower the native citizens like what has been seen as new legislative changes in a few other countries in Southern African Development Community such as South Africa (through the Broad-Based Black Economic Empowerment Amendment Act, 2013) which is still recovering from the legacy of apartheid.
2. In this regard, the Parliament of Botswana found it fitting to promulgate the Economic Inclusion Act (the “Act”), which came into force on 20 April 2022. The primary objectives of this Act is to among other things, promote of the economic empowerment of targeted citizens, ensure the promotion and facilitation of ownership of income-generating activities and assets by targeted citizens, strengthen the ability of a targeted citizen to own, manage and control a private sector enterprise and productive assets. These objectives will be the responsibility of the Economic Empowerment Office (headed by the Coordinator), a body created under the Act, and it is envisaged that it will be monitoring and measuring implementation of the objectives, ensuring ease of monitoring and evaluation of economic empowerment laws, policies, initiatives and programmes, and facilitating enforcement of the economic empowerment laws, policies, initiatives and programmes and continuously reviewing the economic empowerment laws, policies, initiatives and programmes.
3. The term “targeted citizen” which refers to the beneficiary for the enforcement of the Act, is defined under the Act as a citizen whose access to economic resources has been constrained by various factors as may be prescribed by the Minister of Investment, Trade and Industry (the “Minister”) from time to time. As at the date of this article, it may well be argued that the Act cannot technically be enforced against anyone as there are currently no prescribed criteria for identifying a targeted citizen and this would presumably be set out under the Regulations to the Act which are yet to be promulgated to also give effect to a number of provisions of the Act.
4. This notwithstanding, it is imperative to understand the expectations and extent of application of the Act to the private sector players. The Act imposes obligations, which are couched in wide and general terms to all sectors of the economy, the State, public bodies, private entities and agencies, to implement the empowerment of targeted citizens.
5. In terms of the Act, the private sector is obliged to put in place appropriate strategies to empower “targeted citizens” through:
5.1. Mentoring and sharing knowledge on business development and market penetration with “targeted citizens” or targeted citizen owned private sector enterprise;
5.2. Promoting economic empowerment of targeted citizens and to incite entrepreneurial culture;
5.3. Building capacity of targeted citizens and targeted citizens owned enterprises;
5.4. Procuring goods and services from targeted citizens and all targeted citizen owned enterprises within the private sector;
5.5. Developing sector codes of good practice for economic empowerment;
5.6. Developing supplier development programmes with a targeted citizen or a targeted citizen enterprise to foster business relationships;
5.7. Preparing transformation charters and reports of compliance;
5.8. Training employees to effect inclusive ownership of businesses;
5.9. Enabling economic empowerment of private sector businesses owned and managed by targeted citizens;
6. In terms of the Act, the private sector players are required to apply the economic empowerment standards and strategies referred to above, when they are prescribed, and this is also yet to be done as there are no Regulations to the Act.
7. The Act empowers the Coordinator to measure compliance by public bodies, and the Compliance is measured through reporting and returns and imposition of administrative fines for non-compliance.
8. The Act also makes it an offence for private sector where it inter alia, engages in fronting with regard to economic empowerment laws or fails to accord targeted citizens the benefits accorded by the provisions of the Act and prescribes fines of up to BWP 1,000,000.00 and imprisonment of up to 10 years.
9. As a general concluding note, we are of the view that given how the provisions of the Act have been widely and generally couched, it is uncertain as to how it may impact entities in the private sector.
10. In fact, there are no specific provisions in the Act relating to obligations of the private sector, save section 25 of the Act which imposes the general obligations set out above.
11. Therefore, at this stage, it is not possible to determine how the private sector players should structure their businesses or implement the strategies to empower “targeted citizens” because of the general nature of the obligations set out in the Act, and hopefully this will be rectified when the Regulations are promulgated by the Minister in the future.
12. For more information on the above, please contact Simon at simon@armstrongs.bw or call +267 395 3481.
Witnesses are an integral part of both the criminal and civil law system. The question however is always what the court looks at before determining the weight to place on what witnesses present to the court.
A party can compel a competent witness to attend court to give evidence, however, when giving evidence the weight of such evidence is reliant of the credibility of the witness on the stand.
The question of the credibility of a witness is within the peculiar preserve of a trial court. Furthermore, the question of impressiveness or convincingness are products of credibility and veracity; and a court becomes convinced or unconvinced or unimpressed with oral evidence according to the opinion it forms of the veracity of witnesses.
The weight of the evidence given in court is however tied to the credibility of any particular witness and such credibility is gauged by varying factors.
Bias
Signs that the witness is biased in relation to the testimony given can be deduced in cross-examination, if denied, allegations of bias can be independently proved.
The weight evidence given by an individual who carries some bias or is in some fashion conflicted is thereby a candidate for rebuke by the court either in part or in its entirety as there is a potential clear motive to mislead the court on the facts surrounding any particular dispute.
Hostile witnesses
A witness can be considered hostile upon the formation of the opinion by the court that he displays a hostile attitude against the party examining him and does not give evidence fairly and with the clear intention of assisting the court with a truthful testimony.
Hostility can be deduced from a refusal to answer to a particular line of questioning or from an inconsistent series of answers to questions posed. The conduct of the witness while in the witness box may also guide the court in making a determination of hostility.
In Meyer’s Trustee v Malan , it was simply put that:
“the court must come to a decision as to whether the witness is adverse i.e hostile from his demeanour in the box, his position towards or relationship to the party calling him and from the general circumstances of the case.”
It must be noted however that mere inconsistencies in testimony are insufficient to warrant a declaration of hostility.
Inconsistent Statements
A witness who is seen to be hostile by the court has their credibility inevitably impaired.
The variation of written testimony or evidence given on the stand leads to contradictions making the evidence suspect.
Admittedly contradictory statements cannot be placed as proof of fact on which the court can act.
Once it is established that a witness has deviated therefor from a previous statement either during their testimony or with a prior written statement on the same subject matter his credibility must be tested to ascertain the cause of such deviation and the implications on the evidence presented.
Aguda J (as he then was) stated in PHETO v. THE STATE 2000 (1) BLR 105 (CA) that:
“There can be very few cases in which testimonies differing with each other on points of detail are not found. Where this happens, it does not necessarily reflect on the reliability of the witnesses in question. Witnesses who honestly endeavour to tell the truth as they recall it often differ on points of detail. It is only where such differences relate to vital points in proving a case that they may come to be of importance.”
It is thereby the position of the court that minuscule deviations may not carry much impact on the overall credibility and reliability of the testimony of a witness however once such deviations become glaring and obvious in nature the court ought to deal with the testimony cautiously.
It appears to be the position of the law that the evidence of a witness is largely accepted and its value appreciated so long as the witness is not seen to fall within characterisations that diminish their credibility, some of which are discussed above.
A determination of credibility guides the court on the manner to proceed in its evaluation of the overall evidence before it in that if credibility is absent the evidence may be disregarded and in the absence of further evidence,
From a reading on the literature and case law on the issues surrounding credibility of witnesses, it is clear that the courts have been reluctant to set tests for conclusively dealing with the manner particularly as the test is highly subjective. Furthermore, it is apparent that most of our guidance is derived from criminal law decisions and our courts are yet to set a clear tone on the subject matter in civil matter.
NB: Case Law on credibility is very scarce in our jurisdiction, much development is needed in our jurisprudence.
Subrogation is a legal doctrine in which a party assumes the rights and responsibilities of another party. It is mostly used in relation to a debt or obligation. The doctrine is part of insurance law, was established during the 18th Century, and was imported into South African law through the case of Ackerman v Loubser 1918 OPD 31.
Within the Botswana jurisdiction, subrogation is governed by common law principle and is recognized as a valid method for transferring rights and obligations.
Subrogation is also utilized in insurance matters as it allows an insurance company the opportunity to step into the shoes of the insured to recover monies for a loss from a third party who is responsible for the loss.
In the ordinary cause, and in most instances, the doctrine of subrogation is used if an insurance company indemnifies/pays a claim for a loss that was caused by a third party. The insurance company thereon has the right to pursue the third party for reimbursement of the claim amount.
It is important to note that subrogation rights in Botswana are subject to the terms and conditions of the specific insurance policy. Some policies may exclude or limit subrogation rights, so it is important for policyholders to carefully review their policy and understand the scope of their subrogation rights.
In the Botswana Court of Appeal Case of OLIVIA BALESENG V KENNETH MOSELE & ANOTHER [CACGB-023-18] [Unreported], the Appellate court found that subrogation however has no effect on the substantive rights and obligations of the parties. The court held that an insured, who has been indemnified by an insurer, whether fully or in part, is entitled to pursue the original cause of action against the wrongdoer for the full loss.
The court held that am indemnification payment by the insurer does not affect the insured’s right or capacity to bring an action or to appear in a court (also termed as locus standi.)
Therefore, parties must be aware that they are is a likelihood of being sued by an insured party even after indemnification from the insurance company via subrogation.
This article is only intended to be a very high-level overview of some of the differences between litigation and arbitration. It is not intended to cover all of the differences, nor is it intended to provide legal advice.
The fundamental difference between litigation and Arbitration is the forum.
Litigation is conducted in the Courts and is generally presided over by a Judge. In arbitration proceedings, the parties either agree the person who will act as Arbitrator or agree a mechanism by which the Arbitrator will be appointed.
In many commercial agreements, the parties pre-agree to have any disputes which arise between them resolved by Arbitration, and there is a growing trend to include a referral to arbitration in commercial agreements, when these are drafted.
The reasons for parties often preferring to resolve disputes through arbitration are that:
The parties are at liberty to choose their Arbitrator, which is especially advantageous when the dispute involves a question where an expert in a particular field might have better knowledge in that particular field than a judge;
Arbitration proceedings are not open to the public and the details of the dispute therefore remain private;
Arbitration proceedings are generally (but not always) completed faster than litigation proceedings;
The parties are at liberty to choose whether the arbitration proceedings will be conducted formally, or informally, and are at liberty to choose the rules which will govern the proceedings.
Where formal arbitration proceedings are held, the procedure is very similar to that of litigation. The parties exchange Submissions (the Pleadings in litigation) which set out the nature of the claim or defence, as the case may be. Pre-arbitration meetings are held with the Arbitrator in order to regulate the proceedings and the issues to be decided (similar to Case Management Conferences in the High Court); and the dispute(s) to be decided by the Arbitrator may or may not require the leading of evidence through witnesses in the same manner as matters which go to litigation.
There are, however, some fundamental differences between litigation and arbitration. The most important of these are:
The Arbitration Act requires that there must be a “submission to arbitration” which requires a written agreement between the parties to refer the dispute(s) to Arbitration;
Generally, an Arbitration Award is final and binding on the parties, and is usually not subject to an Appeal;
The parties are jointly and severally liable to pay the fees of the person appointed as the Arbitrator;
The basis upon which the Courts can intervene in Arbitration proceedings, or an Arbitrator’s Award can be reviewed and set aside by the Courts, is very limited.
In the event that the parties pre-agree to arbitrate disputes, such as when they agree in a written contract to refer any and all disputes to Arbitration, then they are generally bound by that agreement and may not choose to litigate instead.
Section 6 of the Arbitration Act gives the High Court the power to stay any proceedings commenced in a court where the parties have agreed to refer any dispute to Arbitration. Any party wishing to stay the court proceedings must make application to the High Court for a stay of proceedings pending the outcome of the Arbitration.
Where the parties have agreed to refer disputes to arbitration, the court will usually stay any legal proceedings commenced in court and will generally require the matter to be determined by arbitration.
In the case of in BM Packaging (Pty) Limited v. PPC Botswana (Pty) Limited [1998] BLR 309 HC, the court held that once it is satisfied that a dispute falls within the ambit of an arbitration agreement, the court will require the dispute to be submitted to arbitration and will stay the action before the court, pending the delivery of the Award by the Arbitrator. The court stated that it would require a strong reason to refuse exercising its discretion to enforce the operation of the arbitration agreement. This decision has been followed in numerous other Judgments of the High Court.
That having been said, in the case of Fencing Centre (Pty) Limited v. Murray & Roberts Construction [2002] (2) BLR 269 HC, the Court held that the existence, or otherwise, of an arbitration agreement between the parties (a submission to arbitration) is a matter of interpretation and is an issue solely for determination by the court.
The courts have the power to assist arbitral proceedings and have various powers to order interim measures, as provided by section 16 of the Arbitration Act. These powers include ordering security for costs, ordering document discovery, preserving the subject matter of the arbitration and issuing subpoenas.
Every so often, it happens that one party (having agreed to arbitrate a dispute) is dissatisfied with the result and because (generally) there is no right to appeal an Arbitrator’s Award, the dissatisfied party seeks the intervention of the Court to try and set aside the decision or Award.
There are very limited grounds on which an Arbitral Award can be reviewed and set aside in Botswana. Section 13 of the Arbitration Act limits the grounds on which an Arbitral Award will be set aside to the grounds of (i) where the Arbitrator has misconducted the proceedings; or (ii) where the Award has been improperly procured.
Arbitration Awards are recoginised by the Botswana Courts and may be made an Order of a Court of competent jurisdiction and then enforced in the same way as a Judgment. Section 20 of the Arbitration Act provides that ‘[a]n award on a submission may, by leave of the Court or a judge thereof, be enforced in the same manner as a judgment or order to the same effect, and where leave is so given, judgment may be entered in terms of the award.’
In summary, unless the parties have pre-agreed to resolve disputes by Arbitration, the decision on whether to litigate or arbitrate is a matter or personal choice. Where, however, the subject matter of the dispute involves a highly technical or specialized field or where the parties require their dispute to be resolved quickly and informally, arbitration proceedings will generally be preferred.
1. When companies are placed under liquidation, it is ordinarily on the basis that the company is insolvent, in that, it can no longer meet its financial obligations to its creditors.
2. However, for some insolvent companies, there are several other factors which have contributed to the company’s undoing, such as mismanagement of the company or acts of misconduct or impropriety by those in control of the company’s affairs which may well have led to its current financial predicament, to the prejudice of its creditors.
3. These factors are mostly prevalent in many corporate failures and/or scandals that have occurred globally. Botswana is no exception.
4. It is for this reason that the legislature has made provisions for an insolvency enquiry which is governed under section 430 and 431 of the Companies Act CAP 42:01 (“the Act”), to be held for the benefit of the creditors of an insolvent estate.
5. The purpose of an insolvency enquiry is to provide for a fact-finding mechanism for a Liquidator of a company and/or its creditors to investigate the affairs of the insolvent company and to also to obtain the necessary information and details from relevant parties to assist them in properly winding up the affairs of the company.
6. This is important because relevant parties such as directors may have concealed important information which could assist the Liquidator of a company in determining the contributing factor to the insolvency of the company and whether there are other transactions which may be salvaged for the benefit of the creditors.
7. The Liquidator would therefore, after having observed or discovered that there is impropriety relating to the conduct of the company’s business or its formation, recommend to the creditors that an insolvency enquiry should be held.
8. The creditors would then pass a resolution, at a creditor’s meeting, that an insolvency enquiry ought to take place.
9. The Master who presides at any meeting of creditors (under the advice of the Liquidator of the insolvent company) may then, in terms of Section 430(3) of the Act, summon any person to an insolvency enquiry:
• who is known or, on reasonable grounds, believed to be in possession of any property which belongs or belonged to the company or to be indebted to the company; or
• who in the opinion of the Master may be able to give any material information concerning the company or its affairs, whether before or after the commencement of liquidation for purposes of being interrogated by the Liquidator or creditors who have proved their claim in the insolvent estate.
10. Persons who are summoned to an insolvency enquiry are mandated in terms of section 430(4) of the Act, to provide any documents or books pertaining to the affairs of the insolvent company which are believed to be under his or her control.
11. It is important to note that section 431(4) of the Act stipulates that any evidence given at an insolvency enquiry shall be admissible in any civil proceedings instituted against the summoned person who gave evidence.
12. Further, persons who are summoned to an insolvency enquiry for interrogation have the right to be represented by an accountant or by an attorney with or without counsel and shall be (other than the directors or other officers of the company) entitled to such witness fees, to be paid out of the funds of the insolvent company, as he would be entitled to if he were a witness in any civil proceedings in a magistrate’s court.
13. Directors and other officers of the company are only entitled to such witness fees or expenses in connection with such attendance subject to the approval of the Master of the High Court.
14. Due to the serious nature of an insolvency enquiry, section 431(8) of the Act provides that any person summoned for interrogation who refuses, on any ground other than that the answer may tend to incriminate him, to answer any question (except any question which the presiding officer may see fit to disallow) put to him, shall be guilty of contempt of court.
15. However, section 431(9) of the Act provides that a person is not excused from answering a question in the course of being examined on the ground that the answer may incriminate or tend to incriminate that person.
16. Notwithstanding that a person may not be excused from answering a question on the ground that it may incriminate him, section 431(10) affords protection to the witness in that the testimony of a witness who has been interrogated is not admissible as evidence in criminal proceedings against that person, except on a charge of perjury in relation to that testimony.
17. The Act further sets out punitive measures in an insolvency enquiry in that, persons summoned by the Master or other officer who fail without a valid excuse to attend any meeting to which he has been so summoned or to produce any book or document or extract from any book or document in his possession, custody or control-shall be guilty of contempt of court and liable to a fine not exceeding BWP1,000 or to imprisonment for a term not exceeding 12 months or to both.
18. After the conclusion of the insolvency enquiry, the Liquidator, together with the creditors, having obtained the necessary information from the summoned persons, would have to now consider at a creditors’ meeting whether to institute civil proceedings against the directors or any other relevant persons who were involved in the management of the company for either reckless trading, fraudulent conduct or transactions which were made without value, in the hope of recovering funds for the benefit of the creditors.
19. For more information on the above, please contact Ada at ada@armstrongs.bw or call +267 395 3481.
