On 14 April 2025, the Johannesburg Division of the High Court officially launched a pilot Dedicated Insolvency Court, marking what may be a pivotal development in the evolution of South Africa’s insolvency jurisprudence. The introduction of a specialised court to exclusively manage liquidation, sequestration, business rescue, and related proceedings is a direct response to the longstanding procedural inefficiencies and delays that have historically impeded effective financial distress resolution.

This structural innovation, coupled with a refined set of procedural rules, signals a shift towards a more coherent, efficient, and commercially responsive insolvency system. If implemented effectively and embraced by the legal profession, this initiative could substantially enhance judicial consistency, improve access to expedited remedies, and restore much-needed confidence in South Africa’s business rescue framework.

Rationale for a Dedicated Forum

The growing complexity and volume of insolvency-related litigation in recent years has exposed critical limitations within the existing motion court system. The traditional High Court model, while procedurally sound, has become increasingly ill-equipped to accommodate the time-sensitive and commercially urgent nature of financial distress matters.

The Dedicated Insolvency Court is intended to address these challenges directly, through a purpose-built two-tier system comprising:

1. Insolvency Motion Court (IMC)

The IMC will adjudicate:

• Sequestration and rehabilitation applications;
• Voluntary and compulsory liquidations;
• Business rescue applications under Chapter 6 of the Companies Act 71 of 2008; and
• Statutory reviews of decisions made by the Master of the High Court.

The IMC will function on a strict four-week case cycle, calculated from the date of filing to the allocated hearing date. This reform seeks to reduce the excessive reliance on urgent applications, promote better planning and case management and expedite finalisation of both opposed and unopposed matters.

2. Insolvency Trial Court (ITC)

The ITC will hear complex matters requiring oral evidence, including:

• Actions to set aside impeachable transactions under the Insolvency Act 24 of 1936 or the Companies Act;
• Applications invoking section 424 of the Companies Act, involving personal liability of directors for reckless or fraudulent conduct; and
• Factual disputes that necessitate viva voce testimony.

Importantly, a matter will only be enrolled for trial once it has been certified as trial-ready. This requirement ensures judicial efficiency, avoids unnecessary postponements, and enhances the integrity of the litigation process.

Procedural Developments and Judicial Directives

The establishment of the Dedicated Insolvency Court is accompanied by a suite of procedural directives designed to support the broader objective of case efficiency and specialisation. These include:

• Mandatory four-week notice periods for all insolvency applications, irrespective of whether the matter is opposed or unopposed;
• Compulsory classification of a matter as insolvency-related at the time of filing, failing which it will not be enrolled on the designated insolvency roll; and 
• Automatic administrative transfer of all pending insolvency-related matters on the general motion court roll to the dedicated insolvency roll with effect from 12 May 2025.

Practitioners are accordingly advised to familiarise themselves with the updated practice directives issued by the Office of the Deputy Judge President to ensure compliance with the new system.

Implications for the Profession and Stakeholders

The anticipated benefits of the Dedicated Insolvency Court are multifaceted:

• Judicial specialisation will likely yield greater consistency and commercial sensitivity in decision-making;
• Shortened lead times from initiation to hearing will enhance stakeholder confidence and reduce uncertainty;
• Reduced pressure on the general motion rolls will promote more effective allocation of judicial resources across divisions; and 
• Improved compliance with procedural standards will foster a more disciplined and transparent litigation environment.

For business rescue practitioners, creditors, corporate clients, and restructuring professionals, the new court represents a long-overdue institutional intervention designed to support the rehabilitation of viable businesses and the expeditious winding-up of those beyond rescue.

Strategic Considerations for Legal Practitioners

Legal representatives operating in the insolvency and commercial litigation spheres will need to adjust their litigation strategies to align with the revised timeframes and procedural expectations. Urgent applications should be reserved for truly exceptional circumstances. 

Practitioners should also ensure that:

• •All filings are procedurally compliant and properly categorised;
• •Supporting affidavits are complete, comprehensive, and ready for early judicial scrutiny; and
• •Trial matters are prepared with precision, with witness statements, exhibits, and bundles collated well in advance.

Failure to adapt to these elevated standards may result in adverse cost orders, striking of matters from the roll, or unnecessary delays.

Conclusion: A Step Towards Systemic Reform

While presently confined to the Johannesburg Division as a pilot, the Dedicated Insolvency Court represents a model that, if successful, may serve as the foundation for national rollout. Its introduction reflects a broader recognition that South Africa’s commercial legal infrastructure must evolve to meet the demands of modern business realities.

Ultimately, 14 April 2025 may come to be viewed not merely as an administrative milestone, but as the beginning of a systemic shift towards efficiency, specialisation, and procedural integrity in South African insolvency law. Whether this initiative will deliver on its full promise will depend not only on the judiciary’s stewardship but on the profession’s willingness to engage with it in good faith and with the rigour it demands.

Written by Myron Mer, Director at Fluxmans Attorneys