Authored By: Maletsepe Sehoana
University of the Witwatersrand
Abstract
South Africa’s Constitutional framework has fundamentally transformed the development and application of commercial and corporate law. The adoption of Constitutional supremacy requires that all law, including private and commercial regulation, be interpreted and applied in a manner that promotes Constitutional values such as dignity, equality, fairness, and accountability. This article examines the role of Constitutional values in shaping commercial and corporate regulation in South Africa, with direct emphasis on the influence of Constitutional principles on contractual freedom, corporate governance, and regulatory oversight. This article analyses relevant Constitutional provisions, judicial interpretation, and regulatory developments. It argues that Constitutional values have introduced a public interest dimension into commercial law without entirely displacing the need for legal certainty and economic efficiency. The article further explores the tensions that arise between transformation and commercial predictability and offers recommendations for achieving a balanced approach that promotes both Constitutional compliance and a stable commercial environment.
Introduction
South Africa’s Constitutional order was founded on the principle of Constitutional supremacy, which states that all law and conduct is required to be consistent with the values enshrined in the Constitution of the Republic of South Africa, 1996.1 These values, including human dignity, equality, freedom, accountability, responsiveness, and openness, are not only confined to public law but permeate the entire legal system. Section 39(2) of the Constitution clearly states that every court, tribunal, and forum must promote the spirit, purport, and objects of the Bill of Rights when interpreting legislation or developing the common law. 2
Traditionally, commercial and corporate regulation was understood as largely technical and value-neutral, focused mainly on efficiency, legal certainty, and the facilitation of private economic activity. However, South Africa’s transformative Constitutional framework has fundamentally reshaped this landscape. Commercial and corporate regulation now operates within a constitutional context that demands sensitivity to broader societal concerns, including transformation, fairness, access to markets, and the protection of vulnerable stakeholders.
Constitutionalising commercial law has generated both opportunity and tension. On the one hand, Constitutional values serve as a corrective mechanism, ensuring that corporate power and market activity align with the country’s transformative objectives. On the other hand, increased Constitutional scrutiny raises concerns regarding legal certainty, regulatory predictability, and investor confidence, which are values traditionally central to commercial regulation. The challenge lies in reconciling these competing considerations without undermining either constitutional supremacy or economic functionality.
This article argues that Constitutional values play a critical and constructive role in shaping South Africa’s commercial and corporate regulatory framework. Rather than merely constraining commercial activity, these values enhance the legitimacy and sustainability of corporate regulation by embedding social accountability and public interest considerations into market governance. Through an examination of constitutional jurisprudence, legislative frameworks, and selected regulatory interventions, the article demonstrates how Constitutional values have reshaped commercial and corporate regulation while navigating the inherent tensions between transformation and economic efficiency.
The discussion proceeds by first outlining the Constitutional basis for the application of Constitutional values in private and commercial law. It then analyses key areas of commercial and corporate regulation influenced by constitutional principles, before critically assessing the implications of this Constitutional influence for legal certainty and economic development.
Research Methodology
This article adopts a doctrinal and analytical research methodology. Primary sources, including the Constitution of the Republic of South Africa, 1996, relevant legislation, and judicial decisions of the Constitutional Court and Supreme Court of Appeal, are examined to assess the influence of Constitutional values on commercial and corporate regulation. Secondary sources such as academic journal articles, textbooks, and policy documents are also consulted to provide scholarly insight and contextual analysis. The research focuses on an analytical evaluation of case law to illustrate how courts have interpreted and applied Constitutional values within commercial law disputes. This approach enables a critical assessment of the evolving relationship between Constitutional principles and commercial regulation in South Africa.
Legal Framework: Constitutional Values and Commercial Regulation
South Africa’s commercial and corporate regulatory framework is expressly influenced by the Constitution, which serves as the supreme source of law. Section 8 of the Constitution provides that the Bill of Rights applies to all law, including private law, thereby extending constitutional values into commercial relationships.3In addition, section 39(2) requires courts to promote the spirit, purport, and objects of the Bill of Rights when interpreting legislation and developing the common law.4 These provisions ensure that commercial and corporate regulation cannot be applied in a purely formalistic or value-neutral manner.
Legislation governing commercial activity reflects this constitutional influence. The Companies Act 71 of 2008 explicitly incorporates constitutional values such as accountability, transparency, and fairness, particularly in relation to corporate governance and stakeholder protection.5 Similarly, the Competition Act 89 of 1998 is designed not only to promote efficiency and consumer welfare but also to advance public interest objectives, including employment, transformation, and the participation of historically disadvantaged persons in the economy.6 These statutes demonstrate a deliberate legislative effort to align market regulation with constitutional values.
Importantly, constitutional values act as normative constraints on private economic power. Corporate entities, although private actors, often exercise significant influence over access to markets, employment, and resources. Constitutional values therefore function as a corrective mechanism, ensuring that commercial regulation balances profit-driven objectives with broader societal interests. This framework reflects South Africa’s commitment to an economic system that is both competitive and socially responsive.
Judicial Interpretation: Constitutional Values in Commercial and Corporate Disputes
South African courts have consistently affirmed that commercial and corporate law must be interpreted through a constitutional lens. In Barkhuizen v Napier 2007 (5) SA 323 (CC), the Constitutional Court held that contractual autonomy is not absolute and must be assessed against constitutional values such as fairness, reasonableness, and justice.7 This decision illustrates the judiciary’s willingness to subject commercial arrangements to constitutional scrutiny, particularly where power imbalances exist between parties.
In the corporate context, courts have emphasised that statutory interpretation must advance constitutional objectives. In Ex parte Gore NO 2013 (3) SA 382 (WCC), the court recognised that the Companies Act must be interpreted in a manner that promotes transparency and accountability, consistent with constitutional values.8 This approach reinforces the idea that corporate regulation serves public as well as private interests.
Competition law jurisprudence further demonstrates the judiciary’s role in integrating constitutional values into commercial regulation. In Walmart Stores Inc v Massmart Holdings Ltd [2011] ZACT 42, the Competition Tribunal imposed public interest conditions on a merger to protect local employment and suppliers.9 The decision highlights how constitutional values, particularly equality and socio-economic inclusion, directly influence regulatory outcomes in the commercial sphere.
Collectively, these cases illustrate that constitutional values are not abstract ideals but concrete principles shaping judicial reasoning and regulatory enforcement within commercial and corporate law.
Critical Analysis: Tensions Between Market Efficiency and Constitutional Transformation
Despite the clear constitutional grounding of commercial and corporate regulation, significant tensions remain between traditional market-based principles and South Africa’s transformative constitutional objectives. Commercial law has historically prioritised efficiency, predictability, and freedom of contract, values that are essential for economic growth and investor confidence. However, the constitutional mandate requires that these objectives be balanced against substantive equality, transformation, and socio-economic justice.
One of the key challenges lies in the application of constitutional values to private commercial relationships. While section 8(2) of the Constitution allows the Bill of Rights to bind private parties where applicable, courts have been cautious not to undermine commercial certainty.10 This has resulted in an incremental approach, where constitutional values inform rather than displace established commercial principles. Critics argue that this cautious approach risks entrenching existing economic power structures, particularly in a society marked by deep historical inequalities.
In the corporate sphere, the tension is evident in debates surrounding stakeholder versus shareholder primacy. Although the Companies Act promotes broader accountability, corporate decision-making often remains driven by shareholder value.11 This can limit the practical impact of constitutional values such as dignity and equality, particularly where corporate conduct affects employees, consumers, and small businesses. The challenge for regulators and courts is to ensure that constitutional values meaningfully influence corporate behaviour without rendering the regulatory environment unpredictable or hostile to investment.
Recent Developments and Emerging Trends
Recent legislative and policy developments suggest a growing commitment to embedding constitutional values more deeply within commercial and corporate regulation. Amendments to competition law have strengthened public interest considerations, particularly in merger control. The Competition Amendment Act 18 of 2018 expanded the scope of public interest factors, reinforcing the role of competition regulation as a tool for economic transformation rather than merely market efficiency.12
Judicial decisions continue to reflect this trend. In Coca-Cola Beverages Africa Limited v Competition Commission [2016] ZACT 68, the Competition Tribunal reaffirmed that public interest considerations, including employment and transformation, are central to merger assessments.13 This approach demonstrates an increasing willingness to prioritise constitutional values even where mergers may offer efficiency gains.
Additionally, corporate governance discourse in South Africa has evolved, with frameworks such as King IV emphasising ethical leadership, sustainability, and corporate citizenship. While not legally binding, these principles influence corporate behaviour and align closely with constitutional values.14 Together, these developments indicate a gradual but deliberate shift toward a more constitutionally infused commercial regulatory environment.
Suggestions
To strengthen the role of constitutional values in commercial and corporate regulation, a more coherent and consistent application of constitutional principles is required. Courts should continue to develop jurisprudence that clarifies how values such as fairness, equality, and dignity operate within commercial contexts, particularly in cases involving power imbalances. This would enhance legal certainty while ensuring substantive justice.
Legislators and regulators should also ensure that commercial statutes explicitly articulate their constitutional objectives. Clear legislative guidance can assist courts and regulatory bodies in balancing economic efficiency with transformation imperatives. Furthermore, regulatory enforcement should be supported by practical mechanisms that encourage compliance, such as incentives for inclusive business practices and meaningful stakeholder engagement.
Finally, corporate actors themselves play a critical role. By internalising constitutional values within corporate governance structures and decision-making processes, companies can contribute to sustainable economic development while reducing the need for heavy-handed regulatory intervention. A collaborative approach between the state, judiciary, and private sector is essential to realise the Constitution’s transformative vision.
Conclusion
The South African Constitution has fundamentally reshaped the landscape of commercial and corporate regulation by embedding constitutional values at the heart of economic governance. No longer confined to the public law sphere, values such as fairness, equality, accountability, and dignity now inform the regulation of markets, corporations, and private economic power.
While tensions remain between traditional commercial objectives and transformative constitutional goals, legislative reforms and judicial interpretation demonstrate a clear commitment to balancing these interests. The evolving jurisprudence and regulatory framework reflect an understanding that economic activity cannot be divorced from its social context.
Ultimately, the role of constitutional values in shaping commercial and corporate regulation lies in their ability to promote an economic system that is both efficient and just. As South Africa continues to confront inequality and economic exclusion, constitutional values will remain indispensable in guiding the development of a fair, inclusive, and sustainable commercial order.
Reference(S):
1 The Constitution of the Republic of South Africa, 1996.
2 The Constitution of the Republic of South Africa, 1996.
3 The Constitution of the Republic of South Africa, 1996.
4 The Constitution of the Republic of South Africa, 1996.
5 The Companies Act 71 of 2008.
6 The Competition Act 89 of 1998.
7 Barkhuizen v Napier 2007 (5) SA 323 (CC).
8 Ex parte Gore NO 2013 (3) SA 382 (WCC).
9 Walmart Stores Inc v Massmart Holdings Ltd [2011] ZACT 42.
10 The Constitution of the Republic of South Africa, 1996.
11 The Constitution of the Republic of South Africa, 1996.
12 The Competition Act 89 of 1998.
13 In Coca-Cola Beverages Africa Limited v Competition Commission [2016] ZACT 68.
14 King IV Report on Corporate Governance for South Africa princ. 1 (2016)
