My client is a mining company who has sold its product to a certain buyer, also being a company with an annual turnover which we believe is more than R1 million. The buyer for some time did not pay for all the product sold and delivered to it. The total amount owing to my client is therefore R3.3 million. Our client is not registered as a credit provider since it is not its core business to provide credit. Obviously its core business is to mine and sell its product. My client and the buyer has now agreed to conclude an acknowledgment of debt (AOD) in terms of which the debt will be paid off in instalments over a period of 6 months.

The two questions that I have is whether an AOD in this case would be regulated by the NCA, bearing in mind the exemption in section 4(1)(a)(i) of the NCA; and if the AOD is not regulated by the NCA what is the maxinum interest that our client could charge the buyer if it is in default with its repayment of the debt.

Regards,

David Haasbroek