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Fashion, Finance, and Freezing Orders: Analysing the Vishan Clothing Case
- The Fashion Law Academy Africa
- Aug 28
- 3 min read
In 2023, Lesotho’s Court of Appeal ruled in favour of Vishan Clothing Industries, overturning a High Court decision that discharged urgent orders aimed at freezing the assets of Niminta Fashion (Pty) Ltd. The dispute centres on allegations that Niminta, a subcontractor for Vishan, was secretly relocating assets and selling garments made from duty-free fabric supplied for export orders.
At issue was whether Vishan was justified in seeking a Mareva injunction—a type of order designed to prevent a company from dissipating its assets before judgment can be enforced.
Clothes, Contracts, and Suspicion
Vishan Clothing, a garment manufacturer supplying South African clients, subcontracted Niminta to produce clothing using duty-free fabric imported into Lesotho. Vishan grew suspicious when Niminta moved to a smaller factory, fell behind on rent, and was allegedly seen moving sewing machines and materials. Rumours spread that Niminta, run by South African directors, was shifting operations across the border to Ficksburg.
Fearing it would be left empty-handed on pending claims worth over M1.6 million (Lesotho maloti) ($90,560 (US dollars)), Vishan rushed to court in September 2022. On an ex parte basis (without Niminta present), it secured interim orders requiring Niminta to disclose the location of its assets and preventing it from moving property out of Lesotho. The orders also allowed the Deputy Sheriff to break locks and secure goods located in a landlord’s premises.
Niminta and Salad Enterprise Push Back
Niminta argued that it was an incola (a company resident in Lesotho), not a foreign entity whose assets could be attached under Rule 6 of the High Court Rules. It said it was merely downsizing due to the impact of COVID-19, not fleeing to South Africa, and accused Vishan of misleading the court based on unverified rumours.
The landlord, Salad Enterprise, also opposed the orders, noting it had already exercised a landlord’s lien over Niminta’s property for unpaid rent and that the court-ordered lockdown of its premises had cost it M150,000 in lost rent.
Both respondents called the urgent proceedings an abuse of process and asked for punitive costs against Vishan.
High Court: No Urgency, No Basis
The High Court agreed with Niminta and Salad Enterprise, finding that Vishan’s reliance on rumours of cross-border relocation was misleading. The judge held that the orders effectively treated Niminta as a peregrinus (a foreigner) when it was in fact resident in Lesotho. He also criticised Vishan for failing to disclose material facts in its ex parte application and for sidestepping the proper rules for amendments.
As a result, the court discharged the orders and hit Vishan with punitive costs on the attorney–client scale.
Court of Appeal: Mareva Relief Justified
On appeal, Vishan argued that the High Court took too narrow a view. It maintained that it never alleged relocation abroad as a fact but merely acted on reasonable suspicion, reinforced by Niminta’s failure to publish a change of address as required by the Companies Act and its visible removal of assets.
The Court of Appeal agreed, emphasising that the Mareva injunction (or anti-asset dissipation order) exists to prevent defendants from frustrating judgments by moving assets beyond reach. It found that there was indeed a “reasonable apprehension” of dissipation, especially as Niminta had already hypothecated assets to its landlord.
The court stressed that urgency must be assessed under Rule 8(22), which allows departures from normal procedure where real loss is threatened. Here, the risk of Niminta stripping assets justified Vishan’s urgent approach.
The appeal was upheld, and the Mareva order restored.
Key Takeaways for Fashion Law
This case highlights several important lessons for fashion and apparel businesses operating across borders:
Urgency must be real, not manufactured. Courts will scrutinise whether an applicant truly faced imminent harm or merely acted hastily.
Mareva injunctions are available in Lesotho. Despite their English roots, these orders have become part of Southern African jurisprudence and can be used to stop companies from dissipating assets.
Subcontracting in fashion carries risks. Where materials are supplied duty-free for export, mismanagement or diversion of those goods can trigger serious legal disputes.
Landlord’s liens vs. supplier claims. As this case shows, landlords exercising hypothec over tenant property can complicate asset-freezing efforts.
Disclosure matters. Ex parte applicants must present all material facts honestly—failure to do so risks having orders overturned and costs imposed.
For businesses in the fashion supply chain, the ruling affirms that the courts will step in to preserve assets where there is genuine evidence of risk, but also that applicants must tread carefully when seeking urgent, unilateral relief.
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