Case number: 554/03


Download 114.5 Kb.
Size114.5 Kb.
1   2   3   4   5   6


  1. This is an application for leave to appeal against an order of the Competition Appeal Court (the CAC) in October 2002,1 dismissing an appeal from orders of the Competition Tribunal (the Tribunal) made on 27 March 2001 and on 30 November 2001. The parties’ dispute concerns the importation from the United States of soda ash (an ingredient essential to the manufacture inter alia of glass). The applicant (Ansac) is a non-stock, non-profit Delaware corporation formed by five United States soda ash producers in the early 1980s to export their product abroad. (The second applicant is Ansac’s local distributor: we refer to it with Ansac.) Within the United States, the creation of Ansac and its operations would have been illegal under the 1890 Sherman Antitrust Act,2 but in 1918 Congress granted export-directed cartels exemption from the antitrust legislation.

  2. The question the application raises is to what extent Ansac’s activities run afoul of the South African Competition Act 89 of 1998 (the Act). That question was raised formally in October 1999, when the second respondent, a Botswana producer of soda ash (Botash), and its South African distributor, the third respondent (Chemserve), launched an application for interim relief against Ansac before the Tribunal. (We refer to those respondents together as Botash.) Botash charged that Ansac was contravening the Act’s prohibition on restrictive horizontal practices. These are found in s 4:

(1) An agreement between, or a concerted practice by, firms, or a decision by an association of firms, is prohibited if it is between parties in a horizontal relationship and if 3

(a) it has the effect of substantially preventing, or lessening, competition in a market, unless a party to the agreement, concerted practice, or decision can prove that any technological, efficiency or other pro-competitive gain resulting from it outweighs that effect; or

(b) it involves any of the following restrictive horizontal practices:

(i) directly or indirectly fixing a purchase or selling price or any other trading condition;

(ii) dividing markets by allocating customers, suppliers, territories, or specific types of goods or services; or

(iii) collusive tendering.’

The Act defines ‘horizontal relationship’ as ‘a relationship between competitors’ (s 1).

  1. The parties soon found themselves caught in a procedural bog. The details have already been reported4 and we mention only the essential features. Two months after Botash’s opening salvo, Ansac launched an application against Botash, charging predatory pricing in violation of s 8 of the Act.5 The parties withdrew their contesting challenges when the Competition Commission (the Commission) (which chapter 4 of the Act gives extensive power to initiate anti-competitive measures and investigate and evaluate alleged contraventions),6 itself concluded that Ansac was engaging in prohibited conduct and filed a complaint with the Tribunal, only to withdraw it and file a fresh referral two months later. It was these proceedings that Botash joined when it secured the Tribunal’s leave to serve an intervening complaint on Ansac.

  2. But the bog only deepened, because a year after the first application was launched, the parties were unable to agree on a statement of facts for the Tribunal, and in January 2001 Ansac applied for the complaint to be dismissed on various grounds that are not now relevant. In the reasons the Tribunal gave for its ruling made on 27 March 2001, it recorded that at a ‘pre-hearing’ it convened in relation to those issues, it requested the parties to prepare argument on the question, ‘does s 4(1)(b) allow for an efficiency defence’ because ‘the conclusion would determine whether this evidence could be led at the hearing’. (It seems that the evidence that the Tribunal had in mind was evidence that Ansac wished to lead to establish that it was a ‘legitimate cost-saving efficiency-producing joint venture’, whose savings enabled it to market North American soda ash in Southern Africa more cheaply than local competitors.) On 27 March 2001 the Tribunal rejected Ansac’s objections to the complaint, and also ruled that ‘evidence concerning any technological, efficiency, or other pro-competitive gain that might be admissible in terms of section 4(1)(a) is inadmissible in terms of section 4(1)(b).’ We deal more fully below with the meaning and effect of that ruling.

  3. Eight months later, in a second ruling delivered on 30 November 2001, the Tribunal dismissed two ‘exceptions’ that Ansac had taken to the complaint. The two points concerned the scope of the Act’s territorial application; and the question whether Botash had legal standing to become a complainant when its complaint made no allegation that it had suffered particular harm from Ansac’s activities. The Tribunal rejected all of Ansac’s contentions.

  4. These three rulings – on the inadmissibility of certain evidence regarding an alleged s 4(1)(b) contravention; on the scope of the Act’s application; and on Botash’s standing – the CAC upheld in dismissing Ansac’s appeal.7 An attempt by Ansac to appeal directly to this court without obtaining the CAC’s leave foundered when this court held that such leave was required.8 (We refer to this court’s judgment in the leave to appeal application as ‘Ansac (1)’). Leave was then sought from, and refused by, the CAC, resulting in the present petition for leave to appeal, which the judges who considered it referred for oral argument with the direction that the parties should be prepared, if called upon to do so, also to address the merits of the proposed appeal.9

  5. Before we deal with the substance of the application, it is necessary to consider this court’s jurisdiction to hear the appeal.

Share with your friends:
1   2   3   4   5   6

The database is protected by copyright © 2020
send message

    Main page