Competition case cannot be reinstated once withdrawn: appeal court

05 August 2020 - 14:35 By ERNEST MABUZA
The withdrawal of a matter that had earlier been referred to the Competition Tribunal means the matter cannot be referred again, the Competition Appeal Court ruled.
The withdrawal of a matter that had earlier been referred to the Competition Tribunal means the matter cannot be referred again, the Competition Appeal Court ruled.
Image: 123RF/SEBNEM RAGIBOGLU

Once the Competition Commission withdraws a referral to the Competition Tribunal, proceedings are brought to an end and cannot be reinstated or referred again to the tribunal.

The Competition Appeal Court made this finding on Monday when it dismissed an appeal by the commission, against a decision of the Competition Tribunal in 2019.

The tribunal had refused a request that a matter be heard again after it was withdrawn by the commission in 2018.

The commission had initiated a complaint against Beefcor and Cape Fruit Processors, which allegedly entered into a contract not to compete in the market for the processing of wet peels and citrus pulp used in the production of livestock feed.

The commission had contended that such conduct amounted to a division of markets or an allocation of customers in contravention of the Competition Act.

The case was set down to be heard by the tribunal for three days, beginning on July 2 2018.

A week before the hearing, a senior investigator at the commission communicated to the two companies' attorneys a desire to engage in settlement negotiations.

The attorneys of both companies stated their clients were ready to proceed with the hearing, but indicated they did not have a problem discussing settlement on the morning before the hearing commencing.

The senior investigator then announced that he would withdraw the referral to “allow the settlement negotiations a fair chance”.

He said in his view, the negotiations were likely to be long and could not be completed before the hearing.

He filed a notice of withdrawal, believing the commission was entitled to withdraw the case on the basis that it could be reinstated later if the negotiations did not bear fruit.

The matter was never heard.

Following the withdrawal, the contemplated settlement negotiations never took place.

Instead, two months later, the commission referred a fresh complaint to the tribunal dealing with the same conduct.

In these new proceedings, the companies raised the point that section 67(2) of the Competition Act — which provides that a complaint may not be referred to the tribunal against a firm that had been a respondent in “completed” proceedings in relation to the same conduct — precluded the second referral.

They argued that proceedings became completed before the tribunal in July 2018 when they were withdrawn.

The tribunal dismissed the commission's application to reinstate the referral.

On appeal, the Competition Appeal Court dismissed the commission's appeal.

The judgment found the word “completed” in its ordinary and natural meaning could be applied to proceedings which had come to an end in one way or another — whether following a trial on the merits, a consent order or an abandonment of the proceedings by way of withdrawal.

“In essence, on withdrawal, the respondent should be allowed the certainty of knowing that the commission regards the case as completed,” the court said.

It added that the problem the commission found itself in was created by the fact that it stubbornly persisted in standing by its withdrawal of the proceedings.

This was despite the fact that neither of the companies was willing to have the case postponed and despite that at least one of the companies invited the commission to retract its withdrawal.

“Had the commission done so, it could either have proceeded with the case on the Monday or, if it could justify same, applied for a postponement.”

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