COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: 18/CR/Mar01
In the matter concerning the
Complaint referral by :
The Competition Commission
and
South African Airways (Pty) Ltd
REASONS FOR DECISION
1. In this application the respondent (South African Airways (Pty) (Ltd))
has applied in terms of Rule 22 (1)(c)(iii) of the Tribunal Rules for
clarification of the issues contained in the applicant’s (‘the
Commission’) founding affidavit as amended. 1
2. At a prehearing conference held on 12 August 2003, the respondent
had indicated that it wished to request certain particulars from the
Commission in order to clarify the case against it.
3. Pursuant to this request the presiding member issued the following
directive –
1. Parties wishing to request further particulars with respect to
clarifying issues in this matter for the purpose of preparing for
the hearing must file this request by 29 August 2003.
2. Parties replying to this request must file their answer by 26
September 2003.
3. Any party not satisfied with an answer, and which wishes to file
an application to compel further particulars for hearing, must file
the application within 10 business days of receipt of the answer .
1 Rule 22 (1)(c)(iii) states “ At a prehearing conference, the assigned member of the Tribunal
may …give directions in respect of …. clarifying and simplifying the issues.”
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4. Thereafter the respondent filed its request, which emerged as a 31
page long list of interrogatories. The Commission responded by
answering only a handful of the questions, the balance were met with
the stock answer that the Rule relied on did not require it to provide any
further information.
5. The respondent, not satisfied with the answers it received, then
brought this application to compel further and better responses to the
questions. Whilst the respondent argued that it had pared down its
original list for the purpose of this application, the number of questions
it requires to be answered is still formidable.
6. As the application was served late the Commission did not have an
opportunity to file answering papers. Nevertheless it indicated it was
not prejudiced by the late filing and was willing to argue on the
respondent’s papers. We condoned the noncompliance with the time
periods set out in our directive and heard argument from both parties.
7. The Commission argued that the respondent had abused Rule 22 (1)
(c)(iii) as the rule, properly interpreted, provides that clarification of
issues is the prerogative of the Tribunal and is not intended to mandate
a process where requests for further particulars are conducted
between the parties. It argues that if questions of ‘clarification’ are left
to the parties to determine, this would inevitably lead to an abuse of
process, and that, says the Commission, is what has occurred in this
matter.
8. The Commission appears to want the Tribunal to introduce certainty
regarding the application of the rule in future cases. There was much
debate between the parties as to whether the rule meant the same
thing as a request for particulars for trial in the High Court or whether,
since the language is different, it meant something more or less
since the language is different, it meant something more or less
extensive. 2
9. The Tribunal’s rules must be interpreted in the context of its own
procedures. In implementing its procedures, the Tribunal is subject to
the requirement of fairness imposed on all administrative bodies by the
Constitution and those values set out in section 55(1) (2) of the
Competition Act
10. One of those values is that proceedings be conducted informally. The
prehearing powers found in rules 22 23 invest the presiding member
with a large measure of discretion to determine procedures precisely to
2 The High Court rule reads as follows “ Rule 21(2) – After the close of pleadings any party
may, not less than 20 days before trial, deliver a notice requesting only such further
particulars as are strictly necessary to enable him to prepare for trial. Such request shall be
complied with within 10 days of receipt thereof.”
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retain the element of informality that the Act mandates.
11. We decline the Commission’s invitation to give the rule a rigid
interpretation or to find that it cannot be applied to requests for
clarification made by the parties inter se. We can however
contextualise the rule. It will typically be invoked at some time after the
close of pleadings. Tribunal pleadings as we have noted before are
more extensive than pleadings in High Court trial actions as they
comprise affidavits. Thus a complaint referral is not as succinct as its
counterpart the summons but it is also not necessary to be
exhaustive of all the factual averments in the case as a hearing
involving further testimony will follow. In our proceedings we can
compel the production of witness statements prior to the hearing. How
rule 22 is optimally utilised depends very much on the state of detail
disclosed in the pleadings and whether there will be reliance on
witness statements in advance. The more detail disclosed in the
affidavits and in witness statements, the less likely rule 22(1)(c)(iii)
needs to be invoked or if invoked, to be over ambitious. Beyond this
observation we are reluctant to be prescriptive about how the rule
should be applied in future.
12. That being said, where a procedure embarked upon is used in a
manner that inhibits expedition, (another value enshrined in section 52)
the Tribunal should not permit it.
13. In this case the procedure utilised by the respondent was embarked
upon with the consent of the Commission at the last prehearing. There
is nothing in the rule that suggests that it precludes the Tribunal from
permitting one party to ask questions of another with that objective in
permitting one party to ask questions of another with that objective in
mind. Indeed the Tribunal at the prehearing stage knows less about a
matter than do the litigants before it and hence this approach to the
rule accords with common sense. Nevertheless it does not preclude
the Tribunal from doing what the Commission suggests it does, and
that is asking questions itself, but it is not restricted to this use of rule
22 (1)(c)(iii).
14. In the context of our proceedings where we can direct the parties to
produce witness statements in advance, requests for clarification do
not have to be used as particulars for trial. If parties want to prepare,
and receive a witness statement in advance, that should suffice to
prevent them being ambushed.
15. In this case, as we indicated during the argument, we will direct the
parties to provide witness statements prior to the hearing. Hopefully
much of the outstanding answers that the respondent seeks will be
contained in these.
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16. Although we believe that the submission of witness statements ought
to provide the respondent with the necessary clarity it is entitled to in
terms of our rules, we do not want to prejudge the issue and we will
accordingly stay this application pending the furnishing of those
witness statements by the Commission to the respondent.
17. We are however persuaded that two issues remain that do require
clarification and may not be cured by the furnishing of witness
statements:
18. The first issue relates to the allegation that the respondent is a
dominant firm. The Commission does no more than repeat a legal
conclusion from the Act, that the respondent has more than 45 % of the
relevant market. Whether this figure is based on sales value or the
volume of tickets sold is not clear, although in a related application for
discovery the Commission seeks both from the respondent. 3
19. Nor does the respondent have a more precise view of whether its
alleged market share is 46% or 100%. The Commission is required to
give greater precision in this regard although it of course is not obliged
to commit itself to an exact figure. The respondent is at least entitled to
know where it is in the ballpark.
20. Nor does the respondent know how this percentage has been arrived
at. It is entitled, at the very least, to know whether this figure is based
on the total sales of all travel agents in South Africa or just a
representative sample.
21. In relation to the second issue, the allegation that the respondent is
liable to an administrative fine in terms of section 59 (1)(b) of the Act,
the Commission apart from indicating that it will rely on this section
makes no allegation as to why it may be applicable.
22. The section provides that:
“The Competition Tribunal may impose an administrative penalty only
“The Competition Tribunal may impose an administrative penalty only
.
….
b) for a prohibited practice in terms of section 4(1)(a), 5(1), 8(c ) or
9(1), if the conduct is substantially a repeat by the same firm of
3 See the Commission’s Discovery Application, dated 22 October 2003, in
paragraph 4 of the accompanying Notice which is Annexure X to the founding
affidavit.
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conduct previously found by the Competition Tribunal to be a
prohibited practice:”
23. The Commission fails to make out any allegation as to why the
respondent is a firm contemplated in this section. The respondent is
entitled to know this in order to prepare its defence.
24. We have for this reason, formulated questions that will provide the
respondent with clarity on these two points. They are annexed to our
order as .
In our view, the respondent is not entitled to answers to the remaining
questions at this stage, given that they might well be provided in advance with
the Commission’s witness statements.
The costs of this application are reserved. 4
________________ 31 October 2003
N. Manoim Date
Concurring: U. Bhoola, M.Madlanga
4 Note that in an earlier decision in this matter we left open for later argument the question of
whether in complaint referrals initiated by the Commission we can give costs for or against
the Commission. Our reservation of costs should not be construed as presupposing that we
can. See Competition Commission and SAA 18/CR/Mar01, where the Commission applied
for an amendment of its complaint referral.
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