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[2011] ZACT 17
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Agri Wire (Pty) Ltd and Another v Commissioner of the Competition Commission and Others (63/CR/Sep09) [2011] ZACT 17; [2011] 1 CPLR 175 (CT) (28 March 2011)
IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA
CASE
NO.: 63/CR/Sep09
In the matter between:
AGRI
WIRE (PTY) LIMITED
….........................................................................................
First
Applicant
AGRi
WIRE UPINGTON (PTY) LIMITED
…...................................................................
Second
Applicant
and
THE
COMMISSIONER OF THE COMPETITION COMMISSION
…...................................
First
Respondent
MINISTER
OF TRADE AND INDUSTRY
…................................................................
Second
Respondent
CONSOLIDATED
WIRE INDUSTRIES (PTY) LIMITED
…................................................
Third
Respondent
CAPE
GATE (PTY) LIMITED
….................................................................................
Fourth
Respondent
ALLENS
MESHCO (PTY) LIMITED
…............................................................................
Fifth
Respondent
HENDOK
(PTY) LIMITED
….......................................................................................
Sixth
Respondent
WIRE
FORCE (PTY) LIMITED
….............................................................................
Seventh
Respondent
AGRI
WIRE NORTH (PTY) LIMITED
…......................................................................
Eighth
Respondent
CAPE
WIRE (PTY) LIMITED
….................................................................................
Nineth
Respondent
FOREST
WIRE (PTY) LIMITED
…...............................................................................
Tenth
Respondent
INDEPENDENT
GALVANISING (PTY) LIMITED
…..................................................
Eleventh
Respondent
ASSOCIATED
WIRE INDUSTRIES (PTY) LIMITED
…................................................
Twelfth
Respondent
t/a
MESHRITE
THE
COMPETITION TRIBUNAL
….....................................................................
Thirteenth
Respondent
Panel
: Mbuyiseli Madlanga
Andreas
Wessels
Takalani
Madima
Heard
on: 28 January 2011
Reasons
and Order issued on; 28 March 2011
Reasons
for Decision and Order
Introduction
[1]
This is an application to stay the complaint proceedings instituted
by the applicant ("the Commission") with the
Competition
Tribunal ("the Tribunal"} against the second to eleventh
respondents ("the respondents") for
alleged cartel
conduct. The respondents in the carte! matter are In fact the
applicants before the Tribunal in this stay application,
while the
Commission is the respondent. The respondents contend that the
complaint proceedings before the Tribunal, should be
stayed pending
a review application brought by them and currently serving before
the South Gauteng High Court {'the High Court').
In the High Court
application, the respondents are challenging the Commission's
Corporate Leniency Policy ("the CLP")
and the grant of
immunity in terms of the CLP to the twelfth respondent, Associated
Wire Industries (Pty) Ltd, trading as Meshrite
("CWI").
Background
[2]
The Commission's CLP has been in existence since February 2004
1
.
The CLP offers total or partial immunity to cartel members who
assist the authorities in identifying and successfully prosecuting
cartels.
[3]
On 29 July 2008, and acting in terms of the CLP, CWI submitted an
application to the Commission in which it confessed to cartel
conduct and implicated fellow cartel members including the
respondents. After assessing this application, the Commission
granted
CWI conditional immunity on 28 August 2008 in accordance
with the CLP.
[4]
On 7 September 2009, and upon conclusion of its investigation, the
Commission referred a complaint against the respondents
in terms of
section 50(1) of the Competition Act, No. 89 of 1998 ('the Act'),
including CWi, to the Tribunal. The Commission
promised full
immunity to CWI in exchange for its cooperation and evidence in the
prosecution of the other respondents in the
cartel matter. Although
CWi was cited as a respondent in the complaint referral, no relief
was sought against it.
2
[5]
The Commission's referral of the complaint against the respondents
was based,
inter
alio,
on
the evidence that was obtained by it as a consequence of CWI's
application for immunity under the CLP
3
.
[6]
Some four months later on 5 February 2010, under case number
7585/2010, the respondents launched review proceedings in the
High
Court and sought the following relief against the Commission
4
:
[6.1].
reviewing and setting aside the granting by the Commission of
conditional immunity;
[6.2].
declaring that the granting of the conditional immunity to CWI is
not authorised by any law and is unlawful;
[6.3].
declaring that the evidence obtained by the Commission from CWI in
exchange for the grant of conditional immunity was obtained
unlawfully; and
[6.4].
declaring that the Commission may not use, directly or indirectly,
any evidence obtained as a result of the grant of conditional
immunity in the complaint referral to the Tribunal against the
respondent and that such evidence should be regarded as having
been
struck out.
[7]
The respondents proffer the following grounds in support of the stay
application before the Tribunal:
[7.1].
the application in the High Court is brought in terms of the
Promotion of Administrative Justice Act, No.3 of 2000
("PAJA").
The Tribunal does not have the jurisdiction to hear the review on
which the admissibility of the evidence
and the lawfulness of the
referral depend; and
[7.2].
the CLP has been implemented in a number of previous referrals by
the Commission, including settlements with whistle blowers
incorporating immunity from prosecution and no sanctions against
them. This policy and practice of the Commission has been
implemented by the Tribunal with apparent approval, which is
confirmed by the Commission in paragraph 57 of the answering
affidavit
in the review application
5
.
[8]
The respondents argued before the Tribunal that the Act does not
make for provision of such promises of conditional or full
immunity
in terms of its CLP. Put differently, the Commission has acted
ultra
vires
and
outside its authority in terms of the Act and continues to do so
when it invokes the provisions of the CLP.
[9]
The respondents submitted that the following
inter
aiia
issues
are not in dispute between the parties, although the Commission
concedes and then disputes somewhere in its papers whether
its
actions with regard to the CLP and others in terms of the Act are
indeed administrative in nature and thereby reviewable
under PAJA,
The common cause issues are that:
[9.1].
the Commission is an organ of state as defined in the Constitution
6
and the PAJA
7
;
[9.2].
the Commission is an institution exercising a public power or
performs a public function in terms of the Act;
[9.3].
the Commission is a creature of statute whose powers are limited to
those contained in the Act; and
[9.4].
the granting of conditional immunity to CWI is an administrative
action.
[10]
The respondents argued that all actions of the Commission that are
exercised in accordance with the Act must be administrative
in
nature. The reason for this assertion being that they are decisions
made in the exercise of public power or in the performance
of a
public function under the Act.
[11]
We are required to determine whether (a) the Tribunal has
jurisdiction to determine the review application and (b) the
admissibility of the evidence acquired through the CLP by the grant
of conditional immunity and the lawfulness of the referral
in the
event that we decide not to stay the complaint proceedings.
[12]
The Commission contends that the respondents have failed to make out
a case for a stay for the following reasons:
[12.1].
there are no reasonable prospects of success in the South Gauteng
High Court review application and the balance of convenience
do not
favour the respondents;
[12.2].
Section 27(l}(c) of the Act gives the Tribunal the power to review
any decision of the Commission, including a decision
to grant
conditional immunity to CWI;
[12.3].
the adoption of the CLP by the Commission, and the grant of
conditional immunity to CWI, were lawful acts on the part
of the
Commission. The complaint referral is not unlawful by reason of the
fact that it was based on evidence obtained through
the CLP. Even if
the evidence was obtained unlawfully, it does not follow
automatically that it should be struck out or excluded
from the
complaint proceedings
8
.
The
power of the Tribunal to review the Commission's decisions
[13]
Section 27(l)(c) of the Act provides that:
(1)
The Competition Tribunal may -
...
....
(c)
Hear appeals from, or review
any
decision
of,
the Competition Commission that may, in terms of this Act, be
referred to it;..."
(own
emphasisj
[14]
The Commission argued further that the words
"this
Act"
as
used in section 27(l)(c) is defined to include the regulations and
schedules. This position was articulated most elegantly
by the
Competition Appeal Court
9
when it was confirmed that the words "in terms of this Act"
in section 27{l)(c) must be interpreted to include the
Rules for the
Conduct of Proceedings in the Competition Tribunal ("the
Tribunal Rules").
[15]
Tribunal Rule 42(3)(b)(i) provides as that
(3)
A Notice of Motion in terms of this Rule must-
(a),
indicate the basis of the application; or
(b).
depending on the context -
(i)
set out the Commission's decision that is being appealed or
reviewed;
[16]
The above subsection of the Tribunal Rules, envisages the possible
review by the Tribunal of a Commission decision. That
this is the
case, does not appear to be in dispute between the parties.
Disputed
issues
[17]
The following issues
inter
alia
are
in dispute between the respondents and the Commission:
[17.1].
whether it is the High Court or the Tribunal that has jurisdiction
to hear and decide on the issues raised by the respondents
in the
High Court review application, more specifically;
[17.1.1].
the Commission's authority to grant conditional immunity to CWI; and
[17.1.2].
the status and admissibility of the evidence obtained by the
Commission during the leniency application of CWI.
[18]
As already stated above, the respondents are currently in the High
Court seeking to review the Commission's decision based
on the CLP
in terms of PAJA. It is also common cause that the Tribunal does not
have the jurisdiction to hear a PAJA review.
It is similarly common
cause that the Tribunal has the jurisdiction to review any decision
of the Commission in terms of section
27(l)(c).
[19]
The stay application raises certain novel points of law not
previously decided by the Tribunal. There is a dispute between
the
applicants in the stay application and the Commission with regard to
jurisdiction. There is therefore the possibility that
this very
matter may be referred by the High Court for a decision by the
Tribunal. We find that it will be inappropriate for
us to express a
view on these issues in the context of a stay application. Also it
is not inconceivable that the view ultimately
taken by the High
Court may differ from the one we take and that may lead to an
untenable situation.
[20]
We find it prudent that the Tribunal not make any finding and
decision in this regard given the imminent application in the
High
Court
10
.
[21]
In the circumstances we make the following order
[21.1]
that the proceedings before the Tribunal be stayed pending the
outcome of the review application currently before the South
Gauteng
High Court; and
[21.2]
that there be no order as to costs.
T
Madima 28/3/2011
Date
A
Wessels and M Madfanga concurring
1
.
The CLP was established in
terms
of
section 79(1)
of the
Competition Act, No 89 of 1998
, as amended. The
CLP was published in the Government Gazette Notice 195 of 2004 in
Gazette No 25963
2
.
Commission's heads of argument, paragraph 4, page 2
3
.
Founding Affidavit, paragraph 42, page 19 and Answering Affidavit,
paragraph 74, page 142
4
.
See Commission's heads of argument, paragraph 5, page 3
5
.
Commission's heads of argument in the stay application, paragraphs
6.1-6.2
6
.
Section 239
of Act No. 108 of 1996
7
.
Section 1 of Act No. 3 of 2000
8
.
ibid, paragraphs 8.1-8.3
9
.TWK
Agriculture Ltd v Competition Commission & Others
[2007] JOL
20764
(CAC)
10
.
This matter was in fact heard in the South Gauteng High Court on 07
February 2011 and judgment was reserved