Brief Summary

Competition Law — Joinder and Exception Applications — Competition Commission referred a complaint alleging collusion by 28 banks in manipulating the rand-dollar exchange rate between 2007 and 2013. The Commission sought to join additional respondents and faced objections from the banks regarding jurisdiction and the sufficiency of pleadings. The Tribunal evaluated the objections and the joinder applications in light of previous rulings on jurisdiction and the adequacy of the Commission's case. The Tribunal concluded that while it lacked personal jurisdiction over certain foreign banks (pure peregrini), it could issue a declaratory order regarding their conduct, and dismissed the referral against them while allowing the Commission to amend its pleadings for local banks.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings were a consolidated set of exception, objection, dismissal, strike-out, and joinder applications heard by the Competition Tribunal of South Africa under Case No: CR212Feb171. They arose in response to the Competition Commission of South Africa’s complaint referral alleging cartel conduct in contravention of the Competition Act 89 of 1998, specifically sections 4(1)(b)(i) and 4(1)(b)(ii).

The parties were the Competition Commission as applicant (complainant-referring authority) and a large group of local and foreign banking firms as respondents (28 banks across multiple jurisdictions). The Tribunal noted that, although the banks were formally applicants in the interlocutory applications, it referred to them as “Respondents” for convenience.

The procedural history was central. The Commission initially referred a complaint in February 2017 and then filed several supplementary affidavits. In June 2019, the Tribunal issued a decision addressing, among other matters, jurisdiction and pleading deficiencies, and provided an opportunity to file a consolidated referral affidavit. In February 2020, the Competition Appeal Court (CAC) set aside aspects of the Tribunal’s order and directed the Commission to file a new referral affidavit replacing prior referral affidavits and containing further detail, including allegations aimed at establishing jurisdictional connecting factors in relation to foreign peregrini. Following that order, the Commission filed a fresh referral in June 2020 and further supplementary material.

Instead of delivering answering affidavits on the merits after the June 2020 referral (as contemplated by the CAC’s direction that respondents file their answers within a specified period), the respondents brought a second round of interlocutory challenges. In parallel, the Commission sought the joinder of additional respondents (some previously sought to be joined and held over, and some newly sought to be joined). These consolidated applications were heard over 29–30 November and 1–3 and 6 December 2021, with reasons and the order issued on 30 March 2023.

The dispute’s general subject matter was an alleged single overarching conspiracy (“SOC”) by banks trading in the USD/ZAR currency pair, said to involve information sharing and co-ordination strategies on electronic platforms and otherwise, with the purpose and effect of manipulating the rand–dollar exchange rate and related trading conditions.

2. Material Facts

The material facts, as relied upon by the Tribunal for purposes of these interlocutory applications, were primarily those pleaded in the Commission’s referral and those necessary to assess the various preliminary objections at the pleading stage. The Tribunal repeatedly emphasised that, in exception-type proceedings, the pleaded factual allegations are generally taken as true for purposes of determining whether the pleading is excipiable and whether a prima facie case is alleged.

It was common cause (or treated as undisputed in the Tribunal’s analysis) that the Commission alleged cartel conduct spanning September 2007 to at least September 2013, involving 28 banks in multiple jurisdictions, and that the alleged conduct concerned co-ordination in the USD/ZAR market. It was also not disputed that the Tribunal has exclusive jurisdiction to adjudicate contraventions alleged under section 4(1)(b), subject to the jurisdictional reach of section 3(1) in relation to extra-territorial conduct.

A key pleaded factual premise was that the respondents’ traders participated in regular communications and contacts with competing traders when trading USD/ZAR, with the alleged purpose of sharing competitively sensitive information and reaching understandings on trading strategies that would manipulate trading conditions. The pleaded implementation conduct included, among other things, information sharing and arrangements relating to bid-offer spreads, order and co-ordination of trading, consolidation and offsetting of trades at the FIX, and manipulation of prices on trading platforms and the spot rate. The Tribunal treated the Commission’s pleaded distinction between the single overarching conspiracy (as the common objective) and the various means of implementation (as instances/types of conduct) as material to evaluating the “single conspiracy” requirement.

The Commission’s pleading relied on examples of contact and conduct in particular chatrooms, including the Old Gits and ZAR chatrooms. The Tribunal relied on the pleaded pattern that emerged from these alleged interactions—viewed holistically—as indicating multiple contact points between foreign and local traders and banks, rather than isolated, unconnected “mini-conspiracies”. The Tribunal highlighted pleaded examples involving a South African trader (identified in the referral) communicating with foreign traders and being referred to other traders, as indicative—at pleading stage—of an interconnected structure consistent with an SOC.

In relation to effects within South Africa, the Commission pleaded that manipulation of USD/ZAR would directly affect the exchange rate and that the exchange rate in turn affects imports and exports, investment, debt, company balance sheets, and the pricing of goods, services, and financial assets. The Commission also pleaded facts directed at substantiality (duration over years, persistence during trading days, volumes traded, and the participation of multiple South African authorised dealers) and foreseeability (the internationally traded nature of the rand and the role of quotes as global market information).

Certain admissions or positions adopted by particular respondents were treated as material to joinder decisions. For example, in opposing or addressing joinder, some entities accepted that identified traders were employed by them during particular periods, while disputing attribution beyond those periods; and Standard Americas accepted employment of a named trader while disputing jurisdictional and initiation points. The Tribunal treated these as supporting, at least, that such parties had “a case to answer” at the merits stage.

3. Legal Issues

The central legal questions the Tribunal was required to determine were interlocutory and jurisdictional in nature, and included both questions of law and the application of law to pleaded facts.

A principal issue was whether the Tribunal had subject-matter jurisdiction under section 3(1) of the Competition Act over the alleged extra-territorial conduct, assessed through the qualified effects test (direct, foreseeable, and substantial effects within the Republic), and whether the Commission had pleaded sufficient facts to satisfy that test at the pleading stage.

A related central issue was whether the Tribunal had personal jurisdiction over foreign peregrini respondents in light of the CAC’s development of the common law approach to personal jurisdiction in this competition-law context, including whether adequate connecting factors were pleaded or otherwise apparent so as to render the Tribunal an appropriate and convenient forum to adjudicate the alleged SOC.

Further issues included whether objections based on section 67(1) (time bar / cessation more than three years before initiation) could be determined at the pleading stage, particularly in light of the Constitutional Court’s interpretation of section 67(1) in Pickfords and the need for a factual enquiry into cessation.

The Tribunal also had to determine whether the Commission had validly initiated a complaint (and whether initiation had to name specific firms), and whether respondents could be joined if they were not expressly named at the initiation stage. These issues required consideration of the jurisprudence on initiation (including the scope for “tacit initiation”) and the distinction between initiation of a prohibited practice and naming of particular firms.

Another recurring issue was whether the Commission’s referral complied with the CAC order (which had described the Commission’s new referral as a “final opportunity”) and whether non-compliance compelled dismissal. This issue engaged the interpretation of court orders and the Tribunal’s remedial discretion in exception proceedings.

Finally, the Tribunal had to decide whether the referral complied with Tribunal Rule 15(2) (concise statement of grounds and material facts/points of law), and—separately—how to exercise its discretion as to remedies in exception and joinder contexts, including whether to dismiss referrals or instead direct respondents to plead over.

4. Court’s Reasoning

The Tribunal began by setting out its approach to exceptions and analogous interlocutory objections, aligning it broadly with High Court principles while emphasising the Tribunal’s sui generis procedures and the overarching requirement of fairness in competition proceedings. It relied on established exception principles that the excipient bears the onus, that pleadings must be read as a whole in the manner most favourable to the claimant, that factual allegations are taken as correct at this stage, and that over-technical scrutiny should be avoided. The Tribunal also referred to recent CAC guidance cautioning against forcing premature elections about a case before evidence is led.

Jurisdiction: subject matter and qualified effects

On subject-matter jurisdiction, the Tribunal treated it as settled that the Act applies to economic activity “within, or having an effect within” South Africa under section 3(1), and that extra-territorial application is governed by the qualified effects test articulated in ANSAC and reaffirmed in the CAC’s prior judgment in this very matter. The Tribunal rejected the respondents’ contention that the Commission had to plead traditional consumer-harm competition effects at this stage as a jurisdictional requirement, citing the ANSAC line of authority that the jurisdictional enquiry is about whether there are sufficient jurisdictional links between conduct and consequences within the Republic, not a merits analysis of competitive harm.

Applying these principles, the Tribunal held that the Commission had pleaded direct effects in the form of an alleged distortion of the USD/ZAR exchange rate, which would have immediate consequences for transactions dependent on that exchange rate. It further accepted that the Commission pleaded substantiality through alleged duration, the scale of trading, and the participation of multiple South African authorised dealers, and pleaded foreseeability by reference to the international nature of rand trading and the role of quotes in forming global prices.

Personal jurisdiction and connecting factors

On personal jurisdiction, the Tribunal treated the CAC’s prior decision as pivotal. It understood that personal jurisdiction over foreign peregrini could be founded where there are adequate connecting factors between the alleged conduct and the Tribunal as the forum of appropriateness and convenience. The Tribunal reasoned that, at pleading stage, the enquiry focuses on whether the SOC and its alleged South African effects provide sufficient connection, not on proving each element against each respondent.

In applying this approach, the Tribunal relied on the Commission’s pleaded SOC as a single, holistic conspiracy involving local and foreign banks, implemented through various forms of coordination and information sharing. It rejected the respondents’ “mini-SOC” characterisation (that the pleaded facts supported only separate unconnected conspiracies in different regions), reasoning that, on the pleaded facts, the structure reflected multiple contact points consistent with a global conspiracy. The Tribunal treated the seriousness of the alleged contravention—cartel conduct alleged to manipulate a country’s currency—as reinforcing the appropriateness of adjudication in South Africa. It also took account of contextual connecting factors beyond the four corners of the pleading, including that the Tribunal has exclusive jurisdiction over section 4(1)(b) contraventions and that no other forum in the respondents’ domiciles had indicated enforcement action in relation to the ZAR.

The Tribunal therefore concluded that both subject-matter jurisdiction and personal jurisdiction were prima facie established over all peregrini respondents.

Section 67(1) time bar (cessation/prescription)

The Tribunal relied on the Constitutional Court’s decision in Competition Commission v Pickfords Removals SA (Pty) Ltd (CCT 123/19) to reject the idea of section 67(1) as an absolute “guillotine”. It accepted Pickfords as establishing that section 67(1) is procedural and that the Commission may seek condonation upon good cause shown. It further reasoned that whether conduct has “ceased” more than three years before initiation is fact-dependent and cannot generally be decided at pleading stage. On that basis, time-bar objections were not upheld in this interlocutory round.

Valid initiation and joinder of additional respondents

On the “no valid initiation” objections, the Tribunal treated Competition Commission v Yara (South Africa) (Pty) Ltd and Others 2013 (6) SA 404 (SCA) as confirming that initiation entails no special formalities and may be tacit, and treated Pickfords as clarifying that Woodlands Dairy was fact-specific and did not support a broad proposition that firms not named at initiation can never be proceeded against. The Tribunal understood the Act as requiring initiation of a complaint against an alleged prohibited practice (conduct), not an immutable list of firms from inception. It reasoned that an interpretation preventing later joinder would produce an absurd result by enabling cartelists to avoid enforcement simply because they were not expressly named earlier.

The Tribunal also found that prejudice arguments against joinder carried little weight in the circumstances because the matter had not progressed beyond pleadings and respondents had not yet answered on the merits; joinder would place joined respondents in the same procedural position as others.

Non-compliance with the CAC order and Rule 15(2)

On objections grounded in alleged non-compliance with the CAC order, the Tribunal adopted interpretive principles on court orders, holding that the CAC’s “last opportunity” language was not to be treated as a legislative checklist nor as automatically requiring dismissal for any alleged deficiency. It further held that a CAC order could not be interpreted to fetter the Tribunal’s statutory discretion over remedies in interlocutory proceedings, or to constrain the Commission’s independence in pursuing enforcement where further information comes to light.

On Tribunal Rule 15(2), the Tribunal held that the Commission’s referral (a lengthy affidavit with substantial detail) satisfied the requirement of a concise statement of grounds and material facts/points of law relied upon. It treated the respondents’ complaints as largely directed to evidentiary sufficiency or granularity more appropriate for the merits stage.

Remedies and the direction to “plead over”

In determining remedies, the Tribunal emphasised its broad procedural discretion under the Act and Tribunal rules. It regarded early dismissal as undesirable in circumstances alleging serious cartel conduct. The Tribunal consequently dismissed the various exceptions/dismissal/strike-out applications and directed respondents to file answering affidavits, while allowing that objections not determined could be preserved in those answers provided respondents “plead over”. It also condoned procedural irregularities in the forms of applications, accepted the Commission’s amendment steps, and admitted supplementary affidavits.

5. Outcome and Relief

The Tribunal granted the Commission’s joinder applications, joining HBUS (19R), MLPFS (20R), BANA (21R), CSS (23R), Nedbank Group (24R), Nedbank Ltd (25R), FirstRand Ltd (26R), FirstRand Bank (27R), and Standard Americas (28R) to the complaint referral.

The Tribunal dismissed all the respondents’ exception/objection/dismissal/strike-out applications identified in the order, and directed that all respondents (including joined respondents) must file their answering affidavits within 40 business days of the order, with the Commission permitted to file replying affidavits within 20 business days thereafter.

The Tribunal granted the Commission’s application for leave to amend (Form CT1) and admitted the Commission’s supplementary affidavits, finding they were not irregular steps and in any event condoning any technical irregularities.

On costs, the Tribunal made no costs order, holding that section 57 of the Competition Act does not empower it to award costs against the Commission.

Cases Cited

Competition Commission of South Africa v Bank of America Merrill Lynch International Limited and Others (CR121Feb17).

Competition Commission v Bank of America Merrill Lynch International Limited and Others (175/CAC/Jul19) (28 February 2020).

American Soda Ash Corporation CHC Global (Pty) Ltd v Competition Commission of South Africa and Others (12/CAC/Dec01) [2003] ZACAC 6 (30 October 2003).

American Natural Soda Ash Corporation and Another v Competition Commission of South Africa [2005] 1 CPLR 1 (SCA).

Multi-Links Telecommunications Ltd v Africa Prepaid Services Nigeria Ltd; Telkom SA Soc Limited and another v Blue Label Telecoms Limited and others [2013] 4 All SA 346 (GNP).

Intel v Commission (T‑286/09, EU:T:2014:547) (12 June 2014).

Intel v Commission (C-413/14 P, ECLI:EU:C:2017:632) (6 September 2017).

InnoLux Corp., formerly Chimei InnoLux Corp., v European Commission (Case C‑231/14 P).

United States v. Alcoa, 148 F.2d 416 (2d Cir. 1945).

Hartford Fire Insurance Company v California 509 US 764 (1993).

Competition Commission of South Africa v Senwes Ltd 2012 (7) BCLR 667 (CC).

Competition Commission v Interaction Market Services Holdings (Pty) Ltd In re: Interaction Market Services v Competition Commission CAC Case No: 193/CAC/Jun21 (25 March 2022).

Invensys PLC v Protea Automation Solutions (Pty) Ltd [2014] 2 CPLR 505 (CT).

Woodlands Dairy (Pty) Ltd and Another v Competition Commission 2010 (6) SA 108 (SCA).

Competition Commission v Loungefoam (Pty) Ltd 102/CAC/Jun10.

Competition Commission v Yara (South Africa) (Pty) Ltd and Others 2013 (6) SA 404 (SCA).

Competition Commission v Power Construction (West Cape) (Pty) Ltd [2016] ZACT 87.

Glaxo Wellcome (Pty) Ltd & Others and National Association of Pharmaceutical Wholesalers & Others 15/CAC/Feb02.

Competition Commission v Pickfords Removals SA (Pty) Ltd (CCT 123/19).

Paramount Mills v Competition Commission 112/CAC/Sep11.

Competition Commission v Pioneer Foods (Pty) Ltd (15/CR/Feb07, 50/CR/May08).

S.O.S Support Public Broadcasting Coalition and Others v South African Broadcasting Corporation (SOC) Limited and Others (CCT121/17) [2018] ZACC 37; 2018 (12) BCLR 1553 (CC); 2019 (1) SA 370 (CC) (28 September 2018).

Competition Commission v Pioneer Hi-Bred International Inc. and Others CCT58/13.

Omnia Fertilizer (77/CAC/Jul08).

Valve Corporation v Australian Competition and Consumer Commission [2017] FCAFC 224 (22 December 2017).

Holloway and Another v Padi Emea Limited 2020 (5) SA 172 (GJ).

Standard Chartered Bank, Johannesburg Branch and Others v Mapula Solutions (Pty) Limited In Re: Mapula Solutions (Pty) Limited v African Banking Corporation of Zambia Limited and Others (2016/33936) [2017] ZAGPJHC 247 (11 August 2017).

Netstar v Competition Commission 2011 (3) SA 171 (CAC).

Colonial Industries Ltd v Provincial Insurance Co Ltd 1920 CPD 627.

First National Bank of Southern Africa Ltd v Perry NO and Others 2001 (3) SA 960 (SCA).

Stewart v Botha 2008 (6) SA 310 (SCA).

Natal Fresh Produce Growers’ Association v Agroserve (Pty) Ltd 1990 (4) SA 749 (N).

Telematrix (Pty) Ltd t/a Matrix Vehicle Tracking v Advertising Standards Authority SA 2006 (1) SA 461 (SCA).

Carelsen v Fairbridge, Arderne and Lawton 1918 TPD 306.

Jowell v Bramwell-Jones and Others 1998 (1) SA 836 (W).

Competition Commission v Esorfranki Ltd Rodio Geotechnics (Pty) Ltd; Dura Soltanche Bachy (Pty) Ltd; Geomechanics CC; Diabor (Pty) Ltd; And Grinaker Lta (An Operating Group Of Aveng (Africa) Limited) CR107Mar11.

The Competition Commission v Southern Pipeline Contractors and Conrite Walls (Pty) Ltd 23/CR/Feb09.

Competition Commission v DPI Plastics (PTY) Ltd and Others (15/CR/Feb09).

Legislation Cited

Competition Act 89 of 1998 (sections 3(1), 4(1)(b)(i), 4(1)(b)(ii), 49B, 52, 55, 57, 59, 59(2), 59(2A), 59(3A), 67(1)).

Competition Amendment Act 18 of 2018 (amendment to section 67(1), effective 12 July 2019, as referenced).

Banks Act 94 of 1990.

Supreme Court Act 59 of 1959 (section 19(1)(a)).

Constitution of the Republic of South Africa, 1996 (section 35, as referenced in relation to procedural fairness).

Rules of Court Cited

Rules for the Conduct of Proceedings in the Competition Tribunal (Tribunal Rules), including Rule 15(2), Rule 24(1), Rule 45(1), Rule 55(1), and Rule 55(3).

Held

The Tribunal held that the Commission’s referral, read as a whole and assessed at pleading stage, prima facie pleaded a single overarching conspiracy involving foreign and local banks and thus provided an adequate basis to find connecting factors sufficient to establish both subject-matter jurisdiction and personal jurisdiction over peregrini respondents under section 3(1) as developed in the CAC’s prior judgment.

The Tribunal held that the Commission’s pleaded allegations were sufficient, for jurisdictional purposes, to satisfy the qualified effects test by alleging direct, foreseeable, and substantial effects in South Africa arising from manipulation of the USD/ZAR exchange rate.

The Tribunal held that section 67(1) time-bar objections could not be finally determined at pleading stage and, in any event, were materially affected by the Constitutional Court’s decision in Pickfords, which treated section 67(1) as a procedural bar capable of condonation rather than an absolute substantive bar.

The Tribunal held that objections based on no valid initiation were answered by the prevailing jurisprudence, including Yara (recognising tacit initiation and lack of formality) and Pickfords (distinguishing Woodlands), and that the Commission was not barred from proceeding against or joining respondents not expressly named at the inception of initiation, provided the investigation concerns the prohibited practice.

The Tribunal held that alleged non-compliance with the CAC order could not, in this interlocutory context, be treated as a rigid checklist compelling dismissal, and that the CAC order could not be interpreted to fetter the Tribunal’s remedial discretion or the Commission’s capacity to supplement.

The Tribunal held that the referral complied with Tribunal Rule 15(2) and that the appropriate procedural course was to dismiss the exceptions/objections and require respondents to answer on the merits, preserving any remaining objections in their answering affidavits while pleading over.

The Tribunal granted the Commission’s joinder applications, admitted and condoned the Commission’s amendment and supplementary steps, dismissed the various respondent applications, directed answering and replying timetables, and made no costs order against the Commission due to the statutory limitation in section 57.

LEGAL PRINCIPLES

The judgment applied the principle that, in exception-type proceedings, the tribunal considers whether, on all possible reasonable readings, the pleading fails to disclose a cause of action; the excipient bears the onus; allegations are taken as true; and an over-technical approach should be avoided. A “vague and embarrassing” objection succeeds only where it goes to the root of the cause of action rather than isolated detail, and the pleading must be read holistically and in the manner most favourable to the claimant at this stage.

For extra-territorial application under section 3(1), the Tribunal applied the qualified effects test derived from ANSAC and reaffirmed in the CAC’s prior judgment in this matter, requiring pleaded allegations of direct, foreseeable, and substantial effects within South Africa. The jurisdictional enquiry was treated as distinct from the merits enquiry into competitive harm; at jurisdiction stage, the question is whether sufficient jurisdictional links between conduct and consequences are alleged.

For personal jurisdiction over foreign peregrini in competition matters, the Tribunal applied the CAC’s approach that personal jurisdiction may be established where there are adequate connecting factors between the alleged conduct and the forum, assessed through considerations of appropriateness and convenience. The Tribunal treated the alleged participation in an SOC involving local and foreign banks, combined with the seriousness of the alleged cartel conduct and the Tribunal’s exclusive competence over section 4(1)(b), as relevant connecting factors at pleading stage.

On section 67(1), the Tribunal applied Pickfords as establishing that the time limitation is procedural and may be overcome by condonation on good cause shown, and that cessation/prescription contentions typically require factual enquiry rather than determination on bare pleadings.

On initiation under section 49B, the Tribunal applied the principle that initiation is directed to an alleged prohibited practice (conduct) and requires no special formalities; initiation may be tacit, and later joinder is not barred merely because a respondent was not expressly named at inception. The Tribunal treated interpretations that would immunise cartel participants from later inclusion as inconsistent with the enforcement purpose recognised in the case law it applied.

On procedural and remedial discretion, the Tribunal applied the principle that prior appellate directions about pleadings do not operate as a rigid checklist automatically compelling dismissal and cannot fetter the Tribunal’s statutory discretion as to remedies in preliminary proceedings. The Tribunal also applied the principle that, where form and procedure are contested in interlocutory steps, technical irregularities may be condoned where appropriate to prevent undue delay and to advance fair and expeditious adjudication.

Competition Commission of South Africa v Bank of America Merrill Lynch International Designated Activity Company and Others (CR212Feb17) [2023] ZACT 26 (30 March 2023)