The Supreme Court of Appeal (the “SCA”) upheld an appeal against a judgment of the Competition Appeal Court invalidating a complaint referred to the Competition Tribunal (the “Tribunal”) by the Competition Commission (the “Commission”) against cartel activity allegedly entered into by Yara South Africa (Pty) Ltd (“Yara”) and Omnia Fertilizer Ltd (“Omnia”).
The dispute in this matter arose out of a complaint lodged with the Commission, citing Sasol Chemical Industries Proprietary’ (“Sasol”) for imposing unfair price increases in respect of certain raw materials it supplied to the complainant company. The complainant elaborated upon its complaint by way of an affidavit which explained the price increases with reference to a cartel which Sasol was alleged to have entered into with Yara and Omnia. Pursuant to the complaint, the Commission conducted an investigation which confirmed both the price increase allegations made against Sasol and the claims of cartel activity made against Sasol, Omnia and Yara. As a result, the Commission referred the complaints relating to both price increases and cartel activity to the Tribunal for adjudication.
The legality of this referral formed the substance of the dispute. Omnia argued that the initial complaint brought to the Commission was directed against Sasol alone and, further, was limited to Sasol’s conduct as it related to price increases. Omnia disputed the lawfulness of the referral insofar as the Commission had, under the auspices of the original complaint directed at Sasol, sought to refer Omnia’s conduct to the Tribunal absent a separate complaint initiation. Omnia contended that, in order for the referral of this further complaint to have been lawful, it ought to have been separately initiated by the Commission.
The SCA confirmed Omnia’s position, and that the complaint referred to the Tribunal indeed extended beyond the cause of action raised by the original complaint. However, the SCA went further and stated that complaints made by private persons may well trigger separate complaints and, in such cases, the Commission need only decide to initiate a new complaint, investigate that complaint and, if appropriate, refer that complaint to the Tribunal. The SCA confirmed that the process may be both informal and tacit. Further, should the Commission already have enough information to warrant a referral, the intervening investigation can be cursory. The SCA found that the requirements for valid initiation and referral had been satisfied on the facts of this case.
The SCA’s decision will embolden the Commission to proceed with a number of complaint referrals which were left pending the outcome of the matter.