COMESA, draft, settlement

CCC draft Guidelines (no. 2/3): ‘Hearing Procedure’

COMESA Competition Commission seeks input on Determination of Hearing Procedure Guidelines

By Gina Lodolo

We previously published an analysis of the regional antitrust enforcer’s recently-published “Settlement Guidelines”.

In this article, we briefly discuss the Hearing Procedure draft which has been published (in addition to the Administrative Penalties Procedure and Settlement Guidelines).  The draft Guidelines have been published for public stakeholder comments due by 12 November 2021. Fundamentally, the COMESA Competition Commission (“CCC”) emphasizes that, during its investigative proceedings, the principles of natural justice must be adhered to, in the sense that the parties have the right to be heard.

Hearings will be conducted during either of the following stages:

  1. The hearings during the investigations process;
  2. Hearing by the Director before publication of notice of compulsory recall of defective goods; and
  3. Hearing before the Committee for the Initial Determination (“Committee”) of cases.

The CCC notes that in regard to hearings for the initial determination of cases, hearings are not intended to be the major source of information because the primary method of information gathering will be gleaned from responses received from the
“Notice of Investigation” that will first be sent in terms of  Article 21(6)(a) and 22(1) of the Regulations.

When will the CCC hold hearings?

  1. May hold hearings during investigations (at any time);
  2. Shall hold a hearing:
    • Before making recommendations;
    • Before taking decisions; and
  3. (In its consumer-protection role only:) Before the CCC publishes a notice of a compulsory product recall.

Hearing procedure once it has been determined that a hearing will be held

  1. The CCC shall give fifteen working days notice to all of the parties involved;
  2. A notice will be published to invite interested parties;
  3. Notice of the main issue must be given within ten working days and will provide the main issues identified and the main questions that will be raised (any other questions may still be raised at the hearing as long as “they are reasonably related to the matter under investigation.

During the Hearing

  1. The Committee will test the evidence before it and interrogate the CCC’s team that conducted the investigation.
  2. The party under investigation will also be provided the opportunity to:
    • Clarify and develop the evidence that it provided during the investigation;
    • Comment on and rebut evidence and information supplied by other parties; and
    • Make further representations, which may, in relevant cases, address the question of whether a practice has public benefits that may offset any adverse effects on competition.

After a Committee has been convened to hear the matter:

  1. Any party required to attend the hearing must be given twenty-one days’ notice of the hearing date.
  2. Upon application by a party, a pre-hearing can be requested to confirm that all of the parties can attend the hearing and have received all documentation relied on by the other party.

After the conclusion of the hearing, a decision will be made by the Committee within forty-five days. If the Committee finds that the respondent has breached the Rules or Regulations, in “appropriate instances” a remedy can be discussed.

Any party has a right of appeal and will do so in accordance with Rule 24(d), (e) and (f) of the COMESA Rules, 2004.

Standard
BRICS, South Africa

Competition Appeal Court’s Ruling in Standard Bank Case: A Changing of the Tides?

Threat of Referral no Longer an Arrow in the Commission’s Quiver?

By AAT Senior Contributor Michael-James Currie

In the first week of June 2018, the South African Competition Appeal Court (CAC) upheld Standard Bank’s appeal and ordered that the Competition Commission (Commission) make available its investigation record to Standard Bank. Standard Bank is a respondent in the Commission’s ForEx investigation.

Standard Bank had requested that the Commission make available its record in terms of Rule 15 of the Competition Commission Rules. Rule 15 permits any member of the public to request access to the Commission’s non-confidential record. Standard Bank therefore brought its application in terms of Rule 15 not on the basis of it being a respondent to the Commission’s investigation but as an ordinary member of the public.

Although the CAC had in an earlier case, Group 5, set out the correct interpretation and application of Rule 15 and stated that:

  1. the Commission is obliged in terms of Rule 15 to make available its record of investigation;
  2. that the Commission must do so within a “reasonable time”; and
  3. that the Commission must disregard the applicants status as a litigant when determining what a reasonable time is.

The Tribunal in the Standard Bank case, however, deviated from the CAC’s binding decision in Group 5 and held that the Commission would only need to make its record available to Standard Bank at the time of discovery.

Accordingly, the CAC in the Standard Bank case found that the Tribunal took Standard Bank’s status as a litigant into account when assessing what a reasonable time would be by which the Commission was obliged to make available its record to Standard Bank. The CAC in Standard Bank confirmed that although the Tribunal is not bound by the stare decisis principle in relation to its own decisions, the Tribunal is bound by the CAC’s decisions. The Tribunal’s decision in Standard Bank was inconsistent with the CAC’s earlier decision in the Group 5 case – where the CAC expressly stated that there is no rational basis for linking the production of the Commission’s record with discovery proceedings. The Tribunal’s departure from the CAC’s earlier precedent was noted with concern by the CAC in Standard Bank.

The Commission argued – as justification for not producing its record – that Standard Bank was abusing its position as a litigant. In this regard, the CAC expressly rejected this argument and held that simply because a plaintiff would be better placed to plead its case after receiving the Commission’s record that, in of itself, does not amount to an abuse of process. The CAC held that it would only amount to an abuse of process if an applicant sought to rely on Rule 15 in order to avoid or delay having to plead within the prescribed time periods.

Furthermore, the CAC reaffirmed that a member of the public’s right to access the Commission’s record should not be prejudiced by the fact that such a member is also a litigant.

The Court’s Standard Bank decision is important as respondents will invariably be inclined to seek access to the Commission’s record prior to pleading their case. This may have a material impact on the Commission’s settlement strategy as respondents in settlement negotiations with the Commission are likely to request the Commission’s record in order to assess the strength of the Commission’s case against it before deciding whether to settle the case or not – thereby compelling the Commission to ensure that a robust investigation is conducted prior to entering into settlement negotiations with respondents.

Says John Oxenham, ‘the “threat of a referral” is unlikely to present the Commission with the same negotiating leverage as it may otherwise have enjoyed when respondents were kept in the dark as to the evidence which the Commission may have against them.’

Whether this all plays out in practice remains to be seen although any decision which promotes transparency and legal certainty can only be positive. It is for this reason that the CAC’s express criticism of the Tribunal’s decision to depart from established case precedent is particularly noteworthy as it is a stark reminder to all adjudicative bodies of the importance of adhering to the rule of law.

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