5 September 2011

Intervention has its costs

The Competition Act permits third parties to intervene in merger proceedings, mostly to the detriment of merging parties. A recent Tribunal judgment (Londoloza Forestry Consortium (Pty) Ltd v Bonheur 50 General Trading (Pty) Ltd and others) serves to remind intervenors that in doing so, they cannot look to the emerging parties to cover the legal costs incurred. The Tribunal dismissed an application for a costs order by an intervenor to the merger proceedings.

In this instance, Londoloza opposed an application by the merging parties to have the Tribunal reconsider the Commission's decision to prohibit a merger. When the merging parties eventually abandoned their merger, Londoloza argued that it was entitled to costs in the consideration application.

In dismissing the costs application, the Tribunal expressed that merging parties are compelled by law to notify a merger; and having done so, are required to participate in the Tribunal's proceedings. On the other hand, intervenors are not required to participate in either the Commission's or the Tribunal's proceedings. They elect to do so and therefore do so at their own risk.

In its decision, the Tribunal noted that Londoloza intervened in the matter in pursuit of its own interests, it was neither asked nor compelled to do so. The Tribunal expressed that in the event that Londoloza was uncertain about the Commission's ability to defend its decision, Londoloza could have assisted the Commission in various other ways, including appearing as a witness, making an expert witness available or intervening to a limited extent. However, since Londoloza chose to intervene fully, the Tribunal found that it elected to incur the full cost of its participation.

Nick Altini, Director, Competition

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