3 July 2012 by

Competition Commission has been denied appeal to the Constitutional Court

The Competition Commission has been denied leave to appeal directly to the Constitutional Court (ConCourt) in matters concerning both Omnia/Yara and Loungefoam.

“But the Constitutional Court’s decisions have not brought finality and in effect are tantamount to a rain-delay,” says Chris Charter, Director in the Competition practice at Cliffe Dekker Hofmeyr business law firm.

“Essentially, In the ordinary course, appeal from the Competition Appeals Court (CAC) lies to the Supreme Court of Appeal, and from there to the ConCourt. In certain cases, one can leapfrog the SCA and go straight to the ConCourt. However, this must either be with the leave of the CAC or in the interests of justice. In these cases, the Commission sought direct access to the ConCourt and did not seek leave to appeal from the CAC to the SCA (presumably, the Commission did not think the SCA would rule it its favour given that’s court decision in the Woodlands Dairy cases, on which the CAC largely based its reasoning),” he explains.

“The ConCourt appears to have dismissed the cases based on procedural issues,” says Charter. “ What I find curious is that the ConCourt decisions suggest that it was not in the interests of justice to allow the appeal. At a constitutional court level, direct access can be allowed where the issue related to constitutional matters and where the “interests of justice” demand require the matter to be decided directly.

“The test for whether an appeal is in the interests of justice typically includes whether there are prospects of winning the appeal – presumably the reason the ConCourt took six months to dismiss the cases is because there was much debate among judges as to whether the Commission has a prospect of success on the merits. It is tempting to conclude that the fact that the leave to appeal was dismissed means that the judges felt the case was not that strong. However, this does not emerge from the written judgments, where there are statements (obiter, of course) that the prospects of success may have been good.”

Charter explains that in the majority judgment in the Loungefoam case, Justice Maya writes that “accepting that the matter raises issues of public importance and assuming that there may well be good prospects of success in the appeal, these factors are nonetheless not decisive”. The minority judgment goes even further, stating that “there are prospects of success in the appeal”.

“So it seems that the ConCourt has refused to hear the case based on strict procedural grounds, while tantalisingly suggesting that the Commission may be strong on the merits. There have been a slew of direct access applications to the ConCourt recently, and perhaps the Court has decided to send a message to the effect that it really should be a final stage of a legal process and that the jurisdiction of the SCA should not be side-stepped as a matter of course. However, there may be just enough in the judgments to send a signal to the SCA (and the CAC in determining leave to appeal) that it should consider reversing the CAC decision, as a further appeal to the ConCourt may well succeed,” notes Charter.

“That said, the decisions are a blow to the Commission as it did not get the clarity it was seeking regarding its powers of investigation. It is perhaps ironic that in seeking to overturn decisions constraining its procedural powers, the Commission has been undone again by failing to follow proper legal procedure. The ConCourt awarded costs against the Commission, so it is an expensive lesson in an arena where litigation is not cheap.

“No doubt the Commission was hoping to get a judgment similar to that in the Senwes case, where the ConCourt effectively confirmed very wide powers on the Tribunal to conduct its cases in an inquisitorial manner and with little regard for standard court procedure. The ConCourt judgments seem to leave the door open for a successful appeal process, but the Commission has to join the dots to get there.”

“For the Competition law community, it seems the law as laid down in the CAC remains for now – which is fairly restrictive in terms of the Commission’s powers of investigation. In my view, that is fitting – if the Tribunal proceedings are to be as flexible as the ConCourt suggests , even more reason to ensure that respondents can only be delivered there by a Commission investigation that follows strict rules of due process, “ he adds.
 

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