The Constitutional Court this morning handed down judgement in both the Competition Commission v Yara South Africa and Others (Yara case) and Competition Commission v Loungefoam and Others (Loungefoam case) and dismissed with costs the Competition Commission's (Commission) applications for leave to appeal earlier decisions of the Competition Appeal Court (CAC).

In both of these cases the Commission sought determination on whether it could amend its complaint referral to the Competition Tribunal to include facts that may have arisen as a result of an investigation and thus were not listed in the initial complaint, and where in both of these cases the Competition Appeal Court (CAC) had ruled against the Commission. In light of the CAC ruling in the Yara case, the Commission sought leave to appeal directly to the Constitutional Court as well as concurrently lodging a request for leave to appeal to the Supreme Court of Appeal (SCA) before the CAC, which remains pending. In the Loungefoam case the Commission failed to seek leave to appeal from the CAC before lodging its request with the Constitutional Court.

The majority judgment of the Constitutional Court in the Yara case held that the Commission's delay in lodging this application was excessive and that the Commission failed to adequately explain the reasons for the delay. The Constitutional Court held that the Commission had failed to make an application in terms of the provision in the Competition Act, 1998 that permits a request to the SCA or the Constitutional Court for an appeal of a CAC decision, and that for these reasons, the Commission's applications falls to be dismissed. Further, the judgment concludes that even if the condonation application was allowed, it is not in the interests of justice to grant the Commission leave to appeal directly to the Constitutional Court.

The Loungefoam case saw the Commission appeal the whole judgment of the CAC which amongst others, found that any amendment including a new complaint must be initiated before it can be referred. The majority decision of the Constitutional Court considered similar factors as those in the Yara judgment and found that irrespective of one's interpretation of the provision of the Competition Act which permits appeals to the SCA and Constitutional Court, the Commission failed to seek leave from the CAC before approaching the Constitutional Court and showed no compelling circumstances that would justify a direct appeal. The Constitutional Court held that the matter fell to be dismissed on this basis alone and thus found it unnecessary to decide condonation of the Commission's seemingly excessive delay.

This presents a setback for the Commission in what has been an extremely long and arduous journey following the Woodlands Dairy and Another v Competition Commission case in 2010. Merits of neither matter were considered by the Constitutional Court and the applications were dealt with on procedural grounds. The analyses were firmly based on interpretations of the relevant statutes, rules of court and the importance of due process. These matters are the last in a chain of cases regarding technical challenges questioning the Commissions' powers of investigation, initiation and referral of matters to the Competition Tribunal.

Despite the fact that this is undoubtedly a setback for the Commission, all is not lost. The Commission still have pending applications before the CAC for leave to appeal to the Supreme Court of Appeal (SCA) in both matters. Whether or not the SCA will entertain these applications or whether or not the Commission has the appetite to follow through on these applications in uncertain. However, what both majority judgments of the Constitutional Court stress is the importance of due process and procedures and that failure to adhere to the legislative framework will not be tolerated. This is not only a crucial lesson for the Commission but must be borne in mind by all within the legal field.

Contact:
Daryl Dingley | Partner
Tel: +27 11 530 5285 | daryl.dingley@webberwentzel.com

Desmond Rudman | Partner
Tel: +27 11 530 5272 | desmond.rudman@webberwentzel.com

Janine Simpson | Partner
Tel: +27 11 530 5940 | janine.simpson@webberwentzel.com

Lesley Morphet | Partner
Tel: +27 11 530 5359 | lesley.morphet@webberwentzel.com

Martin Versfeld | Partner
Tel: +27 11 530 5322 | martin.versfeld@webberwentzel.com

Nkonzo Hlatshwayo | Partner
Tel: +27 11 530 5295 | nkonzo.hlatshwayo@webberwentzel.com

Robert Wilson | Partner
Tel: +27 11 530 5756 | robert.wilson@webberwentzel.com