The Constitutional Court found on 12 April 2012 that Senwes did in fact contravene section 8(c) of the Competition Act. A complaint of uncompetitive business practices relating to grain storage tariffs, which was lodged by the Competition Commission against Senwes in 2006, resulted in an extensive legal process which included the Competition Appeal Court, the Appellate Division of the High Court and eventually the Constitutional Court.
“Obviously we are somewhat disappointed with the judgement, particularly after the long and expensive process in this regard, but we are happy that it has come to an end”, said Francois Strydom, Managing Director of Senwes. He further added: “Senwes revised its storage tariff structures extensively in 2008 and all users of storage facilities are offered an equal opportunity to choose from an extensive menu of tariff options.”
Early in 2006, after a two-year long investigation, the Competition Commission referred a complaint against Senwes by CTH Trading, situated in Stellenbosch, to the Competition Tribunal for a ruling. It was alleged that Senwes contravened certain sections of the Competition Act in that it abused its dominant position in the grain market and induced grain producers not to do business with competitors. Senwes was of the opinion that there was no factual legal basis for the complaint and opposed the complaints.
After an extensive legal process, the Tribunal found that the complaints, as referred to the Tribunal, did not constitute a contravention of the Competition Act. However, the Tribunal found that Senwes placed the margins of competitors in the grain trading markets under pressure. This contravention was dealt with by the Tribunal as a so-called “margin squeeze” in terms of section 8(c) of the Competition Act. The finding did not carry a penalty.
Senwes objected against the fact that the particulars of the alleged contravention were not presented to Senwes during the investigation and were also not referred to the Tribunal by the Competition Commission, although the witness statements, which were exchanged a few weeks prior to the hearing, contained allegations relating to such conduct. The Tribunal did, however, make a ruling in this regard.
Senwes then appealed against the judgement at the Competition Appeal Court and subsequently at the Appellate of the High Court in Bloemfontein. The latter ruled in June 2011 that the margin squeeze complaint was never investigated or referred by the Competition Commission and that the Tribunal was not qualified to make a finding in respect thereof.
Subsequently the Competition Commission in turn appealed to the Constitutional Court against the above judgement, which found on 12 April 2012 that the powers of the Tribunal could not be restricted and that it was entitled to consider and rule in respect of more extensive aspects and allegations during the course of a trial at this forum. The Court found that the Tribunal may not be limited unnecessarily in the execution of its legal mandate and that it is entitled to make rulings outside of the scope of the referral.
In a majority judgement the court found that Senwes had adequate opportunity to defend itself, but the minority of the Court found that the process had not been fair in view of the fact that the matters on which the Tribunal ruled, were not clearly defined enough and that there had not been a prior ruling regarding Senwes’ objections.
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