American Natural Soda Ash Corporation and Another v Competition Commission and Others

• Jurisdiction: South Africa
• Judge: Mpati DP, Cameron JA, Nugent JA, Conradie JA and Comrie AJA
• Judgment Date: 13 May 2005
• Citation: 2005 (6) SA 158 (SCA)
• Docket Number: 554/03
• Hearing Date: 24 February 2005
• Counsel: M S M Brassey SC (with him J P V McNally) for the appellant. W J Pretorius SC for the first respondent. D N Unterhalter SC (with him A G Gotz) for the second respondent. A Subel SC (with him N H Maenetje) for the Minister of Justice and Constitutional Development.
• Court: Supreme Court of Appeal

Cameron JA et Nugent JA: A

[1] This is an application for leave to appeal against an order of the Competition Appeal Court (the CAC) in October 2002, [1] dismissing an appeal from orders of the Competition Tribunal (the Tribunal) made on 27 March 2001 and on 30 November 2001. The parties' dispute concerns the importation from the United States of soda ash (an ingredient essential to the B manufacture inter alia of glass). The applicant (Ansac) is a non-stock, non-profit Delaware corporation formed by five United States soda ash producers in the early 1980s to export their product abroad. (The second applicant is Ansac's local distributor: we refer to it with Ansac.) Within the United States, the creation of Ansac and its operations would have been illegal under the 1890 Sherman Antitrust C Act, [2] but in 1918 Congress granted export-directed cartels exemption from the antitrust legislation.

[2] The question the application raises is to what extent Ansac's activities run afoul of the South African Competition Act 89 of 1998 (the Act). That question was raised formally in October 1999, D when the second respondent, a Botswana producer of soda ash (Botash), and its South African distributor, the third respondent (Chemserve), launched an application for interim relief against Ansac before the Tribunal. (We refer to those respondents together as Botash.) Botash charged that Ansac was contravening the Act's prohibition on restrictive horizontal practices. These are found in E s 4:

(1) An agreement between, or a concerted practice by, firms, or a decision by an association of firms, is prohibited if it is between parties in a horizontal relationship and if - [3]

(a)

it has the effect of substantially preventing, or lessening, competition in a market, unless a party to the agreement, F concerted practice, or decision can prove that any technological, efficiency or other pro-competitive gain resulting from it outweighs that effect; or

(b)

it involves any of the following restrictive horizontal practices:

(i)

directly or indirectly fixing a purchase or selling price or any other trading condition; G

(ii)

dividing markets by allocating customers, suppliers, territories, or specific types of goods or services; or

(iii)

collusive tendering.'

Cameron JA et Nugent JA

The Act defines 'horizontal relationship' as 'a relationship between competitors' (s 1). A

[3] The parties soon found themselves caught in a procedural bog. The details have already been reported [4] and we mention only the essential features. Two months after Botash's opening salvo, Ansac launched an application against Botash, charging predatory pricing in violation of s 8 of the B Act. [5] The parties withdrew their contesting challenges when the Competition Commission (the Commission) (which ch 4 of the Act gives extensive power to initiate anti-competitive measures and investigate and evaluate alleged contraventions), [6] itself concluded that Ansac was engaging in prohibited conduct and filed a complaint with the C Tribunal, only to withdraw it and file a fresh referral two months later. It was these proceedings that Botash joined when it secured the Tribunal's leave to serve an intervening complaint on Ansac.

[4] But the bog only deepened, because a year after the first application was launched, the parties were unable to agree on a statement of facts for the Tribunal, and in January 2001 Ansac applied D for the complaint to be dismissed on various grounds that are not now relevant. In the reasons the Tribunal gave for its ruling made on 27 March 2001, it recorded that at a 'pre-hearing' it convened in relation to those issues, it requested the parties to prepare argument on the question, 'does s 4(1)(b) allow for an efficiency defence' because 'the conclusion would determine whether E this evidence could be led at the hearing'. (It seems that the evidence that the Tribunal had in mind was evidence that Ansac wished to lead to establish that it was a 'legitimate cost-saving efficiency-producing joint venture', whose savings enabled it to market North American soda ash in Southern Africa more cheaply than local competitors.) On 27 March 2001 the Tribunal rejected F Ansac's objections to the complaint, and also ruled that 'evidence concerning any technological, efficiency, or other pro-competitive gain that might be admissible in terms of s 4(1)(a) is inadmissible in terms of s 4(1)(b)'. We deal more fully below with the meaning and effect of that ruling. G

[5] Eight months later, in a second ruling delivered on 30 November 2001, the Tribunal dismissed two 'exceptions' that Ansac had taken to the complaint. The two points concerned the scope of the Act's territorial application; and the question whether Botash had legal standing to become a complainant when its complaint made no allegation that it had suffered particular harm from Ansac's H activities. The Tribunal rejected all of Ansac's contentions.

Cameron JA et Nugent JA

[6] These three rulings - on the inadmissibility of certain evidence regarding an alleged s 4(1)(b) A contravention; on the scope of the Act's application; and on Botash's standing - the CAC upheld in dismissing Ansac's appeal. [7] An attempt by Ansac to appeal directly to this Court without obtaining the CAC's leave foundered when this Court held that such leave was required. [8] (We refer to this Court's judgment in the leave to appeal application as 'Ansac (1)'.) Leave was then sought from, and refused by, B the CAC, resulting in the present petition for leave to appeal, which the judges who considered it referred for oral argument with the direction that the parties should be prepared, if called upon to do so, also to address the merits of the proposed appeal. [9]

[7] Before we deal with the substance of the application, it is necessary to consider this Court's jurisdiction to hear the appeal. C

This Court's jurisdiction to hear the appeal

[8] Section 62 of the Act deals with appeals from the CAC. It specifies first matters in respect of which the Tribunal and CAC 'share exclusive jurisdiction' (s 62(1)). These include (subject to D limited exceptions) the interpretation and application of restrictive horizontal practices (s 62(1)(a)). Section 62(2) then confers additional (non-exclusive) jurisdiction on the CAC over the question whether action or proposed action by the Commission or Tribunal is within their respective jurisdictions (s 62(2)(a)); any constitutional matter arising in terms of E the Act (s 62(2)(b)); and the question whether a matter falls within the Tribunal's or the CAC's exclusive jurisdiction (s 62(2)(c)).

[9] Section 62(3) is the critical provision. It provides that the jurisdiction of the CAC F

'(a)

is final over a matter within its exclusive jurisdiction in terms of ss (1); and

(b)

is neither exclusive nor final in respect of a matter within its jurisdiction in terms of ss (2)'.

Section 62(4) provides expressly that, subject to leave to appeal being obtained (s 63), an appeal from the CAC lies to this Court or the Constitutional Court (the CC) 'in respect of a matter within its G jurisdiction' in terms of s 62(2) - in other words, in respect of matters over which the CAC has non-exclusive jurisdiction, including constitutional questions.

[10] As in the case of the relevant sections of the Labour Relations Act 66 of 1995, [10] these provisions H undoubtedly constitute a statutory endeavour to vest partial final appellate jurisdiction in the CAC. The effect of s 62(3) regarding appeals to the CC is uncontroversial, since it

Cameron JA et Nugent JA

allows appeals on 'any constitutional matter', and under the Constitution the CC's sole A jurisdiction is in such matters. [11] No impairment of constitutionally derived appellate power is thus apparent. More difficult is the Act's seeming attempt to limit appeals to this Court.

[11] In National Union of Metalworkers v Fry's Metals, [12] which was argued before the same B panel in the same week as the present application, we held that:

[11.1]

Any legislative endeavour to vest final appellate jurisdiction in an appeal Court other than this Court has to be judged in the light of the appellate structures created by the Constitution.

[11.2]

The Constitution provides not only that this Court 'may decide appeals in any matter', but that it 'is the highest C Court of appeal except in constitutional matters' (s 168(3)): this provision superseded both the statutory and common-law sources of this Court's jurisdiction, and there can be no reason to give it less than its full meaning in relation to both constitutional and non-constitutional matters. D

[11.3]

The Constitution's typology of final appellate Courts is exhaustive: it does not envisage other final appeal Courts with authority equivalent to that of this Court and of the CC.

[11.4]

This Court's appellate powers do not derive from any particular statute, but from the Constitution itself. E

[11.5]

The Constitution does not envisage that legislation can assign the jurisdiction of this Court piecemeal or wholesale to other specialist tribunals with final appellate jurisdiction.

[11.6]

The Legislature may create rights that are not appealable; but once appellate jurisdiction falls to be exercised, this Court is empowered to exercise it finally (apart from the CC), since F final appellate tribunals with authority similar to this Court are not envisaged in the Constitution.

[12] These conclusions govern the present matter. They lead to a similar outcome. The issue in NUMSA v Fry's Metals was the appellate structures created by the...