Competition Commission v Arcelormittal South Africa Ltd and Others

• Jurisdiction: South Africa
• Judge: Brand JA, Nugent JA, Cachalia JA, Pillay JA and Mbha AJA
• Judgment Date: 31 May 2013
• Citation: 2013 (5) SA 538 (SCA)
• Docket Number: 680/12
• Hearing Date: 21 May 2013
• Counsel: NH Maenetje SC (with N Jele) for the appellant. M van der Nest SC (with D Turner) for the first respondent. J Campbell SC (with A Gotz) for the second respondent. D Unterhalter SC (with K Hofmeyr) for the third respondent.
• Court: Supreme Court of Appeal

Cachalia JA (Brand JA, Nugent JA, Pillay JA and Mbha AJA concurring):

[1] This is an appeal by the Competition Commission (the commission) G and two cross-appeals by the first and second respondents, ArcelorMittal South Africa Ltd and Cape Gate (Pty) Ltd that arise from proceedings before the Competition Appeal Court (CAC). It is convenient to refer to these respondents as Amsa and Cape Gate. And where, in the judgment, reference is made to the 'respondents' this refers to Amsa and Cape Gate collectively. H

[2] The nature and status of the appeals need some explanation and to do that requires an account of how the dispute that is before us arose.

[3] There is a dispute between the commission and the respondents over I their entitlement to the production of documents from the commission. They require the documents, they say, to properly consider their written responses to a complaint that the commission has lodged against them with the Competition Tribunal (the tribunal). The commission alleges they have engaged in prohibited practices as part of a steel cartel in contravention of the Competition Act 89 of 1998 (the Act). It refuses to J

Cachalia JA (Brand JA, Nugent JA, Pillay JA and Mbha AJA concurring)

A hand over the documents, saying they are privileged and also contain 'restricted information' under the commission's rules. [1]

[4] Scaw South Africa (Pty) Ltd (Scaw), the third respondent, which admits to being part of the alleged cartel, gave the documents to the commission. It did so to avoid prosecution by taking advantage of B the commission's corporate leniency policy (CLP). [2] The rationale of the policy was recently explained in Agri Wire (Pty) Ltd and Another v Commissioner, Competition Commission, and Others [3] as follows:

'(T)he CLP has been developed to encourage participants to break ranks and disclose information that enables the commission to tackle cartel C behaviour. This information is furnished in return for immunity from prosecution, the latter being the term used in the policy for a reference to the tribunal and adjudication on a complaint of cartel activity in which an administrative penalty is sought. Clause 3.1 says that the CLP outlines the process through which the commission will grant a self-confessing cartel member . . . immunity for its participation in D cartel activity. That immunity is granted in return for full disclosure and full co-operation in pursuing the other cartel members before the tribunal.'

[5] Unable to obtain the documents from the commission, Amsa and Cape Gate separately applied to the tribunal for an order directing the E commission to produce them. The commission opposed the applications, alleging that the documents were both privileged and that they constituted restricted information. Scaw was a party to the proceedings, alleging that it had a claim to have the documents kept confidential. Save for ordering limited disclosure of certain documents, the tribunal F dismissed both applications.

[6] Both respondents then appealed to the CAC against the order of the tribunal. The commission opposed the respondents' appeals. Scaw was again a party to the appeals. The CAC made no order on the appeals by the respondents, considering it unnecessary to decide the issues upon G which the tribunal had pronounced. Instead it upheld Scaw's contention that the documents were protected from disclosure by a claim it had made to confidentiality in terms of s 44(1)(a) of the Act. The position, so it reasoned, was thus governed by the provisions of the Act [4] concerning access to information over which confidentiality had been claimed — a matter for the tribunal, rather than the CAC. In view of its H decision to refuse access on other grounds, the tribunal had had no reason to consider that contention by Scaw. The CAC therefore remitted the matter to the tribunal to determine Scaw's confidentiality claim.

Cachalia JA (Brand JA, Nugent JA, Pillay JA and Mbha AJA concurring)

[7] The order of the CAC — or rather, its failure to rule upon the order A made by the tribunal, which is what was before it on appeal — has created a dilemma for all the parties. Had the appeal against the order of the tribunal been dismissed, then the documents would have been protected from disclosure, and the question whether they were subject to a confidentiality claim by Scaw would have had no practical effect (which B is what the tribunal concluded; hence it did not deal with that claim). It was only if the CAC had upheld the appeal against the order of the tribunal that it would have been necessary for the matter to be remitted to the tribunal to rule on Scaw's confidentiality claim.

[8] As it is, by failing to either confirm or set aside the tribunal's order, C the parties are back to square one. When the tribunal is called upon to consider the confidentiality issue, which has been referred back for its ruling, the commission will again be entitled to invoke the same defences to disclosure, which have already been upheld by the tribunal. It is in an effort to avoid that occurring that the matter is now before us. Strictly, an appeal lies against an order of a court. Absent an order of the CAC on the D appeal that was before it, there was nothing to appeal against. What has brought the matter before us is that the parties need a decision on the issues that were before the tribunal, without which they have reached a stalemate. I think it is clear that they cannot be left in that position, and we ought to accede to their unanimous request to resolve these issues, notwithstanding that strictly there was nothing to appeal. E

[9] The dispute has its genesis in an investigation by the commission against alleged prohibited practices in the steel industry that began more than five years ago. [5] The commission commenced the investigation by initiating two complaints in terms of s 49B of the Act: one on 21 April 2008 F and the other on 5 June 2008. Amsa, Cape Gate, Scaw and the South African Iron and Steel Institute were among the companies being investigated. The Institute is cited as the fourth respondent but it plays no part in these proceedings.

[10] On 19 June 2008 the commission conducted searches at the G premises of various companies as part of the investigation. Following the search, and after learning that no other company had applied for leniency under the CLP, Scaw took the opportunity to do so.

[11] In applying for leniency Scaw first applied for what is known as a 'marker', which allows the applicant to claim priority ahead of other H cartel members who may also apply for leniency. The commission's policy allows leniency only to the first successful applicant. On 2 July 2008, after the marker application was submitted, the commission requested further specific information from Scaw. A week later, on 9 July, Scaw submitted its leniency application, and on 17 July the commission granted Scaw conditional immunity from prosecution. I Thereafter, Scaw handed over numerous further documents to the

Cachalia JA (Brand JA, Nugent JA, Pillay JA and Mbha AJA concurring)

A commission, at the commission's behest, and attended several consultations with the commission concerning the complaints.

[12] In consequence of the information received from Scaw, including the information in the leniency application, and from its own investigations, the commission determined that the respondents had engaged in B prohibited practices in contravention of ss 4(1)(b)(i) and 4(1)(b)(ii) of the Act.

[13] On 1 September 2009 the commission referred a complaint regarding the alleged prohibited practices to the tribunal for adjudication. [6] It alleged that the respondents were party to 'agreements', as defined in the C Act, to fix prices and trading conditions, and to divide markets between themselves. In addition to seeking declaratory and interdictory relief against the respondents, excluding Scaw, which had been granted conditional immunity, the commission sought the imposition of an administrative penalty of 10% on each respondent's annual turnover in D South Africa, including their exports, for the preceding year.

[14] Shortly after the commission delivered its founding affidavit (the referral affidavit) Cape Gate and Amsa sought the production of documents from the commission. The commission provided some documents to Amsa, but refused to hand over the rest.

E [15] In December 2009 the respondents applied to the tribunal for access to the documents. Cape Gate sought access only to Scaw's leniency application document, the annexures and all supporting documents that were submitted in support of the application ('the leniency application'). For this purpose it relied on rule 35(12) of the Uniform Rules of Court, which the tribunal applies. The rule permits any party, F after delivering a notice to any other party in whose pleadings or affidavit there is reference to a document, to inspect and copy the document.

[16] Amsa sought access to a much broader set of documents than Cape Gate did. First, it wanted all the documents the commission generated during its investigation of the complaint. Put simply, it sought the G 'commission record' pertaining to the complaint. It contends that commission rule 15(1), which gives a right to 'any person' — not only to a person being investigated for a prohibited practice — to inspect or copy any commission record, permits this. Second, Amsa also relied on rule 35(12) for discovery of an extensive set of documents described in a table H attached to the notice of motion. [7] This included the leniency application, the marker application and other documents to which reference was made in the referral affidavit. The other documents include letters, faxes, emails and all other forms of correspondence, notes, tape recordings, photographs...