Tribunal dismisses Commission application to reinstate cartel case against Beefcor, Cape Fruit
The Tribunal has dismissed an application by the Competition Commission to reinstate a cartel case against Beefcor (Pty) Ltd and Cape Fruit Processors (Pty) Ltd.
The Commission withdrew its case against the companies in June 2018, in a bid to negotiate a settlement with the parties. Following a withdrawal notice filed by the Commission, the matter was removed from the Tribunal’s roll.
In September 2018, the Commission then attempted to reinstate the same withdrawn complaint under a new case number. Beefcor and Cape Fruit Processors raised objections and the Commission had to bring the application to reinstate the matter.
The Commission had argued that its withdrawal of the cartel case merely amounted to a “removal from the Tribunal roll” and it was therefore entitled to re-enrol the matter.
The companies, however, argued that the Commission’s withdrawal amounted to a withdrawal of the entire case and therefore a settlement. As such, the Commission was prevented from reinstating its case in terms of section 67(2) of the Act.
Tribunal order and reasons
In its order and reasons, the Tribunal has found that “the Commission’s withdrawal notice had the effect of withdrawing the complaint referral against the respondents and not merely a removal of the matter from the roll.”
In relation to whether the withdrawal amounted to a settlement between the Commission and the companies, the Tribunal has found that it did not: “The fact that the complaint referral was withdrawn does not as a matter of fact and law amount to a settlement”.
While it has found that the Commission did not make out a case to support reinstatement of the withdrawn complaint, the Tribunal has noted: “… “While the complaint referral has been withdrawn by the Commission, this does not mean that the Commission cannot bring another complaint referral against the respondents, which would be equivalent to the reinstatement of charges in criminal proceedings. However, it will have to explain why this “new” complaint was different from the withdrawn complaint. For example, it will have to explain that new facts have come to light or the same evidence has been reviewed by the Commission’s investigators in a different light…”
The Commission initiated a complaint against Beefcor and Cape Fruit Processors in September 2017, alleging that the companies had concluded an agreement not to compete in the market for processing wet peels and citrus pulp used in the production of livestock feed. The Commission alleged that this conduct amounted to division of markets or allocation of customers, in contravention of the Competition Act.
However, the Commission subsequently withdrew the complaint on 27 June 2018 “in order to give (settlement) negotiations a fair chance” and filed its notice of withdrawal with the Tribunal.
Beefcor accepted the Commission’s withdrawal but expressed no intention of entering into settlement negotiations, save in relation to costs. Cape Fruit Processors’ lawyer advised the Commission that if it had wanted more time to engage in settlement discussions, it should have applied for a postponement of the matter rather than withdraw it. The company did not find the Commission’s settlement terms acceptable and asked that the Commission revoke its withdrawal so that the matter could proceed.
The Tribunal had attempted to convene an urgent meeting between the parties in a bid to resolve the issues. Due to the Commission’s unavailability the Tribunal subsequently notified the parties that the matter had been removed from the roll, given the Commission’s withdrawal notice. The Tribunal also informed the Commission that it would be required to file an application for reinstatement if it wished to reinstate the matter in future.
Gillian de Gouveia
Tel: +27 (0) 12 394 1383
Cell: +27 (0) 82 410 1195
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