Cape Gate Cartel Case Heads to ConCourt

• The Competition Commission is seeking leave to appeal a decision by the CAC that dismissed a guilty finding against Cape Gate.
• The commission claims it successfully prosecuted Cape Gate before the tribunal and a new hearing is no longer feasible due to witness issues.
• The case has been ongoing for over 20 years, with significant delays in the tribunal's decision-making process.
• The commission is arguing that administrative delay should not be used as a defense against liability for cartel conduct.

The commission seeks to advance the principle before the Constitutional Court that a firm – Cape Gate – cannot be immunised from liability for cartel conduct on the basis of the tribunal’s delay in issuing its decision where there is evidence that the firm engaged in cartel conduct.

The Competition Commission is seeking leave to appeal a decision by the Competition Appeal Court (CAC) that dismissed a guilty finding against Cape Gate, an alleged member of a cartel involving South Africa's large steel manufacturers. The CAC remitted the decision back to the Competition Tribunal for a rehearing after reviewing the case and finding that a delay of over six years 'contaminated' the ultimate decision. This move is extraordinary because the commission is asking for the reinstatement of the tribunal's original guilty finding against Cape Gate, despite the fact that the tribunal itself is not appealing the CAC decision. The commission claims it successfully prosecuted Cape Gate before the tribunal and a new hearing is no longer feasible due to the passing of a key witness and the advanced age of another.

The case has been ongoing for over 20 years, with the Competition Tribunal taking more than six years to issue its guilty finding against Cape Gate. The CAC found that the tribunal members' excuse for the delay was 'false and contradicts the explanation they proffer in their respective explanatory affidavits.' The commission is arguing before the Constitutional Court that a firm cannot be immunized from liability for cartel conduct on the basis of administrative delay, citing evidence that Cape Gate engaged in cartel conduct. This could set a precedent for future cases. The commission's chief legal counsel, Bakhe Majenge, stated that the majority placed excessive weight on the delay and that this was 'misdirected and erred' in its application of principles laid down in jurisprudence.

The outcome of this case could have significant implications for companies involved in cartel conduct. If the Constitutional Court rules in favor of the commission, it could establish a precedent that firms cannot use administrative delay as a defense against liability for cartel conduct. This would be a major development in South African competition law and could lead to increased accountability for companies engaging in anti-competitive behavior.

Lawyers should watch for the Constitutional Court's ruling on whether a firm can be immunised from cartel conduct liability due to administrative delay, which could set a precedent for future cases.

Source: Original reporting via Briefly