South Africa: Cape Gate Cartel Case Advances to Constitutional Court

Cartel conduct by South Africa’s large steel manufacturers ceased more than 20 years ago, yet litigation in the case is still alive and has now proceeded to the Constitutional Court. The Competition Commission is seeking leave to appeal the dismissal of a guilty finding against alleged cartel member Cape Gate. The Competition Appeal Court (CAC) remitted the decision back to the Competition Tribunal for a rehearing following a successful review of the decision. In a rather extraordinary move, the commission is asking for the reinstatement of the tribunal’s finding against Cape Gate. The tribunal is not appealing the CAC decision. The tribunal took more than six years to issue its guilty finding along with its excuses for the inordinate delay. Cape Gate took this finding on review before the CAC. In a majority decision the CAC found that a delay of such magnitude “contaminated the ultimate decision that was made”. It also found that the tribunal members’ excuse for the delay was “false and contradicts the explanation they proffer in their respective explanatory affidavits”. The CAC upheld the review and remitted the decision back to the tribunal for a new hearing but before a different panel. Read: Cape Gate: CAC tears into the Competition Tribunal CompCom raid on Cape Gate based on unlawful warrant The commission says it successfully prosecuted Cape Gate before the tribunal and a new hearing is no longer feasible – a key witness for the commission has passed away, and the only other witness is of an advanced age. The price-fixing complaint against the steel producers was heard by the tribunal just before the outbreak of the Covid-19 pandemic. Cape Gate, alongside ArcelorMittal, Columbus Stainless and Scaw, was accused of being party to a buyer’s cartel. Cape Gate denied culpability from the start. When the tribunal found it guilty of the conduct in 2025 – more than six years after hearing evidence – the firm took the decision on review before the appeal court. The commission believes the majority decision before the CAC was “misdirected and erred” in its application of the principles laid down in the jurisprudence for assessing delay by administrative bodies. “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,” a spokesperson said in response to questions. ‘Obfuscation, omission and inaccuracy’ Cape Gate is opposing the application for leave to appeal saying it is predicated on “obfuscation, omission and inaccuracy” regarding the majority’s treatment of the evidence. One of the tribunal’s excuses for not making a decision sooner is that “the parties”, namely the commission and Cape Gate, informed the panel that they were in settlement discussions. The finalisation of the reasons for its decision was put on hold for that reason. Both the commission and Cape Gate denied ever being engaged in settlement negotiations. Cape Gate presented evidence of around 30 emails by itself and the commission repeatedly asking the tribunal for a decision – never mentioning any settlement discussions. Read: 17 years after the fact, Cape Gate found guilty of scrap metal price-fixing The CAC accepted their allegations that in advancing the negotiations as a reason for the delay the panel members acted “either in reckless or deliberate disregard of the truth”. When it became known that a review application was brought, a former case manager allegedly sent a letter to the tribunal. In a separate letter sent to Moneyweb, she denies ever mentioning settlement talks between the commission and Cape Gate to the panel members. Explanation for delay not ‘unreasonable’ The commission’s chief legal counsel Bakhe Majenge says in his statement before the Constitutional Court that the majority placed excessive weight on the delay in t