The Commercial Case Law Index is a collection of judgments from African countries on topics relating to commercial legal practice. The collection aims to provide a snapshot of commercial legal practice in a country, rather than present solely traditionally "reportable" cases. The index currently covers 400 judgments from Uganda, Tanzania, Nigeria, Ghana and South Africa.
Get started on finding judgments that are relevant to you by browsing the topic list on the left of the screen. Click the arrows next to the topic names to reveal a detailed list of sub-topics. Most judgments are accompanied by a short summary written by subject-matter expert postgraduate students from the University of Cape Town.
The applicant brought a complaint against the defendants for contravening the market allocation prohibition of the Competition Act (the act) by entering into an ongoing agreement allocating market territory for the sale of locking products in both the Free State and Northern Cape. They sought to have the defendant’s conduct declared in contravention and consequently interdicted and charged with a 10% turnover administrative charge in respect of the contravention.
The first issue was whether the commission could allege market allocation for all products. Looking at the legislative powers of the commission, the Competition Tribunal reasoned that since the agreement’s subject matter covered all products the commission had authority therein.
The tribunal then considered whether the agreement was still ongoing after the coming into effect of the act and s 4(1)(b)(ii). It assessed the evidence and established that the defendants had not competed with each other since the entry into agreement until the time in issue and thus the agreement remained ongoing.
The final issue was whether the agreement’s rationale was in contravention of the section above. By looking at the ratio in American Soda Ash Corporation and Another vs. Competition Commission and Others  1 CPLR 1 (SCA) and The Competition-Commission and Pioneer Foods (Pty) Ltd, Case No: 15/CR/Feb07, the tribunal highlighted that s 4(1)(b)(ii)’s market allocation prohibition is a per se prohibition and thus there can be no justification for the conduct.
The agreement was held to be ongoing and in contravention of s 4(1)(b)(ii).
The applicant approached the court to set aside the legal opinion and report of the first and second respondents’ respectively and in turn, the respondents challenged the validity of the application before the court.
The court considered whether the applicant was properly incorporated and whether it had locus standi to bring a petition before the court.
It was held that the applicant indeed did not have locus standi to petition the court to challenge the findings of the respondents due to not being properly incorporated.
The court found that the merger between the entities that formed the applicant was in contravention of both the Constitution and legislation regulating companies. The court held that the Constitution was violated on two occasions. Firstly, when an agreement was entered into with an entity controlled by the government without the approval of the Attorney-General. Secondly, when the entity controlled by the government decided to hold a minority shareholding in the company that assisted in incorporating the applicant, which had the effect of parliament not having control of the funds as required. Legislation regulating companies was not complied with since the requirement for incorporating a private company was not observed.
As a result, the preliminary objection raised by the respondents succeeded. The applicant did not exist in law thus it could not sue or be sued. No costs ordered as the applicant does not exist.