On 27 October 2022 the Constitutional Court (CC) in Competition Commission of South Africa v Group Five Construction Ltd 2023 (1) BCLR 1 (CC), handed down judgment to answer the question of whether the High Court or the Competition Tribunal and Competition Appeal Court had exclusive jurisdiction to review a decision taken by the Competition Commission.
The CC in a split decision had to consider whether a party affected by a decision of the Competition Commission (the Commission) could review such a decision in terms of the Promotion of Administrative Justice Act 3 of 2000 (PAJA) or the principle of legality through the High Court as opposed to the Competition Tribunal (the Tribunal) or Competition Appeal Court.
The appeal to the CC is pursuant to a unanimous decision by the Supreme Court of Appeal (SCA), which held that the Commission’s decision could be reviewed in terms of PAJA or legality by the High Court.
Section 62 of the Competition Act 89 of 1998 (the Act) characterises the jurisdiction of the Tribunal, Competition Appeal Court and court in respect of matters falling under the Act. Section 6 of PAJA provides for a judicial review of an administrative action. The principle of legality is a common law vehicle to review an administrative action.
This matter concerns itself with a complaint referred to the Tribunal on 12 November 2014 by the Commission. The complaint was against Group Five Construction Limited (Group Five) and other companies for possible collusion in the process of tender bidding in respect of stadium construction works for the 2010 FIFA World Cup.
The primary allegations were that Group Five and other companies had engaged in prohibited and anti-competitive practices in contravention of s 4(1)(b)(i) and (ii) of the Act in that –
Pursuant to receiving the complaint from the Commission, Group Five launched a review application out of the High Court against the Commission in terms of PAJA and alternatively legality.
Group Five sought to review, set aside, and declare invalid the Commission’s decision to refer the complaint to the Tribunal and/or seek a sanction against it, on the basis that the Commission had granted it immunity from prosecution through its Corporate Leniency Policy. Group Five argued that the Commission’s conduct to refer the complaint to the Tribunal and seek sanctions against it ‘was oppressive, vexatious and motivated by bad faith.’
In response to the review application, the Commission launched an application to declare and set aside the review proceedings instituted by Group Five on the basis that they constitute an irregular step in that the High Court lacked the jurisdiction to hear the matter.
The Commission’s main contention was that the Tribunal and Competition Appeal Court had exclusive jurisdiction in accordance with s 62(1)(a) of the Act to consider and adjudicate on issues raised in the review application.
The High Court held that the Tribunal and Competition Appeal Court’s exclusive jurisdiction was only confined to matters relating to the interpretation and application of chapters 2,3 and 5 of the Act.
The High Court further held that the claimed exclusive jurisdiction was ousted in matters concerning ‘a challenge to the lawfulness and validity of a referral.’ In such matters, the High Court had the necessary jurisdiction to adjudicate on the matter.
Undeterred, the Commission appealed the judgment of the High Court to the SCA. The SCA dismissed the appeal with costs having found that the Commission’s challenge of jurisdiction had no merit.
The SCA confirmed the High Court’s view in that s 62(2)(a) of the Act empowers the High Court with the requisite jurisdiction to determine whether it has jurisdiction to consider to the review application.
The SCA held that the issues raised by Group Five in the review application do not fall within the exclusive jurisdiction of the Tribunal and Competition Appeal Court as envisaged by s 62(1)(a).
The SCA was also of the view that the issues raised by Group Five in the review relate to the lawfulness and validity of the initiation and referral of the complaint to the Tribunal. The SCA expressed that such issues relate to the principle of legality, which unbolts the jurisdiction of superior courts. The issues were not considered to be of a specialist competition law nature which require the exclusive attention and jurisdiction of the Tribunal and Competition Appeal Court.
Consequently, it was held that the High Court had jurisdiction to hear the review application.
The judgment of the SCA was then appealed against in the CC.
The CC had to consider and analyse s 27(1), s 62(1) to (3) of the Act and s 6 of PAJA to determine whether the High Court was empowered to adjudicate on a competition law related review application.
Section 27(1)(c) of the Act elucidates the review powers of the Tribunal in relation to a decision by the Commission.
Section 62(1)(a) provides that: ‘The Competition Tribunal and Competition Appeal Court share exclusive jurisdiction in respect of the … :
(a) Interpretation and application of chapters 2,3 and 5’.
Section 62(2)(a) provides that the Competition Appeal Court and the court have jurisdiction to hear matters relating to whether they have jurisdiction to adjudicate on an action taken or proposed to be taken by the Commission or Tribunal.
Section 62(3)(b) states that: ‘The jurisdiction of the Competition Appeal Court –
…
(b) is neither exclusive nor final in respect of a matter within its jurisdiction in terms of subsection (2).’
The CC emphasised that the above provisions, which are at the heart of the issues in the matter must be given their proper and ordinary meaning. Reliance was placed on Cool Ideas 1186 CC v Hubbard and Another 2014 (4) SA 474 (CC) in providing the approach to statutory interpretation.
The CC found that s 62(2)(a) allows the High Court entry into the competition law sphere to resolve a non-competition law issue. Flowing from that determination was a key consideration as to whether the Tribunal or Competition Appeal Court are clothed with the requisite jurisdiction to adjudicate review proceedings in terms of PAJA or legality.
The CC held that the Tribunal lacks the jurisdiction to adjudicate review proceedings in terms of PAJA or legality. However, it was held that the Competition Appeal Court, which embodies a similar status to that of a High Court has jurisdiction to adjudicate reviews in terms of PAJA or legality when having regard to s 62(2).
The CC confirmed that the review application by Group Five does not fall within the exclusive jurisdiction of the Tribunal and Competition Appeal Court as contemplated by the Act. The CC reaffirmed the SCA’s stance that the Commission’s conduct and decision constitutes the exercise of public power.
The CC clarified that the review proceedings launched by Group Five are brought under PAJA alternatively under legality and that such proceedings challenge the authority of the Commission to act in the manner that it did. The CC emphasised that the issues at hand relate to powers and legality, which fall within the jurisdiction of superior courts. In the court’s view, the grounds of review are not linked to competition law matters, which attract the exclusive jurisdiction of the Tribunal and Competition Appeal Court.
The CC held that the since the review application concerns itself with issues of legality as opposed to competition law, the Tribunal had no jurisdiction to consider and hear the review. The CC further held that High Court and Competition Appeal Court had concurrent jurisdiction to adjudicate on the review.
As a result, the appeal was dismissed.
The Commission is a public body and thus exercises public power when making a decision. An aggrieved party wishing to challenge the authority and validity of the Commission’s exercise of its power must do so in terms of PAJA or the principle of legality through the relevant superior court, alternatively the Competition Appeal Court. The Act empowers both courts with concurrent jurisdiction to adjudicate on such a matter.
The CC has made it clear that the Tribunal and Competition Appeal Court do not have exclusive jurisdiction to adjudicate PAJA or legality reviews concerning a decision taken by the Commission.
When considering to review a decision taken by the Commission, a party ought to determine whether the grounds of review raise a competition law issue or attack the way the Commission has conducted itself. If the latter applies, then the Tribunal has no jurisdiction to entertain the review, and the relevant superior court and Competition Appeal Court have jurisdiction. If the former applies, then the review may be subject to the exclusive jurisdiction of the Tribunal and Competition Appeal Court.
Sechaba Mchunu LLB (UKZN) is a legal practitioner and member of the Johannesburg Society of Advocates in Johannesburg.
This article was first published in De Rebus in 2023 (April) DR 8.
