Clarifies the test for interim
injunction under the merger provisions of the Competition
Requires the Commissioner of
Competition to make out a strong, non-speculative case in order to
obtain an interim injunction to block or delay a merger
Impacts parties' risk allocation
considerations with respect to potential challenges, hold separate
On June 3, 2015, the Canadian Competition Tribunal issued a
decision requiring Parkland and Pioneer to hold separate six retail
gas stations for the duration of the Commissioner of
Competition's challenge to their proposed merger. The
Parkland/Pioneer decision has important implications for
parties planning complex mergers. It provides that, among other
things, the Commissioner must make out a
"non-speculative" case that competition will be harmed in
the markets of concern in order to succeed on an interim remedy
application. Parties planning complex mergers should therefore
carefully consider both interim remedies (such as a hold separate
or a preservation commitment) and final remedies early in the
transaction planning stage, as this may prove helpful in closing
The merging parties supply gasoline to consumers through retail
gas stations. In his application challenging the proposed
acquisition, the Commissioner alleged that the merged party would
give rise to unilateral and coordinated effects in 14 local markets
across Ontario and Manitoba. Though Parkland proposed to divest
stations and make other commitments to address the
Commissioner's concern in 11 of the 14 markets, the
Commissioner sought an order under section 92 of the
Competition Act, prohibiting Parkland and Pioneer from
implementing the proposed transaction in all 14 markets or,
alternatively, requiring Parkland to dispose of assets in those
markets. The application challenging the proposed acquisition
The Commissioner also sought an interim injunction under section
104 of the Competition Act, to require the parties to hold
separate the assets at issue for the duration of the section 92
proceedings. In deciding the Commissioner's section 104
application, the Tribunal clarified that the test for an interim
injunction under section 104 is based on the standard for
injunctive relief used in Canadian courts; namely, the Commissioner
Demonstrate there is a serious issue
to be tried
Establish, using "clear and
non-speculative" evidence, that irreparable harm will result
if the interim relief is not granted
Demonstrate that the balance of
convenience supports the granting of relief
In Parkland/Pioneer, the Tribunal found that:
There would be serious issues to be
tried in all 14 local markets because (1) Parkland did not offer a
remedy in three of the markets and (2) Parkland's proposed
remedy in the remaining 11 markets would not satisfy the
Commissioner's concerns because the remedies were not
The Commissioner had not demonstrated
that irreparable harm would result in all markets because the
Commissioner's expert did not provide sufficient evidence or
information as to how the geographic markets were defined.
(Irreparable harm would result in six markets where Parkland's
expert did not contest the Commissioner's position.)
The balance of convenience favours
issuing an interim injunction in respect of the six locations where
irreparable harm would result since Parkland would suffer minimal
inconvenience in holding separate the six stations while the
possibility of harm to the public interest expected in the absence
of the interim order was high.
On the basis of this reasoning, the Tribunal ordered that
Parkland hold separate stations in six markets pending the outcome
of the section 92 proceedings.
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