South Africa: In Competition Proceedings, Hasty Exception Applications May Be Futile

Last Updated: 15 October 2014
Article by Ryan Goodman and Michael Mbikiwa

On 3 September 2014, the Competition Tribunal (the "Tribunal") published the reasons for its decision to grant an exception application by Invensys plc, Invensys Systems (UK) Ltd and Eurotherm Ltd (collectively, "Invensys" or the "Invensys Group") in respect of the self-referral of a complaint by Protea Automation Solutions ("Protea"). The reasons restate a position that is very well known by competition practitioners: the Tribunal will, where possible, adopt a flexible approach to its processes, giving primacy to its inquisitorial powers and favouring considerations of fairness and flexibility over formalism.

The complaint has a long history; however, for present purposes, only the salient facts bear brief mention. The Invensys Group manages the international production, sales and distribution of various industrial automation and control system components, including through the "Eurotherm" and "Foxboro" brands. Until recently, the respondent, Protea, was – in terms of an exclusive distribution agreement with Invensys – the sole South African supplier of Eurotherm and Foxboro products.

The catalyst to the present litigation was the termination by Invensys on 1 March 2011 of its exclusive agreement with Protea and its subsequent decision to conclude a similar arrangement with EOH Mthombo – which is today the sole and exclusive distributor of Foxboro and Eurotherm products in South Africa. Accordingly, Protea is now able to obtain Foxboro and Eurotherm products only from EOH Mthombo, and not from Invensys directly.

Aggrieved by this state of affairs, Protea lodged a complaint with the Competition Commission (the "Commission") and, following the issuing of a notice of non-referral by the Commission, referred the complaint to the Tribunal itself under section 51(1) of the Competition Act, No. 89 of 1998 (as amended) (the "Competition Act"). In its complaint referral, Protea alleged that the arrangements between Invensys and EOH Mthombo, and between EOH Mthombo and itself, contravened the horizontal (section 4), vertical (section 5), abuse of dominance (section 8) and price discrimination (section 9) provisions of the Competition Act.

In its answer to the complaint, Invensys alleged as a "point in limine" (that is, a point taken at the outset of the suit) that the referral was fatally deficient for a variety of reasons. This kind of response, in which a respondent objects at the outset on the basis that a complainant's pleadings are legally deficient (because, for example, they fail to disclose a cause of action) is known as an exception. In this regard, Invensys argued that Protea had had ample opportunity to rectify the deficiencies in its pleadings, which included i) an erroneous reliance on the horizontal provisions in section 4 of the Competition Act (erroneous because Invensys and EOH Mthombo were not competitors of one another); ii) a failure to provide sufficient facts to support its claim that Invensys was dominant in any market; and iii) the misjoinder of the non-trading Invensys holding company.

Protea opposed the exception application on the basis that its referral reflected a prima facie case. Alternatively, it argued that even if the referral was indeed deficient, the appropriate remedy would be for it to be allowed to amend its referral rather than to dismiss its complaint.

In its reasons, the Tribunal provided a useful exposition of its general approach to exception applications. In this regard, there are three central considerations by which it is guided. First, complaint proceedings in the Tribunal are "sui generis" (of their own kind), meaning that they constitute a hybrid process, containing elements of civil motion and trial proceedings. Second, the subject matter of Tribunal proceedings lies at the intersection of law and economics, with the result that a particular set of facts can often reasonably be viewed through the lens of various sections of the Competition Act. Third, the Tribunal is endowed with a wide discretion, and its proceedings are inquisitorial and flexible rather than formalistic. Cumulatively, these considerations demand the adoption of a fact-specific and flexible stance.

That said, the Tribunal recognised that fairness requires respondent parties to be placed in a position where they know the case they are required to meet. In addition, it noted that exceptions are a useful means by which to expedite a trial through the clarification of issues between the parties. Importantly (and correctly, in our view), the Tribunal rejected an argument by Protea that the Constitutional Court decision in Competition Commission v Senwes established a precedent that a complainant's pleadings need not set out its entire case, which may be supplemented through subsequent witness statements. The Tribunal's proceedings may be inquisitorial and flexible, but a complainant is required to provide full particulars of the case it wishes to bring.

The default remedy for a successful exception application is for the Tribunal to grant the offending party an opportunity to amend its pleadings. By corollary, it is only in exceptional circumstances that the Tribunal will dismiss a case pursuant to an exception application. An example of a circumstance in which it will do so is where the exception concerns a pure point of law which might be determinative of the dispute, and which does not require in-depth factual analysis.

However, circumstances such as these are rare; in fact, as noted above, the Tribunal regards it as in the very nature of its proceedings that they comprise mixed questions of law and fact. And the present case did not deviate from that norm. Therefore, although it declared Protea's pleadings to be inadequate, the Tribunal ordered that the appropriate remedy was not to dismiss the referral outright, but instead to afford Protea the opportunity to amend its papers.

In light of this decision, respondents to complaint referrals would be wise not to bring exception applications hastily as a means of curtailing proceedings. Instead, litigants would be better advised, as the Tribunal explicitly suggested, to utilise the Request for Further Particulars procedure prior to the filing of an answering affidavit. If, having done so, the complainant still fails to clarify its case sufficiently, the respondent will then be better positioned to argue for the outright dismissal of the complaint.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions