Originally published in Blakes Bulletin on Competition Law, January, 2008
Rarely do decisions from the Federal Court of Appeal promise to have such a wide-ranging impact on businesses. On January 22, 2008, the Federal Court of Appeal released its decision in Commissioner of Competition v. Labatt Breweries Limited. The appellate court dismissed an appeal by the Commissioner of Competition (the head of Canada's Competition Bureau) of a decision by the Competition Tribunal made March 27, 2007 to allow Labatt to conclude its takeover bid for rival Lakeport Breweries. This decision represents an important development in competition law jurisprudence. (See also our April 2007 Blakes Bulletin on Competition Law: New Timing Paradigm in Canada for Merger Review: The Labatt Decision.)
The case is the first appellate decision regarding section 100 of the Competition Act, which allows the Commissioner to apply for a temporary injunction to delay closing for up to 60 days after the expiry of the statutory waiting period. The Federal Court of Appeal decision is significant as it affirms with appellate authority the Tribunal's view that it will not block closing unless there is evidence that its remedial powers will be substantially impaired in accordance with Canadian law.
As noted by the Court of Appeal:
". . . the Competition Tribunal must consider the effectiveness of the available section 92 remedies in the absence of an interim order, assuming there is a determination that the proposed transaction would, or would be likely to, prevent or lessen competition." - para. 17
". . . the Commissioner's application for an interim order [was] deficient in that it failed to establish that, without an interim order, the Tribunal's remedial powers under section 92 would be substantially impaired. That conclusion was not wrong in law, and was reasonably open to [the Tribunal] on the record." - para. 18
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