South Africa: Constitutional Court Rules There Is No Automatic Prescription Or Immunity For Cartel Conduct Three Years After The Effect Of The Conduct Has Ceased

On 24 June 2020, the South African Constitutional Court handed down a ground-breaking judgment in the case of Competition Commission of South Africa v Pickfords Removals SA Proprietary Limited.

Section 67(1) of the Competition Act, 1998 (since amended), read that "A complaint in respect of a prohibited practice may not be initiated more than three years after the practice has ceased". This so-called "prescription" provision was previously widely interpreted as a substantive time bar that extinguished the Commission's statutory power to initiate a complaint more than three years after the practice has ceased to have an effect.

There are multiple arguments why it is rational for the legislature to impose a limitation on the period that the Commission has to use its public powers. The main ones are that it would not be the best use of public resources and public powers to pursue investigations and prosecutions of conduct that has ceased and is therefore not capable of undermining the objectives of the Act and that the interests of justice are not served given uncertainty and prejudice that arise when proceedings are delayed.

The court has taken a different view and has concluded that the Commission's work as a public body, the objectives of the Act, and affected parties' ability to sue for damages will be undermined if section 67(1) were to be interpreted as imposing an absolute substantive time bar. Rather, the court has concluded in a unanimous decision that it is rational to interpret section 67(1) as a procedural time-bar and that non-compliance with the procedural time-bar can be condoned by the Tribunal on good cause shown.

In addition, the court clarified that a respondent does not need to be named or specifically identified by the Commission in its complaint initiation statement for a matter to be considered to be initiated against the unnamed party - the unnamed party can be identified and added at a later stage.

The full Constitutional Court judgment can be accessed here.

For further information, please contact ENSafrica's anti-trust/competition team.

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