News of the Competition Commission’s referral of 17 banks accused of price fixing and market allocation to the Competition Tribunal has dominated the business media in South Africa since its announcement on Wednesday, 15 February.

The case raises technical legal questions about historical conduct in an exceptionally complex market.

Before drawing conclusions on the guilt or otherwise of the respondent firms and the consequences that should follow, an understanding of what this procedural step actually means and what happens next, is important.

What is a referral?

    • A referral to the Competition Tribunal means that the Competition Commission has completed its investigation of the complaint, and has concluded that in its view the Competition Act has been contravened.
    • It is the first step in litigating a contested matter before the Competition Tribunal, similar to the issue of summons in a civil matter.

What happens next?

    • The respondent parties may, if they wish, request access to unrestricted documents in the Commission’s record of investigation.
    • Any disputes about access to particular documents can then be resolved by application to the Tribunal.
    • If the respondents believe that the Commission’s case is deficient in some fundamental way, they may bring further applications challenging the validity of the referral. For example, the complaint may be time-barred, a referral may not disclose the minimum requirements to enable a proper response, or the jurisdiction of the authorities may be challenged.
    • The respondent banks will have the opportunity to provide a formal answer, on affidavit, to the Commission’s allegations. The Commission has a right of reply.
    • A detailed discovery process will then take place, where all documents relevant to the case will be exchanged between the Commission and the respondents.
    • Witness statements will then be exchanged, summarising the oral evidence that each party intends to present at the hearing.
    • The matter will then be heard by the Competition Tribunal – an independent adjudicative body comprising expert lawyers and economists.
    • The Tribunal will issue its decision, with detailed reasons.
    • The Commission or the respondents may then appeal to the Competition Appeal Court, if they believe they have a basis to do so.

This process has been designed to ensure a fair hearing, and an accurate decision on whether the Competition Act has been contravened.

At any stage, a respondent firm can admit guilt and agree to cooperate with the Commission, in exchange for a reduced penalty.

This matter could still take a number of years to complete. Until the process has been concluded, premature judgements about the facts and legal outcomes should be withheld.