This blog was co-authored by Luthando Dlamini (Candidate Attorney).

  1. The division of jurisdiction in competition law matters creates a complex legal landscape in which there is sometimes overlap between how different legal regimes deal with a matter arising from the same set of facts. This has led to the misconception that an outcome obtained in one forum can be considered afresh in another. In a recent decision, the Competition Tribunal has confirmed that this is not the case. The res judicata principle, which states that a matter that has been finally determined by a court of competent jurisdiction cannot be relitigated between the same parties, precludes the Competition Tribunal from hearing matters the High Court has already decided.
  2. On 18 June 2024, the Competition Tribunal refused an application for interim relief by ruling that compliance with a court order does not amount to engaging in a concerted practice, which is a practice that the Competition Act 89 of 1998 prohibits.
  3. The two applicant firms, being suppliers and distributors of lighting products and services, lodged a complaint with the Competition Commission alleging that the respondent firm, also a supplier and distributor of lighting products and services, engaged in a prohibited practice of market division by implementing a restraint pursuant to an order of the Johannesburg High Court.
  4. The applicants alleged that the conduct of the respondent constitutes the division of markets in that it allocates specific customers and suppliers to the respondents.
  5. The applicants approached the Tribunal and made application for interim relief and sought to interdict the enforcement of the restraint and suspension of the operation of the restraint until the earlier of either a final determination of the complaint in terms of the Competition Act or a date six months after the grant of the interdict and suspension of the operation of the interdict.
  6. In January 2015, the respondent appointed an individual as a sales representative and later a director. On 18 August 2015, the respondent and the individual entered into a non-disclosure agreement in terms of which the individual undertook to not disclose the confidential information of the respondent without its written consent. The individual resigned from the employ of the respondent on 29 May 2018 but remained a shareholder.
  7. The respondent alleged that the individual disseminated the respondent’s confidential information to the first applicant, who was both a customer and a competitor of the respondent. The respondent alleged that the individual and the directors of the first applicant founded the second applicant to compete with the respondent and used the information to assist it in that regard. In January 2019, the respondent launched an urgent High Court application and sought an urgent interdict against the applicants and its directors based on the common law doctrine of unlawful competition.
  8. The High Court granted the respondent an interim interdict and prohibited the applicants from dealing with certain named customers and suppliers of the respondent.
  9. It is against this background that the applicant approached the Tribunal to interdict and restrain the enforcement of the restraint. The Tribunal was seized with deciding whether it has the powers to suspend and prevent the operation of a High Court order on the basis that its implementation would result in a prohibited practice in terms of the Competition Act. The Tribunal opted not to decide this question because it was of the view that the applicant firms had failed to make out a prima facie case that would entitle them to interim relief under section 49C of the Competition Act.
  10. The Tribunal was of the view that concerted practice is a volitional act between parties to co-operate and achieve mutual benefit. The Tribunal asserted that actions taken under coercion from a court order, which a firm opposed, cannot be viewed as concerted practice as this interpretation would undermine the term’s meaning and purpose.
  11. Furthermore, the Tribunal stated the applicants neglected to proceed with the appeal against the High Court order and the lapse of the appeal rendered the order final. It is thus res judicata that the applicant firms had been engaging in unlawful competition with the respondent. The Tribunal reaffirmed that its jurisdiction arises from the Competition Act and stated that it could not conceive of a situation where it would issue an order granting a firm the right to engage in unlawful competition, as that would be inimical to the purpose of the Competition Act.
  12. This decision is a warning to firms that the divided jurisdiction of the competition authorities and the civil courts in relation to certain aspects of competition law is not a licence to forum shop and have matters finalised in a different forum considered afresh. Where a court of competent jurisdiction has made a final order on a matter, the Competition Tribunal is precluded from reconsidering the matter.
  13. The decision is Streamlight FX (Pty) Ltd and Iron Ice (Pty) Ltd and Genesis One Lighting (Ltd) Pty IR029Jun23.