New decision of interest: Constitutional Court delivers seminal prescription judgment

On 24 June 2020, the Constitutional Court (the CC) handed down judgment in an application for leave to appeal against the Competition Appeal Court's (CAC) decision in the matter involving the Commission and Pickfords Removals SA (Pty) Ltd (Pickfords). This important judgment has a significant impact on the interpretation of the prescription provisions of the Competition Act and examines the precise scope of a complaint initiation.

The case relates to complaint referrals by the Commission against various furniture removal companies alleged to have engaged in collusive tendering in respect of tenders for furniture removal services. Pickfords argued that out of the 37 instances of collusion against it, 14 have prescribed since these incidents stopped three years before the investigation started. Pickford also argued that the complaint was only initiated in 2011 (not 2010, as contended by the Commission), since it was not identified as a party in the 2010 initiation.

The Competition Tribunal (Tribunal) and CAC agreed with Pickfords and held that section 67(1) of the Competition Act prevents the Commission from investigating and prosecuting cartels that stopped three years before the investigation started. The Tribunal and CAC had differing opinions on whether the 2011 initiation constituted an amendment of the 2010 initiation, or if it constituted a separate self-standing initiation.

In a unanimous judgment, the CC held that the 2010 initiation is the correct trigger date and that the 2011 initiation was merely an amendment of the 2010 initiation. Notably, the CC held that interpreting section 67(1) of the Competition Act as imposing an absolute time-bar in the form of a prescription provision would clearly subvert access to the Tribunal, the CAC and other courts. The CC concluded that an interpretation of section 67 as a procedural time-bar is preferred and that the Tribunal has the power to condone non-compliance with section 67, on good cause shown.

As a consequence of this judgment, it can now be argued that section 67 no longer prevents the Commission from investigating and prosecuting cartel conduct that stopped three years before its investigation started - if the Tribunal is willing to condone non-compliance with the entrenched prescription provisions of the Competition Act. Although this interpretation will need to be tested, firms should be aware of this important development and the potential expanded scope of competition law prosecutions.