After the applications were dismissed by the Tribunal on September 2, 2010, the respondents appealed to the Competition Appeal Court (the CAC), which, on April 2, 2012, made no order on the substantive aspects of the appeals but remitted the matter to the Tribunal to determine Scaw’s confidentiality claim over the documents. Arcelormittal South Africa Ltd. v. Competition Commission, Arcelormittal South Africa Ltd. v. Manoim NO (103/CAC/Sep10). Had the appeal against the order of the Tribunal been dismissed by the CAC, the documents would have been protected from disclosure, and the question of whether they were subject to a confidentiality claim by Scaw would have been superfluous. It was only if the CAC had upheld the appeal against the order of the Tribunal that it would have been necessary for the matter to be remitted to the Tribunal to rule on Scaw’s confidentiality claim.
Given that the CAC did not, in fact, make an order, strictly speaking, the parties did not have anything to appeal against. However, being left in a stalemated situation and requiring a decision on the issues before the Tribunal, the parties approached the Supreme Court of Appeal (the SCA).
In a judgment dated May 31, 2013, the SCA observed that litigation privilege protects communications between a litigant or his legal advisor and third parties if such communications are made for the purpose of pending or contemplated litigation and two established requirements are met: the document must have been obtained or brought into existence for the purpose of a litigant’s submission to a legal advisor for legal advice and the litigation must have been pending or contemplated as likely at the time. Competition Commission of SA v. Arcerlormittal SA Ltd. (680/12) 2013 ZASCA at 84 paras. 20 and 21 (the SCA judgment).
After hearing arguments from the Commission and the respondents, the SCA found that the leniency application was privileged in the hands of the Commission. In light of this, the question was whether the Commission had waived its privilege by referring to the leniency application in its referral affidavit to the Tribunal. Under Rule 35(12) of the Uniform Rules of Court, a document becomes disclosable if it is referred to in a pleading or affidavit. With regard to what constitutes waiver, the SCA held that the test to determine implied waiver is objective and must be judged from the perspective of how a reasonable person would view it (para. 33 of the SCA judgment).
The Commission argued that its “bare references” to Scaw’s leniency application in its referral affidavit did not amount to a waiver of privilege. The SCA disagreed, stating that the Commission’s references to the leniency application amounted to “much more than a bare or oblique reference” (para. 36 of the SCA judgment). The Commission was under no obligation to refer to the leniency application; it was only required to provide a concise statement of the grounds of the complaint and the material facts or points of law relevant to the complaint, and it relied on Rule 15(2) of the Rules for the Conduct of Proceedings in the Tribunal. The SCA held that, objectively viewed, “the Commission’s reference to the leniency application in the referral affidavit is consistent with an implied waiver of the privilege” (para. 37 of the SCA judgment). It then followed that, having waived its privilege to the leniency application, “any entitlement of the Commission to claim the information as restricted information . . . was similarly waived” (para. 38 of the SCA judgment).
Before the leniency application documents could be provided to the respondents, Scaw’s confidentiality claim over the documents had to be resolved, and the SCA remitted this issue back to the Tribunal for determination and the making of an appropriate order regarding access to the information.
The landmark decision of the SCA is important for several reasons. First, references by the Commission to the leniency application in the referral document could result in an implied waiver of litigation privilege over the document. Secondly, this case is also significant insofar as it recognizes the right of access to the Commission’s record, subject to the Commission’s right to restrict access to specific documents or categories of documents, as opposed to broadly restricting access to all documents.
The SCA judgment regarding disclosure of leniency applications may also discourage cartel members from cooperating fully with the Commission under its leniency program. This case may have significant implications for pending referrals that have already been made to the Tribunal in which the Commission has referred to leniency applications. Going forward, the Commission will need to proceed with caution when referring to the content of a leniency application in its referral affidavit to ensure that privilege is not waived.
Leniency applicants should, in the future, also carefully consider the reasons for claiming confidentiality over leniency application documents because, if privilege is found to be waived, leniency applicants may need to justify their confidentiality claims.