In a landmark case, the South African Competition Commission (the Commission) has been ordered to provide leniency application documents to litigants. Cartel activity is discouraged by means of the Commission’s leniency policy, which allows participants to disclose such activity and remain immune from prosecution. Until now, leniency application documents have not been disclosed by the Commission to third parties (including respondents to a complaint) on the basis that the leniency application and supporting documents were protected by legal privilege and also contained restricted information in terms of Rule 14(1)(e) of the Commission’s rules. This case serves as a warning to all litigants who refer to privileged documents in affidavits.
In June 2008, the Commission conducted dawn raids at the premises of various companies in the steel industry. Following this, Scaw South Africa (Proprietary) Limited (Scaw) applied for leniency and was granted conditional immunity by the Commission. As a result of information obtained from Scaw and from its own investigations, the Commission referred a complaint against Arcerlormittal South Africa Limited (AMSA) and Cape Gate (Proprietary) Limited (Cape Gate) (together, the respondents) regarding alleged prohibited practices to the Competition Tribunal (the Tribunal) for adjudication. The Commission sought the imposition of an administrative penalty of 10 percent of each respondent’s annual turnover in South Africa (including exports) for the preceding financial year, for engaging in price-fixing and market allocation.
Unable to obtain Scaw’s leniency application documents from the Commission, the respondents applied separately to the Tribunal for access to the documents in order to properly consider their written responses to the complaint against them. In doing so, both respondents relied on Rule 35(12) of the Uniform Rules of Court, which permits any party, after delivering a notice to any other party in whose pleadings or affidavit there is reference to a document, to inspect and copy the document. The Commission contended that the documents were privileged and also contained “restricted information” in terms of its own rules.