Mercantile Bank, a Division of Capitec Bank Limited and Others v Mohammed Iqbal Surve and Others

The Sekunjalo Group, comprising 36 entities all identified as black-owned firms under common control, sought interim relief from the Competition Tribunal alleging that nine banks engaged in anticompetitive conduct by refusing to provide or terminating banking services. The refusals began after the March 2020 Mpati Commission Report into allegations of corruption at the Public Investment Corporation (PIC) which made adverse findings regarding the Sekunjalo Group. Starting with ABSA Bank in August 2020, over a period of 15 months, eight banks either closed accounts, refused to onboard new accounts, or indicated accounts were under review. The banks justified their conduct on regulatory compliance grounds, particularly under the Financial Intelligence Centre Act (FICA), citing reputational risk and obligations to terminate banking relationships based on the Mpati Report findings and subsequent media attention. Three banks - Mercantile Bank (serving one entity), Standard Bank (serving three entities), and Access Bank (serving one entity) - appealed the Tribunal's interim relief order. At the time of the Tribunal hearing, Standard Bank had not yet terminated services but was conducting due diligence. Sekunjalo had also brought parallel proceedings in the Equality Court and High Court seeking similar relief.

• Whether parallel conduct by banks in refusing banking services constitutes a concerted practice under section 4(1)(a) of the Competition Act
• Whether banks possessed market power and were dominant firms under section 7(c) of the Competition Act
• Whether the refusal to deal constituted abuse of dominance under sections 8(1)(c) and 8(1)(d)(ii)
• Whether an applicant for interim relief must establish a theory of harm demonstrating anticompetitive effect
• Whether a respondent in interim relief proceedings can appeal an order that does not have a final or irreversible effect under section 49C(8)
• Whether the interests of justice permit appeal of an interim order
• Whether the same relief sought in other courts constitutes lis alibi pendens
• Whether additional evidence of events occurring after the Tribunal hearing should be admitted
• Whether the Tribunal properly applied the test for interim relief under section 49C(2)

1. The appeal of the three appellants is upheld. 2. The Tribunal's orders in respect of paragraphs 1.2 (re Standard Bank), 1.5 (re Mercantile) and 1.8 (re Access Bank) are set aside. 3. The appellants are entitled to the costs of the appeal and review including the costs of two counsel where employed.

1. To establish a prima facie case of a concerted practice under section 4(1)(a), parallel conduct alone is insufficient; the applicant must establish a theory of harm explaining why the conduct has an anticompetitive effect that substantially prevents or lessens competition in a market. 2. In oligopolistic markets, parallel conduct does not establish concertation unless, given the nature of the market, the behavior cannot be explained other than by concerted conduct. 3. An applicant cannot satisfy the burden of establishing anticompetitive effect merely by demonstrating exclusionary outcomes; exclusion from a market is not synonymous with anticompetitive effect and requires explanation through a competition theory of harm. 4. Under section 4(1)(a), the onus to establish anticompetitive effect rests on the applicant before the respondent is required to rely on the pro-competitive justification proviso; a court cannot infer anticompetitive conduct solely by rejecting a respondent's justification. 5. To establish dominance under section 7(c) based on market power rather than market share thresholds, an individual assessment of each firm's market power is required; a generalized assessment of the entire sector is insufficient. 6. Abuse of dominance under sections 8(1)(c) and 8(1)(d)(ii) requires a theory of harm explaining the anticompetitive effect; where a dominant firm does not compete in the markets of its customers and is not leveraging dominance vertically, refusal to supply those customers does not constitute abuse even if they are excluded from their respective markets. 7. An interim relief order under section 49C is appealable by a respondent where the interests of justice require correction of error, even if the order does not strictly have a 'final or irreversible effect' as contemplated in section 49C(8). 8. Proceedings in different courts and tribunals involving the same facts but different legal frameworks and exclusive jurisdictions do not constitute lis alibi pendens.

The Court observed that switching costs are not a relevant factor for inferring market power in a refusal to deal case, as distinct from cases involving leverage over existing customers' reluctance to switch. The Court noted that concerns about firms being 'unbanked' and unable to access essential banking services may be addressed through other legal frameworks such as the Promotion of Equality and Prevention of Unfair Discrimination Act or common law, rather than competition law. Manoim JP expressed that where a court enjoys both appeal and full review jurisdiction, it should not adopt a highly technical approach that might result in failing to provide access to justice, and should recognize the dilemma facing parties who genuinely wish to challenge both the regularity of proceedings and the merits of a case. Spilg AJA in his separate concurring judgment observed that Sekunjalo acted precipitously in joining Standard Bank before that bank had completed its due diligence and received responses to legitimate FICA-related inquiries, and that had it been necessary, he would have admitted Standard Bank's further evidence regarding events after the Tribunal hearing, as Sekunjalo only had itself to blame for the delay in responding to legitimate requests for information.

This judgment significantly clarifies the requirements for establishing anticompetitive conduct under the Competition Act, particularly in refusal to deal cases. It establishes that even at the prima facie interim relief stage, an applicant must present a legally cognizable theory of harm explaining why the conduct is anticompetitive - mere parallel conduct coupled with exclusionary effects is insufficient. The judgment is important for its treatment of concerted practices under section 4(1)(a), holding that parallel behavior in oligopolistic markets does not establish concertation unless the behavior cannot be explained other than by concerted conduct, applying the European 'Woodpulp' test. It clarifies that applicants cannot avoid the burden of establishing anticompetitive effect by relying solely on rejection of respondents' pro-competitive justifications. The case also addresses abuse of dominance in essential facilities contexts, establishing that refusal to supply requires a vertical theory of harm (such as leveraging into downstream markets or raising rivals' costs) and cannot be based solely on exclusionary effects in unrelated markets where the dominant firm does not compete. On procedure, the judgment liberalizes access to appeal from interim relief orders by applying an 'interests of justice' test rather than a strict 'final or irreversible effect' test, and confirms that parties may bring both appeals and reviews without being penalized on costs where genuine jurisdictional uncertainty exists. The case has important implications for the intersection of competition law and sector-specific regulation, particularly in banking where FICA compliance obligations may conflict with competition law duties to deal.