Senwes Limited v The Competition Commission of South Africa

Senwes Limited, a vertically integrated grain storage and trading firm, operated silos constituting over 90% of storage capacity in its area. Historically, it offered both farmers and traders a daily storage tariff and a capped tariff equivalent to about 100 days’ storage. In 2003 Senwes removed the capped tariff for traders while retaining it for farmers, resulting in a differential tariff structure. A competing trader, CTH Trading (Pty) Ltd, complained to the Competition Commission, alleging anti-competitive conduct. The Commission referred a narrowed complaint to the Competition Tribunal, alleging that the differential tariff constituted price discrimination under section 9 of the Competition Act 89 of 1998, alternatively an exclusionary act under section 8(c). The Tribunal rejected the price discrimination claim but found that Senwes had engaged in a margin squeeze in contravention of section 8(c). The Competition Appeal Court upheld this finding. Senwes sought leave to appeal to the Supreme Court of Appeal, arguing that margin squeeze was never pleaded in the referral and that the Tribunal therefore exceeded its competence.

Leave to appeal was granted. The appeal was upheld with costs. The order of the Competition Appeal Court was set aside and replaced with an order upholding Senwes’ appeal and setting aside the Competition Tribunal’s decision, with the Commission’s application dismissed.

The case is significant for clarifying the limits of the Competition Tribunal’s adjudicative powers and reinforcing procedural fairness in competition law enforcement. It confirms that respondents may only be found liable for conduct clearly pleaded in the Commission’s referral, and that competition authorities cannot rely on unpleaded theories, such as margin squeeze, introduced through evidence or argument.