Competition Commission of South Africa v ArcelorMittal South Africa Limited

The Competition Commission investigated alleged prohibited practices in the steel industry involving ArcelorMittal South Africa (AMSA), Cape Gate, Scaw South Africa and the South African Iron and Steel Institute. Following searches at various companies' premises in June 2008, Scaw applied for leniency under the Commission's Corporate Leniency Policy (CLP), first obtaining a marker to claim priority for immunity, then submitting a full leniency application on 9 July 2008. The Commission granted Scaw conditional immunity on 17 July 2008. Scaw provided numerous documents and attended consultations with the Commission. On 1 September 2009, the Commission referred a complaint to the Competition Tribunal alleging that the respondents fixed prices, trading conditions and divided markets in contravention of sections 4(1)(b)(i) and (ii) of the Competition Act 89 of 1998. AMSA and Cape Gate sought production of documents from the Commission, particularly Scaw's leniency application and other documents referred to in the Commission's referral affidavit. Cape Gate sought access under Uniform Rule 35(12), while AMSA sought both access under rule 35(12) and access to the full Commission record under Commission rule 15(1). The Commission refused, claiming litigation privilege and that the documents constituted restricted information under Commission rule 14(1)(e).

• Whether the leniency application was protected by litigation privilege
• Whether the purpose of a document for litigation privilege is determined by reference to the author or the person who procured it
• Whether the definite purpose test or dominant purpose test applies to litigation privilege in South African law
• Whether the Commission waived litigation privilege by referring to the leniency application in its referral affidavit
• Whether Scaw's claim to confidentiality under section 44(1)(a) of the Competition Act was valid
• Whether AMSA was entitled to access the Commission record under Commission rule 15(1)
• Whether the Commission could restrict access to its record under rule 14(1)(e) read with section 37(1)(b) of PAIA

The appeal by the Commission was dismissed and the cross-appeals by AMSA and Cape Gate were upheld. The Commission was ordered to: (i) provide to AMSA the documents listed as items 3-42 in para 14 of the CAC judgment; (ii) provide the leniency application and marker application to AMSA, and the leniency application to Cape Gate, subject to the tribunal's determination of Scaw's confidentiality claim in form CC7 dated 9 July 2008; (iii) provide to AMSA its record of information collected during investigation, subject to any claims to privilege or restricted information to be determined by the tribunal. The Commission was ordered to pay AMSA's and Cape Gate's costs in the appeal and in the tribunal proceedings, including costs of two counsel where employed. No order was made regarding Scaw's costs.

The binding legal principles established are: (1) For purposes of litigation privilege, the purpose of a document is to be ascertained by reference to the person or authority under whose direction it was produced or brought into existence, not by reference to the author's intention. (2) A leniency application obtained by the Competition Commission for the purpose of prosecuting cartel members, with legal advisors involved throughout, is protected by litigation privilege even though it provides ancillary benefit of immunity to the applicant. (3) Litigation privilege is waived where a party refers to a privileged document in pleadings or affidavits in terms that go beyond a bare reference and disclose substantive content about what the document confirms or contains. (4) Waiver of privilege is to be determined objectively from the perspective of how a reasonable person would view the disclosure. (5) Once privilege over a leniency application is waived, any claim that it constitutes restricted information under Commission rule 14(1)(e) is also waived. (6) A litigant is entitled to invoke Commission rule 15(1) to obtain access to the Commission record, not merely members of the general public. (7) The Commission cannot withhold its entire record generally but must identify specific documents or categories of documents to which it seeks to restrict access under rule 14.

The court made several non-binding observations: (1) It left open the question of whether South African law should adopt the dominant purpose test for litigation privilege (as applied in English, Canadian and Australian courts) or continue with the definite purpose test articulated in Sweiden and King v Zim Israel Navigation. (2) The court expressed doubts about whether Scaw's claim to confidentiality was properly formulated within the statutory definition of confidential information, noting that Scaw merely asserted the information was confidential rather than describing the nature and economic value of the information as required, but held this was a matter for the Tribunal to determine. (3) The court noted that absent guarantees that confidential commercial information will be protected from disclosure, firms may be reluctant to submit information to the Commission, which would severely hamper the Commission's ability to investigate breaches of the Act – highlighting the public policy importance of protecting legitimately confidential information. (4) The court observed that documents prepared for litigation need not have submission to legal advisers as their sole purpose to attract privilege.

This case is significant for establishing important principles regarding litigation privilege in the context of competition law proceedings, particularly concerning leniency applications. It clarifies that the purpose of a document for litigation privilege purposes is determined by reference to the person who procured it rather than its author. The judgment provides important guidance on when privilege is waived through disclosure in pleadings, holding that substantive references to privileged documents (not merely bare references) constitute implied waiver. The case also addresses the interaction between the Corporate Leniency Policy, litigation privilege, confidentiality claims under the Competition Act, and access to information under the Commission's rules. It is particularly important for competition law practice in South Africa as it establishes the framework for disclosure of leniency applications and Commission records in contested proceedings, balancing the Commission's investigative needs with respondents' rights to prepare their defence.