The Competition Commission v Pioneer Hi-Bred International Inc and Others

This was an application for leave to appeal to the Constitutional Court against a costs order made by the Competition Appeal Court in its judgment of 28 May 2012. The matter arose from merger proceedings where the Competition Commission had recommended a particular course of action which was either overturned or confirmed by the Competition Tribunal. The merging parties then appealed to the Competition Appeal Court. The matter involved a 'full blown' trial before the Tribunal, and the Commission vigorously opposed the appeal, fighting to ensure that the merger should be prevented. The Commission even sought leave to appeal to the Supreme Court of Appeal on the merits. After the Competition Appeal Court's decision on 28 May 2012, the only issue remaining for determination was whether the costs order made by that court should be subject to appeal to the Constitutional Court.

• Whether the Competition Appeal Court has the power to grant a costs order against the Competition Commission in circumstances where the applicant recommends a particular course of action in merger proceedings which is overturned or confirmed by the Tribunal and then made subject to an appeal to the Competition Appeal Court
• Whether the Competition Appeal Court is empowered to grant a costs order adverse to the Commission for costs incurred before the Tribunal
• Whether the Competition Appeal Court is empowered to grant a costs order adverse to the Commission in the appeal proceedings itself
• Whether the role of the Competition Commission in merger cases is properly characterized as an amicus curiae or as an opposing party

Leave to appeal to the Constitutional Court was granted against the costs order of the Competition Appeal Court in its judgment under case number 113/CAC/Nov11 dated 28 May 2012, subject to the rules of the Constitutional Court. The costs of the application for leave to appeal were ordered to be costs in the appeal.

The binding legal principle is limited given this is an application for leave to appeal. However, the court determined that there is sufficient legal uncertainty regarding whether the Competition Appeal Court has the power to grant costs orders against the Competition Commission in merger proceedings (particularly for costs incurred at the Tribunal level) to warrant consideration by the Constitutional Court. The court also held that in the interests of practicality and efficiency, where one aspect of a costs order raises a constitutional issue warranting appeal, the entire costs order (including both Tribunal and appellate costs) should be permitted to be canvassed together by the Constitutional Court.

Davis JP made significant obiter observations regarding the characterization of the Competition Commission's role in merger proceedings. He expressed 'significant doubt' as to whether the Commission's role should be characterized as an amicus curiae, noting that while merger proceedings should take the form of an inquiry, the procedure before the Tribunal has developed in a similar fashion to that of a trial. He observed that in this case, a 'full blown' trial took place and the Commission 'vigorously opposed the appeal, fought tooth and nail to ensure that the merger should be prevented' and sought leave to the Supreme Court of Appeal on the merits. The Judge stated: 'Manifestly, it did not comport itself as an amicus. It acted as the opposing party.' He further expressed that 'I find it difficult to conclude, that this Court may never have the discretion to conclude that costs follow the result of the appeal' - suggesting a preliminary view that the court likely does have discretion to award costs against the Commission in appeal proceedings, though this was not definitively determined.

This case is significant in South African competition law as it addresses the important procedural question of the Competition Appeal Court's powers to make costs orders against the Competition Commission in merger proceedings. It highlights the tension between viewing the Commission as a neutral amicus curiae versus an active opposing party in merger litigation. The case also demonstrates the court's recognition that there is legal uncertainty regarding the scope of costs powers in competition appeal proceedings, particularly distinguishing between costs incurred at the Tribunal level versus costs at the appellate level. The decision to refer both issues to the Constitutional Court reflects the importance of obtaining clarity on the procedural framework governing competition merger appeals and the allocation of costs in such proceedings.