Accelerate Property Fund Ltd v 15 Letting Enterprises being sold by Fourways Precinct (Pty) Ltd (16170) [2013] ZACT 28; [2013] 2 CPLR 519 (CT) (17 April 2013)

Accelerate Property Fund Ltd v 15 Letting Enterprises being sold by Fourways Precinct (Pty) Ltd (16170) [2013] ZACT 28; [2013] 2 CPLR 519 (CT) (17 April 2013)

The Tribunal found that the proposed merger did not raise competition concerns in the relevant property markets, as there was no significant overlap and sufficient competing shopping centres existed within the affected area. However, the Tribunal agreed with the Commission that exclusivity clauses in certain lease agreements could impede small businesses from accessing retail space, raising a public interest concern under section 12A(3)(c) of the Competition Act. The Tribunal imposed conditions requiring Accelerate to negotiate in good faith with the relevant tenants to remove the exclusivity clauses within specified periods, rather than waiting for distant renewal dates. The merger was...

Citation
[2013] ZACT 28
Parties
Applicant: Accelerate Property Fund Limited; Respondent: 15 Letting Enterprises being sold by Fourways Precinct (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
17 April 2013
Case Number
016170
Procedural Posture
Merger Control / Conditional Approval
Outcome
Conditional approval of the merger subject to public interest conditions.
Judges
Andreas Wessels, Medi Mokuena, Mondo Mazwai
Legal Topics
Merger Control, Public Interest Conditions, Exclusivity Clauses, Small Business Access
Competition Law Commercial and Corporate Merger Control Public Interest Conditions Exclusivity Clauses Small Business Access

Case Brief

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Parties

Accelerate Property Fund Limited

Applicant

15 Letting Enterprises being sold by Fourways Precinct (Pty) Ltd

Respondent

Procedural Posture

Merger Control / Conditional Approval

Legal Issues

  1. 1 Does the proposed merger raise competition concerns in the relevant property markets?
  2. 2 Do exclusivity clauses in lease agreements raise public interest concerns under section 12A(3)(c) of the Competition Act?
  3. 3 Are conditions warranted to address the effect of exclusivity clauses on small business access to retail space?

Ratio Decidendi

The Tribunal found that the proposed merger did not raise competition concerns in the relevant property markets, as there was no significant overlap and sufficient competing shopping centres existed within the affected area. However, the Tribunal agreed with the Commission that exclusivity clauses in certain lease agreements could impede small businesses from accessing retail space, raising a public interest concern under section 12A(3)(c) of the Competition Act. The Tribunal imposed conditions requiring Accelerate to negotiate in good faith with the relevant tenants to remove the exclusivity clauses within specified periods, rather than waiting for distant renewal dates. The merger was...

Court Disposition

Conditional approval of the merger subject to public interest conditions.

Orders

  • Accelerate Property Fund Limited must negotiate in good faith with the relevant tenants to remove exclusivity clauses in lease agreements for the Fourways Mall Shopping Centre, Cedar Square, and Buzz Shopping Centre within specified periods from the Tribunal's approval date.
  • The merger is approved subject to the conditions set out in Annexure A.