Competition Commission v Isipani Construction (Pty) Ltd and Another (CR128Nov14) [2016] ZACT 88; [2016] 2 CPLR 516 (CT) (18 July 2016)

Competition Commission v Isipani Construction (Pty) Ltd and Another (CR128Nov14) [2016] ZACT 88; [2016] 2 CPLR 516 (CT) (18 July 2016)

Isipani Construction admitted to two separate instances of cover pricing with Neil Muller Construction, constituting contraventions of section 4(1)(b) of the Competition Act. The Tribunal found that each instance was a distinct infringement but, in the interest of fairness and proportionality, imposed a single administrative penalty for both. The Tribunal applied the six-step penalty determination process, using Isipani's total turnover for the financial year ended 30 June 2012 as the basis. The base amount was set at 12% of turnover, discounted from the upper bound due to the lack of direct profit and mitigating factors such as Isipani being a first-time offender and pleading guilty....

Citation
[2016] ZACT 88
Parties
Applicant: Competition Commission; Respondent: Isipani Construction (Pty) Ltd; Respondent: Neil Muller Construction (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 July 2016
Case Number
CR128Nov14
Procedural Posture
Administrative Penalty Application / Penalty Determination After Admission of Contravention
Outcome
Isipani Construction was found to have contravened section 4(1)(b) of the Competition Act by engaging in two instances of cover pricing and was ordered to pay an administrative penalty.
Judges
A Wessels, M Mokuena, A Roskam
Legal Topics
Collusive Tendering, Cover Pricing, Administrative Penalty, Corporate Leniency Policy, Bid Rigging
Competition Law Commercial and Corporate Collusive Tendering Cover Pricing Administrative Penalty Corporate Leniency Policy Bid Rigging

Case Brief

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Parties

Competition Commission

Applicant

Isipani Construction (Pty) Ltd

Respondent

Neil Muller Construction (Pty) Ltd

Respondent

Procedural Posture

Administrative Penalty Application / Penalty Determination After Admission of Contravention

Legal Issues

  1. 1 Whether Isipani Construction contravened section 4(1)(b) of the Competition Act by engaging in cover pricing with Neil Muller Construction.
  2. 2 Whether the administrative penalty should be calculated for each contravention or as a single penalty.
  3. 3 What is the appropriate quantum of the administrative penalty under section 59 of the Competition Act.

Ratio Decidendi

Isipani Construction admitted to two separate instances of cover pricing with Neil Muller Construction, constituting contraventions of section 4(1)(b) of the Competition Act. The Tribunal found that each instance was a distinct infringement but, in the interest of fairness and proportionality, imposed a single administrative penalty for both. The Tribunal applied the six-step penalty determination process, using Isipani's total turnover for the financial year ended 30 June 2012 as the basis. The base amount was set at 12% of turnover, discounted from the upper bound due to the lack of direct profit and mitigating factors such as Isipani being a first-time offender and pleading guilty....

Court Disposition

Isipani Construction was found to have contravened section 4(1)(b) of the Competition Act by engaging in two instances of cover pricing and was ordered to pay an administrative penalty.

Orders

  • Isipani Construction (Pty) Ltd is ordered to pay an administrative penalty of R21,783,153.40 for both contraventions of the Competition Act.
  • No order as to costs.