DCD Dorbyl (Pty) Ltd v Globe Engineering Works (Pty) Ltd (108/LM/Oct08) [2009] ZACT 26; [2009] 1 CPLR 122 (CT) (30 April 2009)

DCD Dorbyl (Pty) Ltd v Globe Engineering Works (Pty) Ltd (108/LM/Oct08) [2009] ZACT 26; [2009] 1 CPLR 122 (CT) (30 April 2009)

The Tribunal found that the merger would result in the merged entity controlling the A-berth facility, which is an essential facility for large oil and gas repairs in Cape Town harbour. Exclusive control could foreclose actual and potential competitors from the market. To address this, the Tribunal imposed a condition that the merged entity may lease no more than 50% of the A-berth lay-down area, with the remainder available to competitors on a common user basis. This condition was accepted by the merging parties and competitors as practical and sufficient to cure competition concerns. On employment, the Tribunal concluded that retrenchments at Globe Engineering were more likely caused by...

Citation
[2009] ZACT 26
Parties
Applicant: DCD Dorbyl (Pty) Ltd; Respondent: Globe Engineering Works (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
30 April 2009
Case Number
108/LM/Oct08
Procedural Posture
Merger Application / Reasons for Decision After Conditional Approval
Outcome
Merger conditionally approved subject to competition and employment conditions.
Judges
N Manoim, M Mokuena, N Theron
Legal Topics
Merger Control, Essential Facility, Foreclosure, Public Interest, Employment Effects
Competition Law Commercial and Corporate Merger Control Essential Facility Foreclosure Public Interest Employment Effects

Case Brief

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Parties

DCD Dorbyl (Pty) Ltd

Applicant

Globe Engineering Works (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Reasons for Decision After Conditional Approval

Legal Issues

  1. 1 Whether the merger between DCD Dorbyl and Globe Engineering will substantially prevent or lessen competition in the ship repair and oil and gas repair markets.
  2. 2 Whether control of the A-berth facility in Cape Town harbour by the merged entity will foreclose competitors from the oil and gas repair market.
  3. 3 Whether the merger will have a substantial adverse effect on employment and public interest grounds.

Ratio Decidendi

The Tribunal found that the merger would result in the merged entity controlling the A-berth facility, which is an essential facility for large oil and gas repairs in Cape Town harbour. Exclusive control could foreclose actual and potential competitors from the market. To address this, the Tribunal imposed a condition that the merged entity may lease no more than 50% of the A-berth lay-down area, with the remainder available to competitors on a common user basis. This condition was accepted by the merging parties and competitors as practical and sufficient to cure competition concerns. On employment, the Tribunal concluded that retrenchments at Globe Engineering were more likely caused by...

Court Disposition

Merger conditionally approved subject to competition and employment conditions.

Orders

  • The merged entity may lease no more than 50% of the A-berth lay-down area; the remainder must be available to competitors on a common user basis.
  • The merged entity must not retrench any employees of the merging firms for a period of one year after the date of approval, except as provided for in paragraphs 11.3.1.1 and 11.3.1.2 of the competitive report.