Nedschroef Johannesburg (Pty) Ltd and Teamcor Ltd / Waco International Ltd / CBC Fasteners (Pty) Ltd / Avlock International (Pty) Ltd (95/IR/Oct05) [2006] ZACT 7; [2006] 1 CPLR 98 (CT) (1 February 2006)

Nedschroef Johannesburg (Pty) Ltd and Teamcor Ltd / Waco International Ltd / CBC Fasteners (Pty) Ltd / Avlock International (Pty) Ltd (95/IR/Oct05) [2006] ZACT 7; [2006] 1 CPLR 98 (CT) (1 February 2006)

The Tribunal found that clause 16 of the sale agreement constitutes a prima facie prohibited market allocation between competitors under section 4(1)(b) of the Competition Act. The applicant, though not a competitor at the time of the agreement, is now a potential competitor, and the restraint operates to divide the market and restrict competition. The Tribunal rejected CBC's arguments regarding delay, reciprocity, and jurisdiction, holding that delay did not bar relief and that market division does not require strict reciprocity or prior competition. The Tribunal further held that suspending the operation of clause 16 on an interim basis does not amount to voiding the contract under...

Citation
[2006] ZACT 7
Parties
Applicant: Nedschroef Johannesburg (Pty) Ltd; Respondent: Teamcor Limited; Respondent: Waco International Limited; Respondent: CBC Fasteners (Pty) Ltd; Respondent: Avlock International (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
1 February 2006
Case Number
95/IR/Oct05
Procedural Posture
Urgent Application / Interim Relief Application Before the Competition Tribunal
Outcome
Interim relief granted. The first and third respondents are interdicted and restrained from enforcing clause 16 of the sale agreement pending final determination of the complaint or expiry of six months. Costs awarded against the third respondent.
Judges
N. Manoim, M. Moerane, D. Lewis
Legal Topics
Restraint of Trade, Market Allocation, Horizontal Agreements, Interim Relief, Section 4 Competition Act
Competition Law Commercial and Corporate Restraint of Trade Market Allocation Horizontal Agreements Interim Relief Section 4 Competition Act

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Parties

Nedschroef Johannesburg (Pty) Ltd

Applicant

Teamcor Limited

Respondent

Waco International Limited

Respondent

CBC Fasteners (Pty) Ltd

Respondent

Avlock International (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Interim Relief Application Before the Competition Tribunal

Legal Issues

  1. 1 Does clause 16 of the sale agreement constitute a prohibited market allocation between competitors under section 4(1)(b) of the Competition Act?
  2. 2 Is the applicant entitled to interim relief suspending enforcement of the restraint of trade pending final determination of the complaint?
  3. 3 Does the delay in bringing the application bar the applicant from interim relief?

Ratio Decidendi

The Tribunal found that clause 16 of the sale agreement constitutes a prima facie prohibited market allocation between competitors under section 4(1)(b) of the Competition Act. The applicant, though not a competitor at the time of the agreement, is now a potential competitor, and the restraint operates to divide the market and restrict competition. The Tribunal rejected CBC's arguments regarding delay, reciprocity, and jurisdiction, holding that delay did not bar relief and that market division does not require strict reciprocity or prior competition. The Tribunal further held that suspending the operation of clause 16 on an interim basis does not amount to voiding the contract under...

Court Disposition

Interim relief granted. The first and third respondents are interdicted and restrained from enforcing clause 16 of the sale agreement pending final determination of the complaint or expiry of six months. Costs awarded against the third respondent.

Orders

  • The first and third respondents are interdicted and restrained from enforcing clause 16 of the Sale Agreement and/or from requiring the applicant to abide by clause 16 and/or from implementing such clause.
  • The relief operates until the earlier of a final determination of the applicant's complaint under the Competition Act or six months from the date of the order.