Resilient Properties (Pty) Ltd v NAD Property Fund (Pty) Ltd in respect of Jubilee Mall Property (019216) [2014] ZACT 58; [2014] 2 CPLR 489 (CT) (22 August 2014)

Resilient Properties (Pty) Ltd v NAD Property Fund (Pty) Ltd in respect of Jubilee Mall Property (019216) [2014] ZACT 58; [2014] 2 CPLR 489 (CT) (22 August 2014)

The Tribunal found that the proposed merger would not result in a substantial prevention or lessening of competition, as there is no overlap in the activities of the parties and no regional centre owned by the acquiring firm within a 15km radius of Jubilee Mall. The exclusivity clauses in anchor tenant leases are not merger-specific and predate the transaction; their removal cannot be effectively achieved through merger conditions, as such clauses are a result of the bargaining power of major tenants and not aimed at excluding small businesses. The Tribunal concluded that enforcement through the prohibited practice regime is the appropriate mechanism to address such clauses, not merger...

Citation
[2014] ZACT 58
Parties
Applicant: Resilient Properties (Pty) Ltd; Respondent: NAD Property Income Fund (Pty) Ltd; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 August 2014
Case Number
019216
Procedural Posture
Merger Review / Decision on Unconditional Approval
Outcome
Merger approved unconditionally.
Judges
N Manoim, Y Carrim, I Valodia
Legal Topics
Merger Control, Public Interest Clauses, Exclusivity in Leases, Small Business Access
Competition Law Merger Control Public Interest Clauses Exclusivity in Leases Small Business Access

Case Brief

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Parties

Resilient Properties (Pty) Ltd

Applicant

NAD Property Income Fund (Pty) Ltd

Respondent

Competition Commission

Respondent

Procedural Posture

Merger Review / Decision on Unconditional Approval

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the exclusivity clauses in anchor tenant leases raise public interest concerns affecting small businesses or historically disadvantaged persons.
  3. 3 Whether merger conditions should be imposed to address pre-existing exclusivity clauses.

Ratio Decidendi

The Tribunal found that the proposed merger would not result in a substantial prevention or lessening of competition, as there is no overlap in the activities of the parties and no regional centre owned by the acquiring firm within a 15km radius of Jubilee Mall. The exclusivity clauses in anchor tenant leases are not merger-specific and predate the transaction; their removal cannot be effectively achieved through merger conditions, as such clauses are a result of the bargaining power of major tenants and not aimed at excluding small businesses. The Tribunal concluded that enforcement through the prohibited practice regime is the appropriate mechanism to address such clauses, not merger...

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed transaction is approved unconditionally.
  • No conditions are imposed regarding the exclusivity clauses in anchor tenant leases.