Competition and Consumer Protection Commission and Anor v Syngenta Zambia Limited and Ors (APPEAL NO. 150/2024) [2025] ZMCA 92 (17 June 2025)

IN THE COURT OF APPEAL OF ZAMBIAAPPEAL, NO 150/2024 HOLDEN AT KABWE (Civil Jurisdiction) BETWEEN ATS AGROCHEMICALS LIMI AND ROTECTIO 1 7 JUN 2025 1 . . ----· ..... .. . IVIL REGIST MISSION ELLANT ELLANT 1 8 SYNGENTA ZAMBIA LIMITED T RESPONDENT 2ND RESPONDENT TOMBWE PROCESSING LIMITED PRECISION FARMING HOLDINGS LIMITED 3RD RESPONDENT CORAM: SIAVWAPA JP, CHISHIMBA AND PATEL JJA On 20th May and 17th June 2025 FOR THE 1sr APPELLANT: FOR THE 2 ND APPELLANT: IN-HOUSE MISS N. MTONGA COUNSEL MISS P. CHANDA OF MUKUKA MUTALE LEGAL PRACTITIONERS WITH MR. T. G. KAIRA OF A. B. AND DAVID FOR THE 18T RESPONDENT: MR. A . AKAPELWA OF CHIBESAKUNDA ADVOCATES FOR THE 2 ND & 3 RD RESPONDENTS: MR. R. PETERSEN OF MARRIETA HOWARD, AND PETERSEN J U D G M E N T SIAVWAPA JP delivered the Judgment of the Court Cases referred to: 1. IT-53/ 03 BPB plc v Commission of the European Communities: 2008: 254 2. Monsanto Co. v Spray-Rite Service Corp, 465 US 752 3 . Bayer AG v Commission of European Communities Case T-41 / 96 4. Standard Oil Company v United States (1 9 11) Legislation referred to: 1. Competition and Consumer Protection Act 2010 2. Commission of European Communities Treaty 1957 1.0 INTRODUCTION 1.1 This is an appeal and cross appeal against the Judgment delivered in the High Court, Commercial Division, under the hand of the Honourable Mr. Justice Bonaventure C. Mbewe, on 25th March 2024. 1.2 The said J u dgment largely overturned the decision of the Competition and Consumer Pr otection Tribunal (Tribunal), which had earlier upheld the decision of the Competition and Consumer protection Commission (Commission) . The effect of the J u dgment was th at the Respon dents herein were exonerated from the charges under Sections 8, 9 and 16 of the Competition and Consumer Protection Act 2010 (the Act). 1.3 This appeal brings to th e fore the intricacies of the Competition and Consumer Protection Law, which is fairly new in this jurisdiction and without much to look up to in terms of precedent. The interpretation of terms used in the Act and how they in terplay are aspects that have been extensively canvassed by the opposing parties to this appeal. J2 2.0 BACKGROUND 2.1 By letter dated 26th Au gust 2015, Messrs Tembo, Ngulube & Associates, acting on behalf of Amiran Zambia limited and ATS Agrochemicals limited, wrote to the 1st Appellant complaining that the Respondents had contravened Sections 8, 9, 12, and 45 of the Act. This communication constituted the Complaint. 2 .2 On 2 nd October 2015, the Executive Director of the Commission, granted authority to investigate the Respondents on the possible contravention of Sections 8, 9 (1), (a), 9 (1) (b), 16 (1) and 16 (2) (b) of the Act. 2.3 The nature of the Complaint was that the 2 nd Respondent, a major player in the Tobacco Industry, as a buyer, in which the Complainants were major suppliers of Crop Protection Agents, (CPAs), had instructed its clients to purchase agrochemicals from the 1st and the 3 rd Respondents only. 2.4 By letters dated 19th October 2015, the 1st Appellant communicated the allegations to the Respondents. The letters were accompanied by Notices of Investigation instituted by the Appellant pursu ant to the Competition and Consumer Protection (General) Regulations of 2011 . 2.5 Subsequent to the Notices of Investigation served on them, the Respondents responded denying involvement in any anti competition or restrictive business practices. They also denied J3 providing their products at lower than normal retail prices as alleged by the Complainants. 2.6 Upon completing its investigations, the 1st Appellant produced a 51-page Report running from page 529 to page 579 of volume two of the Record of Appeal. The Report is dated July 2016 and contains the following conclusions; 1. It was established that the relevant market was the sale of commercial agrochemicals by Agrochemical Suppliers contracted tobacco farmers. to 2. The Commission established that there was an agreement between the Respondents and a decision by Tombwe to direct its contracted commercial farmers to only purchase chemicals from MRI and Precision. 3. The review of the case under consideration revealed that the agreement between the Respondents and decision by Tombwe were not aimed at preventing, restricting or distorting competition in the relevant market. It would appear that the Respondent had taken a defensive measure to safeguard its business. However, Tombwe's approval of only two agrochemicals has the effect of lessening competition amongst the distributors of agrochemicals because Tombwe contracted tobacco farmers could no longer source chemicals from other suppliers of the chemicals. 4. Investigations revealed that it was likely that the agreement between the Respondents and decision by Tombwe would result into competition being either prevented, restricted or distorted to an appreciable extent in Zambia or any substantial part of it in line with Section 14 of the Act. 5. On the basis of the findings and analysis, the Commission has established that Tombwe was not a dominant enterprise in the buying of tobacco crop with an approximate market share of 28%. However, it was established that Tombwe had market power in the buying of tobacco. 6. It was found that Tombwe had market power over farmers and refused to deal with Amiran and ATS. It was also revealed that the refusal to deal did deter the Complainants access to tobacco farmers who were sponsored by Tombwe. However, the conduct did not substantially limit market access for the competition to the complainants since an alternative market existed. 7. It is thus the Commission's view that Tombwe did not abuse its dominant position in the agrochemical market. J4 2.7 Having made the above conclusions, the Appellant recommended as follows; 1. Tombwe, MRI and Precision be fined 10% of their annual turnover for violating Section 8 of the Act in accordance with Section 58 (3) of the Act 2. The case be closed under Section 16. 2.8 The 1st Appellant submitted its Report to the Respondents on 9 th August 2016, and invited comments from them. The Respondents submitted their comments to which the Appellant responded and apparently reviewed its earlier imposition of a 10% fine on the Respondents and reduced it to 5% of the annual turnover. 2.9 After further reviews, the Appellant delivered its final decision on 20th December 2016, by which it stated as follows; "The Board determined that MRI and Precision Farming violated Section 8 of the Act and that Tombwe violated both Section 8 and section 16". It went further to state as follows; "In view of the above analysis and conclusion, the Board hereby directs that the following actions be taken; i. ii. iii. Tombwe, MRI and Precision be fined 1 % of their annual turnover for violating Section 8 of the Act in accordance with Section 58 (3) of the Act Tombwe be fined 0. 5% for violation of Section 16 Tombwe should be restrained from the behaviour and be ordered to lift the directive imposed on the farmers". JS 2.10 The 1st Appellant communicated its final decision to the Respondents by letters dated 17th January 2017. This prompted the Respondents to respond by filing Notices of appeal to the Tribunal on 16th February 201 7. 2.11 The Tribunal handed down its decision on 11 th February 2020, upholding the decision of the Appellant. This prompted the Respondents to file their notices of appeal to the High Court on 9 th October 2020. It is out of the Judgment from this appeal that we have the appeal herein. 3.0 THE APPEAL 3 .1 The 1st Appellant filed its Notice and Memorandum of Appeal on 12th April 2024, while the 2nd Appellant filed its Notice and Memorandum of Appeal on 24th April 2024, in Appeal No 192 of 2024. By consent order filed by the parties, dated 30th June 2024, Appeal Numbers 192 and 150 of 2024 were consolidated and heard under Appeal No 150 of 2024. To that end, the 2 nd Appellant filed a Supplementary Record of Appeal on 17th July 2024, containing the Consent Order. 3.2 The 1st Appellant's Memorandum of Appeal contains thirteen grounds of appeal which we shall refer to when reviewing the opposing arguments and in the analysis part of this Judgment. J6 4.0 ARGUMENTS IN SUPPORT 4.1 In grounds one and two, the 1st Appellant criticizes the Court below for determining that the standard of proof in the matter was beyond reasonable doubt. In that regard, it has submitted that the standard of proof applicable is on a preponderance of probabilities which the Appellant discharged through email and oral evidence adduced. 4.2 In grounds five and seven, the Appellants impugn the decision by the Court below that there was no concurrence of will among the Respondents and that the unilateral decision of the 2 nd Respondent had no appreciable preventive, restrictive or distortion of competition effect. 4 .3 In ground six, the Appellants criticize the holding of the Court below that the Appellant ought to have surveyed the market when it carried out an investigation pursuant to Section 55 (4) and not a market inquiry under Section 39 of the Act. 4.4 In ground eight, the Appellants have simply defended the Tribunal's reliance on Section 58 in relation to a unilateral decision on the basis that it was applied in relation to Section 8 of the Act. 4.5 In grounds nine and ten , the Appellants express disagreement with the holding by the Court below that justifications J7 advanced by the Respondents were done within the law (ex iure). 4.6 In ground eleven the Appellants contend that the Court below should not have pronounced itself on the Tribunal's order of 1 % fine as the same was not argued before it. 4.7 In ground twelve, the Appellants contend that the law of reason did not apply to Section 8 of the Act. As regards exemptions, the Appellants contend that the same apply to Section 8 but only subject to conditions set out under Section 19, among them, is an application for exemption. 4.8 The thirteenth ground disputes the definition of 'relevant market' under the Zambian Competition law. 4.9 The 2 nd Appellant supplemented arguments to grounds one, two, five , nine and eleven. These will be considered in the analysis section of this Judgment. 5.0 ARGUMENTS IN OPPOSITION 5 .1 In countering arguments in grounds one and two, the Respondents placed emphasis on the issue that was before the Court below being the burden of proof and not the standard of ; , proof. In that regard, the Respondents assert that the Court below truly shifted the burden from the Commission, which alleged contravention of the law by the Respondents, to the R esponde nts. They nonetheless, also support the holding that J8 .• the standard of proof for contravention of Sections 8 and 16 of the Act is beyond reasonable doubt. This is on the basis that Section 58 (4) requires proof of intentional or negligent breach for the Commission to impose financial penalties. 5.2 In responding to the third and fourth grounds and arguments, the Respondents have alleged that the Appellants focused on a trivial issue in relation to the e-mail of 10th August 2015 from the 2 nd Respondent referred to as the letter of 12t h August 2015. The Respondents accordingly support the holding of the Court below. 5.3 In grounds five and seven, the Respondents simply argue that the Court below was right in finding that there was no concurrence of wills among the Respondents based on the unilateral instructions by the 2 nd Respondent appearing in the e-mail of 10th August 2015. 5.4 In responding to ground six and the arguments by the Appellants, the Respondents have looked to Section 58 (4) of the Act, which, in their view, imposes stringent proof of intentionality or negligence of breach for a financial penalty to be imposed. In their view, this can only be achieved through a market survey as determined by the Court below. 5.5 In response to the Appellants' arguments in ground eight, the Respondents have argued that the Court below did not apply J9 Section 58 of the Act to unilateral decisions. They instead assert that the Court considered whether the Tribunal had correctly applied the law to the evidence before it. 5.6 In addressing the arguments in support of grounds nine and ten, the Respondents have argued that the Court below was justified in considering the justifications advanced by the 2 nd Respondent for the instructions it gave to its CPAs. This is on the basis that the instructions were necessary and proportional in order to maintain the quality and integrity of the product. 5.7 In response to the Appellants' arguments in ground eleven, the Respondents assert that the issue of the 1 % fine of the annual turnover was raised and argued in the Court below. Further, that it was proper for the Court below to review the fine in order to ascertain its basis and legality. 5.8 On ground twelve, the Respondents have argued that Section 8 does not exclude the application of the rule of reason and that the Court below was therefore, right in holding that the Tribunal ought to have applied it. They argue that the rule of reason is justifiable where an agreement may be inherently illegal but necessary for promotion of efficiency, innovation or consumer welfare. JlO 5.9 In ground thirteen, the Respondents refute the argument that the Court below misapprehended and consequently misapplied the definition of 'relevant market.' 6.0 ARGUMENTS IN SUPPORT OF CROSS-APPEAL 6 . 1 In its sole ground of appeal, the 1st Respondent challenges the decision by the Court below to disallow the Appellants to raise issues on the Tribunal's decision to order costs against the Respondents on the basis that the same was not raised before the Tribunal. The 1st Respondent argues that costs are an order of the Court at the end and do not need to be argued during trial. 6.2 The 1s t Respondent has also argued that since the dispute in the appeal borders on public interest matters, the issue of costs ought to be considered and reversed. 7.0 ARGUMENTS IN REPLY AND IN OPPOSITION TO THE CROSS-APPEAL 7 .1 The Appellants filed arguments in reply and in opposition to the cross-appeal. We will consider them jointly with the arguments in support in the analysis section of this Judgment. 8.0 AT THE HEARING 8.1 At the hearing, the Appellants relied entirely on their filed arguments. Similarly, the 1st Respondent relied on the filed arguments to which it augmented orally. In his oral J11 submission, on behalf of the 1st Respondent, Mr. Akapelwa urged us to focus on whether or not the 1 st and 3rct Respondents breached Section 8 of the Act on the basis of concurrence of wills. In his view, there was no concurrence of wills. 8.2 On behalf of the 2 nd and 3 rd Respondents, Mr Petersen submitted that in the Court below, the issue was not on the standard of proof but the shifting of the burden of proof against which there is no appeal. 8.3 On the issue of dominance of the market by the 2 nd Respondent, Mr. Petersen submitted that in the presence of three markets, it was not indicated over which market the 2 nd Respondent exercised dominance. He urged us to dismiss the Appeal even as he supported the cross-appeal. 9.0 ANALYSIS AND DECISION 9.1 As earlier indicated, the Appellants have fronted thirteen grounds of appeal, with a number of them intertwined, hence, their being argued and considered in clusters of two. However, after an intensive scrutiny and consideration of the grounds and the arguments filed by the parties, we take the position that the issue in contention in this appeal is whether the Respondents contravened Sections 8, 9 and 16 of the Act. 9 .2 The answer to the question depends on whether the Court below correctly interpreted the relevant provisions of the Act J12 and the evidence before it. Although the Respondents were charged under Sections 8, 9 and 16 of the Act, there are other provisions of the Act that aid the primary provisions. 9 .3 For ease of reference, the Complaint against the Respondents as settled by the Commission after its investigations reads as follows ; "Tombwe had instructed its clients to purchase agrochemicals from two suppliers, MRI-Syngenta and Precision Farming (and its agents, Green Solutions)." 9 .4 The above allegation speaks to the broader subject of Restrictive Business and Anti-Competitive Trade Practices as set out in Section 8 of the Act which provides as follows; "Any category of agreement, decision or concerted practice which has as its object or effect, the prevention, restriction or distortion of competition to an appreciable extent in Zambia is anti-competitive and prohibited" 9.5 As a starting point, for Section 8 to apply, it must be established that there is some agreement or a decision or a concerted practice. In this case, the reference point for one or more of the above is the e-mail dated 10t h August 2015, from the 2nd Respondent addressed to its contracted farmers . For ease of reference, the e-mail is reproduced hereunder. "Dear Tombwe contracted farmers, Please find attached the Tombwe List of Crop Protection Agents (CPA) for 2015/2016 season. Crop Protection Agents are chemical AND biological products used to protect crops. Hence it is the CPA list. Aldert and myself have spoken to farmers about the development in the tobacco industry and the decision by Tombwe to limit the CPAs that can be used on the tobacco grown for Tombwe . J13 The products permitted to be used are available at MRI-Syngenta and Precision Farming {including the agent, Green Solutions). Please do not get any products elsewhere! This is vital for the tobacco industry to keep these CPAs only. (Underlining for emphasis) It is extremely important for us to make sure we have traceability of which products were bought and used by farmers. We have to be able to tell our customers what products are used for the integrity of Tombwe to tobacco crop. Therefore, we have decided that all CPAs must be ordered through Tombwe whether you are paying for them yourself or not. MRI and Precision Farming have looked at their prices in order to give a reduced price on products {compared to regular retail price)." 9.6 The e-mail continues but what has been reproduced above is what constitutes the contention in this appeal. The first question that arises from the e-mail is whether it discloses an agreement. Clearly, the e-mail does not disclose any form of agreement between Tombwe on the one hand and MRI Syngenta and Precision Farming on the other. What is however, clear from the e-mail is that decisions were made by Tombwe and it did instruct its contracted farmers to procure specific CPAs from MRI-Syngenta and Precision Farming only. 9.7 It is not disputed that the decisions stated above were unilateral to the 2 nd Respondent, Tombwe. The evidence does not disclose any input or concurrence by either MRI-Syngenta or Precision Farming to the decision. In the circumstances, the only way to determine if there was concurrence of wills as argued by the Appellants is by considering the resultant effects of the unilateral decision by Tombwe. J14 9.8 The latter part of the e-mail, as reproduced in paragraph 9.5 above states that the MRI and Precision had looked at their prices in order to reduce them in comparison to the market retail prices. The question that follows is; were the obtaining market prices for the listed CPAs at the time ascertained? 9.9 There is a suggestion in the Appellants' heads of argument that Tombwe's contracted farmers had complained that the CPA prices at MRI and Precision were higher than those offered by other suppliers. If that is true, then the statement in the e-mail suggests that MRI and Precision would bring their prices to levels competitive with those offered by other suppliers. 9.10 The key question however, is whether MRI and Precision did, in fact, reduce the prices of the CPAs to meet the concurrence of wills test. There is no clear indication to that effect from the evidence and neither do the Appellants argue to that effect. According to the Appellants, the reason the 1st and 3 rd Respondents looked at the prices was to give a reduced price. They also argue that even without the usage of the word "agreed" it is inferable that discussions took place among the Respondents. 9.11 What the Appellants are doing is to create assumptions that discussions took place and the 1st and 3 rd Respondents reduced their prices to levels below the ruling market retail J15 prices at the time. We do not accede to such assumptions in the absence of strong suggestions to that effect. 9. 12 In order to overcome the absence of direct evidence of the violation of Section 8 of the Act, and vice versa, both parties looked to the decisions of the European Court of Justice which has pronounced itself on a number of anti-competition cases in that jurisdiction. One such case called in aid by the Appellants is case IT-53/ 03 BPB plc v Commission of the European Communities 1, 2008. In that case, the Court stated as follows; to be held in secret, and for "It is normal, in the context of anti-competitive practices and agreements, for the activities to take place in a clandestine fashion, for meetings the associated documentation to be reduced to a minimum. It follows that, even if the commission discovers evidence explicitly showing unlawful contact between traders, it will normally only be fragmented and sparse, so that it is often necessary to reconstitute certain details by deduction. Accordingly, in most cases, the existence of an anti competitive practice or agreement must be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules" 9 .13 The above pronouncement by the European Court brings to the fore difficulties inherent in anti-competition cases with regard to direct evidence g1v1ng nse to reliance on circumstantial evidence. On the other hand, the Respondents have relied on the case of Monsanto Co v Spray-Rite Service Corp2 in which the Court stated as follows; "The correct standard is that there must be evidence that tends to exclude the possibility of an independent action by the manufacturer and distributor. That is, there must be direct or circumstantial J16 •. evidence that reasonably tends to prove that the manufacturer and others had a conscious commitment to a common scheme designed to achieve an unlawful objective." 9. 14 But all this has to be understood on the backdrop of the fact that we are here dealing with a unilateral decision or directive, which, according to the case of Bayer AG v Commission of European Communities3 , is exempt from the prohibition of Section 85 ( 1) then and now Section 101 ( 1) of the Treaty on the Functioning of the European Union. 9.15 There is however, an exception to that position in that if a unilateral conduct by an undertaking is adopted in its contractual relations with its commercial partners; that may form the basis of an agreement between the parties. But this is only so if there is established acquiescence of the partners with the attitude adopted by the undertaking expressly or impliedly. 9. 16 In this appeal, we are attracted to the view that coincidence of wills among the Respondents is implicit from the tone of thee mail. The idea that the 1st and 3 rd Respondents had looked at their prices with a view to reducing them, suggests complicity by the 1st and 3 r d Respondents. Whether or not they actually reduced the prices is immaterial because, the effect of concurrence of wills by the parties to a unilateral decision or directive transforms into an agreement within the context of Section 8 of the Act. J17 •. . . 9.17 This then leads to the object part of the prohibition in Section §_of the Act. Can it be said or discerned, from the e-mail and other evidence that the object of the unilateral decision or directive by Tombwe, to its contracted farmers, was to prevent, restrict or distort competition to an appreciable level? 9.18 It has been argued that it can not be said that the object of such an agreement was to prevent, restrict or distort competition in light of the negative experience the 2014/2015 season had gone through. This is in relation to the rejection of the tobacco crop by the major buyer, China, on account that the crop had an objectionable taste, attributable to the CPAs used on the crop. 9 .19 In that regard, the Respondents have argued that the decision or directive was made to preserve the integrity of Tombwe and the crop. This brings in the factor of the applicability of the doctrine of 'rule of reason.' It is argued that this doctrine is not available under the Act. Our survey of the 88 sections of the Act reveals no such provision. The doctrine was enunciated by the Supreme Court of the United States of America, in the case of Standard Oil Company v United States4 (1911). 9.20 The case was in response to the Sherman Antitrust Act of 1890 which prohibits contracts and conspiracies that restrain trade. In its Judgment, the United States Supreme Court reasoned that not all business practices that may restrain trade competition are inherently unlawful. The Court further J18 . ' . reasoned that the determination should be based on whether the business agreement serves the public interest or hinders competition. 9.21 Applying that reasoning to this appeal, it would appear to us that the agreement herein had no public interest effect. It was purely a business matter and therefore, not amenable to the doctrine of rule of reason. 9. 22 Closely related to the doctrine of rule of reason, is the exemption provision under Sections 18 and 19 of the Act. Under Section 18, the Act provides as follows; (l)Subject to subsection (2), an enterprise that wishes to be exempted from a prohibition under section twelve may apply to the Commission for exemption 1n the prescribed manner and form upon payment of the prescribed fee. (2)Subsection (1) does not apply to an agreement that is prohibited per se. Section 19 then grants the Commission discretion to either grant or refuse to grant the exemption. Subsection (2), of Section 19, makes it mandatory for the Commission to grant an exemption to an agreement that meets the criteria set thereunder. 9.23 The starting point is that exemptions under Section 18 only apply to prohibitions under Section 12 of the Act. The J19 t I • second issue is that subsection (2) excludes agreements that are prohibited per se from exemption. Thirdly, to access the possible exemption under Section 18, the culpable enterprise must apply to the Commission. 9.24 Having already established that the Respondents were charged under Sections 8, 9 and 16, Section 18 does not apply to them. In Section 9, horizontal agreements between enterprises are prohibited per se. In order to establish whether the agreement between Tombwe on the one hand and MRI Syngenta and Precision Farming on the other is horizontal or vertical, Section 2 of the Act defines the term 'horizontal' as follows; "horizontal agreement means - an agreement between enterprises each of which operates, for the purpose of the agreement, at the same level of the market and would normally be actual or potential competitors in that market." 9.25 In our view, the agreement in issue is not horizontal per the above definition. This is because whereas, Tombwe's directive is to its contracted farmers, to procure CPAs from the 1st and 3 rd Respondents only, the two Respondents are at liberty to supply to the wider market. Further to that, the parties are involved in two different businesses, even though the market is the same. It can not therefore, be said that the parties to the agreement are actual or potential competitors in the market. In the sense described above, the agreement in issue is not prohibited per se. This however, changes nothing as Section 18 does not apply to the agreement in issue. J20 • • • 9.26 With the failed application of the doctrine of reason and the non-applicability of the exemption provision, we are persuaded that the decision had as its object, the restriction of competition to an appreciable extent in Zambia, and therefore, anti-competitive, contrary to Section 8 of the Act. 9.27 As regards the alleged contravention of Section 9, having already held in paragraph 9.25 above that the agreement between the parties was not horizontal, it follows that the same was not contravened. It appears that the more appropriate classification of the agreement is 'vertical,' as defined by section two of the Act as follows; '"Vertical agreement' means an agreement between enterprises each of which operates, for the purposes of the agreement, at a different level of the production or distribution chain and relates to the conditions under which the parties may purchase, sell or resell certain goods or services." 9.28 A vertical agreement is prohibited per se under Section 10 (1) of the Act. However, because the Respondents were not charged under Section 10, the same has no effect on the appeal and it will not be considered any further. 9 .29 As regards the charge under Section 16 of the Act, the allegation is that the 2 nd Respondent, Tombwe, abused its dominant position. In that regard, the Section provides as follows; (1) An enterprise shall refrain from any act or conduct if, through abuse or acquisition of a dominant p osition of market power, the act or conduct limits access to markets or otherwise unduly J21 J. ' restrains competition, or has or is likely to have adverse effect on trade or the economy in general (2) For the purposes of this part, "abuse of a dominant position" includes (a) Imposing, directly or indirectly, unfair purchase or selling prices or other unfair trading conditions; (b) Limiting or restricting production, market outlets or market access, investment, technical development or technological progress in a manner that affects competition (c) Applying dissimilar conditions to equivalent transactions with other trading parties; (d) Making the conclusion of contracts subject to acceptance by other parties of supplementary conditions which by their nature or according to commercial usage have no connection with the subject matter of the contracts; (e) Denying any person access to an essential facility; (f) Charging an excessive price to the detriment of customers or; (g) Selling goods below their marginal or variable cost (3) An enterprise that contravenes this section is liable to pay the Commission a fine not exceeding ten percent of its annual turnover. 9.30 In relation to the above Section, the Appellants argue that the 2 nd Respondent held a dominant position of the tobacco market which it abused. Dominant position is defined in Section 2 of the Act as follows; "'dominant pos ition' means a situation where an enterprise or a group of enterprises possesses such economic strength in a market as to make it possible for it to operate in that market, and to adjust prices or output, without effective constraint from competitors or potential competitors." 9.31 The Appellants argued that the 2nd Respondent abused its market dominance when it issued a directive to its contracted farmers to only purchase CPAs from the 1st and 3rd Respondents. Going by the above definition of 'dominant position,' it is important to ascertain whether, the directive J22 (. . I. I issued by the 2nd Respondent was an assertion of its alleged dominant position in the tobacco market. 9 .32 In order for an enterprise or a group thereof to attain a dominant market position, it must attain the following criteria; (a) Hold a much larger market share compared to their competitors (b) Have the power to dictate prices (c) Have the power to influence product features, designs or trends (d)Ability to inhibit entry of new competitors 1n the market 9.33 From the Record of Appeal, it is not certain that the 2 nd Respondent had attained any of the above listed criterion to constitute a dominant position in the tobacco market. Section 15 of the Act provides as follows; "A dominant position exists in relation to the supply of goods or services in Zambia, if; (a) Thirty p ercent or more of those goods or services are supplied or acquired by one enterprise; or (b) Sixty percent or more of those goods or services are supplied or acquired by not more than three enterprises." 9.34 In this case, the 2 nd Respondent has contracted farmers, on tobacco out-grower schemes to whom it supplies in puts and offers technical services for the growing of tobacco. The contracted farmers sell the tobacco to the 2 nd Respondent. J23 . ... , . 9.35 The Report of the Commission places Tombwe's tobacco market share at 28%. In terms of Section 15, the threshold for an enterprise to be considered dominant is 30% of the market. In other words, it must be ascertained that the tobacco farmers contracted to the 2nd Respondent constitute 30% or more of the tobacco market in Zambia. 9.36 However, in this appeal, the offending agreement is not between the 2nd Respondent and its contracted farmers. It is between the 2n d Respondent and the 1st and 3rd Respondents. The complaint is that the agreement shut out the other players in the CPA supply market. The question is whether the shut out restricted the Complainants and other CPA suppliers from competing in the market. 9 .37 In that regard, it must be established that the 1st and the 3 rd Respondents control 60% or more of the CPA supply market between them in Zambia to be classified as dominant. There is no evidence to support that position to sustain the complaint under Section 16 of the Act. 9.38 The ground on the 1 % fine that was reversed by the Court below is based on the finding by the Court below that the issue was argued before the Tribunal. The Appellants have argued that the Respondents did not proffer arguments on the fine and as such, the Tribunal was right not to intervene. Further that the 1 % fine was imposed within the ambit of the la w in view of the violation of Sections 8 and 16 of the Act. J24 9.39 The Respondents' argument against the imposition of the 1 % fine is their belief that they did not contravene the cited Sections of the Act. This argument is however, flawed in that unless a party has successfully argued its innocence, an argument against a penalty that is a consequence of a sustained finding of liability is futile. 9.40 It is also noted, as submitted by the Appellants, that the Court below did not reveal its mind fully on the argument against the penalty. It was not sufficient for the learned Judge to have simply stated that the issue was argued and therefore , it succeeds. The learned Judge ought to have interrogated the legality or otherwise of the fine before setting it aside. 10.0 THE CROSS-APPEAL 10. 1 The 1st Respondent cross-appealed on one ground having withdrawn the other. The grievance raised in the sole ground of the cross-appeal is that the Court below refused to entertain the challenge to the imposition of costs on the Appellants in a matter of public litigation, because the same was not raised before the Tribunal. 10.2 The 1st Respondent started by acknowledging the general rule that costs follow the event, that is, the successful party is entitled to costs unless they are found to have done something wrong. It also pointed to cases in the Industrial Relations Division where the rules disallow costs generally. J25 .. . 10.3 The contention in the main, however, is that the Court below should not have refused to hear the ground on costs on the basis that it was not raised before the Tribunal. The argument is anchored on the fact that costs are imposed as the final pronouncement of the Court's decision. Therefore, a litigant, who is defending against an allegation can not raise and argue against costs before they are awarded. The opportunity to raise the issue arises afterwards and where an appeal is lodged, it is appropriate to raise it. 10.4 We therefore, agree with the 1st Respondent's argument on the issue. Any disquiet against an imposition of costs becomes a ground of appeal. The learned Judge therefore, grossly misdirected himself in holding that he could not entertain the ground on costs because it was not raised before the Tribunal. 10.5 The other argument against costs is that matters of Competition Law are matters of public interest as they do not just affect the parties thereto but the general public as well. In that regard, the 1st Respondent has argued that disputes arising from Competition Law are of public interest. 10.6 The Appellants dispute the suggestion that matters of Competition Law are of public interest. They have further argued that the Act enforces matters of public law and since J26 the Tribunal has the powers to award costs, the award of costs in this case cannot be questioned. 10.7 In our considered view, the argument that matters of Competition Law are matters of public interest is without merit. The 1st Respondent has not referred to any direct authority to that effect. We therefore, reject that argument. It is also beyond dispute that the Tribunal is vested with discretion to or not to award costs. It follows therefore, that an award of costs by the Tribunal can only be impugned on proper grounds. 11.0 CONCLUSION 11.1 Having considered all pertinent issues raised in this appeal, through the grounds of appeal, the arguments for and against, the cross appeal, and the Judgment of the Court below, we are satisfied that the Respondents contravened Section 8 of the Act. 11 .2 In view of the fact that Section 8 of the Act does not provide a penalty for its contravention, recourse is had to Section 58 (3) of the Act which provides as follows; "The Commission may, in relation to a restrictive agreement referred to under subsection (1), in addition to, or instead of, giving a direction, make an order imposing a .financial penalty on the enterprise not exceeding ten percent of that enterprise's annual turnover during the period of the breach of the prohibition up to a maximum period of five years" J27 11.3 The Tribunal was therefore, on firm ground to impose the penalties that it did on the Respondents and we are disinclined to interfere with the same. 11.4 We however find no merit in the allegation that the Respondents contravened of Sections 9 and 16, of the Act. We dismiss it accordingly. 11.5 As for the cross appeal, it succeeds in relation to the decision by the Court below not to consider it on the ground that it was not raised before the Tribunal. It however, fails on the argument that it was a matter of public interest 11.6 The Appeal substantially succeeds and costs are for the Appellants to be taxed in default of agreement. J. M. SIAVWAPA JUDGE PRESIDENT F. M. CHISHIMBA COURT OF APPEAL JUDGE A. N. PATEL SC COURT OF APPEAL JUDGE J28