THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

REPORTABLE
Case number:  554/03

In the matter between:

AMERICAN NATURAL SODA ASH CORPORATION
First applicant
CHC GLOBAL (Pty) Ltd
Second applicant

and

COMPETITION COMMISSION OF SA
First respondent
BOTSWANA ASH (Pty) Ltd
Second respondent
CHEMSERVE TECHNICAL PRODUCTS (Pty) Ltd
Third respondent
MINISTER OF TRADE AND INDUSTRY
Fourth respondent

BEFORE:
MPATI DP, CAMERON, NUGENT,
CONRADIE JJA and COMRIE AJA

HEARD:

24 FEBRUARY 2005

DELIVERED:
13 MAY 2005

Constitution – appellate court structure – section 168(3) – appeal
lies from Competition Appeal Court to Supreme Court of Appeal –
section 173 – court’s inherent power to protect and regulate own
process – requirement that special leave to appeal be obtained
imposed – Competition Act 89 of 1998 – Section 3(1) – Act
applying to all economic activity having effect within Republic –
adverse effect not a precondition for jurisdiction of Competition
Commission – Standing before Competition Commission – Act’s
provisions to be interpreted widely – no need for complainant to
show particular damage – Section 4(1)(b) – admissibility of

evidence before Competition Commission – Commission first to
construe provisions of s 4(1)(b) to establish width of statutory
prohibition – ruling on evidence premature – matter remitted to
Commission to determine meaning of s 4(1)(b) and to determine
what evidence, if any, is admissible to establish whether
agreement at issue falls within prohibition in s 4(1)(b).

JUDGMENT

CAMERON AND NUGENT JJA:

[1] This is an application for leave to appeal against an order of the
Competition Appeal Court (the CAC) in October 2002,1 dismissing an
appeal from orders of the Competition Tribunal (the Tribunal) made
on 27 March 2001 and on 30 November 2001.  The parties’ dispute
concerns the importation from the United States of soda ash (an
ingredient essential to the manufacture inter alia of glass).  The
applicant (Ansac) is a non-stock, non-profit Delaware corporation
formed by five United States soda ash producers in the early 1980s

1 American Natural Soda Ash Corporation v Competition Commission 2003 (5) SA 633 (CAC) (Malan
AJA, Davis JP and Jali JA concurring).

to export their product abroad.  (The second applicant is Ansac’s
local distributor: we refer to it with Ansac.)  Within the United States,
the creation of Ansac and its operations would have been illegal
under the 1890 Sherman Antitrust Act,2 but in 1918 Congress
granted export-directed cartels exemption from the antitrust
legislation.
[2] The question the application raises is to what extent Ansac’s
activities run afoul of the South African Competition Act 89 of 1998
(the Act).  That question was raised formally in October 1999, when
the second respondent, a Botswana producer of soda ash (Botash),
and its South African distributor, the third respondent (Chemserve),
launched an application for interim relief against Ansac before the
Tribunal.  (We refer to those respondents together as Botash.)

2 Sherman Act, 15 USC § 1: ‘Every contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is
declared to be illegal.  Every person who shall make any contract or engage in any combination or
conspiracy hereby declared illegal shall be deemed guilty of a felony, and, on conviction thereof, shall
be punished by fine not exceeding $10 000 000 if a corporation, or, if any other person, $350 000, or
by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.’
§ 2 makes monopolizing trade a felony.

Botash charged that Ansac was contravening the Act’s prohibition on
restrictive horizontal practices.  These are found in s 4:
(1) An agreement between, or a concerted practice by, firms, or a decision by an
association of firms, is prohibited if it is between parties in a horizontal
relationship and if 3 –
(a) it has the effect of substantially preventing, or lessening, competition in a
market, unless a party to the agreement, concerted practice, or decision can
prove that any technological, efficiency or other pro-competitive gain resulting
from it outweighs that effect; or
(b) it involves any of the following restrictive horizontal practices:
(i) directly or indirectly fixing a purchase or selling price or any other trading
condition;
(ii) dividing markets by allocating customers, suppliers, territories, or specific
types of goods or services; or
(iii) collusive tendering.’

The Act defines ‘horizontal relationship’ as ‘a relationship between
competitors’ (s 1).
[3] The parties soon found themselves caught in a procedural bog.  The
details have already been reported4 and we mention only the
essential features.  Two months after Botash’s opening salvo, Ansac
launched an application against Botash, charging predatory pricing in

3 Section 3 of Act 39 of 2000 amended the Act by moving the italicised words, which had been in sub-
para (a), to the end of the opening portion of the provision.  When the proceedings commenced the Act
was in its unamended form, but nothing turns on this and we give the post-2000 wording.
4 American Natural Soda Ash Corporation v Competition Commission 2003 (5) SA 633 (CAC);
American Natural Soda Ash Corporation v Competition Commission 2003 (5) SA 655 (SCA).

violation of s 8 of the Act.5  The parties withdrew their contesting
challenges when the Competition Commission (the Commission)
(which chapter 4 of the Act gives extensive power to initiate anti-
competitive measures and investigate and evaluate alleged
contraventions),6 itself concluded that Ansac was engaging in
prohibited conduct and filed a complaint with the Tribunal, only to
withdraw it and file a fresh referral two months later.  It was these
proceedings that Botash joined when it secured the Tribunal’s leave
to serve an intervening complaint on Ansac.
[4] But the bog only deepened, because a year after the first application
was launched, the parties were unable to agree on a statement of
facts for the Tribunal, and in January 2001 Ansac applied for the
complaint to be dismissed on various grounds that are not now

5 Section 8 of the Act prohibits ‘abuse of dominance’, making it unlawful for a dominant firm (defined
in s 7) to charge an excessive price to the detriment of customers, and related exclusionary acts.
6 In terms of s 21(1)(g) of the Act the Competition Commission may refer matters to the Competition
Tribunal and appear before the Tribunal.

relevant.  In the reasons the Tribunal gave for its ruling made on 27
March 2001, it recorded that at a ‘pre-hearing’ it convened in relation
to those issues, it requested the parties to prepare argument on the
question, ‘does s 4(1)(b) allow for an efficiency defence’ because
‘the conclusion would determine whether this evidence could be led
at the hearing’.  (It seems that the evidence that the Tribunal had in
mind was evidence that Ansac wished to lead to establish that it was
a ‘legitimate cost-saving efficiency-producing joint venture’, whose
savings enabled it to market North American soda ash in Southern
Africa more cheaply than local competitors.)  On 27 March 2001 the
Tribunal rejected Ansac’s objections to the complaint, and also ruled
that ‘evidence concerning any technological, efficiency, or other pro-
competitive gain that might be admissible in terms of section 4(1)(a)
is inadmissible in terms of section 4(1)(b).’  We deal more fully below
with the meaning and effect of that ruling.

[5] Eight months later, in a second ruling delivered on 30 November
2001, the Tribunal dismissed two ‘exceptions’ that Ansac had taken
to the complaint.  The two points concerned the scope of the Act’s
territorial application; and the question whether Botash had legal
standing to become a complainant when its complaint made no
allegation that it had suffered particular harm from Ansac’s activities.
The Tribunal rejected all of Ansac’s contentions.
[6] These three rulings – on the inadmissibility of certain evidence
regarding an alleged s 4(1)(b) contravention; on the scope of the
Act’s application; and on Botash’s standing – the CAC upheld in
dismissing Ansac’s appeal.7  An attempt by Ansac to appeal directly
to this court without obtaining the CAC’s leave foundered when this
court held that such leave was required.8  (We refer to this court’s
judgment in the leave to appeal application as ‘Ansac (1)’).  Leave

7 American Natural Soda Ash Corporation v Competition Commission 2003 (5) SA 633 (CAC).
8 American Natural Soda Ash Corporation v Competition Commission 2003 (5) SA 655 (SCA).

was then sought from, and refused by, the CAC, resulting in the
present petition for leave to appeal, which the judges who
considered it referred for oral argument with the direction that the
parties should be prepared, if called upon to do so, also to address
the merits of the proposed appeal.9
[7] Before we deal with the substance of the application, it is necessary
to consider this court’s jurisdiction to hear the appeal.

This court’s jurisdiction to hear the appeal
[8] Section 62 of the Act deals with appeals from the CAC.  It specifies
first matters in respect of which the Tribunal and CAC ‘share
exclusive jurisdiction’ (s 62(1)).  These include (subject to limited
exceptions) the interpretation and application of restrictive horizontal
practices (s 62(1)(a)).  Section 62(2) then confers additional (non-

9 Supreme Court Act 59 of 1959 s 21(3)(c)(ii).

exclusive) jurisdiction on the CAC over the question whether action
or proposed action by the Commission or Tribunal is within their
respective jurisdictions (s 62(2)(a)); any constitutional matter arising
in terms of the Act (s 62(2)(b)); and the question whether a matter
falls within the Tribunal’s or the CAC’s exclusive jurisdiction (s
62(2)(c)).
[9] Section 62(3) is the critical provision.  It provides that the jurisdiction
of the CAC –
‘(a) is final over a matter within its exclusive jurisdiction in terms of subsection
(1); and
(b) is neither exclusive nor final in respect of a matter within its jurisdiction in
terms of subsection (2).’

Section 62(4) provides expressly that, subject to leave to appeal
being obtained (s 63), an appeal from the CAC lies to this court or
the Constitutional Court (the CC) ‘in respect of a matter within its
jurisdiction’ in terms of s 62(2) – in other words, in respect of matters

over which the CAC has non-exclusive jurisdiction, including
constitutional questions.
[10] As in the case of the relevant sections of the Labour Relations Act
66 of 1995,10 these provisions undoubtedly constitute a statutory
endeavour to vest partial final appellate jurisdiction in the CAC.  The
effect of s 62(3) regarding appeals to the CC is uncontroversial,
since it allows appeals on ‘any constitutional matter’, and under the
Constitution the CC’s sole jurisdiction is in such matters.11  No
impairment of constitutionally derived appellate power is thus
apparent.  More difficult is the Act’s seeming attempt to limit appeals
to this court.

10 See the judgment of this court in National Union of Metalworkers of South Africa v Fry’s Metals
(Pty) Ltd (case no 026/03, delivered on Tuesday 12 April 2005) paras 9-33.
11 Constitution s 167(3)(b): CC has jurisdiction ‘only’ in ‘constitutional matters, and issues connected
with decisions on constitutional matters’.

[11] In National Union of Metalworkers v Fry’s Metals,12 which was
argued before the same panel in the same week as the present
application, we held that –
11.1 Any legislative endeavour to vest final appellate jurisdiction in an
appeal court other than this court has to be judged in the light of the
appellate structures created by the Constitution;
11.2 The Constitution provides not only that this court ‘may decide
appeals in any matter’, but that it ‘is the highest court of appeal
except in constitutional matters’ (s 168(3)): this provision
superseded both the statutory and common law sources of this
court’s jurisdiction, and there can be no reason to give it less than
its full meaning in relation to both constitutional and non-
constitutional matters;

12 Judgment of this court dated Tuesday 12 April 2005, paras 5-33.

11.3 The Constitution’s typology of final appellate courts is exhaustive: it
does not envisage other final appeal courts with authority equivalent
to that of this court and of the CC;
11.4 This court’s appellate powers do not derive from any particular
statute, but from the Constitution itself;
11.5 The Constitution does not envisage that legislation can assign the
jurisdiction of this court piecemeal or wholesale to other specialist
tribunals with final appellate jurisdiction;
11.6 The legislature may create rights that are not appealable; but once
appellate jurisdiction falls to be exercised, this court is empowered
to exercise it finally (apart from the CC), since final appellate
tribunals with authority similar to this court are not envisaged in the
Constitution.
[12] These conclusions govern the present matter.  They lead to a
similar outcome.  The issue in NUMSA v Fry’s Metals was the

appellate structures created by the Labour Relations Act 66 of 1995
(the LRA).  The relevant provisions of the LRA are replete with
admonitions that they are ‘subject to the Constitution’.  This particular
phraseology is not manifest in the Act.  But its absence is of no
significance.  This is for two reasons.  First, s 1(2)(a) of the Act
provides expressly that the Act ‘must be interpreted –
‘in a manner that is consistent with the Constitution’.
That governs the entire Act and each of its provisions.  Second, it is
a principle of statutory interpretation – by now above debate or
citation of authority – not only that all legislation must be interpreted
in the light of the Constitution, but that ‘legitimate interpretive aids’
must, where possible, be employed to avoid a finding of
unconstitutionality.  Only if this is not possible should a statutory
provision be found unconstitutional.13

13 See National Coalition for Gay and Lesbian Equality v Minister of Home Affairs 2000 (2) SA 1

[13] In accordance with the Act’s own injunction, it must be interpreted
consistently with the Constitution.  In accordance with sound
constitutional hermeneutics, its provisions should if possible be
interpreted so as not to render them unconstitutional.  This result is
attained if the appellate structures the Act creates are read in
conjunction with and in conformity with those the Constitution
establishes.  Those structures must, it follows, be read as adjunct to,
and not exclusionary of, the Constitution’s appellate structures.  No
express provision in the Act prevents this, and constitutional principle
requires it.
[14] The apparent attempt to vest exclusive jurisdiction in the CAC in
respect of the interpretation and application of chapters 2, 3 and 5 of
the Act can and must thus be read so as to be consistent with the
Constitution, and the finality conferred on the CAC by s 62(3)(c) is

(CC) paras 23-24 and particularly National Director of Public Prosecutions and another v Mohamed
NO 2002 (4) SA 843 (CC) para 33.

thus subordinate to the appellate powers the Constitution confers on
this court.  It follows that this court has jurisdiction to consider the
substance of the application for leave to appeal.
[15] This conclusion does not involve a finding of unconstitutionality,
but derives from an application of the Constitution’s provisions to the
appellate structure created by the Act, and from following the Act’s
own injunction as to its interpretation.

The test for leave to appeal
[16] The Act’s provision dealing with leave to appeal, s 63, covers only
the right to appeal from the CAC in terms of s 62(4).  In other words,
the statute’s leave to appeal mechanism deals only with appeals
from matters where the CAC exercises its non-exclusive powers.
Section 63 does not deal with the right to appeal to this court

conferred by the Constitution, in conjunction with which, as we have
held, the Act’s own appellate structures must be interpreted.
[17] In Ansac (1), the applicants claimed that the Act’s provisions
conferring
exclusive
final
jurisdiction
on
the
CAC
were
unconstitutional, and thus that they were entitled to note an appeal
directly to this court without seeking leave from the CAC.  This court
refused the order.  The basis for doing so was that ‘even if the
applicants’ attack on the constitutionality of the attempted
jurisdictional ouster succeeds, the need for leave to appeal will
remain and will extend, on the excision of the wording complained of,
to all appeals from the Competition Appeal Court’.14
[18] It was not argued that, nor did the court consider whether, the
Act’s appellate provisions should be interpreted consistently with the
Constitution in a manner that avoided the need for any excision on

14 2003 (5) SA 655 (SCA) para 16.

the ground of unconstitutionality.  Our present finding that the
provisions can be so read thus raises a question that was not before
the court in Ansac (1), namely what procedure should govern an
appeal to this court on a matter that the Act’s express leave to
appeal provision does not cover.
[19] In NUMSA v Fry’s Metals15 we held that –
19.1 this court’s inherent constitutional power to protect and regulate its
own process16 empowers it to require applicants for leave to appeal
from a specialist appellate tribunal to demonstrate, in addition to a
reasonable
prospect
of
success,
that
there
are
‘special
circumstances’ indicating that a further appeal should lie;

15 Judgment of  12 April 2005, paras 34-44.
16 Constitution s 173: ‘The Constitutional Court, the Supreme Court of Appeal and the high courts
have the inherent power to protect and regulate their own process, and to develop the common law,
taking into account the interests of justice’.

19.2 the benefit of institutional expertise, and the imperative of
expedition, strongly indicate that the path to this court from a
specialist tribunal should not be untrammelled;
19.3 leave to appeal is necessary to protect the process of this court
against abuse by appeals that have no merit, and it is in the
interests of justice that the requirement of special leave be
imposed, for if appeals were allowed without trammel, the
expeditious resolution of disputes would be unconscionably
delayed, and the justified objects of the statute impeded.
[20] For the reasons set out in NUMSA, we come to the same
conclusions here.  Leave to appeal from this court is required before
an appeal may be prosecuted from the CAC on the matters set out in
s 62(1), and special circumstances must exist before this court will
grant leave.

[21] As we observed in NUMSA (para 43), the procedures for applying
for leave to appeal, and the factors relevant to obtaining special
leave, are well-established.17  The criterion for the grant of special
leave to appeal is not merely that there is a reasonable prospect that
the decision of the CAC will be reversed – but that the applicants can
establish ‘some additional factor or criterion’.  One is where the
matter, though depending mainly on factual issues, is of very great
importance to the parties or of great public importance.  In applying
this criterion, this court must be satisfied, notwithstanding that there
has already been an appeal to a specialist tribunal, and that the
public interest demands that disputes about competition issues be
resolved speedily, that the matter is objectively of such importance to
the parties or the public that special leave should be granted.

17  They are set out in the Supreme Court Act 59 of 1959 and in the decisions of this court, including
Westinghouse Brake & Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd 1986 (2) SA 555 (A) 564H-
565E.

[22] We emphasise once more that the fact that applicants have
already had a full appeal before the CAC will normally weigh heavily
against the grant of leave.  And the demands of expedition add
further weight to that.
[23] We now deal with the merits of the application.

The territorial application of the Act
[24] Section 3(1) of the Act provides that it applies (subject only to
collective bargaining-related exceptions) ‘to all economic activity
within, or having an effect within, the Republic’.  Ansac’s argument
was, and is, that the ‘effect’ the statute contemplates must be an
adverse effect, whose nature must be established before it can be
said that the Act applies.  Because neither the Commission nor
Botash in its intervention alleged that the Ansac agreement has
negative or deleterious effects within the Republic, Ansac urged that

the complaint be dismissed.  The Tribunal rejected this contention.
The CAC gave it comprehensive consideration, but also rejected it.18
[25] Before us, Ansac did not dispute that the statutory phrase ‘an
effect’ was wide and unqualified.  But it persisted in the contention
that s 3(1), when placed in its proper context and purposively
interpreted, had to be read as bringing only anti-competitive activity
within its purview.  If, therefore, Ansac urged, the Tribunal examined
the Ansac membership agreement in the context of evidence relating
to its competitive gains and found that its effect was pro-competitive,
it should decline entirely to assume statutory jurisdiction over
Ansac’s activities since this would best promote the Act’s objectives.
[26] The argument flies in the face of the plain meaning of the statute’s
wording.  ‘Effect’ is not only neutral, but extremely wide.  Standing
without qualification, it necessarily embraces both the benign and the

18 2003 (5) SA 633 (CAC) paras 7-21.

malign.  It is hard to avoid the conclusion that this is deliberate.  The
Act’s language elsewhere is pregnant with words and concepts that
convey the negative effects of what it sets out to prohibit.  The
absence of any such terminology in the application provision must be
accorded its proper significance.
[27] Ansac’s argument moreover requires that words be added to s
3(1) when there is no discernible justification for doing so.  Well-
known canons of statutory interpretation inhibit the court’s power to
do this.  Words cannot by implication be read into a statute unless
the implication is necessary in the sense that without it effect cannot
be given to the enactment as it stands.19  Not only is there no evident
justification for the super-addition Ansac’s argument requires, but the
statute can be given fully coherent effect without it.

19 Rennie NO v Gordon NO 1988 (1) SA 1 (A) 22F, per Corbett CJ, adopted in Bernstein v Bester
1996 (2) SA 751 (CC) para 105, per Ackermann J.

[28] Ansac’s contention moreover has the anomalous consequence
that, if it were adopted, the Tribunal and the Commission would have
no jurisdiction to conduct any of their activities until they had
established that the economic activity at issue had a negative or
deleterious effect within the Republic.  A long contestation about the
statute’s applicability would ensue before the Act’s institutions could
assume jurisdiction.  That, manifestly, is to approach the structure
and operation of the Act, and the functioning of its institutions, from
the wrong end.
[29] The correct approach – which the wide and unqualified wording of
s 3(1) requires – is that all effects are captured, but that the statute
enjoins only those that are adverse.  We agree with the CAC, for the
reasons fully set out in its judgment, that the ‘effect’ the Act
contemplates must be such that it falls within the regulatory

framework created by the statute, whether anti-competitive or not.
This inquiry, as Malan AJA pointed out –
‘does not involve a consideration of the positive or negative effects on
competition in the regulating country, but merely whether there are sufficient
jurisdictional links between the conduct and the consequences. … The question
is … one relating to the ambit of the legislation: the Act in the matter under
consideration, its regulatory “net”, concerns not only anti-competitive conduct but
also conduct the import of which still has to be determined.’20

Ansac’s contention must for these reasons be rejected.

The intervenor’s legal standing
[30] The CAC found that even though Botash did not allege that it had
suffered individual harm because of the performance of the Ansac
agreement, it had the standing necessary to seek an order against
Botash interdicting the continued performance of that agreement.
The CAC’s conclusion was based on a careful analysis of the Act’s
provisions.21  The CAC gave particular weight to the Act’s complaint

20 2003 (5) SA 633 (CAC) para 18.
21 2003 (5) SA 633 (CAC) paras 2-5.

procedure,22 which provides that, in addition to the Competition
Commissioner, ‘any person’ may submit a complaint against an
alleged prohibited practice to the Commission (s 49B(2)(b)),
whereupon the Commissioner ‘must direct an inspector to investigate
the complaint as quickly as practicable’ (s 49B(3)).  The CAC also
gave weight to the fact that a complainant may apply to the Tribunal
for interim relief (s 49C).
[31] The CAC took further into account in deciding that Botash had
standing that the statute casts the right to participate in hearings of
the Tribunal widely.  The complainant has this right not only if it
referred ‘the complaint’ to the Tribunal (s 53(a)(ii)(aa)), but also if in
the opinion of the presiding member of the Tribunal the
complainant’s interest is not adequately represented by another
participant (s 53(a)(ii)(bb)).

22 We refer, since it makes no material difference, to the provisions of the Act as amended by Act 39
of 2000.

[32] It is true, as Ansac pointed out on appeal, that s 53 specifically
sets out the participation rights of the complainant, and that one of
the factors the statute requires the Tribunal to consider in granting
interim relief is ‘the need to prevent serious or irreparable harm’.
[33] It does not follow from these facets of the statute, however, that an
intervening party must (as Ansac urged us to find) show the ordinary
common law prerequisites for obtaining relief.  As the CAC rightly
pointed out, the orders the Tribunal can make in response to the
referral of a complainant are ‘of a limited kind to be made in the
public interest’.  From this the CAC inferred that a complainant need
not show that it has suffered particular damage.23
[34] We agree with the CAC’s conclusion.  Ansac’s argument seeks to
conclude from the limited express rights the Act confers on a
participant in a hearing that the Act requires an intervenor to comply

23 2003 (5) SA 633 (CAC) para 4.

with the strict common law requisites for interdictory relief; but this is
to overlook the significance of the fact that a broad ambit of
participatory rights is created in the first place.  Ansac likewise
underscores that an applicant, to obtain interdictory relief under the
Act, must place on the scale the risk to it of ‘serious or irreparable
damage’; but ignores the fact that obtaining such relief may not be
an intervenor’s sole interest in the proceedings.
[35] We see no reason to circumscribe narrowly the right to intervene
in proceedings under the Act.  We therefore conclude that the
absence of a claim of particular damage on the part of Botash is no
bar to its title to claim relief as an intervenor.

Admissibility of evidence about the nature and effect of the
agreement

[36] The greatest part of the parties’ dispute, and of the argument
before this and the other forums, related to the ruling concerning the
admissibility of evidence.  What complicates the matter is the lack of
consensus about the effect of the Tribunal’s ruling.
[37] It is clear from its juxtaposition with s 4(1)(a) that s 4(1)(b) is aimed
at imposing a ‘per se’ prohibition: one, in other words, in which the
efficiency defence expressly contemplated by sub-para (a) cannot be
raised.  The reason for the blunt terms of sub-para (b) is plain.
Price-fixing is inimical to economic competition, and has no place in
a sound economy.  Adopting the language of United States anti-trust
law, price-fixing is anti-competitive per se.  All countries with laws
protecting economic competition prohibit the practice without more.
The fact that price-fixing has occurred is by itself sufficient to brand it
incapable of redemption.  The Tribunal has found that once the
conduct complained of is found to fall within the scope of the

prohibition, that is the end of the enquiry.  There is no potential for a
further enquiry as to whether the conduct is justified (an enquiry of
the kind that is envisaged by s 4(1)(a)), and evidence to that end is
not relevant and thus inadmissible.  It is this finding that the
Competition Appeal Court upheld; and it is clearly correct.  Indeed,
none of the parties to the appeal suggests otherwise.
[38] Yet there is no consensus between the parties as to whether the
Tribunal’s ruling was limited to that. While the respondents contend
that the Tribunal’s ruling upheld by the CAC only excludes evidence
that is tendered to establish an ‘efficiency defence’ of the nature
contemplated by s 4(1)(a) (an outcome not controversial before us),
Ansac submits that the ruling goes much further.  It contends that the
Tribunal has also precluded evidence that is relevant to
‘characterising’ its conduct and thus to determining whether or not it

falls within the scope of the legislative prohibition in sub-para (b) at
all.
[39] That lack of consensus is not altogether surprising because
Ansac’s argument before the Tribunal, as recorded in its heads of
argument (and repeated before us) was not directed to the question
whether conduct prohibited by s 4(1)(b) could be justified by
evidence.  It was directed rather to the question whether evidence
was admissible to determine whether Ansac’s conduct is prohibited
at all: in other words, whether the Ansac agreement constitutes
price-fixing as prohibited by the Act.  Only in the alternative did
Ansac submit that, if its conduct did not fall foul of s 4(1)(b), but was
sought to be brought within the separate prohibition in s 4(1)(a)
(which the Commission has not yet tried to do), evidence would be
admissible to justify its conduct as envisaged by that sub-paragraph.

[40] The Tribunal appears to us to have elided these two separate
submissions and thereby misdirected its enquiry.  It seems to have
been of the view that Ansac sought to advance the evidence in order
to establish that its conduct, though falling within s 4(1)(b), is
nevertheless justifiable by criteria of the kind contemplated by s
4(1)(a) when that was not Ansac’s contention.  That the Tribunal’s
ruling posits that no evidence except the terms of the agreement in
question is relevant (and thus admissible) to the question whether s
4(1)(b) has been contravened is evident from the following passage
from its reasons:
‘[T]hose who set themselves the task of impugning agreements thus described
in Section 4(1)(b) do not have to establish any deleterious impact on
competition. All that has to be established is the existence of an agreement
embodying the features detailed in Section 4(1)(b)(i)-(iii).’  (Emphasis added.)

Moreover, the terms of its ruling are sufficiently expansive to exclude
all evidence relating to the purpose and effect of the agreement.  Its
ruling (which we repeat for convenience) was that:

‘On the argument we requested on section 4(1)(b) we find that evidence
concerning any technological, efficiency, or other pro-competitive gain
that might be admissible in terms of section 4(1)(a) is inadmissible in
terms of section 4(1)(b).

In the reasons it gave for its later ruling of 30 November 2001, the
Tribunal explained its earlier ruling as follows:
‘The panel held that Section 4(1)(b) required no showing of anti-
competitive effect and that it permitted of no efficiency defence [the
defence allowed for by s 4(1)(a) – the mere fact of the agreement was
sufficient to condemn it.’

This lends support to Ansac’s contention that the ruling was
intended to exclude all evidence except the terms of the
agreement.
[41] The Tribunal’s ruling, particularly in the context of the reasons it
gave, is open to the construction that (perhaps inadvertently) it has
precluded evidence even if the object of advancing it is to
demonstrate that Ansac’s conduct does not fall within the prohibition
in s 4(1)(b) at all. To that extent its ruling was in our view premature

and therefore incorrect.  This ruling the CAC endorsed.  In this in our
view it fell into the same error.
[42] But even if the ruling is no more than ambiguous, and was not
intended to have that effect, it is clearly desirable that there should
be clarity on the issue, bearing in mind the uncertainty that clearly
exists, and the enormous expense this uncertainty has already
entailed.
[43] We pointed out earlier that an agreement that involves, amongst
other things, price-fixing, is prohibited by s 4(1)(b), and nothing can
be advanced to justify it.  But when has prohibited price-fixing
occurred?  This is not always simple to determine.  In the United
States the condemnation of price-fixing arises from judicial

interpretation of s 1 of the Sherman Act.24  In the European Union, in
Australia, and in this country it is decreed by legislation.
[44] In the United States the enquiry is approached by ‘characterising’
the conduct complained of to determine whether it constitutes that
form of conduct that the courts have through case precedents
labelled ‘price-fixing’ but have not comprehensively defined.  In this
country, where the prohibition is decreed by legislation rather than by
judicial intervention, the prohibited form of conduct must be
established by construing s 4(1)(b).
[45] Once the ambit of sub-para (b)’s prohibition has been established
the enquiry can move to whether or not the conduct in issue falls
within the terms of the prohibition.  That is a factual question that
must be answered by recourse to relevant evidence.

24 Quoted in note 2 above.

[46] There is in principle no reason why the enquiry should not be
conducted in reverse.  The enquirer might choose first to identify the
true character of the conduct that is the subject of the complaint, and
only then turn to whether the conduct (so characterised) constitutes
price-fixing as contemplated by s 4(1)(b).  (This is how the enquiry is
conducted in the United States, though there the two elements tend
to be elided, because the scope of the prohibition is itself a matter of
judicial rather than legislative determination.)
[47] Whichever approach is adopted, the essential enquiry remains the
same.  It is to establish whether the character of the conduct
complained of coincides with the character of the prohibited conduct:
and this process necessarily embodies two elements. One is the
scope of the prohibition: a matter of statutory construction.  The other
is the nature of the conduct complained of: this is a factual enquiry.

In ordinary language this can be termed ‘characterising’ the conduct
– the term used in the United States, which Ansac has adopted.
[48] Price-fixing necessarily contemplates collusion in some form
between competitors for the supply into the market of their respective
goods with the design of eliminating competition in regard to price.
That is achieved by the competitors collusively ‘fixing’ their
respective prices in some form. (By setting uniform prices, or by
establishing formulae or ratios for the calculation of prices, or by
other means designed to avoid the effect of market competition on
their prices.)
[49] But while price fixing inevitably involves collusive or consensual
price determination by competitors, it does not follow that price fixing
has necessarily occurred whenever there is an arrangement
between competitors that results in their goods reaching the market
at a uniform price.  The concept of ‘price fixing’, both in lay language

and in the language that the Act uses, may, for example, be limited
to collusive conduct by competitors that is designed to avoid
competition, as opposed to conduct that merely has that incidental
effect.
[50] As the majority of the United States Supreme Court pointed out in
Broadcast Music, Inc v Columbia Broadcasting System, Inc 441 US
1 (1978) at 9:
‘Literalness [when interpreting the phrase ‘price-fixing’] is overly simplistic
and often overbroad.  When two partners set the price of their goods or
services they are literally “price fixing,” but they are not per se in violation
of the Sherman Act…Thus, it is necessary to characterise the challenged
conduct as falling within or without that category of behaviour to which we
apply the label “per se price fixing.”  That will often, but not always, be a
simple matter.’

[51] What is important for the present proceedings is that the nature of
the prohibiting source in this country – a legislative injunction against
a certain form of conduct – makes it impossible to conclude the
enquiry into whether particular conduct is prohibited without at some
stage determining the scope of the legislative prohibition.  And

unless that determination is made, it is not possible to predict what
evidence will be relevant or irrelevant to the factual part of the
enquiry.
[52] There can be little doubt that an agreement by competitors that
has as its specific design the elimination of price competition (the
essential characteristic of a cartel)25 constitutes direct price-fixing as
contemplated by the statute.  Where competitors have reached an
agreement to set uniform prices, without more, all that might be
required in order to establish a transgression of s 4(1)(b) is to
produce their agreement, because its very terms may admit of no
conclusion but that it was designed to eliminate price-competition.
[53] But indirect price-fixing presents greater complexity.  It is not
difficult to envisage conduct by competitors that is designed to
eliminate price-competition indirectly, by shifting the supply of

25 Concise Oxford English Dictionary: ‘an association of manufacturers or suppliers formed to
maintain high prices and restrict competition’.

competitors’ goods to a separate entity that is under their control,
and which purports to set the price for the goods.  If that separate
entity is no more than the alter ego of the individual competitors in
association, who are in truth consensually fixing their prices through
the medium of that alter ego, then no doubt the façade behind which
they are acting can be stripped away to reveal the reality of the
arrangement (collusion by two or more competitors designed to
ensure that their respective goods reach the market at non-
competing prices). 26
[54] But not every arrangement between competitors entailing the
ultimate supply of goods necessarily falls into that category.  It is, for
instance, not difficult to envisage a bona fide joint venture that is
embarked upon by competitors for a legitimate purpose, through the
vehicle of a separate entity, which must necessarily set a price for

26 Compare 91/301/EEC: Commission Decision of 19 December 1990, relating to a proceeding under
Art 85(1) of the EEC Treaty (IV/33.016 – Ansac), Official Journal L 152, 15/06/1001 p 0054 – 0060.

goods that it supplies (emanating from the competitors) merely as an
incident to the pursuit of the joint venture.
[55] There is in our view no a priori reason to assume that such an
arrangement constitutes prohibited price-fixing as contemplated by s
4(1)(b) of the statute.  (We emphasise that we make no finding as to
whether or not it is.)  If, on a proper construction of s 4(1)(b), such an
arrangement does not constitute prohibited price-fixing, then it might
well be necessary to enquire beyond the mere terms of the
competitors’ agreement in order to establish whether it is or is not
merely a sham: to establish, in other words, whether the vehicle for
the joint venture is in truth a single entity supplying its own goods to
the market (albeit that the source of the goods is the competitors) for
which a price must necessarily be set by the joint venture vehicle; or
whether the vehicle for the joint venture is merely a cloak for what is

in truth collusive action designed to ensure that the goods of
competitors are supplied to the market at non-competitive prices.
[56] What is critical to the present application is that the determination
of what evidence is admissible depends on the scope of the
legislative prohibition. Until there is clarity on what the legislation
prohibits (and on what is not prohibited) it is premature to rule on
what evidence might or might not be relevant and admissible to
determine whether the prohibited conduct has occurred.
[57] The parties are agreed that the Tribunal has yet to determine that
issue.  The Tribunal has not yet in express terms construed s 4(1)(b)
and established its scope (nor what falls outside its scope). Nor is
the scope of the prohibition in our view self-evident.  The
Competition Commission, in its submissions before us, has
recognised some of the absurdities that would follow from a
construction of s 4(1)(b) that prohibits all consensual conduct by

competitors that ultimately produces a uniform price for goods
emanating from them.  The Commission has for this reason been
constrained to read words into the statute to avoid the absurdities.
[58] If the statute prohibits all consensual conduct amongst competitors
that has the effect of creating uniform prices for their goods in the
market, then the only evidence relevant to the enquiry is no doubt
evidence that establishes the existence of a consensus having that
effect.  But if the prohibition is more restricted, then plainly the terms
of the agreement alone might not be decisive.
[59] We are not called upon in this application to give meaning to the
prohibition and indeed it is not permissible for us to do so.  The
jurisdiction of this court, as we have pointed out, is confined to
considering appeals, which contemplates the existence of an order
or ruling by another court on the issue under appeal.

[60] We do not suggest that the evidence Ansac seeks to lead is
necessarily admissible.  We hold only that it is premature at this
stage to make a finding as to what evidence is or is not admissible,
so long as the characteristics of the prohibited conduct have not
been established by construing the statute.  It is for the Tribunal to
consider, in the manner and in accordance with such procedure as it
may decide, to what extent evidence may be admissible to establish
whether the Ansac agreement falls within the prohibition contained in
s 4(1)(b).
[61] To the extent that the Tribunal’s ruling is confined to precluding
evidence purporting to justify conduct prohibited by s 4(1)(b) its
finding is correct, and the CAC correctly dismissed the appeal
against it.  But to the extent that its ruling precludes evidence to
‘characterise’ the conduct in issue in order to determine whether or

not the s 4(1)(b) prohibition covers that conduct at all, its ruling was
premature and thus incorrect and is liable to be set aside.
[62] Our findings that the CAC’s conclusions relating to jurisdiction and
standing are unassailable clearly constitute a sufficient basis on
which to refuse leave to appeal on those issues.  Our finding relating
to the remaining issue (the ruling on the admissibility of evidence),
however, is of sufficient importance, both for the proper
determination of the present dispute and for the future application of
s 4(1)(b), to justify our intervention to correct the Tribunal’s findings
insofar as it is necessary to do so.
[63] As for the costs of the application, Ansac has failed in its
contentions regarding the territorial application of the Act, and
Botash’s legal standing.  But it has had some success regarding
what may be seen as the parties’ principal dispute – the admissibility
of evidence to characterise the Ansac agreement and Ansac’s

projected activities within South Africa.  The parties are therefore
invited to submit written argument as to what costs order would be
most appropriate in this court and in the forums below.
[64] There is a remaining observation.  The present proceedings
underline the need for care to be taken when isolating issues and
dealing with them separately from the remaining issues.  We repeat
what was said by this court in Denel (Pty) Ltd v Vorster27 in a related
context:
‘[I]t is appropriate to make a few remarks about separating issues. Rule
33(4) of the Uniform Rules – which entitles a court to try issues separately
in appropriate circumstances – is aimed at facilitating the convenient and
expeditious disposal of litigation. It should not be assumed that that result
is always achieved by separating the issues. In many cases, once
properly considered, the issues will be found to be inextricably linked even
though at first sight they might appear to be discrete. And even where the
issues are discrete the expeditious disposal of the litigation is often best
served by ventilating all the issues at one hearing, particularly where there
is more than one issue that might be readily dispositive of the matter. It is
only after careful thought has been given to the anticipated course of the
litigation as a whole that it will be possible properly to determine whether it
is convenient to try an issue separately. But where the trial court is
satisfied that it is proper to make such an order – and in all cases it must
be so satisfied before it does so – it is the duty of that court to ensure that
the issues to be tried are clearly circumscribed in its order so as to avoid
confusion… [A]nd when issuing its orders a trial court should ensure that
the issues are circumscribed with clarity and precision.’

27  2004 (4) SA 481 (SCA) para 3, per Nugent JA.

[65] We make the following order:
1. The application for special leave to appeal against the order of the
Competition Appeal Court insofar as it dismissed the appeal
against the findings of the Tribunal relating to jurisdiction and
standing is refused.
2. The application for special leave to appeal against the order of the
Competition Appeal Court insofar as it dismissed the appeal
against the ruling of the Tribunal relating to the admissibility of
evidence is granted.
3. The appeal succeeds to that extent and the order of the
Competition Appeal Court is set aside.  In its place there is
substituted:
‘(a)
The Tribunal’s ruling that evidence is not admissible to
justify conduct falling within the prohibition contained in s
4(1)(b) stands.

(b) The Tribunal’s ruling, to the extent that it excludes all
evidence relating to the nature, purpose, and effect of the
Ansac agreement, is set aside.’
4. The parties are invited to submit written argument as to the
appropriate costs order, in this court and in the courts below.

E CAMERON & RW NUGENT

JUDGES OF APPEAL

CONCUR:

MPATI DP
CONRADIE JA
COMRIE AJA