EXCLUSIVITY CLAUSES – COMPLAINT BY MASSMART
On 11 June 2015, Massmart referred its complaint against Shoprite, Pick ‘n Pay and Spar to the Competition Tribunal following the Commission’s decision to ‘non-refer’ the matter due to the Grocery Retail Sector Market Inquiry.
SAPOA has been cited as fourth respondent in the proceedings. Massmart states that SAPOA is cited in the complaint merely for the ‘interest’ that it and its members have in the matter. Importantly, no relief is sought against SAPOA or any of its members.
However, if Massmart is successful in its complaint, SAPOA’s members may well be affected in respect of new lease agreements which are to be negotiated or concluded and existing lease agreements which contain exclusivity provisions.
Interlocutory procedural applications
Exception Applications – Shoprite, Spar and Pick ‘n Pay
During August 2015, Shoprite, Spar and Pick ‘n Pay each filed a pleading known as an ‘exception’ to the Massmart complaint. The exceptions set out argument as to why the substance of the complaint referral to the Tribunal by Massmart does not meet the strict procedural and content requirements to allow the respondents to deal with the complaint.
In summary, Shoprite, Spar and Pick ‘n Pay have asked that the Tribunal throw out the complaint, alternatively to direct that the points raised of defective pleading must be remedied by Massmart before the matter proceeds further.
In a combined answer to all three exceptions, filed on 16 September 2015, Massmart contends that the exceptions are in respect of matters of particularity and detail, and it is not required or appropriate to decide these issues at this stage of the proceedings.
The Tribunal will ultimately decide whether the complaint referral meets the requirements of particularity and detail required by the Competition Act, and/or stipulate what further is required in order for the respondents to answer the case before them.
Stay Application – Spar
On 21 December 2015, Spar filed an application to stay proceedings. The relief sought by Spar is to stay (suspend) the Massmart complaint proceedings pending finalisation of the Grocery Retail Sector Market Inquiry.
Spar argues that allowing the Massmart complaint to proceed will result in parallel investigations into the same substantial issues by the Competition Tribunal and the Commission’s assigned Market Inquiry team. This, Spar suggests, is not in the interests of the principle of institutional comity between the Tribunal and the Commission – this principle can be described as a restraint exercised by one institution out of respect for the role of another.
Spar also suggests that there is no indication that the Massmart complaint will be finally resolved before the Market Inquiry is due to be completed – by May 2017.
Although the Tribunal has not previously been asked to stay proceedings pending conclusion of a market inquiry, it has accepted that it has the power to stay complaint referrals before it. The Tribunal has and will exercise a general discretion in deciding whether or not to grant this application.
If the complaint is stayed pending the Market Inquiry, Massmart’s rights to proceed will simply be postponed pending the outcome of the Market Inquiry in the same way as SAPOA has agreed to suspend its rights in terms of the SAPOA complaint.
SAPOA’s role in proceedings
For now, SAPOA has elected to simply take a passive role in the proceedings. It may later choose to make a submission to assist the Tribunal and it may be called upon by the parties to provide information and possibly give evidence on these issues.
Fasken Martineau’s brief is to monitor proceedings and communicate developments which may have an impact upon SAPOA and its members.
The hearings are set down for the 26th and the 27th July 2016.