The boundaries of South Africa’s competition law are set to be tested today (19th August 2013) when the Competition Tribunal hears an extraordinary case of a black advocate who claims to have been locked out of the shipping law market by a racially biased cartel.
The case will test the reach of the Competition Act which tends to be promoted as one of the most flexible in the world in accounting for South Africa’s history of racial prejudice. Sponsors of the act have in the past promoted it as politically aware. This can be drawn from the preamble of the Act which clearly identifies racially informed economic exclusion as an area of focus.
However there have been questions as to whether the Act and or the competition authorities have done enough to cater for affirmative action, corrective action if you like. A case like this will be closely watched given the raging debate about transformation in the legal sector, especially in commercial law market. Just recently Chief Justice Mogoeng Mogoeng lamented of transformation in the sector; https://www.ujuh.co.za/news/mogoeng-war-has-been-declared-against-transformation/. The Chief Justice has come under severe attack for his comments.
A statement released on behalf of the tribunal at the weekend announced that Advocate Simba Chitando, a junior advocate qualified in shipping law, will ask the Competition Tribunal to restrain three senior white advocates from engaging in allegedly “racist anti-competitive conduct”. This alleged action, argues Adv. Chitando , has had the effect of excluding him from the shipping law market.
The statement said Adv Chitando is out to request the Tribunal to order the senior advocates to include him in the pool of junior advocates they refer work to. The request to the Tribunal comes as an application for interim relief while the Competition Commission completes its investigation of the complaint Adv.
In his application, Adv. Chitando alleges that:
· the senior advocates have an agreement to keep the pool of junior advocates in shipping law small by choosing white male juniors of British descent and excluding black African’s from participating in this market;
· the senior advocates have anti-competitive relationships with major law firms in Cape Town which puts them in a position to influence the distribution of shipping law work to junior advocates in the field. This friendship and allegiance has created an exclusive club of advocates and lawyers who work on shipping law matters; and
· the senior advocates, who are dominant individuals in shipping law, have influenced law firms that practice shipping law not to deal with Adv. Chitando.
The statement said the respondents deny Adv. Chitando’s allegations and argue that he has chosen the wrong forum to bring the application because the Tribunal does not have jurisdiction to hear such a case. They also consider his accusations defamatory and devoid of legal merit. The respondents argue that Adv. Chitando has not brought any evidence of an agreement amongst the respondents, or between the respondents and Cape Town law firms, which has the impact of lessening competition. According to the senior advocates, Adv. Chitando’s allegations were motivated by his own self-interest, not harm to competition. They argue the application for interim relief should not succeed.
The Competition Tribunal must decide whether to grant Adv. Chitando’s request or refuse it.
While this case is obviously unique, it resonates with bigger debates about the relationship between Black Economic Empowerment (BEE) and the competition law. A paper written by Neo Chabane is highly useful in unraveling the debate; http://www.tips.org.za/files/732.pdf. Titled: An Evaluation of the Influence of BEE on the Application of Competition Policy in South Africa, it concluded that competition policy is important for the facilitation of BEE.
Clearly the competition authorities are going to be challenged by the Chitando case and perhaps more by the need to transcend the mechanical approach of understanding economic exclusion.