The Constitutional Court has clarified key principles for cartel prosecutions involving foreign firms.
The unanimous judgment in BNP Paribas v Competition Commission concerned alleged USD/ZAR exchange rate manipulation between 2007 and 2013.
The Court did not determine whether manipulation occurred but addressed the adequacy of the Commission’s pleadings and which respondent banks must answer the allegations.
Jurisdiction over foreigners
A key question was whether South African competition authorities have jurisdiction over foreign banks, requiring both:
- Personal jurisdiction (over the firm) - requiring adequate connecting factors to South Africa; and
- Subject matter jurisdiction (over the conduct) - requiring direct, substantial, and foreseeable effects in South Africa.
The CAC developed these tests in 2020 under section 3(1) of the Competition Act, which extends to conduct having an effect in South Africa.
The Court categorised the banks as (i) pure peregrini (no South African presence), (ii) local peregrini (with a presence), and (iii) incolae (local banks), holding that for a peregrinus, subject matter jurisdiction requires qualified effects in South Africa.
The Court questioned whether a South African branch unconnected to the conduct would suffice for personal jurisdiction but did not decide the point as it was not a question before it.
Binding nature of earlier decisions
A central issue was the Commission’s attempt to revisit the CAC’s 2020 interpretation of section 3(1).
The Court held the Commission was bound by that decision, having not appealed it and filed an affidavit to comply. Res judicata and peremption prevented reopening the issue, though the Commission could raise it in another matter as a point of general public importance.
The judgment reinforces the importance of timely appeals.
Post-referral joinder
The Court confirmed that additional firms may be joined after referral to the Tribunal, since a complaint targets a prohibited practice, not only the firms initially identified.
A new complaint is not required when further participants come to light, but the Commission must apply to the Tribunal for joinder.
Single overarching conspiracy (SOC)
The Court confirmed the EU competition law requirements for a SOC: (i) a common anti-competitive objective; (ii) intentional contribution to that objective; and (iii) actual or constructive knowledge of co-conspirators’ conduct.
The Court described pleading a SOC as an "onerous exercise" requiring plausible evidence of intentional contribution and awareness of co-conspirators’ conduct. A firm may be liable even if it did not participate in all the conduct, but sharing the same anti-competitive objective is insufficient - there must be a "concurrence of wills” between the parties.
Outcome
The case continues against BNP Paribas, JPMorgan, Investec, HSBC Bank plc and Standard Americas.
The judgment confirms the extraterritorial reach of South African competition law while emphasising the need for clear pleadings against each respondent.
A copy of the judgment can be found here:
