The Competition Tribunal has ruled that it does have jurisdiction to hear and decide a case in which a large producer of wire and steel products has accused a local municipality of charging it excessive prices for electricity.

The steel products manufacturer Cape Gate self-referred a complaint to the tribunal against the Emfuleni local municipality, in Gauteng, accusing the municipality of contravening the Competition Act by charging it excessive prices for electricity since 2017.

This follows after the Competition Commission decided not to refer the matter to the tribunal.

ARGUMENTS ON JURISDICTION
Before the merits of the main application could be heard, the municipality raised a technical legal point on jurisdiction.

It argued that the tribunal does not have jurisdiction to hear Cape Gate’s complaint because the Electricity Regulation Act (ERA) gives power to the sector regulator the National Energy Regulator of South Africa (Nersa), to investigate complaints regarding discrimination of tariffs or failure by a licensee to abide by its licence conditions.

In brief, the municipality argued that Cape Gate’s excessive pricing complaint falls within Nersa’s investigatory powers – and that Cape Gate should have exhausted “internal remedies” or procedures set out in the ERA before approaching the competition authorities.

Cape Gate, in turn, argued that Nersa does not have the power to adjudicate over alleged conduct relating to excessive pricing, as such powers lie exclusively with the competition authorities in terms of the Competition Act.

It emphasised the distinction between price discrimination and excessive pricing and argued that, even in the event that Nersa has jurisdiction over alleged excessive pricing, such jurisdiction is shared concurrently between the competition authorities and Nersa.

TRIBUNAL ORDER & REASONS
In dismissing the municipality’s technical legal point on jurisdiction, the tribunal concludes: “It is beyond doubt that the tribunal has jurisdiction regarding this complaint of excessive pricing. The assertion that Cape Gate was required to pursue an ‘internal remedy’ through a complaint to Nersa is without foundation”.

In summary, the tribunal notes that, among others: “ . . . we do not have to determine whether the ERA gives Nersa the power to deal with complaints of excessive (as opposed to discriminatory) pricing, since if Nersa does have that power, there is concurrent jurisdiction . . .”.

Citing case law, the tribunal notes that, where there is concurrent jurisdiction, the tribunal will have authority, unless there is an express provision ousting the tribunal’s jurisdiction.

Although conceding that the Competition Act creates a system of concurrent jurisdiction, the municipality contended that there was no concurrency regarding the present matter, on the basis that concurrency only began in 2021 on conclusion of a memorandum of agreement (MoA) between the commission and Nersa.

The tribunal says it finds that this is incorrect.

Concurrency arises from the Act, not from the conclusion of the MoA, it states.

Moreover, it outlines that the MoA itself states that it is not intended to be a legally enforceable document and merely seeks to describe the nature and cooperative intentions of the parties thereto and to suggest guidelines for cooperation, with the result that nothing shall diminish the full autonomy of either party or constrain either party from discharging its statutory functions.