A recent judgment by the Constitutional Court of South Africa has clarified when a third party can intervene during mergers under the Competition Act and reaffirmed that the Competition Tribunal maintains the power to decide when third-party participation is appropriate, according to experts at Pinsent Masons.
In this case, Lewis Stores attempted to intervene in a merger between Shoprite and Pepkor, a transaction worth approximately R3 to R3.2 billion (approx. US$200.44 million). Lewis raised concerns about competitive effects in local furniture retail markets, especially in areas where lower-income consumers depend on in store credit.
The Constitutional Court clarified the legal standard for third-party intervention in merger cases under section 53(c) of the Competition Act. It reaffirmed that the Tribunal is the specialist body best placed to decide when non-merging parties can participate meaningfully in merger proceedings, provided they can assist the Tribunal’s analysis based on a clear and principled test.
The Tribunal originally granted Lewis limited rights to participate because its sector-specific insights could help address competitive issues that the Competition Commission had not fully examined, before an appeal to the Competition Appeal Court (CAC) ruled that Lewis did not demonstrate access to unique information. The CAC warned that allowing Lewis’s involvement could cause procedural delays and confidentiality problems.
The Constitutional Court ultimately overturned the CAC’s ruling and reinstated the Tribunal’s original order, ruling that the correct test is whether the third party can reasonably assist the Tribunal based on credible and admissible material, not whether the information is exclusive or unavailable elsewhere.
Anthony Crane, an expert in competition law at Pinsent Masons, said: “The judgment restores a coherent, workable standard for intervention.”
“It confirms that the Tribunal is the expert forum entrusted with evaluating whether a third party can genuinely contribute to merger assessment. The judgment reaffirms that intervention is not about gatekeeping exclusivity of information, but about equipping the Tribunal with the insights it needs to reach robust merger decisions,” he said.
“Lewis had submitted detailed market data and analysis, which the Tribunal deemed potentially helpful. The Constitutional Court confirmed that the Tribunal acted properly in granting only limited, issue specific rights and that the CAC had overstepped by substituting its own view of the evidence.”
The Constitutional Court stated that while third parties gain the right to be heard, the Tribunal alone retains the authority to approve, approve with conditions, or prohibit mergers.
Caroline Bergmann of Pinsent Masons said: “The decision confirms a balanced approach: third-party input is welcome where it adds real value, but the Tribunal retains full authority to manage and limit participation to ensure a fair and efficient process.”
“The judgment highlights the role of Tribunal Rule 46, which allows the Tribunal to manage participation by setting limits, confidentiality protections, or issue specific boundaries to ensure efficient proceedings,” she said.
Future merger proceedings are likely to be guided by the judgment, both in terms of its clarification of when a third-party can intervene and its reinforcement of the Tribunal’s ability to ensure both informed participation and procedural discipline, according to Bergmann.
For further information, please contact:
Anthony Crane, Partner, Pinsent Masons
anthony.crane@pinsentmasons.com
