IFLR 1000
The Guide to the World's Leading Financial Law Firms

The competition market in South Africa has continued to be extremely busy, with a lot going on that is both contentious and changing the way the market works. "It has been an extraordinarily busy year, dealing mostly with cartel litigation and dominance," says one partner, while another adds that "there has been a dip in merger work but prohibited practices work has kept us very busy".

There have been some big changes to the Competition Commission and competition law itself this year. This includes a restructuring of the commission and the creation of a new department within it, the Cartels Division. Advocate Oliver Josie has been named as the head of the newly-established department, which has been active since April. Elsewhere, the Woodlands Milk decision that was handed down in September 2010 effectively narrowed down the scope of what the Commission can investigate, which has made most partners extremely happy.

"The old regime played fast and loose with the rules of investigating. I agree with this change as sometimes it was like representing clients with my hands tied behind my back," says one antitrust lawyer.

"The Woodlands Milk decision led to a change in subpoenas, narrowing the focus and investigating powers down. It was a procedural thing. It created more certainty and jurisdictional challenges and things like that will be a hallmark for 2011," explains a peer.

Some partners however feel that these changes are merely superficial and will not permanently affect the Commission. "I don't think the commission has had its wings clipped. It looks like they've taken a knock but overall it isn't that significant," remarks one, while another states: "I think they should just stop crying over spilt milk and get on with it."

A trend from last year has also spilled into this period too, with the Commission increasingly being used as a tool to steer the economy.

"An interesting hallmark of work in 2010 into 2011 has been the shift in the government regarding competition. The Competition Commission is now within the economic planning department. They are using the commission to help with the government's growth strategy," explains a partner, as others feel the Commission is doing well: "The commission has been flooded with work but have been successful, despite being under-resourced."

In other areas, things have been changing too, as one partner comments: "On the prohibited practices side, cartel prosecutions and the taking off of the leniency program are two big trends." The leniency programme has been focussed on certain areas such as manufacturing and food and beverage companies as well as offering a Settlement Process for the construction industry.

"The Settlement Process is big now. What this does is asks construction companies to come forward and disclose knowledge of collusion before it is revealed. There is a similar application of this in Europe," states a partner.

On the merger side, there have been seismic changes too, with intervention becoming more prominent and referred to by a large number of lawyers: "In terms of merger control the government involved themselves in two big matters, with Walmart probably being the biggest," remarks one. "Merger control is seeing a lot of intervention, not just government departments but trade unions too," observes a partner, while it is clear that public interest issues, such as employment, will also become heavily weighted factors in future Commission judgements.

Another practitioner however points out that the government does not really have the power to halt deals outright: "I feel the government is going to be a lot more interventionist in merger control. They only have a public interest power though; they can put information in but they can't actually veto things."

One final thing that is still hovering over the market is the new Competition amendment act, signed but still not promulgated. This is due to arguments regarding the potential unconstitutionality of criminalising some aspects of conduct covered by the act. "It's passed but not promulgated, as they are having issues getting it through due to the collective responsibility aspect of the law. There are some fears about it being possibly unconstitutional," explains a practitioner.

Bowman Gilfillan is most definitely considered a frontrunner in the market, with peers praising the consistent quality of its work. "Bowman Gillifan are very good, they have an excellent team," says one rival, and another adds: "There is no doubt about Bowmans being in the top tier." "BG is still up there, it is always a consistent player," remarks another.

Leading lawyers come in for praise too, Rob Legh being described as having a "big reputation" and Derek Lotter as "being seen a lot", with both being highly respected by peers.

All the leading lawyers in Bowman's team have been active this year, with Jean Meijer advising on matters arising from Kansai's hostile takeover of Freeworld Coatings. Freeworld's board of directors provided opposition to the takeover on competition and public interest grounds and Meijer acted for Kansai, which ultimately proved successful with the Competition Commission conditionally approving the transaction in April 2011.

Derek Lotter also had an interesting instruction, representing Murray & Roberts Group by carrying out a compliance review and advising on leniency applications, work that entailed defending a number of complaint referrals related to alleged collusion in the construction industry, a big target for the Competition Commission at the moment. A long-term mandate that commenced back in 2006, investigations are still ongoing.

A team from Bowman, in this case led by practice head Legh, has also been advising Altech Netstar with regard to appeals relating to impropriety in the vehicle tracking industry, namely the private setting of standards between Altech and others including prohibited horizontal practices. Despite having the decision overturned, appeals are still pending and as such this instruction remains open to date.

Webber Wentzel's competition practice has had a rocky couple of years, with a number of comings and goings. This had led to divided opinion on whether the firm remains a top tier proposition, and it hangs on this year due to its impressive deal list and some backing from the market.

"I haven't come across Webber Wentzel in significant matters. They are not involved in cartel matters anyway," comments one partner, while another says: "I don't think Webber Wentzel really regained its top spot after Norton leaving."

Conversely, other peers feel that the opposite is actually true, and that the firm has dealt with the disruption well: "Webber do a lot of this activity and have clawed back some of what they lost when people left for Nortons."

"With Webber Wentzel it is still early days. They have got Lesley Morphet but she is more a merger person not prohibited practices so they need to consolidate. They'll get there though," observes another partner.

Another partner that is well respected is leading lawyer Desmond Rudman, who has been very active across a range of deals and was described by one partner as "very solid." He led the team advising Walmart on its proposed acquisition of Massmart, taking a 51% interest in the company. A merger hearing in May 2011 finally approved the extremely high profile transaction, with conditions, for a value of $2.2 billion.

Rudman also represented Unilever as it looked to acquire Sara Lee's bodycare business, a global transaction worth $1.8 billion and which gained approval in November 2010.

Leading lawyer Martin Versfeld also won an important decision this year on behalf of his client, British Airways/Comair, when the Competition Appeal Court dismissed South African Airways' appeal against BA/Comair relating to an abuse of dominance allegation in April 2011 with costs.

DLA boasts a respectably strong competition practice, which is headed up by Mondo Ntlha, who is very much a hands-on partner. She is backed up by leading lawyers Nick Altini, Petra Krusche and Chris Charter, all of whom are spoken of well in the market.

Partners however do reference the fact that they haven't seen too much of the team over the past 12 months on the bigger mandates. "I don't see a lot of Cliffe Dekker, or at least they are not in any of the key cases," observes one.

The team has been actively engaged though, with Ntlha leading the way. She has been acting for Aveng, a construction company, in the first ever fast-track settlement procedure as well as bringing a handful of leniency applications too. Ntlha has also been representing Old Mutual Investment Group Property Investments in connection with an investigation into exclusive leases that were alleged to have been brokered between property developers and supermarket chains.

Charter was also engaged on significant work this year, including acting for Coca Cola South Africa, The Coca Cola Company and various Coca Cola licensed bottlers when an investigation was launched into its multi-bottler distribution setup. The issue was to what extent exclusive territories and non-compete obligations put in place limited competition, a contravention of the law, as well as allegations of horizontal relationships. Charter is defending against this investigation, which is still ongoing to date.

The team also won mandates from companies in the retail sector, one of the areas under the scrutiny of the Commission this year. Petra Krusche has been advising Shoprite Checkers after a complaint was made that the company was participating in anti-competitive practices, including but not limited to the exclusive leases case mentioned above. This case is still being investigated to date.

A large and diverse team, ENS is a competition practice that is going places and which is looking toward the top tier, taking on over half a dozen new lawyers in the past 12 months.

"I am happy with ENS. Lee Mendelsohn is their lead and she is strong. The team has good lawyers," comments one partner and another adds: "Edward Nathan is always a consistent player."

Clients also are consistently keen on the service they receive, with only one minor blemish regarding cost. "They are very good from a technical point of view," says one client, referencing the good, while another states: "Their fees are excessive, and a little over-the-top." Another client also alluded to this: "I tell them often that I think it is too much and then they reduce it. Their opening fee level is too high."

The team itself has a core of leading lawyers, including Justin Balkin, Mark Garden, Natalia Lopes and department head Mendelsohn, all of whom have been very active on landmark deals this year.

Garden has been advising Caterpillar on merger control matters for its $8.6 billion acquisition of Bucyrus International. He also teamed up with Balkin to advise Massmart, the target of Walmart, the US giant which was looking to acquire a 51% stake in the wholesale and retail chain. The merger was cleared, with conditions, in May 2011.

Mendelsohn advised Metropolitan Holdings on issues arising from its $4.6 billion merger with Momentum, and acted for Tiger Brands alongside Balkin in defending a class-action started by consumers and distributors with regard to alleged anti-competitive practices in the bread industry.

The firm also acted for Massmart, Tiger Brands, Nedbank and Liberty Group in connection with the Supermarket Investigation by the Competition Commission. For this a large team was required, with all four leading lawyers acting for the clients.

Norton Rose possesses a solid competition practice that has the respect of the market but which some comment does not possess the correct size to really be top tier.

Their lead practitioner is solid and on the ball and competent but it is a small team," observes one partner. Client feedback is steadfastly enthusiastic about the team, although the firm has something in common with others in that clients feel the fees are a touch too expensive. "Yes, it was reasonable overall. Lawyers charge a lot but they did a lot of work for us and if you want top work you have to pay for it," comments one.

The team on a technical level comes in for high praise from clients: "They are excellent across the board. They know exactly what they are doing," says one, while a corporate client likes the foresight the lawyers possess: "They were very proactive in looking for aspects we might have missed, which was impressive. "They are our number one firm, we use them a lot and on an ongoing basis," sums up another client.

The head of the team is the respected Heather Irvine, who stepped into the position vacated by Lesley Morphet when she joined Webber Wentzel..

One standout case was the successful merger notification to both the South African and Namibian competition authorities regarding JD Group's acquisition of Steinhoff Doors and Building Materials and Unitrans Motor Enterprises, a deal, which also saw Steinhoff acquire all of JD Group's shares in Abra, a Polish furniture business, as well as a minority stake in JD Group itself.

In 2011 Irvine successfully defended global computing giant Hewlett Packard against a complaint brought by Mustek regarding discounts and rebates offered to South African distributors of its equipment.

The team added a couple of fresh faces in 2011, with Geoff Parr returning after serving as Deputy Chief Economist for the New Zealand Commerce Commission (Competition) and advising the NZ Department for Building and Housing and partner Glenn Stein being hired from Eversheds.

Nortons Inc is a specialist boutique firm dealing only with competition matters, set up by former Webber Wentzel partner Anthony Norton. The firm boasts a great team, but the market feels the size of the relatively new firm is what holds them back from the upper tiers for now.

"Nortons have a great team," comments one partner, "we see them a lot. They are doing very well for a young firm, only set up a few years ago. They could go up in the future."

"The size of Nortons prohibits it going up. They are not able to handle massive litigation as they are a small team and not full-service. Due to this they don't get a steady stream of merger control work like full-service firms do. They can't punch in the top tier," observes a partner, and again there is backing for this, as another agrees: "Nortons could possibly be tier two. They are antitrust specialists but I suppose its size is what could hold them back."

Despite having a number of deals still under confidentiality the firm has been active on the Tsogo Sun Holdings and Gold Reef Resorts deal, advising the former in gaining competition approval and also representing Freeworld in relation to its hostile takeover by Kansai Paint.

Bell Dewar has a competition practice led by Stephen Langbridge, a highly respected antitrust practitioner, but partners remark that there is not much of a team around him.

"Bell Dewar has no dedicated team really, so it merits that ranking there," comments a peer.

Be that as it may, Langbridge, alongside Neil McKenzie, has been doing a lot of work, including advising on regulatory matters for mining companies and, in its biggest mandate, representing ArcelorMittal South Africa in litigation proceedings before the Competition Tribunal and Appeal Court in connection with allegations of cartel conduct being perpetrated in the steel sector. This case is still awaiting judgement.