Bomaid granted another chance to avoid CCA investigation
● CCA wants to investigate Bomaid for anti competitive practices ● CoA grants Bomaid chance to appeal ● Bomaid had paid security fees ‘unreasonably’ late ● Matter is of public interest – Court
Justice Lakhvinder Singh Walia of the Court of Appeal (CoA) has granted Botswana Medical Aid Society (Bomaid) another chance to avoid regulation and investigation by the Competition and Consumer Authority (CCA).
On November 4, 2022, the High Court ruled that Bomaid is an enterprise subject to regulation by the Competition Act, clearing the way for the CCA to resume its investigations against the entity for alleged anti-competitive practices.
The High Court found that Bomaid is an enterprise within the meaning of the Competition Act 2018 and is, therefore, subject to regulation by the Act. The High Court declared that Bomaid is a body that carries out business for gain or reward and that its goal is one of a commercial and socio-economic nature.
The reasons for this declaration were that Bomaid regulates its tariffs, the scheme is not compulsory, it provides several types of schemes by subscriptions effected by members, and a member’s ability to access healthcare benefits is determined by the scheme they subscribe to.
And finally, a member’s failure to subscribe may result in their exclusion from such benefit. The CCA had initiated investigations against Bomaid in 2020 for abuse of dominance contrary to Section 31 (1) (e) and (g) of the Competition Act for refusal to deal with another enterprise and price discrimination or other trading conditions, respectively.
After the Authority served Bomaid with a notice of intention to investigate, Bomaid approached the High Court alleging that it is exempt from the provisions of the Competition Act because its activities are designed to achieve a non-commercial socio-economic objective; that it is not an enterprise as defined under Section 2 of the Act, and does not carry out business for gain or reward.
Bomaid instituted legal proceedings before the High Court on January 21, 2021, seeking a declaratory order as to whether it is exempt from the application of the Competition Act or not. The CCA opposed this application but agreed to halt any action aimed toward investigating Bomaid pending the outcome of the High Court case. Issues for determination by the High Court were whether Bomaid is exempted from the reach of the Competition Act, and if the High Court found that there is no exemption, then it must find that Bomaid is not an enterprise as defined under Section 2 of the Competition Act, and with the result that Section 31 under which the CCA intended to investigate is not applicable.
When the CCA would resume its investigations on Bomaid’s alleged anti-competitive practices, Bomaid appealed in November 2022. Unfortunately for them, Bomaid would not pay the required security for appeal on time.
The parties recently appeared before Justice Walia, who is set to determine whether Bomaid deserves a second shot at avoiding the investigation by being heard by the CoA despite failing to pay security fees for the appeal in time. If they succeed, they will have a chance to bypass the investigation they want to avoid.
According to Bomaid’s legal team at Armstrong Attorneys, a total fee of P21,800 was to be paid, but unfortunately, due to miscommunication between Bomaid and its attorneys, they failed to pay the amount on time. Bomaid, however, fancied its chances of success because per the Trojan case, the bar is not to be set too high, where there is an appeal as of right, provided that a reasonably arguable case has been disclosed.
Despite Walia finding that the reasons advanced for the delay do not meet the standard of an acceptable explanation for the delay, he determined there were prospects of success.
Walia raised the matter of public interest. He said Botswana is lacking in jurisprudence on the duties and powers of the CCA constituted under the Act. It is of equal public importance that ‘enterprise’ be properly interpreted in the context of the Act.
“For that reason and given the importance of the case, I find that the applicant has a reasonably arguable appeal and that these reasons to compensate for the unsatisfactory explanation for the delay in payment,” he said.
As a result, the following orders were made: Leave is granted for the security for costs and the costs of transcription set by the Registrar to be paid out of time;
Payment shall be made as directed by the Registrar within 14 days of this order;
Thereafter, the appeal process shall follow its course in terms of the rules; Costs of the application shall be in the cause of the appeal, but in the event of the appeal not eventuating, shall be paid by the applicant.