| Summary | The Competition Tribunal has dismissed Replication
Technology Group’s (RTG) application for interim relief
against Gallo Africa with costs stating that it would not be
reasonable and just to grant interim relief in the
circumstances. . Central to this application is a restraint
of trade clause contained in a sale of shares agreement
between RTG and Gallo Africa (Gallo), which RTG contends,
constitutes a market sharing arrangement between RTG and
Compact Disc Technologies (CDT) in contravention of the
Competition Act. (Prior to the application RTG participated
in the market for CD and DVD manufacturing, replication;
marketing and sales in South Africa through the CDT joint
venture with Gallo). The restraint of trade agreement in
question is contained in a Sale Agreement in which RTG
disposed of its shareholding of approximately 40% in CDT to
Gallo. Gallo already owned the remaining 60% of CDT,
although the company was effectively managed by RTG. CDT
thus became a wholly owned subsidiary of Gallo which assumed
responsibility for its management. RTG sought relief in the
form of an order interdicting and restraining Gallo from
enforcing clause 13 (a restraint clause) of the Sale
Agreement. The restraint clause forbids RTG from furnishing
CD and DVD manufacturing, replication, marketing, packaging
and sales services to approximately 592 CDT customers for a
period of two (2) years. Put differently, RTG was free to
remain in the market and furnish its services to any
customer, except to those customers specifically identified
as CDT customers RTG has placed much reliance on the
Tribunal’s Nedschroef decision in which a restraint of
trade contained in a sale agreement was successfully
interdicted. The Tribunal says “Counsel for RTG insists
that this matter is on all... |
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| Keywords | interim relief, entertainment, music, movies, CD, DVD, restraint of trade, market division, south africa |
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