High Court of Kenya rules on its first competition case
23 September 2016, 17:46
Nairobi - The High Court of Kenya handed down judgment on the first competition case in Kenya, in the
matter between Mea Limited and the Competition Authority of Kenya (CAK), in August this year.
to Xolani Nyali, senior associate in the Competition Practice at
firm Bowmans, the ruling confirms the principle that dawn raids,
provided they are based on a reasonable suspicion which is supported by
facts, are legal and no prior notice that a search warrant is being
sought is required to be given to the company that is
to be raided.
"This position is consistent with international best practice," he says.
Court in this matter also touched on the fact that it is not always
necessary for the
CAK to even obtain a search warrant before conducting a dawn raid.
However, while the Court did not decide in what circumstances this would
be applicable, it did point out that at a minimum, the Constitution of
Kenya and the Fair Administrative Action Act would
need to be complied with" Nyali notes.
says that while the Court in this case specifically lent its support to
the CAK’s submissions
that, given the role the CAK plays, it ought to be able to perform its
statutory mandate with minimal interference, the CAK is a relatively
young regulator and both its powers and the ambit of the Competition Act
are largely untested.
notes that business leaders, for instance, may be concerned about
to their business operations during the course of the regulators’
investigation. While a level of discomfort is necessary and possibly is
even by design (as a deterrent against anti-competitive conduct), it
must be accepted that not all investigations lead
to findings of a contravention. In the circumstances, both the regulator
and the broader competition community need to consider whether there is
a reasonableness standard to the level of disruption to the
respondents’ business that the CAK is afforded during
carried out its first dawn raid and at the back of this recent success
before the courts,
it remains to be seen whether the CAK will have an increased appetite
for dawn raids or whether it will opt for the softer approach of
leniency policies, which appear to be the favoured approach by
comparable regulators," Nyali adds.
Joyce Karanja-Ng'ang'a, partner and head of the Competition Practice
at Bowmans Kenya notes, "This
is the first time that the Kenyan courts have examined the dawn raid
process under the provisions of the Kenyan Competition Act and it is a
welcome development since there is a need to build up competition law
jurisprudence in Kenya.
explains, "What would perhaps have been interesting, and which may not
have been applicable
to this case, is whether the CAK is obliged to wait for the respondent
company’s legal counsel before commencing the dawn raid and/or
interviewing staff. And if so, how long the CAK should wait for the
respondent company’s legal counsel before it commences
is particularly important in circumstances where the Kenyan Competition
criminal sanctions for contraventions of the restrictive trade practices
provisions. As such, the consequences of not being afforded legal
representation can be dire," she adds.