Bomaid turns to CoA to avoid anti-competitiveness test
Innocent Selatlhwa | Tuesday November 28, 2023 06:00
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 Competition and Consumer Authority (CCA) to resume its investigations against Bomaid 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 purposes of gain or reward and that its goal is one of a commercial and socioeconomic 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 socioeconomic 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 exempt 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.
Just 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 are now before Justice Singh Walia who is set to determine whether Bomaid deserves a second shot at avoiding the investigation by being heard by the Court of Appeal 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, fancies its chances of success on the basis that, 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. Justice Walia will determine on December 1 whether Bomaid deserves to be heard by the Court of Appeal.