The High Court has dismissed an appeal by steel manufacturer Accurate Steel Mills Ltd against a Sh26.8 million fine imposed against it three years ago for price-fixing, clearing the way for the Competition Authority of Kenya (CAK) to enforce the penalty.
The court ruled that CAK did not err in law or fact by requiring the manufacturer to explain its involvement after the watchdog presented evidence linking it to the alleged anti-competitive conduct.
The judge said the legal burden of proof was on the CAK throughout the proceedings, even though the evidential liability shifted to the manufacturer once the regulator presented evidence, including several emails containing anti-competitive information.
The company was among more than 13 firms found guilty of price fixing in a case that attracted fines totalling Sh338.8 million.
Accurate Steel Mills argued that merely receiving the messages did not prove its participation in the malpractice.
However, the court said that the company failed to explain how its conduct could not amount to passive participation in a practice prohibited under Section 21 of the Competition Act.
“I adopt the reasoning in these decisions as applicable to this case. The only way that the Appellant could have avoided liability was by publicly denouncing the actions. It did not, and was thus found culpable,” the judge said in a judgment delivered on September 25.
The manufacturer had challenged the tribunal’s finding that the emails, without more, constituted a concerted practice under sections 21(1) and 21(3)(a) of the Act, despite the absence of evidence of an express agreement, coordination or implementation of price changes.
It also argued that the tribunal wrongly shifted the burden of proof to the company by requiring it to disprove participation in price-fixing arrangements, instead of requiring CAK to establish its case to the required legal standard.
Accurate Steel Mills maintained that it had merely been copied in emails whose subject lines included “pricing” and “proposed thickness of tubes and pipes”. It argued that receiving the messages could not, by itself, amount to participating in discussions or an agreement between businesses in violation of the law.
However, the court said that information about a company’s confidential business dealings was peculiarly within the knowledge of the matter.
“It follows, both as a matter of ordinary common sense and as a matter of law under section 112 of the Evidence Act, that once the objective fact of such an exchange has been established, the burden of proving or disproving how it came about must fall upon the party in whose hands that knowledge exclusively resides,” the court said.
Besides the fine, equivalent to 0.5 per cent of the manufacturer’s gross annual turnover in 2021, CAK had directed the company to implement an approved competition compliance programme within 12 months of its approval.
