Where is the Solidarity

Supreme Court of Namibia: NAMAF and others v Namibian Competition Commission and another

Supreme Court of Namibia: NAMAF and others v Namibian Competition Commission and another
Where is the solidarity?

On 19 July 2017, the Supreme Court handed down judgement in an appeal concerning the jurisdiction of the Namibian Competition Commission (“the Commission”) over registered medical aid funds. The judgement concerns an appeal by the Namibia Association of Medical Aid Funds (“NAMAF”) and eight of its members (“the Funds”), of a High Court decision of 17 March 2016. The High Court found that the Funds are undertakings within the meaning of the Competition Act No 2 of 2003 (“the Act”) as they operate for gain and reward and do not perform a “non-commercial socio-economic” function as envisaged by the Act and are therefore not exempt from the application of the Act. The High Court also found that the benchmark tariff issued annually by NAMAF is not authorized under the Medical Aid Funds Act 23 of 1995 (“the MAF Act”) and the setting of benchmark tariffs is therefore not excluded from the jurisdiction of the Act.

The High Court judgment was precipitated by an application to the High Court for an order declaring that the Funds are not undertakings as contemplated in the Act and that the Commission, therefore, has no jurisdiction over them. The application was prompted by an investigation by the Commission of the Funds conduct of setting prices for medical services by setting benchmark tariffs after collective negotiations amongst the Funds. The Commission contended that this conduct contravened s23 of the Act which proscribes concerted practices between undertakings which directly or indirectly fixes purchase or selling prices.

In their application, the Funds contended that they are not undertakings as defined in the Act because they did not carry on business for gain or reward as they are precluded from distributing any profits by the MAF Act. Alternatively, if they are found to be undertakings, that the setting of the benchmark tariffs is exempt from the ambit of the Act by virtue of section 3(3) as the setting is authorised by the MAF Act. Further alternatively that the setting of the benchmark tariffs is designed to achieve non-commercial social – economic objective and hence is excluded from the ambit of the Act by section 3(1)(b).

The scope of the Commission is limited to “undertakings”. An “undertaking” is defined in the Act as “any business carried on for gain or reward by an individual, a body corporate, an unincorporated body of persons or a trust in the production, supply or distribution of goods or the provision of any service.”

Authored by Mr Patrick Kauta and Ms Mercy Kuzeeko
Directors