For over a decade, a fundamental question has hung over South African corporate law: do the country's competition authorities have the power to prosecute foreign companies for alleged anticompetitive conduct occurring entirely offshore?
This issue remained highly contentious until the Constitutional Court provided a definitive answer in a unanimous judgment penned by Judge Owen Rogers, handed down on 30 June 2026.
The ruling resolves jurisdictional disputes at the heart of South Africa's longest-running competition enforcement saga: the forex cartel case. This marathon legal battle began in April 2015 when the Competition Commission initiated an investigation into 18 banks for allegedly colluding to manipulate the USD/ZAR exchange rate between 2007 and 2013.
Following the referral of the complaint to the Competition Tribunal in 2017, the case wound through multiple hearings and appeals before reaching the apex court in 2026. The judgment represents the most comprehensive treatment to date of when local authorities may prosecute foreign firms, particularly those with no physical presence or implicated employees on South African soil.
The legal arguments centered on two distinct types of jurisdiction: personal jurisdiction (the ability to compel a foreign person to appear before a local court) and subject-matter jurisdiction (the authority to rule on specific conduct).
Both concepts are anchored in common law. The Commission argued that section 3(1) of the Competition Act No. 89 of 1998, which extends reach to "all economic activity within, or having an effect within, the Republic", bypassed traditional requirements for establishing personal jurisdiction. The foreign banks, classified into "pure peregrini" (no local presence) and "local peregrini" (having a branch or representative office), strongly objected.
The question of personal jurisdiction over foreign banks
Under South African common law, a foreign peregrinus ordinarily submits to jurisdiction only if local assets are attached or if it consents. The Commission obtained neither. When the matter first reached the Competition Appeal Court (CAC), the Commission was directed to show personal jurisdiction by alleging "adequate connecting factors".
The CAC suggested this could be achieved by alleging a "single overarching conspiracy" (SOC) that tied foreign banks to South African entities. However, the Commission struggled to produce evidence demonstrating that traders from most foreign banks were directly involved with their South African counterparts.
Ultimately, the CAC found that the Commission could not tie most foreign banks to an SOC involving South African participants. The Constitutional Court held that this was a factual finding it would not overturn, as no constitutional issue or compelling public policy ground necessitated interference.
Furthermore, the Court declined to revisit whether section 3(1) of the Act displaces common-law personal jurisdiction. It cited the principle of res judicata (settled issues cannot be relitigated) and peremption (the Commission abandoned the argument by attempting to comply with the CAC's earlier requirements). Thus, the "connecting factors" test remains the prevailing standard for future cases.
Subject-matter jurisdiction
Regarding subject-matter jurisdiction, the Court upheld an effects-based test. The Commission was required to plead facts showing that a foreign bank's conduct had a "direct, immediate and substantial effect" in South Africa.
This mirrors standards used in the United States and Europe. The Court rejected the Commission's view that the mere involvement of the ZAR currency constituted a sufficient effect. Because the Commission failed to allege specific facts showing a substantial local impact for most foreign banks, the case against them was dismissed.
Similarly, while local banks are subject to the authorities' jurisdiction, the Court found insufficient evidence on the papers to sustain the SOC cause of action against most of them.
Who survives and what it means
After a decade of technical litigation, the case will proceed before the Tribunal against only five banks: BNP Paribas, JPMorgan entities, Investec, HSBC Bank plc, and Standard Americas Inc. Investec remains the sole local bank involved, while others like Absa and Barclays have previously settled.
The case against numerous others, including Bank of America, ANZ, and the major South African banks (Standard Bank, Nedbank, FirstRand), has been dismissed. This marks a significant setback for the Commission, though it now has the opportunity to focus on proving the merits of its global cartel case against the remaining respondents.
In conclusion, the judgment clarifies that international firms participating in cross-border cartels are not beyond the Commission's reach, provided a genuine connection to South Africa or a substantial local economic effect is demonstrated.
The reach of the authorities is not unlimited; connections cannot be manufactured from the mere existence of a branch office or flimsy evidence of market effects. As the proceedings shift to the merits stage for the remaining banks, the legal community will be watching closely to see if the Commission can translate this jurisdictional foothold into a successful prosecution of the alleged global forex trading cartel.
Shawn van der Meulen, partner, and Kelton Miller, associate, were part of the Webber Wentzel team who successfully represented the Bank of America group in this case.