The Competition Tribunal has refused to confirm a consent agreement reached between the Competition Commission and four chemicals companies after a five-year process because the agreement does not specify what aspect of the Competition Act was being contravened.

A Business Day report says the issue arose because of the terms of the agreement between the four companies – Sasol, Foskor, AECI and Omnia Fertilisers – over their jointly owned ammonia storage facility at Richards Bay. The commission initiated an investigation in 2012 into clause 12 of the partnership agreement between the four.

The clause set out a pricing formula under which the parties could sell ammonia to each other if they could not agree on a price through bilateral negotiation.

The formula was based on an international index plus a dollar freight rate. The commission concluded that this clause could potentially affect the pricing of ammonia in SA and that the same objective could be met in another way. Under the consent agreement, the commission and the parties agreed to remove this clause.

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