JSE-listed cellular operator MTN has been successful in its bid to have a compliance notice issued against it by the National Consumer Commission (NCC) overturned.
In a decision handed down by the National Consumer Tribunal recently, the higher body found the commission did not consult with industry regulator, the Independent Communication Authority of SA (ICASA), despite this being a requirement.
Recently, several tribunal decisions have gone against the NCC, because it did not follow its own procedures. As a result, the merits of the cases have never been tested and no precedent has been set.
The case dealt with a compliance notice issued against MTN by the NCC last August, which argued that its original subscriber contract was not compliant with the Consumer Protection Act, which came into effect last April. The notice followed several meetings between the parties and MTN's undertaking to issue a revised addendum to its contract.
The notice followed an investigation into cellular companies initiated by the NCC to determine whether the operators were abiding by the new law. The NCC was set up to ensure compliance with the CPA.
No consultation
The 12-page ruling found the NCC drafted the notices before meeting with ICASA, and then issued them two days later, without consulting with the regulator. The tribunal cancelled the notice issued against MTN, but made no order regarding costs.
MTN, SA's second-largest cellular operator, had applied to the tribunal for a compliance notice to be set aside, arguing that the NCC's investigation was "illegally initiated" and there was no basis for the commission to conclude that MTN had engaged in prohibited conduct in terms of the Act.
MTN argued that its contract was already in compliance with the law at the time that the NCC issued the compliance notice. It said the NCC acted irrationally and arbitrarily. MTN also argued the commission did not consult with the industry regulator, ICASA, despite being required to do so.
The NCC, in its answering affidavit, argued the notice was based on a consumer agreement that applied at the time, and the notice was not issued after an invalid investigation.
Missed deadline
The NCC argued in a written submission that the cellular company contravened several sections of the CPA, including one that deals with the expiry and renewal of fixed-term agreements, contract terms, quality service, as well as expiry of prepaid certificates, credits and vouchers.
The tribunal ruled in the absence of oral arguments or heads of argument from the NCC, as these were never filed, despite a delay granted by the tribunal and assurances that the paperwork would be forthcoming by the deadline.
In July, the tribunal convened to hear arguments from MTN as to why a notice issued against it to change its contracts should be overturned. However, the NCC's legal representatives were not prepared to argue, and the matter was postponed to the next day.
Despite the NCC's assurances that it would work through the night to prepare, the matter was again not heard. The tribunal gave additional time to sort out its paperwork, but it failed to file heads.
Former commissioner Mamodupi Mohlala-Mulaudzi told ITWeb, via e-mail before her contract expired, that heads of argument were submitted to the tribunal. However, the tribunal has confirmed to ITWeb that this was not the case, and that it had to make its decision on all the information before it, including the written and oral submissions by MTN and the NCC's written submissions.
In January, MTN and the NCC argued whether the notice issued to MTN should have been issued to MTN Service Provider, which is the entity that contracts with subscribers.
In March, the tribunal ruled that MTN, SA's second-largest cellular network, could not scupper the notice from the NCC by arguing that it was issued against the wrong legal entity. This paved the way for the merits of the matter - whether MTN's contract was CPA-compliant - to be heard.
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