Constitutional Court rules foreign banks largely outside South Africa’s jurisdiction in decade‑long forex cartel case; five banks remain respondents

For over a decade, the question of whether South Africa's competition authorities have the power to prosecute foreign companies for alleged anticompetitive conduct occurring entirely offshore remained contentious.

The Constitutional Court has answered this in a unanimous judgment by Judge Owen Rogers, handed down on 30 June 2026.

The ruling resolves jurisdictional disputes that lay at the heart of South Africa's longest-running competition enforcement saga, the forex cartel case, which began in April 2015 when the Competition Commission (the 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 (the Tribunal) in 2017, the case wound its way through multiple Tribunal hearings – where the respondent banks raised a multitude of exceptions and objections – and appeals by the Commission and the banks before the Competition Appeal Court (the CAC), before finally reaching the apex court in 2025.

The judgment is the most comprehensive treatment to date by a South African court of when local competition authorities may prosecute foreign companies, particularly those with no office, branch or implicated employees on South African soil.

Key to the legal arguments before the court were two distinct types of jurisdiction: personal jurisdiction, the ability of a party or regulator to compel a foreign person to appear before a South African court, and subject-matter jurisdiction, the authority of the courts to rule on a particular type of conduct.

Both concepts have been anchored in our common law for decades. The Commission, however, had sought to argue that section 3(1) of the Competition Act 89 of 1998 (the Act), which extends the Act's reach to "all economic activity within, or having an effect within, the Republic", did away with the requirement of establishing personal jurisdiction in competition cases involving alleged global cartels.

The foreign banks unsurprisingly objected to this.

Not all foreign banks are alike, and that distinction matters

The court noted that the respondent banks fell into three distinct groups:

First, there were the truly foreign banks with no South African office or presence of any kind, the so-called "pure peregrini".

Second, there were foreign banks that did have a South African branch or representative office, the "local peregrini".

Third, there were the South African banks themselves, for whom the question of personal jurisdiction did not arise, as the competition regulators clearly have jurisdiction over them and their conduct in South Africa.

The question of personal jurisdiction over foreign banks

Under South African common law, a foreign peregrinus (stranger) ordinarily submits to the jurisdiction of South African courts only if its local assets are attached or it consents to jurisdiction. The Commission failed to obtain either, and all the foreign banks objected to the competition authorities' jurisdiction over them.

The first time the matter reached the appeal court, the CAC directed the Commission to refile its case to show personal jurisdiction over the foreign banks by alleging "adequate connecting factors" to South Africa. The CAC said this could be done if the Commission alleged a "single overarching conspiracy" (SOC) that included not only the foreign banks but also South African banks, thereby tying the foreign entities to a genuine South African dimension.

The difficulty for the Commission, when it filed its restated case, was that it did not, or could not, allege facts showing that clear evidence in respect of most foreign banks showing that their traders had any involvement with any South African banks or employees, or that any of the peregrini's branch offices were involved at all.

The Commission therefore could not tie most foreign banks to an SOC involving South African banks.

The CAC found this to be the case in its second decision, which the Court decided was a factual finding that did not engage its discretion to overturn – it was not a constitutional issue and there were no compelling reasons or public policy grounds in this case to overturn the CAC. There was therefore simply no case on the papers against most of the foreign banks.

Before the court, the Commission also attempted to revive an argument that had been decided in the first CAC decision: that section 3(1) of the Act displaces the common-law requirements for personal jurisdiction. The CAC had decided that if the Commission wished to pursue an SOC case, it needed to plead adequate connecting factors tying the foreign banks to South Africa.

In the second appeal, the CAC said the Commission had failed to do this on its refiled papers. When the Commission tried to argue before the court that the CAC's "adequate connecting factor" test was incorrect, the court declined to engage with this argument.

The court said two fundamental legal principles prevented it from revisiting this decision and there were no compelling reasons to depart from these foundational principles of our law:

• first, the issue had been decided and was not appealed by the Commission when it ought to have been, the res judicata principle, meaning a settled issue cannot be relitigated; and
• second, this option had been abandoned by the Commission's own conduct, peremption, when it refiled its case in an attempt to comply with the first CAC decision's requirements. The question of the CAC's interpretation of section 3(1) and the adequate connecting factors test remains reserved for a future case.

Subject-matter jurisdiction

The second jurisdictional test, for subject-matter jurisdiction, is effects-based. The CAC and the court held that the Commission was required to plead facts showing it was foreseeable that any foreign bank’s conduct would have a "direct, immediate and substantial effect" in South Africa.

This is not a novel idea: similar tests are used in the United States under the Foreign Trade Antitrust Improvements Act and by European competition authorities. This test was applied to the foreign banks, purely foreign and locally-branched alike, because the only jurisdictional hook for their conduct was the alleged effect it caused in South Africa.

The Commission's view was that the fact that the alleged forex manipulation involved the ZAR was a sufficient "effect", but the CAC disagreed and found that the Commission had failed to allege facts showing a direct, immediate and substantial effect in South Africa in respect of most of the foreign banks. It held that there was accordingly no basis for such foreign banks to remain in the proceedings and the court agreed.

In respect of the local banks, the CAC held that while the competition authorities clearly have personal and subject-matter jurisdiction over them, the Commission's lack of evidence meant there was insufficient evidence on the papers to sustain a cause of action for an alleged SOC involving the local banks.

The court again held that these were factual findings by the CAC which did not engage its discretion to overturn.

Who survives and what it means

When the procedural dust settles, after 10 years of technical legal objections and appeals, the case will continue before the Tribunal against five banks: BNP Paribas, JPMorgan entities, Investec, HSBC Bank plc and Standard Americas Inc.

Investec remains the only local bank involved, having chosen not to participate in the various appeals or in the Constitutional Court proceedings.

Absa, Barclays and Standard Chartered had already settled with the Commission and will not be active respondents in the proceedings. The case against the other respondent banks, including the Bank of America entities, ANZ, Nomura, Commerzbank, Macquarie, HSBC US, Credit Suisse Securities, Standard Bank, Nedbank and FirstRand, has been dismissed.

The judgment clarifies that international firms that participate in cross-border cartels causing real harm in South Africa are not beyond the Commission's reach simply because the participants never operated in South Africa. But the Commission's reach is not unlimited.

To bring a purely foreign firm before South African competition authorities, the Commission must show that the firm was part of a conspiracy that genuinely implicates South African participants, or that the conspiracy had a "substantial, direct and immediate effect" on South Africa's economy.

The connection to South Africa cannot be manufactured from mere coincidence of a local connection, such as a branch office, or from flimsy evidence of anticompetitive effects in the local market.

While the judgment represents a significant setback for the Commission and most local and foreign banks will now exit the proceedings, it will take some heart in being able to proceed with the case against the five remaining banks before the Tribunal. Now comes the difficult part of proving its case of a global forex trading cartel on the merits.

* Shawn van der Meulen, partner, and Kelton Miller, associate, are part of the Webber Wentzel team who successfully represented the Bank of America group in this case.