Summarise the reasons for the court's decision with regard to subject and personal matter jurisdiction:

Question

It is common cause that the first respondent (BAMLI) is a peregrinus. The link
that the Commission alleges it can show between BAMLI and the alleged conspiracy
is that ‘at certain material times from at least 1 October 2007 the first and / or twentieth
and / or twenty first respondents were represented inter alia, by Gavin Cook acting
within the course of his employment. At certain material times from at least 1 October 2007, the first and/or twentieth and/or twenty first respondents were also represented
inter alia by Mark Sheppard acting within the course of his employment. Furthermore,
the first, twentieth and twenty first respondents (Bana) and twentieth respondent
(Merrill Lynch Pierce Fenner and Smith Inc) are members of the same group of
companies and are therefore directly or indirectly linked to one another. Hence the
allegation that the Bank of America group was represented by Cook and Sheppard is
the critical component of the Commission’s case in respect of jurisdiction.The difficulty for the Commission is that it had been informed on oath in an
exception affidavit generated by BAMLI, that Cook was at all material times employed
by MLPFS, a fact never denied by the Commission.
[89] It may well be that as a result thereof the Commission has sought to join MLPFS
on the basis that Cook was employed by the latter company. Insofar as Sheppard
was concerned, while he is mentioned as a representative of either MLPFS, BAMLI or
BANA, there is no evidence which was provided by the Commission that Sheppard
participated in a single example of discussion in the implicated chatroom which was
the key evidence for the prima facie case justifying the conclusion that there was an
SOC. At the very least therefore the Commission has not shown the facts which are
necessary to justify the conclusion that there was a connecting factor to the extent that
BAMLI participated in the conspiracy together with South African respondent banks to
manipulate the currency exchange between the USD and ZAR.
[90] In this connection it is again important to emphasize the order of this Court in
2020 which required the Commission for the purpose of pleading a SOC to specify the
bank on behalf of which it alleges each trader acted, whether the alleged trader had acted for more than one respondent at a time, whether a trader ceased to act for a
respondent bank and that when did a respondent’s participation end or on what basis
the participation might have continued. The Commission alleges that Cook and
Sheppard ‘were employed and/or representing Merrill Lynch alternatively Bank of
America and authorized by Merrill Lynch alternatively Bank of America to trade in the
USD/ZAR currency pair on its behalf. This is devoid of the kind of specificity which
was required by the 2020 order or by a referral that could pass legal muster.
BANA, by contrast, is a local peregrinus with a representative office in South
Africa. Accordingly, personal jurisdiction is therefore not an issue in this case. The
Commission’s justification for joining all three of these companies of the Bank of
America Group, rested on Mr Cook having an email address. But on its own this did not provide a basis to join Bana.
[92] As set out earlier in this judgment there is no plausible basis on which a holding
company such as Bana could have been joined. The creative conclusion generated
by the Tribunal on its own was that s 59 (3) A of the Act could apply, namely, the
holding company could be held jointly and severally liable for the action for the
subsidiaries. To reiterate s 59 (3) (A)of the Act did not apply retrospectively and,
besides, the Commission had not relied upon this section in the complaint referral or
its joinder application.
[93] MLPFS is a pure peregrinus. Accordingly, even accepting that Cook and
Shepard were employees of MLPFS, there was no evidence linking MLPFS to a South
African bank, and none of Cook’s chats were linked to a South African bank, save for one reference to a decision with Katz about the trading position in the Johannesburg
office. As to Shephard, there is no evidence meaningfully linked him to the SOC. On
balance, given that MLPFS is a pure peregrinus, there are insufficient connecting
factors to South Africa to justify personal (as opposed to subject matter) jurisdiction.

Answer 1

The court's decision on subject and personal matter jurisdiction in this case hinges on several key factors:

1. Peregrinus Status of BAMLI: BAMLI is identified as a peregrinus (a foreign entity), which complicates the Commission's assertion of jurisdiction. The connection suggested by the Commission links BAMLI and the alleged conspiracy through the actions of its representatives, Gavin Cook and Mark Sheppard.

2. Lack of Evidence Linking Representatives to South African Banks: While Cook was confirmed to be employed by Merrill Lynch Pierce Fenner and Smith Inc. (MLPFS), and the Commission acknowledges this, there was no evidence presented that established a connection between either Cook or Sheppard and the specific events of manipulation alleged within the implicated chatroom. Sheppard's involvement was particularly questioned due to the absence of evidence of his participation in relevant discussions.

3. Inadequate Specificity in Allegations: The Commission's claims lacked the necessary specificity required by a prior court order, which demanded clear identification of which bank was represented by each trader, their timing of involvement, and the nature of their participation. The vague assertion that Cook and Sheppard were affiliated with either Merrill Lynch or Bank of America did not meet the legal standards specified.

4. Personal Jurisdiction of BANA: Unlike BAMLI and MLPFS, BANA has a local presence (a representative office in South Africa), meaning personal jurisdiction over it is established. However, the Commission's effort to join BANA based solely on Cook having an email address from the company was insufficient and did not provide a solid basis for this legal action.

5. Holding Company Liability Issues: The Tribunal's suggestion that BANA could be held liable as a holding company for its subsidiaries lacked sufficient legal grounding, especially since the relevant statutory provision cited did not apply retroactively and was not invoked in the Commission’s initial referral.

6. Absence of Connection for MLPFS: As another foreign entity, MLPFS also lacked a meaningful link to South Africa. Although Cook and Sheppard were employees of MLPFS, evidence did not establish their connection to the South African banking activities alleged in the conspiracy.

Overall, the court found insufficient evidence to support both subject matter jurisdiction concerning BAMLI's alleged participation in the conspiracy and personal jurisdiction concerning MLPFS, as the required connections to South African banks were not demonstrated.