CCI Chairman upset with judicial interventions into competition matters |

The recent outbursts of CCI outgoing Chairman, Mr. Ashok Chawla on interventions by the Competition Appellate Tribunal (COMPAT) have started attracting media attention and are being reported periodically. For instance, consider these news –“CCI doesn’t want orders stuck down on technical issues – CCI Chairman Ashok Chawla” and “Entities make concerted attempts to stonewall CCI work: Ashok Chawla”

The outbursts of Mr. Chawla though not unfounded or unreasonable need to be examined. As discussed in one of my previous posts, the origin of the remarks lies in the recent COMPAT order of 11^th December,2015 quashing the penalties of Rs. 6316 Crores on 11 major cement companies . While it is true that the COMPAT did not go into the merits of the case i.e. whether the cement majors had entered into a cartel to increase cement prices while restricting capacity utilization during the period of inquiry by CCI, yet, there were allegations of serious procedural irregularities which, according to the COMPAT, violated the principle of natural justice i.e. one who hears must decide, which, as per COMPAT renders the entire order of CCI as legally untenable. Noticeably, this was not the first time that CCI orders have been overruled by COMPAT.

This gives rise to two major yet opposite issues, firstly, whether such order by COMPAT sends the right signals for the economy and will it not encourage future violators of the law and discourage existing members of hard core cartels to come out to avail the leniency provisions thereby saving the consumers from being exploited , and secondly, whether the appellate tribunal should overlook procedural irregularities in the inquiry proceedings by CCI which deprive the legal rights of parties under investigation of their legitimate right of defense . There are no ready answers and perhaps some guidance will be provided by the Supreme Court in near future.

Nevertheless, an analysis of the evolution of jurisprudence in two major jurisdictions i.e. USA and EU shows that in the initial years such judicial interventions on procedural grounds are inevitable to infuse fairness of procedure in antitrust inquiries as every order of any competition authority which imposes sanctions for alleged anticompetitive practices on businesses must stand on its own legs in the courts of law being legally sound.

About the author

M M SHARMA

 Comdt. (Retd.) M. M. Sharma heads the Competition Law & Policy team in VA since 2009 and has over 30 years’ experience as an Advocate of Delhi High Court and holds a Post Graduate Diploma in Economics of Competition Law from Kings College, London. He has worked in the Competition Commission of India (CCI) as Additional Registrar during 2006-2008 and was responsible for drafting the Implementing Regulations under the Competition Act, 2002. He has experience of working as Head-Legal /In-house Counsel for a large Corporate Group in the Steel and Power sector before joining VA in 2009. He has represented clients as an independent arguing Counsel in landmark cases decided by CCI, the Competition Appellate Tribunal (COMPAT) , High Courts and the Supreme Court. As a prolific writer, he contributes articles and is regularly quoted on competition issues in National Newspapers and interviewed by TV Channels. He also teaches as a visiting faculty in various Universities and Institutions and is widely regarded as a subject expert in various Committees of Apex Business Chambers, such as FICCI, CII, ASSOCHAM and PHD CCI.  Mr. Sharma has been mentioned as a “Notable Practitioner” in the “Competition/Antitrust” category of Chambers & Partners (Asia Pacific) Ranking of Leading Lawyers for Business in India for the year 2012 and 2013. VA’s competition law and policy team has also been awarded the Law Firm of the Year Award for “Competition/Antitrust Law” for 2013 by the Indian Business Law Journal. Included as a ‘Recognised Practitioner’ in Individual Lawyers’ranking by Chamber’s Asia Pacific Guide 2020 for Antitrust/Competition Law.