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CCI gets into a spat with appellate body

CCI gets into a spat with appellate body
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First Published: Thu, Apr 22 2010. 11 35 PM IST

Updated: Thu, Apr 22 2010. 11 35 PM IST
New Delhi: Even before the Competition Commission of India (CCI) has disposed of a single case, it’s got into a tussle with its own appellate body.
CCI has filed an appeal in the Supreme Court against an order of the Competition Appellate Tribunal (Compat) over an interim ruling. According to a lawyer closely associated with the development, this will be the first time that the apex court will be asked to look into certain provisions of the Competition Act.
Appeals against CCI decisions are heard by Compat, a three-member tribunal that was set up last year under justice Arijit Pasayat.
The tussle relates to a complaint by Jindal Steel and Power Ltd (JSPL) filed with CCI, alleging that an agreement for supply of rails between Indian Railways and Steel Authority of India Ltd (SAIL) was anti-competitive and amounted to the abuse of a dominant position. While JSPL also makes rails, SAIL is sole supplier of these to the railways.
CCI decided there was a prima facie case and referred the matter to its director general (DG), investigations, in December. Before the DG could commence its inquiry, SAIL moved Compat, appealing against the CCI order. The tribunal allowed SAIL’s appeal and stayed the DG’s investigation on 15 February.
Further, Compat held that CCI could not become a party in an appeal before the tribunal.
“This is very wrong on Compat’s part as CCI should have been allowed to do its investigation,” said a senior CCI official, who did not want to be identified as he is not authorized to speak to the media. “At this rate, CCI and Compat will just keep playing ping-pong and no cases will get disposed.”
The apex court ruling in the case will help delineate the powers and functions of CCI and the tribunal, and decide the issue of whether Compat can stay an investigation in a prima facie case of competition law violation.
Though the Competition Act was passed in 2007 by Parliament, CCI only started hearing cases in May. So far, more than 30 cases are pending before the commission, but it has not passed final orders on any one of them.
As per the legislative framework, CCI orders are subject to appeal at Compat and ultimately at the Supreme Court.
Dhanendra Kumar, chairman of CCI, did not respond to an email sent to him. Pasayat declined comment.
“While the Competition Act allows CCI to move the Supreme Court, both CCI and Compat should resolve the issue fast as more cases will come; such matters have long-term implications,” said Vinod Dhall, former CCI chairman.
Rahul Singh, who has taught competition law at National Law School of India University, Bangalore, and is currently training CCI staff, feels that courts in India should employ the US doctrine of deferential review.
“In this doctrine, courts give adequate value to the decision of expert bodies such as CCI. Contrary to deferential review, Indian courts have, in the past, applied the standard of what is called de novo review—here, the appellate authority is willing to start hearing the case from scratch. This perhaps explains why a multitude of Sebi (capital markets regulator Securities and Exchange Board of India) orders are often overturned by its appellate authority, the Securities Appellate Tribunal,” said Singh.
Such reversals lead to uncertainty and unpredictability, increasing transaction costs for stakeholders, he said.
CCI’s endeavour to seek legitimacy and credibility in the eyes of consumers here would mean getting courts to adopt some kind of deferential review.
Economic Law Practice is representing CCI, with Delhi litigation partner Tarun Gulati and Delhi competition partner Samir Gandhi being assisted by senior associate Neil Hildreth.
manish.r@livemint.com
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First Published: Thu, Apr 22 2010. 11 35 PM IST