Competition panel to drag CAT to apex court

The move to set up an appellate tribunal against decisions passed by the Competition Commission of India...

The move to set up an appellate tribunal against decisions passed by the Competition Commission of India (CCI) is already backfiring. The Commission plans to move the Supreme Court against the Competition Appellate Tribunal (CAT),alleging it has overstepped its brief.

The CCI,set up by the government to break monopoly and unfair trade practices,is upset over a stay order imposed by CAT,a quasi-judicial body. In a recent order,the Tribunal had asked for halting investigations by the Commission into an alleged cartel-like arrangement between SAIL and the Indian Railways.

CCI is upset as it believes the Competition Act clearly states CAT can only hear cases after these have been settled. CAT cannot impose a stay order because they are not authorised to look into this, said an official with the Commission. Only final orders passed by the Commission can be appealed against in the CAT. This is also the rule for all sectors with government regulators.

In December 2009,Jindal Steel and Power complained to CCI that SAIL and the railways had entered into an exclusive supply arrangement which was an abuse of their dominant position.

In their support they cited sections 3 (4) and 4 (1) of the Competition Act.

The Commission sought SAILs view within 15 days. However,SAIL requested for another two weeks to collect relevant details from the steel plants concerned which are manufacturing and selling the rails. This request was rejected by the Commission,which instituted an inquiry.

SAIL approached CAT to plead its case,sparking off a controversy over the precise role of the Tribunal and whether it could take up cases suo motu.

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Experts point out that there is bound to be initial hiccups. The early years of the implementation of the Competition Act through institutional mechanisms of the CCI and CAT may not be as smooth as it should be because of lack of awareness and domain knowledge in the country,points Manas Kumar Chaudhuri,Partner at law firm Khaitan & Company and an expert on competition law.

Prima-facie,there does not seem to be any issue on competition, says Vinod Dhall,former acting chairman of the CCI. However,he refused to comment further.

According to its charter,CATs role is to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of Indiaand some agree that the Commission had no option but to move the apex court. “The CCI has the right to move the Supreme Court because they did not pass any final order… it was merely a miscellaneous one. CAT has no right to look into such orders, says Sangram Patnaik,managing partner Patnaik & Associates.

According to Naresh Chandra,chairman of CII’s task force on corporate governance,”There is no other option for parties concerned but to move the Supreme Court when such issues arise. However,its better that such things should not happen too often.”