T
he paper summarises the jurisprudence on the overlapping jurisdiction between the Competition Commission of India and various sectoral regulators. It argues that the
, being a special statute while dealing with the adjudication of anti-competitive conduct, should have primacy over sectoral statutes in such matters.The (Competition Act) is the primary antitrust law in India, enacted to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers, and to ensure freedom of trade carried on by other participants in markets, in India.
The jurisdiction given to the Competition Commission of India (CCI) under the Competition Act is wide. While commenting on the jurisdiction of the CCI, the Supreme Court holds that:
10. … a unique feature of the CCI is that it is not sector based body but has the jurisdiction across which transcends sectoral boundaries, thereby covering all the industries, with focus on the aforesaid object and purpose behind the .
As is inevitable, the jurisdiction of the CCI, when it comes to anti-competitive conduct in various industries, would overlap with the jurisdiction of various sectoral regulators tasked with regulating their respective sectors under various sectoral statutes. Such regulators could include the insurance regulator, securities regulator, or the telecom regulator among others. Since the enforcement of the Competition Act in 2009, courts have often been faced with this question and jurisprudence has been developed in the form of settled case laws. The decisions of the Supreme Court in CCI v. Bharti Airtel Ltd. (Bharti Airtel) and Coal India Ltd. v. CCI (Coal India Ltd.) appear to have settled this position. The present paper summarises the jurisprudence laid down in this area through various decisions. The paper also takes note of the recent decision of the Delhi High Court in Telefonaktiebolaget LM Ericsson (Publ) v. CCI (Ericsson) and argues that the decision is not consistent with the established jurisprudence of the Supreme Court. The Supreme Court has held that the Competition Act is a special statute dealing with anti-competitive conduct. This paper argues that the Competition Act should have primacy over the sectoral regulators when it comes to adjudication of anti-competitive conduct in various sectors. On the same lines, the sectoral regulators should have primacy over jurisdictional aspects specific to the sectoral regulations.
CCI’s jurisdictional overlap with sectoral regulators
The wide jurisdiction exercised by the CCI across all sectors has been acknowledged by the Supreme Court in Bharti Airtel case . The Court dealt with the issue of jurisdictional overlap between the Telecom Regulatory Authority of India (TRAI) and CCI. It was held that CCI (being a market regulator) is not a sector-specific body but has jurisdiction across all sectoral boundaries, including all industries. Where the sectoral regulators as well as the CCI have parallel jurisdiction over the same matter, the Supreme Court provides important guidance in terms of providing primacy to the sectoral regulators with regard to technical issues arising out of the sectoral dispute. Once the sectoral regulator has decided the technical aspect(s) of the dispute, adjudication of anti-competitive conduct (if any) was held to be within the purview of CCI. The above approach, the Court held, would lead to avoidance of conflicting decisions by two authorities as well as maintaining comity between regulators.
Importantly, it was observed by the Court that even though the TRAI has been bestowed with the functions to deal with anti-competitive conduct and ensure fair and non-discriminatory conduct in the telecom sector under the TRAI Act, CCI’s jurisdiction is not ousted, and it is better equipped to deal with the anti-competitive conduct in the market post the findings of the sectoral regulator on domain issues. This guidance becomes particularly important in cases where parallel proceedings are ongoing before sectoral regulator and the CCI arising from the same cause of action.
The issue of concurring jurisdiction was again dealt by the Supreme Court in Coal India Ltd. case . The Court reiterated that other fora having jurisdiction to adjudicate the dispute does not in itself oust the jurisdiction of CCI. The case related to unfair conditions imposed by Coal India Limited (CIL) and its subsidiaries in supply of non-coking coal to thermal power plants, in alleged abuse of its dominant position. It was pleaded by CIL that its conduct should be challenged before the Coal Controller wherein the complaints of nature, viz. quality of coal could be ventilated, and subjecting CIL to the ambit of the Competition Act would be unjustified. The Coal Controller under Colliery Control Order, 2000 had the jurisdiction to decide issues with respect to the quality of coal. The Supreme Court rejected the contention and upheld the jurisdiction of CCI to decide a dispute which may also be under the jurisdiction of the Coal Controller. The Court noted:
124. It is true that the actions of the appellants can be challenged in proceedings in judicial review as contended by the appellants. Equally, the appellants are justified in pointing out as a matter of fact that there may be forums other than the CCI such as the Controller of Coal whereunder redress may be sought against action of the appellants. But that by itself, cannot result in denial of access to a party complaining of contravention of a law which is otherwise applicable. It must also be remembered that action can also be taken by the CCI suo motu. Such is the width of the power vouchsafed for the authority under the Act.
The decision of the Supreme Court in Coal India Ltd. case gives definitive guidance on overlaps between sectoral regulators and the CCI in relation to multiple fora where the dispute could be adjudicated.
It is notable that the decisions of CCI operate in rem. This is a particularly important aspect in cases where there may be an arbitration agreement between parties in cases which are filed before the CCI. The Delhi High Court has held that the existence of arbitration agreements between the parties does not oust the jurisdiction of CCI to adjudicate on the competition concerns arising out of the agreement. This issue was adjudicated by the Delhi High Court in a writ petition challenging the maintainability of the proceedings before the CCI by contending that an arbitration agreement existed between the parties and the proceedings before the CCI could not proceed and were liable to be referred to arbitration under the (Arbitration Act). It was observed by the High Court that the scope of an enquiry before an Arbitral Tribunal is limited, and it does not have the mandate or expertise to decide the issue of abuse of dominant position.
The patent see-saw at the Delhi High Court
After the decisions of the Supreme Court in Bharti Airtel case and Coal India Ltd. case , a judgment of the Division Bench of the Delhi High Court in Telefonaktiebolaget LM Ericsson (PUBL) v. CCI (2023 judgment) reignited the jurisdictional conflict, in this case between the (Patents Act) and the Competition Act. While deciding an intra-court appeal against a Single Judge Bench judgment of 2016 (2016 judgment) , the Division Bench of the Delhi High Court held that the CCI cannot exercise jurisdiction over the actions of enterprises that are in the exercise of their rights as a patentee. The Division Bench held that the Patents Act must prevail over the Competition Act on the issue of the exercise of rights by a patentee under the Patents Act. The High Court held that:
49. In our view, the inquiry that the CCI proposes to conduct in respect of an assertion of patent rights is nearly identical to that which the Controller will conduct under Chapter XVI of the Patents Act. The legislative intent is apparent in that the Patents Act — especially as amended by the 2003 Amendment that introduced Chapter XVI after the Competition Act was enacted. It is especially for the field pertaining to patents, unreasonable conditions in agreements of licensing, abuse of status as a patentee, inquiry in respect thereof and relief that is to be granted therefor are all to be governed by the Patents Act.
In the opinion of the authors, the High Court excluded the applicability of the Competition Act to patent disputes by holding that the question of whether an agreement under which a patent is licensed will cause an appreciable adverse effect on competition within India or will amount to an abuse of dominant position is not one that is reserved for the CCI.
To appreciate the finer nuances of the Division Bench decision, it is apposite to refer to the 2016 judgment which was under appeal, as well as the guidance given by the Supreme Court in its Bharti Airtel case decision. Factually, Telefonaktiebolaget LM Ericsson (PUBL) (Ericsson) held patents for certain telecom technologies which were designated as Standard Essential Patents (SEP) by Standard Setting Organisations. Micromax, seeking to use Ericsson’s SEPs in their respective products, alleged that Ericsson imposed unfair, unreasonable, and discriminatory conditions on licensing its SEPs.
Ericsson initiated proceedings before the Delhi High Court under the Patents Act against Micromax alleging that the products manufactured and dealt with Micromax violated its patents.
While the above proceedings filed by Ericsson under the Patents Act were pending before the Delhi High Court, Micromax filed a case against Ericsson before the CCI. Given that Ericsson enjoyed a de jure monopoly on account of its patents being designated as SEPs, it was alleged before the CCI that Ericsson was abusing its dominant position by adopting practices that were discriminatory and contradictory to fair, reasonable and non-discriminatory (Frand) terms. The CCI prima facie agreed with the allegations and directed a detailed investigation against Ericsson for abuse of dominance. Notably, the CCI held that the pendency of the civil suit (proceedings under the Patents Act) did not prevent the CCI from proceeding under the Competition Act. This led to Ericsson filing a writ petition before the Delhi High Court which ultimately led to the 2016 judgment .
Ericsson contended that the disputes are subject matter of proceedings in the suit filed by Ericsson and, therefore, outside the purview of the CCI. It argued that the Patents Act would prevail over the Competition Act and therefore the CCI would not have jurisdiction to adjudicate the case filed by Micromax. The Single Judge Bench decided against Ericsson holding that the remedies under the statutes are not mutually exclusive and are materially different. On the issue of parallel litigation before the patent authority as well as CCI, the High Court held:
208. It has been contended on behalf of Ericsson that since, the disputes between the parties were subject matter of pending suits, the same could not be entertained by CCI. In my view, the aforesaid contention is also unmerited. As explained earlier, the proceedings under the Competition Act before the CCI are not in the nature of a private lis. The object of the proceedings is to prevent and curb the practices which have an adverse effect on the competition in India. The proceedings in the suits filed by Ericsson and the proceedings before CCI are not mutually exclusive. It is also necessary to bear in mind that it is not necessary that an adverse finding against Ericsson by CCI would necessarily results in the grant of relief as prayed for by Intex or Micromax. The scope of enquiry before CCI would obviously be limited to whether Ericsson has abused its dominant position and, if so found, CCI may issue orders as contemplated under Section 27 of the Act. Additionally, it must be noted that Ericsson had filed a suit after Intex had made a complaint before the CCI.
The High Court concluded the jurisdiction of CCI cannot be held to be ousted in matters related to patents. It is notable that the Court gave a green signal to parallel litigation before the sectoral regulator as well as the CCI. Further, the Court also did not require the CCI to await the decision of the sectoral regulator on technical aspects, before commencing the inquiry on anti-competitive conduct.
The Division Bench, on the other hand, reversed the 2016 judgment , and ruled that no allegation of anti-competitive conduct in relation to patent rights can be made before CCI and such questions are to be governed by the Patents Act.
The contrasting approach of the two decisions will need to be tested on the yardstick of the Supreme Court guidance in Bharti Airtel case where the Supreme Court ruled that in matters of conflict of jurisdiction between regulatory authorities and CCI, comity between regulators has to be upheld. To this effect, technical aspects of the dispute is to necessarily be adjudicated by sectoral regulators, and thereafter the CCI is the authority empowered to enquire into anti-competitive conduct. The authors agree with the Division Bench’s approach of overruling parallel proceedings before two authorities. However, the decision is silent on the consequential jurisdiction of CCI on the anti-competitive conduct once the patent authorities have decided the in personam disputes under the Patents Act. This omission is even more curious given that the Bharti Airtel case decision of the Supreme Court was expressly brought to the attention of the Court before the 2023 judgment . The CCI has appealed the 2023 judgment of Delhi High Court before the Supreme Court.
CCI’s jurisdiction to adjudicate anti-competitive conduct
The Competition Act is a special statute for adjudicating anti-competitive conduct. While the decision of the Supreme Court in Bharti Airtel case goes a long way in drawing jurisdictional boundaries, the argument still exists as to whether the CCI should have the exclusive jurisdiction (or at least have primacy over other regulators) when it comes to adjudicating anti-competitive conduct across all sectors. This is without prejudice to the premise that in matters of jurisdictional overlaps with sectoral regulators, sectoral regulators should have primacy for dealing with technical/sectoral aspects of the dispute. Multiple reasons exist to support the above argument. Foremost among those is the scheme of the Competition Act when it comes to adjudication of anti-competitive conduct. The Competition Act is a complete Code in itself, as the CCI has various tools at its disposal to adjudicate anti-competitive conduct. Sections 3 and 4 of the Competition Act respectively provide for substantive violations of anti-competitive conduct, viz. abuse of dominance and anti-competitive agreements. Section 19 of the Competition Act provides detailed provisions on how to assess anti-competitive conduct. These provisions include assessment of appreciable adverse effect on competition, delineation of relevant market (in its product and geographic aspect) and assessment of dominance of an entity. Section 26 of the Competition Act provides a detailed procedure for adjudication before the CCI, and Section 27 of the Competition Act provides vast powers of the CCI in case of violations of Sections 3 and/or 4 of the Competition Act.
In contrast, sectoral statutes almost never contain any machinery for specialised adjudication for anti-competitive conduct, and hence cannot be considered special statutes for dealing with anti-competitive conduct. For determination of whether a statute is special or general, guidance is available in the decision of the Supreme Court in LIC v. D.J. Bahadur , where the Court held as follows:
52. In determining whether a statute is a special or a general one, the focus must be on the principal subject-matter plus the particular perspective. For certain purposes, an Act may be general and for certain other purposes it may be special and we cannot blur distinctions when dealing with finer points of law.
Upon determination of the specific and general nature of the dispute, it becomes important to examine whether the jurisdiction of a court under general law has been ousted in terms of the procedure specified under special law. It is trite law that the general law must give way to the special law. While dealing with the conflict between the and Arbitration Act in dealing with validity/enforceability of unstamped arbitration agreements, the Supreme Court considered that the Arbitration Act is the special law in context of the case. The Court opined that the Arbitration Act is a complete code in itself by which arbitration might be conducted, with a view to ensuring its success as a speedy and efficacious alternative to the courts. A statute which exists as a complete Code becomes an important factor in determination of exclusion of other statutes. In the opinion of the authors, the same ratio applies to anti-competitive disputes under the Competition Act which is a complete Code for the adjudication of anti-competitive conduct. The Supreme Court in CCI v. SAIL considered the scheme and the essence of the Competition Act and the underlying regulations and held that the same were suggestive of speedy and expeditious disposal of matters.
In the authors’ opinion, the CCI’s jurisdiction should be harmoniously read with the other prevailing sectoral regulators. It is reemphasised that CCI’s jurisdiction should be harmoniously read with the other prevailing sectoral regulators, this is not to say that CCI’s jurisdiction should be to the exclusion of the other sectoral authorities to adjudicate the sectoral/technical issues. Consequences under both statutes should follow. This premise also follows from Section 62 of the Competition Act which provides that the provisions of the Competition Act are in addition to and not in derogation to the provisions of other laws.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of DSK Legal or any of its partners or retainers.
*Principal Associate, DSK Legal. Author can be reached at: danish.khan@dsklegal.com.
**Associate, DSK Legal. Author can be reached at: aakrit.sharma@dsklegal.com.
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