Friday, 20 January 2017

Competition Appellate Tribunal Ruling in the Auto Parts Case | India Corp Law

[The following guest post is contributed by Harsh Loonker, who is a final year student at the Jindal Global Law School]

The Competition Appellate Tribunal (“Compat”), by way of its order dated December 9, 2016, upheld the order by the Competition Commission of India (“CCI” or the “Commission”) dated August 25, 2014, with minor modifications to the order and a substantial reduction in the penalties levied. Acknowledging that the competition law regime in India and the automotive industry are going through a transitionary process, the Compat reduced the penalty imposed on the appellants, who are car manufacturers.

The CCI had penalised a total of 14 car manufacturers with presence in India, with a blanket 2% penalty on total turnover of their business. This 2% penalty would include their individual turnover from their car sales as well as their spare parts and after-market sales. This was so because the car manufacturers or the original equipment manufacturers (“OEMs”) were considered to be causing anti-competitive effects in the spare parts and after sales and service markets through restrictive agreements. The Informant had filled the information against Honda Siel Cars Ltd., Volkswagen India Pvt. Ltd. and Fiat India Automobiles Pvt. Ltd, none of which were party to this appeal. The Commission, in order to expand its investigation, conducted an inquiry on other OEMs in India and included them in the final order by the Commission. Three aggrieved OEMs, namely Toyota Kirloskar Motor Pvt. Ltd., Ford India Pvt. Ltd. and Nissan Motor India Pvt. Ltd. (“Appellants”), had availed an appeal through statutory appellate process provided in the Competition Act, 2002 (“Act”), while other OEMs had approached various high courts under writ jurisdiction.

Indian Corp Law a blog containing a periodic review of topics of interest in corporate and commercial law that impact India. Founded in 2007 by Jayant ThakurJayant is a Chartered Accountant and is currently resident of Mumbai. interested in learning and sharing about the complex web of laws and regulations that affect corporate, securities and related transactions. Specifically Securities Laws, Corporate Laws, Foreign Exchange laws, Accounting, Tax.

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