Private Damages Regime

This article was first published in The Practical Lawyer

The Competition Act, 2002 (the Act) was brought into force inter alia with the objective of curbing anti-competitive behaviour which causes appreciable adverse effect on competition in the Indian market, to ensure a fair competitive environment.[1] Although one does not find any mention of consumer welfare in the Statement of Objects and Reasons of the Act, the preface to the Act unequivocally lays down its spirit by providing that it intends to promote and sustain competition in the markets, to protect the interest of consumers and to ensure freedom of trade carried on by other participants in the market

In furtherance of this objective, the Act empowers the Competition Commission of India (CCI) with multifarious penal powers to ensure compliance with the legal regime. However, such provisions are predominantly directed towards penalising the violators rather than compensating the parties affected by the anti-competitive behaviour of one or more market players. To ensure that the victims of anti-competitive behaviour receive their dues, the Act also lays down a mechanism for such parties to seek compensation for the losses that they may have suffered due to the anti-competitive behaviour.

The private damages regime under the Indian competition law, which came into force in 2009, lays down the legislative foundation for consumers and competitors to sue for compensation in relation to the damages suffered as a result of the anti-competitive behaviour. Considering that the Competition Law is still in nascent stages in India, there has been no ruling pronounced in this space until date. While the case involving the National Stock Exchange (NSE) and the MCX Stock Exchange (MCX- SX)[2] remains the sole case to utilise the private enforcement provisions of the Act, the matter remains sub judice. Curiously, in the celebrated case involving DLF[3], while private damages litigation was drawn up against DLF, it was consequently withdrawn.

Continue Reading Private Enforcement under Indian Competition Law – A Roadmap