In a notification dated July 4, 2018, the Ministry of Corporate Affairs (MCA) has granted an additional three year extension to the Vessel Sharing Agreements Exemption (VSA Exemption) in the liner shipping industry. This exempts VSAs from scrutiny under Section 3 (i.e., anti-competitive agreements) of the Competition Act, 2002 (as amended) (Act). This extension, which is a furtherance of international best practice, has come as a source of relief to the liner shipping industry, given that the last extension of the VSA exemption expired on June 19, 2018. The expiry of the previous exemption had led to speculation regarding the status and future of the VSA exemption.
* This piece was first published in the December 2017 issue of the Practical Lawyer (2017) PL (Comp. L) Dec 76
This century is continually being marked by the convergence of this goliath world into a global village. While this phenomenon is attributable to a number of factors, inter-operability of technology and adoption of common standards have acted as important catalysts in this process. As such, this convergence perforce requires that common standards are available on fair terms to all. However, a number of components of these essential standards are patented, i.e., are standard essential patents (SEPs), thereby implying the exclusive right of the patentee to use and exploit the SEP. It is at this juncture that a complex yet interesting legal wrestle between the competition law and intellectual property rights (IPR) regimes emerges.
In essence, SEPs encompass those patented technologies which have become essential to a standard. From an antitrust perspective, an SEP holder enjoys substantial, almost monopolizing market power due to lack of substitute alternative technologies. The SEP holder is susceptible to engaging in abusive practices, such as refusal to license the SEP to other manufacturers, or charging exorbitant royalties. In order to balance this one-sided bargaining power, standard setting organizations (SSOs) across all jurisdictions obligate SEP holders to license the their intellectual property on fair reasonable and non-discriminatory (FRAND) terms. However, the multi-jurisdictional decisional practice elucidates that mere affirmation by SEP holders to SSOs does not preclude them from engaging in abusive practices, thereby necessitating an interaction between competition laws and IPR.
This piece was first published in the October 2017 edition of the Manupatra Competition Law Reports.
Over the years arbitration has become a preferred private and consensual mode of dispute resolution. Arbitral tribunals and courts have been dealing with complex contracts and rapidly evolving the law relating to arbitrations. An issue commonly faced by arbitral tribunals is whether the dispute referred to it is arbitrable in the first place. These questions commonly arise when allegations of fraud are made before a tribunal, or a reference is made to decide issues relating to competition law.
Traditionally, courts across jurisdictions have taken the view that competition law disputes are non-arbitrable. This was because arbitration being a private and consensual mode of dispute resolution, was considered to be an inappropriate forum for deciding competition law issues which related to the larger public interest of promoting competitive markets. However, around late 1980s to early 1990s, the judicial trend on arbitration of competition law disputes changed. The U.S. Supreme Court’s decision in Mitsubishi Motor Corp. v. Soler Chrysler Plymouth (Mitsubishi) and the European Court of Justice’s decision in Eco Swiss China Time Ltd. v. Benetton International N.V. held that an arbitral tribunal could also arbitrate upon competition law issues. Continue Reading Arbitrating Competition Law Disputes in India
The Competition Commission of India (CCI) has imposed a cumulative penalty of INR 120 million (approx. USD 1.87 million) on ten coal and sand transporters (Opposite Parties or OPs) for bid-rigging. The OPs were found to have rigged the bids submitted in relation to four tenders for coal and sand transportation floated by Western Coalfields Limited (Informant), a subsidiary of the state-owned monopolist, Coal India Limited.
The information filed with the CCI alleged contravention of the provisions of the Competition Act, 2002 (Competition Act) on the ground that the OPs had quoted identical prices, which were suspiciously higher than the rates quoted for the same jobs in the recent past.
The Ministry of Corporate Affairs, Government of India has again extended the exemption granted to Vessels Sharing Agreements (VSA) of Liner Shipping Industry from the provisions of Section 3 (i.e., anti-competitive agreements) of the Competition Act, 2002 (as amended) (Act) for a period of one year, with effect from 20 June 2017 (VSA Exemption). The VSA Exemption applies to carriers of all nationalities operating ships of any nationality from any Indian port as long as such agreements do not include concerted practices involving fixing of prices, limitation of capacity or sales and the allocation of markets or customers.
On 8 May, 2017, in a landmark judgment, the Hon’ble Supreme Court (bench consisting of Hon’ble Mr. Justice A.K. Sikri and Hon’ble Mr. Justice N.V. Ramana) upheld the principle of “relevant turnover” for determination of penalties in competition law contraventions; and settled a critical issue in India’s antitrust jurisprudence, which was heavily debated amongst all stakeholders for over five years.
The above ruling arises out of a proceeding involving an alleged contravention of Section 3(3) of the Competition Act, 2002 (Competition Act) in the public procurement of Aluminium Phosphide (ALP) Tablets by the Food Corporation of India (FCI). The Competition Commission of India (CCI) found a violation of Section 3(3) of the Competition Act and imposed a penalty at the rate of 9% of the total turnover of the concerned ALP manufacturers – namely, Excel Corp Care Limited (Excel), United Phosphorus Limited (UPL) and Sandhya Organic Chemicals Private Limited (Sandhya).
On March 22nd, 2017, nearly seven years since the introduction of the leniency regime in India, the Competition Commission of India (CCI) has proposed the first set of amendments to the Competition Commission of India (Lesser Penalty) Regulations, 2009 (Leniency Regulations) and invited comments from stakeholders.
In line with most developed competition law regimes, the Competition Act, 2002 (Competition Act) also provides for establishment of a leniency regime in India. Section 46 of the Competition Act, supplemented by the Leniency Regulations, draws up the leniency regime in India. The regime enables enterprises to come forward and provide information on cartel arrangements and, in return, avail themselves of up to 100% reduction in penalties.[i]
In view of the CCI’s powers and increasing awareness of the Competition Act, the past few years have seen a number of enterprises come forward to gain benefit of the leniency provisions. In fact, in January this year, the CCI passed its first ever order in a leniency matter[ii] and a glance at the proposed amendments indicates that the CCI is seeking to clarify issues relating to procedures in such matters.
On 7 March 2017, the Supreme Court of India (SC) upheld an appeal by the Competition Commission of India (CCI) against an order of the Competition Appellate Tribunal (COMPAT) in a case of alleged cartelisation by members of a film and television artists’ trade union in the state of West Bengal. This order of the SC (Order) is arguably the first of the apex court on substantive issues arising under the provisions relating to anti-competitive agreements under the Competition Act, 2002 (Competition Act).
The matter arose out of information filed by a distributor and telecaster of regional serials in Eastern India, including the state of West Bengal (Informant). The Informant alleged that he had been assigned the rights to dub and telecast the television serial ‘Mahabharat’ in Bengali and had entered into agreements to telecast it on two television channels. However, under opposition and pressure from two associations, namely the Eastern India Motion Picture Association (EIMPA) and the Committee of Artists and Technicians of West Bengal Film and Television Investors (Co-ordination Committee), one of the two channels decided to not proceed with the telecast.
The Co-ordination Committee is a joint platform comprising the Federation of Cine Technicians and Workers of Eastern India, and West Bengal Motion Pictures Artists Forum. Upon one channel deciding to not telecast the dubbed serial, the Informant decided to approach the CCI and filed an information alleging that the restrictive acts of EIMPA and the Co-ordination Committee were in violation of the provisions of the Competition Act.