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Compat affirms explosives cartel but reduces fine to Rs 5.8 cr

Compat affirms cartellisation finding but finds mitigating circumstances
Compat affirms cartellisation finding but finds mitigating circumstances
The Competition Appellate Tribunal (Compat) today reduced the fines but dismissed the appeals of nine explosives manufacturers against last year’s Competition Commission of India’s (CCI) Rs 60 crore penalty in favour of Coal India, which was advised by Amarchand Mangaldas.

Coal India had complained about cartellisation by explosive manufacturers controlling 75 per cent of the market entering into anti-competitive agreements and threatening a boycott of competitive reverse auctions for the procurement of explosives by Coal India.

In April 2012 the CCI unanimously fined 10 manufacturers around Rs 60 crore, or 3 per cent of their annual turnovers of the last three financial years, for violating the anti-cartellisation provisions of the Competition Act 2002 under Section 3(3)(b) (cartels attempting to limit or control supply) and 3(3)(d) - directly or indirectly rigging bids in auctions.

An Amarchand press release stated that today that the Compat passed a final order dismissing the appeals of nine of the manufacturers and upholding the section 3(3)(d) contravention:

Pursuant to an information filed by CIL, the CCI had conducted a detailed investigation, following which it passed an order imposing a total fine of approximately Rs 60 crores on the ten explosives manufacturers.

In its order today, the COMPAT dismissed the appeals upholding the violation of the Competition Act, but considering various mitigating factors, reduced the fine payable to 10% of the fine imposed by the CCI.

The fine would therefore be reduced Rs 5.8 crore, said Amarchand partner Shweta Shroff Chopra.

The team at the firm also included Delhi senior partner Pallavi Shroff, principal associate designate Harman Singh Sandhu, and associates Yaman Verma and Sreemoyee Deb for Coal India.

It is understood that a number of law firms and advocates, including AZB & Partners, Luthra & Luthra, Vaish Associates and PH Parekh acted for explosive manufacturers, which included Gulf Oil Corporation, Ideal Industrial Explosives, Solar Industries India, Blastec India, Indian Explosives, Emul Tek, Regenesis Industries & Techno Blasts India, Black Diamond Explosives, and Keltech Energies.

“We are happy with the outcome of the case,” commented Pallavi Shroff in the press release. “We hope that the Hon’ble Tribunal’s order is complied with.”

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