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Vaish wins vs CAM, TMT in Compat: CCI’s IATA ruling was ‘serious illegality’

The COMPAT, overruling the CCI yet again, held that the CCI is bound to record reasons for closing a case and if it does not do so it commits a serious illegality

How many of the CCI's orders has the Compat overturned now?
How many of the CCI's orders has the Compat overturned now?

“The Competition Appellate Tribunal (Compat) on Thursday set aside an order of fair trade regulator Competition Commission of India (CCI) in a case of alleged abuse of dominant position and anti-competitive practices by the International Air Transport Association (IATA) and its Indian arm. Dismissing the CCI findings, Compat ordered a fresh probe in the matter,” reported Mint.

“The Compat’s order came over an appeal filed by The Air Cargo Agents Association of India, challenging a CCI order passed on 4 June, 2015, which discharged IATA for alleged anti-competitive practices and abuse of dominance,” according to Mint.

Vaish Associates competition head MM Sharma, senior associate Deepika Rajpal and associate Danish Khan briefed senior advocate Jimy F Pochkhanawalla acted for the Air Cargo Agents Association of India (ACAAI).

TMT Law Practice founding partner Abhishek Malhotra and associates Angad Singh Dugal and Nishita Chaturvedi acted for the Competition Commission of India (CCI).

Cyril Amarchand Mangaldas partner Bharat Budholia and associate Neelambera Sandeepan with counsel Rajshekhar Rao and advocate Sameer Dawar acted for IATA and IATA-India.

The ACAAI had complained to the CCI in 2012, with allegations of limiting and controlling the market and fixing rate of commission payable to cargo agents by airlines and abuse of dominance, against the IATA and IATA-India. The CCI referred the complaint to its investigating arm and this arm – the Director General (DG) – reported back that the IATA’s behaviour did raise competition concerns but that the ACAAI’s specific allegations on limiting and controlling the market and fixing commission rates were not proved.

The CCI agreed with the DG and dismissed the complaint, without taking any decision on the other part of the complaint – the abuse of dominance.

COMPAT chairman GS Singhvi, setting aside the CCI’s June 2015 order on 15 November, stated:

[…] the Commission is duty bound to record reasons, howsoever briefly, for closing a case under Section 26(2), which has admittedly not been done while dealing with the information filed by the appellant. If the Commission was to pass an order under Section 26(2) in respect of the allegation of abuse of dominant position levelled against [IATA and IATA-India], the appellant could have challenged the same by filing an appeal under Section 53B(2) read with Section 53A(1) of the Act.

However, the fact of the matter is that no such order was passed by the Commission and as mentioned above, order dated 21.03.2013 does not contain any indication about negation of the allegation of abuse of dominant position levelled by the appellant. On the basis of the above discussion, we hold that the DG committed serious illegality by not recording a finding on the allegation of abuse of dominant position [….]

Read full order (PDF)

Photo by James Petts

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