C&A eAlert – Obituary - the Competition Appellate Tribunal 

May 2017

On 26 May 2017, a government notification[1] finally put an end to the Competition Appellate Tribunal (COMPAT) replacing it with the National Company Law Appellate Tribunal (NCLAT).

The government notification brings Part XIV of the Finance Act, 2017 (Finance Act) into operation, which provides for merger of several tribunals, including the COMPAT. From the effective date (26 May 2017), COMPAT will cease to exist and NCLAT will begin operating as the appellate body under the Competition Act, 2002 (Competition Act).

Amendments

The Finance Act primarily amends Section 53 A of the Competition Act, 2002 (Competition Act) which was the core provision in relation to filing an appeal against specific orders of the Competition Commission of India (CCI/Commission).

The amendment essentially replaces the appellate body from COMPAT to NCLAT. However, the substantive provisions in relation right to appeal un-amended. Thus, right to appeal before the NCLAT would be the same as the pre-existing right of appeal before the COMPAT.

In addition, like its predecessor, the NCLAT would also be relevant authority to seek a compensation under the Competition Act.

The Transition

The amendment came into force on 26 May 2017 (date of appointment). Fresh appeals from this date would be filed with the NCLAT.

Post this date of appointment, all cases pending before the COMPAT will be transferred. The matters can either be heard afresh or continue from the state pending before the COMPAT.

The Takeaways

While the amendment is fairly straightforward, the actual transition is likely to face predictable teething problems such as the relevant procedure for filing the appeal.

Notably, the amendment does not touch the substantive provisions. Right to appeal under the Competition Act has been restricted to only certain orders of the Commission – leaving a significant lacuna for relief against orders not listed in Section 53 A. This gap would continue to apply even post the amendment.

However, the most important question, currently left open is the efficacy of the NCLAT. In the eight years of its existence, the COMPAT proved to be the sentinel on the qui vive – emphasizing the strict adherence to due process and natural justice by CCI and its investigating arm. Perhaps, most importantly, the COMPAT articulated the concept of ‘relevant turnover’ which significantly reduced the CCI’s powers to penalize erring enterprises.

Being a specialized appellate body, the COMPAT was quick to understand and apply the nuances of competition law. On the contrary, the NCLAT, responsible for adjudicating matters under the Indian Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 will now have appeals under the Competition Act to deal with. Whilst the amendment reflect the government policy to avoid multiplicity of various tribunals, it remains to be seen if the NCLAT will be an effective appellate tribunal in dealing with competition specific issues.

Should you have any questions, please contact members of our competition law team.

Karan Singh Chandhiok
Head, Competition and Dispute Resolution Practice
karan.chandhiok@chandhiok.com

Vikram Sobti
Managing Associate
vikram.sobti@chandhiok.com

Kalyani Singh
Managing Associate
kalyani.singh@chandhiok.com

 

 

© 2017 Chandhiok & Associates, Advocates and Solicitors

This e-alert is for information purposes only and does not constitute legal advice.

© 2020 Chandhiok & Mahajan