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INTERIM ORDERS

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20 views3 pages

INTERIM ORDERS

Uploaded by

karishma.taneja0508
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INTERIM ORDERS

Interim measures, providing temporary relief pending the outcome of a case, are a potent tool
to preserve competition during ongoing anti-trust investigations as well as to improve the
effectiveness of the ultimate enforcement decision. Thus, their objective is twofold,
protective and corrective.

As per section 33 of the Competition Act, 2002, the interim order can be passed by the
Competition Commission of India during an inquiry on the contravention of section 3(1), or
4(1), or 6 of the Act. The said section empowers the CCI to restrain the anti-competitive
activity for a temporary period. The procedure for the interim order has to be mandated
according to Regulation 31 of the General Regulation, 2009. Also, the CCI can pass an ex–
parte interim order against a party, but the CCI must send a notice to that party immediately.
It may be argued that during the inquiry of a competition matter, the interim order can be seen
as the strongest tool to prevent irreparable damage due to anti-competitive activity.

Orders passed under section 33 are directly challengeable at the Hon’ble National Company
Law Appellate Tribunal under section 53A of the Act. In case of violation of natural justice
by the CCI, the parties can also file a writ before the High Court under article 226 of the
Indian Constitution. In 2010, the Supreme Court laid down principles and three conditions to
be followed by the CCI while deciding interim order in CCI v. SAIL.

Section 33 of the Competition Act, 2002 (Competition Act) specifies that where, during an
inquiry, the CCI is satisfied that an act in contravention of substantive provisions of the
Competition Act (broadly, anti-competitive agreements, abuse of dominant position and
regulation of combinations) has been committed and continues to be committed or that such
act is about to be committed, the CCI may, by order, temporarily restrain any party from
carrying on such act until the conclusion of such inquiry or until further orders, without
giving notice to such party, where it deems it necessary. Further, the law presumes that an
“inquiry” is commenced when the CCI, in exercise of its powers under Section 26(1) of the
Competition Act, issues a direction to the Director General (the investigative arm of the
CCI)1. Till the time a final order is passed by the CCI in accordance with law, the inquiry
under the Competition Act continues. A bare reading of Section 33 of the Competition Act
implies that the CCI: (a) has to record its satisfaction on contravention of the provisions of
the Competition Act (either through a past, continuing or imminent act/conduct); (b) can
restrain any party (not necessarily a named opposite party) from carrying out an act of
contravention; and (c) does not have to grant such a party an opportunity of being heard
before passing an interim relief order. ...

The principles for deciding the interim relief application under Section 33 of the Competition
Act were laid down by the Supreme Court of India (Supreme Court) in CCI v. SAIL2 where
the Court mandated that, while recording a reasoned order under Section 33 of the
Competition Act, the CCI should, inter alia, ensure fulfilment of the following conditions: (a)
record its satisfaction (which has to be of much higher degree than formation of a prima facie
view under Section 26(1) of the Competition Act) in clear terms that an act in contravention
of the stated provisions has been committed and continues to be committed or is about to be
committed; (b) it is necessary to issue an order of restraint; and (c) from the record before the
CCI, there is every likelihood that the party to the lis would suffer irreparable and
irretrievable damage, or there is definite apprehension that it would have an adverse effect on
competition in the market. Further, the court cautioned that this power must be exercised by
the CCI sparingly and only under compelling and exceptional circumstances. The CCI has
followed this directive of the Supreme Court in letter and spirit, as can be seen from the
statistics. Of more than a thousand enforcement matters taken note of by the CCI, 480
investigations have been ordered.

Therefore, to date, the CCI theoretically has had the opportunity to grant interim relief in 480
instances. However, based on publicly available information, this power has been exercised
by the CCI in only 9 cases so far. Given the far-reaching consequences of interim relief orders
(keeping in mind that in India investigations may take years to complete), there are certain
procedural safeguards in place for parties if an interim relief is granted by the CCI,
specifically if the relief is granted ex parte4. First, the CCI must pass a separate order in
relation to the grant of an interim relief recording its reasons. Second, wherever the CCI has
passed an interim order ex parte, it is mandated to hear the parties against whom such an
order has been made “as soon as possible”. Third, in cases where an interim order has been
passed, the CCI is required to pass a final order, as far as possible, within ninety days from
the date of the interim order (although, given the broad wording of the regulation, this time
period has not been strictly observed by the CCI)....

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