Compat overturns fine issued by the Competition Commission of India (CCI) to Kingfisher for alleged non-compliance

Neelam Mathews

Sept 16, 2012

Amid all the news breaks, we missed writing on the judgment of the Competition Appellate Tribunal (Compat) which has annulled a fine issued by the CCI to Kingfisher Airlines.

Non-Compliance Image Source- cattlelogos.com

The 10 million rupee (about EUR 145,000) fine was the first penalty levied by the Indian Competition Commission under the Competition Act 2002 where Kingfisher was sanctioned for allegedly failing to supply information in the context of the CCI's investigation into the company's alliance with Jet Airways.

 "Kingfisher appealed to Compat, which set aside the CCI order and remitted it for consideration.  Compat found that the letters sent to the airline were notices of extension and not, as argued by CCI, reminders to comply with the original information request.  Compat found that the CCI failed to distinguish between a failure to comply and late compliance. In respect of the latter, there is only failure where the relevant time period and extension has expired," said Suzanne Rab, Partner, King & Spalding to Aerospace Diary.

"In January 2012, the CCI imposed a new fine amounting to 7.2 million rupees which was again challenged before Compat.  In annulling the fine last week Compat has yet again distinguished between notices of extension and reminder notices. Viewed in the context of Compat's earlier ruling, it considered that  the CCI had acted beyond its powers in levying a 7.2 million penalty and that this could not stand.

"The case has been going on for some time and the latest ruling by Compat has clarified one procedural matter at least, namely that a distinction needs to be made between reminder notices and timing extensions.  It sends a strong message to CCI in terms of how it drafts correspondence such that there be no equivocation on what is required by the company to comply with its directives.

"Compat clearly has an important role to play in terms of judicial oversight of the CCI's decisions both in matters of process such as the instant case and in its substantive assessment, “ adds Rab.