#CementCartel: COMPAT sets aside CCI’s 6307 cr penalty order, remands case to CCI for fresh hearing

The Competition Appellate Tribunal (COMPAT) today set aside the CCI order imposing a penalty of 6,307 crore on cement companies for alleged cartelization and has remitted the matter to the Commission for fresh adjudication of the issues..Former Supreme Court judge and COMPAT Chairman Justice GS Singhvi has allowed the cement companies to withdraw the 10% of the penalty that was deposited as per the interim order passed by COMPAT..Allowing the appeals, the COMPAT has also directed the CCI to give a fresh order within 3 months and to evolve common protocol guidelines for conducting investigation to ensure that the appellants don’t suffer from violations of natural justice..In its 210 page Order, the COMPAT observed, “It should be realized that much of the appellate litigation would be obviated if a just and fair procedure is adopted for conducting investigation and inquiry and passing of orders under Section 27, 28 and the provisions contained in Chapter VI of the Act.”.The COMPAT further said that the parties in the hearing before the CCI can rely on the documents produced before the Joint DG..In June 2012, the CCI had found 11 cement companies guilty of cartelization on the basis of price parallelism, production parallelism and dispatch parallelism, and had imposed a penalty at the rate of 0.5 times of their profit for the years 2009-10 and 2010-11..It was against this order that the 11 cement companies had filed appeals in the COMPAT..The COMPAT heard the 11 cement companies on the grounds of violation of principles of natural justice and not on merits. Since there were common issues raised by various cement companies, Lafarge was designated the lead counsel. It was represented by Cyril Amarchand Mangaldas Mumbai Competition Law Partner Nisha Kaur Uberoi, along with Senior Advocate Gopal Subramanium..The main issues that were raised included “he who hears must decide” and “bias and lack of fairness”. The cement companies argued that the Chair was not present at the time of the hearing but only participated in subsequent deliberations and signed the order..Ambuja and Ultratech supplemented the arguments made by Lafarge and all other companies adopted Lafarge’s arguments..Below is the list of counsels who argued before COMPAT:.PartyLaw Firm & Senior CounselLafargeCyril Amarchand Mangaldas (Mumbai Partner Nisha Kaur Uberoi along with Bharat Dudholia, Arunima Chandra & Kaustav Kundu) with Senior Advocate Gopal SubramaniumAmbujaCyril Amarchand Mangaldas (Mumbai Partner Nisha Kaur Uberoi, Anisha Chand, Aishwarya Gopalakrishnan & Neelambara) with Senior Advocate Ramji SrinivasanUltratechSameer Parekh with Senior Advocate Gourab BanerjeeCCIVaibhav Gaggar with Senior Advocate Pallav ShishodiaBAISeth Dua Associates (Partner Atul Dua along with Ankush Walia).Read the order: