By an order dated August 31 2016, the Competition Commission of India (CCI) re-imposed penalties on 11 cement manufacturers and the Cement Manufacturers Association (CMA) for violations of Sections 3(3)(a) and 3(3)(b) of the Competition Act. The CCI had imposed an earlier penalty under Section 27 of the act in the same case through a June 20 2012 order (for further details please see "Commission imposes heaviest penalty yet against cement cartel").(1)
However, the Competition Appellate Tribunal (COMPAT) set aside the CCI order on December 11 2015, referring the case back to the CCI to rehear the parties' arguments and issue a new order in accordance with the law. Interestingly, the CCI order was set aside by COMPAT not on the merits, but rather for a failure to follow the principles of natural justice. The violations were in relation to the fact that the chair of the CCI had signed the impugned order despite the fact that he was not present for the final hearings (ie, between February 21 and 23 2012), during which arguments were advanced by the parties' counsel.
The CCI reheard the parties at length, ultimately concluding that the cement manufacturers had acted in concert in order to fix cement prices and limit and control the production and supply of cement. The CCI again imposed a penalty at the same rate: 0.5% of the profit for 2009-2010 and 2010-2011 in the case of the cement manufactures and 10% of the total receipts for two years on the CMA.
For further information on this topic please contact MM Sharma at Vaish Associates by telephone (+91 11 4929 2525) or email ([email protected]). The Vaish Associates website can be accessed at www.vaishlaw.com.
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