Daunted by deadlines, CCI to decide on Jet-Etihad on Nov 11

India's competition regulator Competition Commission of India (CCI) will take up the Jet-Etihad deal for approval next Monday, by when it would have received the opinion of Air India on the proposed deal. 

Also read: Jet Airways sees Etihad deal closure despite record Q2 loss

The national carrier is expected to send its reply to the CCI within the next 24 hours. These views will be crucial in helping the Commission pass on order on whether the deal complies with India’s fair trade rules.

The CCI has been considering this deal for quite some time now, leading to questions on why it was taking so long for it to come to a conclusion on the pact. The rules specify time limits on the regulator’s actions with respect to clearing such deals. Section 30 of the Competition Act, 2002 specifies that if the Commission does not pass an order within 210 days of a filing, then the deal is deemed to have been approved.

There is another time limit – rule 19 of the combination regulations - which requires the Commission to take a prima-facie view on a deal within 30 days of a filing. If this deadline passes, then it is mandatory for the Commission to undertake a detailed investigation of the deal. Simultaneously, the Commission has to make public the entire deal and its details, in order to ensure wider scrutiny of the deal.

Various reports suggest that the Jet-Etihad deal was filed before the CCI on May 1, 2013. Over six months have passed since and the final word is yet to be said by the regulator. This has led to considerable disquiet within Jet Airways and the Abu Dhabi based carrier Etihad. It has also led to disquiet within the competition law fraternity, which has questioned the delay, as well as the lack of a clear cut announcement from the Commission.

In response, a senior Commission official told CNBC TV18 that the 30 day limit had not yet been invoked, as the original Jet-Etihad filing had been amended. “The 30 day trigger for making the deal public has not yet been triggered. There cannot be blame if the original filing was half-baked and defective. The party took time in furnishing additional information”, the official said.

The Foreign Investment Promotion Board had given its nod to deal on July 29 this year, while the government cleared the Rs 2058 crore deal on October 3. The clearances came after the Jet-Etihad combine revised its shareholder and commercial agreements. Since the contours of the deal have changed from the original filing, it stands to reason that perhaps the fresh filing was made after the clearance.

The Commission is now expected to consider the deal on next Monday and its decision, officials said, would be based on the internal findings and the views of Air India among others. In the event that it is not cleared, it would imply that the competition watchdog is going to undertake a detailed investigation of the deal.