Cement cos likely to contest CCI order: ALMT Legal

The Competition Commission of India (CCI) may give an order on cement cartel today. In an interview to CNBC-TV18, Hitesh Jain, partner, ALMT Legal says, it is going to be a protracted litigation. According to him, cement companies are likely to contest CCI order.

Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video. Q: How protracted could be any litigation process involving the cement companies? A: It is certainly going to be a protracted litigation. Unlike the tax litigation, when you go to the appeal, you have to deposit the amount and then contest the appeal, the powers of the COMPAT (Competition Appellate Tribunal) are very wide. Infact they have wide powers to call for the evidence and to hear the case as if it is hearing as a court of the first instance. This is the second round. The third round is to the Supreme Court. None of the appellate provision requires you to deposit the money and contest. It can act like the court of the first instance including power to summon evidence and everything. So, it is going to be a protracted litigation. Q: Some people have pointed out that it is virtually impossible to work in a cartel, when there is a set of 40-45 companies in an industry. What’s your sense of how watertight the case is right now from the CCI’s side? A: From my experience, what I have seen when I have done couple of matters pertaining to cartelisation, you really require a hard evidence to prove a cartelisation. Merely with some correspondence or some media based reports, it is very difficult to come to the conclusion that the cartelisation is there. So, you need hard and solid evidence. In cartelisation, investigation at the DG level, they have the wide powers, they can go and search the records including look for all the documents. You require really some strong evidence, material enough, to come to the conclusion that there has been cartelisation. Q: Will a final ruling by the COMPAT be binding on both parties or can either then take it to the Supreme Court? Will it still eventually go down that long litigation route or do you think this can be resolved at the COMPAT level? A: Competition Commission has clearly provided that all the orders of the COMPAT can be challenged before the Supreme Court. So, COMPAT, according to me, is not the final order. However, like the COMPAT has a wide scope to examine all the issues, the power of Supreme Court is restricted. It cannot get into the evidence; the appeal in the Supreme Court will be confined to specific questions of law. If the COMPAT has committed any error on the questions of law then the Supreme Court examines. But the power that the Supreme Court exercises is similar to the power of the civil courts or the high courts, when they hear the second appeals in the civil cases. So, considering that COMPAT is only one forum and this is the new tested area, there will be lot of new questions and all, the Supreme Court may look to open the doors even after the COMPAT has passed the orders.