High pendency plagues NCLAT: Analysts push for dedicated Competition benches

At present, the number of pending Competition appeals at NCLAT are about 200.

A high pendency of Competition law cases in the National Company Law Appellate Tribunal (NCLAT) makes a strong case for the government to allocate separate and distinct benches, within the appellate authority (AA), for Competition matters, say analysts.

Section 53B(5) of the Competition Act, 2002, says that "endeavour shall be made by it (AA) to dispose of the appeal within six months" from the date of it’s received. However, this is a not a statutory benchmark. In actual practice, appeals take longer, often between 2-3 years or more, say analysts.

Therefore, they say, there is an urgent need for distinct benches so that the six-month timeline "suggestion" can be followed. Some also say, an attempt to revive the erstwhile COMPAT or Competition Appellate Tribunal can be made, as they were dedicated tribunals—dissolved in 2017—to deal with Competition matters.

"Perhaps, a big administrative decision at several levels will be required to revive a dedicated appellate body for Competition cases. A more practical solution could be found in re-jigging the NCLAT hearing procedures," noted Pranjal Prateek, Partner at Khaitan & Co.

"If not dedicated bench(es) for competition appeals, there must be dedicated time of the court for competition matters (for example, one or two dedicated days in a week for a few benches for competition appeals)," added Prateek.

At present, the number of pending Competition appeals at NCLAT are about 200. Among those pending are a few important cases, such as the WhatsApp appeal against the CCI order that imposed penalty of Rs 213 crore; airlines fuel surcharge case; cases against several pharma companies relating to distribution practices; and cases of abuse of dominant position like the JSW’s case against Asian Paints.

Analysts say with the current strength of NCLAT—12 members—the disposal rate stands at about 50 cases per year, while in the erstwhile COMPAT, the rate crossed over a 100 a year.

Since competition matters are often facts heavy that require back-to-back hearings, dedicated benches to competition cases is necessary for upping the disposal rates, they say.

The central government through the Finance Act, 2017 had merged many tribunals, which were overlapping or had similar functions, with an objective to reduce administrative costs, bring uniformity in service conditions and appointment processes and improve efficiency by consolidating adjudicatory forums. As a part of this reform, the COMPAT was merged into NCLAT.

The Law Commission of India, however, in its 272nd report acknowledged that NCLAT’s mixed jurisdiction had diluted the quality and speed of competition law adjudication. Besides Competition cases, NCLAT also deals with IBC and NFRA matters.

"Due to specific focus on competition law matters, not only the appointed judge(s) and members were able to develop good domain knowledge but also deliver judgments at a quick pace despite facts-heavy and complex nature of competition litigation," noted Shubha Yadav, Partner, RS Law Chambers.

The Law Commission report had also highlighted the lack of specialised capacity, and recommended measures to strengthen the appellate framework for competition law adjudication.