Compat to hear NSE plea against CCI order tomorrow

The Competition Appellate Tribunal (Compat) will hear tomorrow NSE's petition against a CCI order, wherein the stock exchange was held guilty of abusing market dominance and asked to pay a fine of Rs 55.5 crore.

The matter is scheduled for its first hearing tomorrow before a three-member bench headed by Compat Chairman Justice Arijit Pasayat.

In its appeal, filed last month through leading corporate law firm Amarchand and Mangaldas, the National Stock Exchange has asserted that it was wrongly charged of leveraging its dominance in equity and other segments for benefit in currency derivatives market.

The exchange has further claimed that the Competition Act did not envisage low price, which is not predatory, as an abuse of dominance and the charges levelled on it had no basis either in facts or laws.

NSE is believed to have further contended that the order from CCI (Competition Commission of India) was "antithetical" or contradictory to the principal purpose of the Competition Act, which was to protect and promote consumer welfare.

In its order dated June 23, CCI had imposed Rs 55.5 crore fine on National Stock Exchange (NSE) for abusing its dominant market position and asked the bourse to stop unfair trade practices like subsidising its services with a zero-price regime in currency derivatives segment.

Imposing a penalty equivalent to 5% of the bourse's three-year average turnover, CCI had said that there was "a clear intention on the part of NSE to eliminate competitors in the relevant market".

The CCI order followed months-long probe by it into the matter after a complaint from NSE's younger rival MCX-SX.

NSE has said that it has mostly been number two in this market and zero-pricing strategy has developed the market, which was evident from growth in trading volumes so far.

The exchange has sought relief from Compat on payment of penalty, as also from the requirement of maintaining segmented accounts and from any compensation claims that might be filed by MCX-SX or any other third party.

After the CCI order, MCX-SX had said it would look at claiming compensation for the losses and damages suffered by it due to NSE's anti-competition business practices.

NSE last month announced that it will start levying charges for currency derivatives trading from August 22, in deference to the CCI order.