COMPAT issues notice to CCI over JSPL plea over SAIL,IR MoU

The Competition Appellate Tribunal today issued notice to fair trade regulator CCI over the plea of Jindal Steel and Power Ltd (JSPL) challenging closure of its complaint over the exclusive supply agreement between the Indian Railways and steel major SAIL for supply of rails.

The COMPAT also issued notices to India Railways and Steel Authority of India Ltd asking them to file replies within four weeks.

"Issue notice returnable in four weeks," said the COMPAT bench headed by its Chairman Justice V S Sirpurkar.

The matter would now come on August 30 for next hearing. The Competition Commission of India (CCI) had closed JSPL's complaint on December 20, 2011 saying there was nothing wrong in the agreement between the Railways and SAIL.

"The Commission finds that the MOU between the SAIL and IR is not anti-competitive and does not lead to foreclose of the market. The Commission closes the case," CCI had said.

During the proceedings, Percival Billimoria, counsel appearing for JSPL submitted that CCI completely ignored the exclusive agreement between the Indian Railways and SAIL.

He further submitted there was abuse of dominance by SAIL which has denied market access to JSPL by entering into an exclusive supply agreement with the Indian Railways on February, 2003.

According to JSPL, with 96% market share, SAIL has a dominant and substantial market share for rails in India that are complaint with the specifications of Research Design & Standards Organisation (RDSO) of Ministry of Railways. According to Billimoria, RDSO had also certified the rail manufacturing facility of JSPL in 2009.

CCI, in its report, had said there was nothing wrong in having a long term relationship and that major automobile firms also source their intermediate inputs with long term relationship.

"The MoU has not hindered competition in the rail market. The allegation that SAIL as a dominant player has strategised to create entry barriers by locking IR into a long term agreement is not borne out by the available evidences," CCI had said in its order.