SC admits pleas against NCLAT nod to Rs 873-cr fine on United Breweries, others for beer cartel

Supreme Court of India

The Supreme Court on February 17 admitted appeals against a National Company Law Appellate Tribunal (NCLAT) order upholding the Rs 873-crore penalty imposed by Competition Commission of India (CCI) on United Breweries and other beer makers.

The court has stayed the proceedings to recover the penalty, subject to the beer makers depositing an additional 10 percent of the penalty. It is to be noted that the companies have 10 percent of the penalty at NCLAT, and they would now have to deposit an additional 10 percent.

Senior counsels Aryama Sundaram and Shyam Divan appeared for the beer makers, while Additional Solicitor General Balbir Singh appeared for CCI. Sundaram was briefed by Trilegal Competition led by Nisha Kaur Uberoi, Partner & National Head  of Competition along with Gautam Chawla, Partner.

The CCI, on September 24, 2021, imposed penalties totalling over Rs 873 crore on UBL, Carlsberg India, All India Brewers' Association (AIBA) and 11 individuals for cartelisation in the sale and supply of beer.

This order was challenged before the NCLAT, which is the appellate authority over the CCI against any direction issued or decision made or order passed by the regulator.

In December 2022, the NCLAT upheld the Rs 873-crore penalty imposed by fair trade regulator CCI on United Breweries and other beer makers and dismissed the appeal.

The NCLAT held that the beer makers had admitted in the leniency application regarding their involvement in cartelisation before the CCI. “Lesser penalty application is like an admission of guilt in a cartel. Once they have admitted their involvement, they were only entitled to question the imposition of penalty,” the Tribunal said.

The NCLAT also dismissed the submissions made by the beer makers that a CCI order is liable to be set aside in the absence of a judicial member, which is required to be noticed only for its rejection.

The period of cartelisation was considered to be from 2009 to at least October 10, 2018, with Carlsberg India joining in from 2012 and AIBA serving as a platform for facilitating such cartelisation since 2013. All three beer companies were lesser penalty applicants before the regulator.