Recent CCI orders clarify facets of Competition Law

By Suchitra Chitale, Chitale & Chitale Partners
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The past few months have seen a flurry of activity with the Competition Commission of India (CCI) ruling on important issues and with the passing of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Amendment Regulations, 2012, on 23 February. This column seeks to throw light on these.

Intragroup combinations

By an order dated 28 December 2011, approving the combination of Tata Chemicals Limited (TCL) and Wyoming Mauritius (Private) Limited, a subsidiary of TCL, the CCI held that for any transaction between a holding and subsidiary company, a notice under section 6(2) of the Competition Act, 2002, must be filed. The CCI examined the definition of enterprise under section 2(h) of the act, and held that a subsidiary, being a separate legal entity, constitutes an enterprise separate from the holding enterprise. The order has clarified the definition of enterprise.

The CCI also clarified that the exemption under the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, applies only in cases of acquisition of shares, control or assets within the same group and not to amalgamations among group companies. However, under the new amendment regulations, category 8A has been inserted in Schedule I, exempting intragroup mergers or amalgamations from filing under section 6(2).

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Suchitra Chitale, the managing partner of Chitale & Chitale Partners, heads the competition team of the firm, which advises and acts on the behalf of clients in Indian competition law matters. She has been in practice for more than 24 years.

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Email: suchitra@chitales.com

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