To notify or not to notify?

Delano Furtado of Trilegal explains how ambiguities in the regulations have created uncertainties about exemptions

All acquisitions of shares, voting rights and control, and mergers and amalgamations which cause or are likely to cause an appreciable adverse effect on competition in India are now on the radar of the Competition Commission of India (CCI). This follows the recent notification of sections 5 and 6 of the Competition Act, 2002, and issue of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011.

The act prescribes monetary thresholds to evaluate if a combination may have an appreciable adverse effect, and the CCI has to be informed of all combinations that are above the prescribed thresholds. Two notifications issued on 4 March by the Ministry of Corporate Affairs outline conditions under which some combinations may be exempted from the obligation to alert the CCI. But inconsistencies between the notifications, the act and the regulations are creating conflicting views on how the exemptions are to be applied.

Delano Furtado is a partner at Trilegal. Avirup Bose, Anant Kaushik and Siddharth Sharma, who are associates at the firm’s Mumbai office, contributed to the article. Trilegal is a full-service law firm with offices in Delhi, Mumbai, Bangalore and Hyderabad. It has more than 140 lawyers.