Tyre Cartel: Vaish Associates represents Modi Tyres before CCI

The Competition Commission of India (CCI) has deleted the name of Modi Tyres from the inquiry proceedings in a complaint filed by the All India Tyre Dealers Federation (AITDF) against the major tyre manufacturers for creating a cartel..Vaish Associates with a team led by Head of Competition Practice M.M. Sharma along with Associate Vaibhav Choukse represented Modi Tyres..The complaint was filed in 2008 before the MRTP Commission, which was later on transferred to the CCI on the repeal of the MRTP Act, 1969. The matter was referred to the Director General (DG) (the investigating arm of CCI) for investigation. The DG in his report found that Automotive Tyre Manufacturers Association (ATMA) and its five major domestic tyre companies have acted in violation of section 3 of the Competition Act dealing with price fixing and limiting and controlling the market. The major tyre companies are MRF Tyres, Apollo Tyres, Ceat Tyre, Birla Tyre and JK Tyres..Thereafter, CCI sent a notice to not only the companies named in the DG report involved in the alleged cartel to file objections but also to other major tyre companies. The other major tyre companies alleged to be involved in the cartel include Dunlop Tyres, Goodyear, Bridgestone, Michelin India, Modi Tyres etc..M.M. Sharma argued on behalf of Modi Tyres and informed CCI that during the entire period of investigation from 2005 to 2010 neither Modi Tyres nor the parent company was in business due to BIFR proceedings/Liquidation proceedings. Therefore, Modi Tyres could not be considered as a “necessary party” within the meaning of section 26(4) of the Act..Sharma, particularly, drew the attention of the CCI towards Regulation 26 of the Competition Commission of India (General) Regulations, 2009, which empowers the CCI to strike out unnecessary parties. Sharma further argued that neither any complaint has been made against Modi Tyre nor any relief has been claimed against Modi Tyres in the complaint and therefore, urged the Commission to exercise its powers under the abovementioned Regulation..The CCI in its order held that Modi Tyres was not a “necessary party” and deleted the name of Modi Tyres from the inquiry proceedings. However, the inquiry is still on for the other companies who are alleged to be involved in this cartel.