Amarchand Mumbai gets 54.24 crore CCI penalty on BCCI set aside; COMPAT’s Justice GS Singhvi remits matter for fresh disposal

The Competition Appellate Tribunal (COMPAT) has set aside the 54.24 crore penalty imposed on the Board for Control of Cricket in India (BCCI) by the Competition Commission of India (CCI). The penalty, imposed in February 2013, was  for the abuse of dominant position in connection with the Indian Premier League (IPL).

The CCI had acted on the basis of a complaint filed by cricket fan S. Singh Barmi, alleging irregularities in the manner in which the BCCI conducted the IPL, more specifically the grant of contractual rights (including franchise rights) related to the IPL. Apart from the fine, the CCI had also asked the BCCI to develop an internal regulatory mechanism.

It was against this order; BCCI went on to file an appeal before COMPAT.

Amarchand Mangaldas Mumbai’s Competition Law Partner Nisha Kaur Uberoi along with Bharat Budholia and Aishwarya G. briefed Senior Advocate, Aryama Sundaram for the BCCI while Advocate Prashanto Chandrasen represented the CCI.

Senior Advocate Aryama Sundaram argued that the CCI order violated the principles of natural justice. He argued that the Director General (DG) had treated the ‘relevant market’ as “underlying economic activities which are ancillary for organizing the IPL” while the CCI differed with him and held that the relevant market is the ‘Organization of Private Professional Cricket League /Events in India’ and this was done without giving any notice or opportunity of hearing to the BCCI.

He further argued that the findings on Section 4 (abuse of dominant position) of the Competition Act were liable to be set aside because the CCI relied upon information allegedly available in public domain without disclosing the same to BCCI and giving it an opportunity to controvert the same.

The COMPAT observed,

“A careful scrutiny of the record reveals that while directing its Secretary to forward the report of the DG to the appellant, the Commission had nowhere indicated that it did not agree with the finding recorded by the DG on the issue of ‘relevant market’ and the appellant should show as to why Organization of Private Professional Cricket League/ Events in India may not be treated as the ‘relevant market’.”

“It is, thus, evident that the appellant did not get any opportunity to contest the proposed determination of the ‘relevant market’ by the Commission…. Therefore, there is no escape from the conclusion that the finding recorded by the Commission that Organization of Private Professional Cricket League/Events in India is the ‘relevant market’ is vitiated due to violation of the rule of audi alteram partem”, held COMPAT Chairman GS Singhvi.

Additionally, the COMPAT also stated that the Commission’s failure to disclose the information it planned to use, and give an opportunity to the appellant to explain the same has not only resulted in violation of the principles of natural justice but also occasioned failure of justice.

Allowing the BCCI’s appeal, the COMPAT also held that

“the finding recorded by the Commission on the issue of abuse of dominance is legally unsustainable and is liable to be set-aside because the information downloaded from the [Internet] and similar other material do not have any evidentiary value and, in any case, the same could not have been relied upon by the Commission without giving an effective opportunity to the appellant to controvert the same.”

The Compat therefore held,

“The impugned order is set aside and the matter is remitted to the Commission for fresh disposal in accordance with law.”

This relief comes at a time when the BCCI is under the judiciary’s scanner. Just yesterday, the Supreme Court was hearing contempt petition against N Srinivasan for disobedience of the Supreme Court judgment.