NCLAT stays CCI order imposing ₹751 crore penalty on United Breweries

The National Company Appellate Tribunal (NCLAT) this week stayed an order passed by the Competition Commission of India (CCI) imposing a ₹751 crore penalty on United Breweries (UB) for indulging in cartelisation..The penalty levied on UB through the CCI order passed in September this year is the largest amount the competition regulator has imposed in the last five years..The Commission had ordered that UB, Anheuser-Busch InBev and Carlsberg were engaged in cartelisation though the platform of the All India Brewers’ Association (AIBA), in contravention of Section 3 of the Competition Act, 2002..The Bench of Justice M Venugopal and Dr Alok Srivastava stayed the order subject to UB depositing 10% of the penalty fee with the Registrar, NCLAT within three weeks..Appearing for UB before the NCLAT, Senior Advocate Gopal Subramanium contended that the CCI order was passed in violation of the Principles of Natural Justice, failed to meet the prescribed legal and jurisdictional standard necessary to find a contravention of Section 3 of the Competition Act, 2002 and did not adhere to binding precedents of the Supreme Court.He added that CCI had accepted the recommendations of the Director General without conducting any further enquiry as per Section 26(8) of the Act on the market conditions or the legal, commercial and economic evidence furnished by UB.Further, the Commission failed to consider the existence of an agreement among the competitors and whether such agreement caused an appreciable adverse effect on competition, Subramanium submitted.He thus sought a stay on the order, arguing that very serious prejudice and hardship will be caused to UB if stay is not granted..Additional Solicitor General Balbir Singh, appearing for CCI, argued that the order was tenable, valid, just and sustainable in the eye of law and ought not to be stayed by the Tribunal in the interest of justice..After hearing the parties, the NCLAT ordered,"In view of the above, this ‘Tribunal’ keeping in mind the pivotal fact that the Appellant has filed the instant Appeal being aggrieved with the impugned order dated 24.09.2021 passed by the Respondent in suo moto case no. 6/2017, during the pendency of the ‘Appeal’ to prevent an aberration of justice and in furtherance of substantial cause of justice stays the impugned order dated 24.09.2021 in suo moto case no. 6/2017 subject to the payment of 10% of the penalty amount of Rs. 7,51,83,28,719/- levied by the first Respondent/CCI, by way of ‘Fixed Deposit Receipt’ to and in favour of the Registrar, NCLAT within three weeks from the date of passing of this order.".For UB, Subramanium and Senior Advocate Amit Sibal were assisted by a team from Trilegal led by Partner & National Head – Competition Law Nisha Kaur Uberoi, along with Partner Gautam Chawla, Counsel Sonam Mathur, Senior Associate Rahat Dhawan and Associates Shivangi Chawla, Aditi Khemani, Parumita Pal, Samriddha Gooptu and Raghav Harini..ASG Singh for CCI was assisted by Advocates Balaji Subramanian, Arav Kapoor, Ishani Banerjee, Monica Benjamin and Surbhi Singh.The individual employees of UB were represented by Economic Laws Practice, who had instructed Sibal. AIBA was represented by Saikrishna & Associates.