Telangana High Court Halts CCI Probe into GMR Airport and Aerotech
The court stated, "Once a settlement has been reached... the very substratum of the proceedings by CCI is lost," while mandating a two-week stay on further proceedings to examine the jurisdiction of the CCI in the matter
The Telangana High Court has intervened to stall an ongoing investigation by the Competition Commission of India (CCI) against GMR Hyderabad International Airport and GMR Aero Technic Ltd. The court's decision comes in response to a plea from GMR, which sought to quash the CCI's inquiry into alleged market power abuse.
The controversy stems from a settlement agreement between GMR International Airport and Air Works India, an aircraft maintenance, repair, and overhaul service provider, which had filed a complaint prompting the CCI's investigation. Despite the settlement, the CCI proceeded with its inquiry, prompting GMR to challenge the decision before the high court.
In an order issued on March 19, single judge Bench of Justice Surepalli Nanda expressed concerns over the continuation of proceedings following a settlement agreement between the complainant and the accused party.
The court stated, “Once a settlement has been reached... the very substratum of the proceedings by CCI is lost," while mandating a two-week stay on further proceedings to examine the jurisdiction of the CCI in the matter.
“….this court opines that the issue needs examination in detail in so far as the jurisdiction of CCI to proceed further in the subject issue is concerned. Therefore, there shall be a stay of all further proceedings …..for a period of two weeks from today,” the order further stated.
This marks the second time GMR has sought relief from the Telangana High Court regarding the CCI investigation. Earlier, in October 2022, a similar plea from GMR was dismissed by the court. The CCI's initial investigation, prompted by a complaint from Air Works in October 2019, found GMR to have prima facie contravened provisions of the Competition Act, 2002, related to abuse of dominant position.
Following the CCI's order, GMR had contested the decision in court and secured an interim stay on the probe in 2019.
Samir Gandhi, co-founder and partner at Axiom5 Law Chambers, commented on the recent court order, highlighting its implications. He stated, "The order of the Telangana High Court effectively pauses the CCI’s investigation... citing a 2015 judgement of the Madras High Court." Gandhi noted the debate surrounding the role of an informant in competition proceedings and its equivalence to a complainant in civil proceedings, given the "in rem" nature of proceedings under the Competition Act, as per Supreme Court rulings.
Gandhi further pointed out potential implications of bilateral settlements on the recently introduced settlement and commitment mechanism, suggesting complexities in navigating competition law proceedings.
Source : The Hindu Business Line