On August 14, 2024, the Delhi High Court (‘DHC’) passed a judgment allowing the writ petitions filed by JCB India Limited and JCB Bamford Excavators Limited (‘JCB’) against the Order passed by the CCI quashing the CCI’s 2014 investigation Order, terminating the CCI proceedings, and directing the return of seized materials, following the settlement between JCB and Bull Machines Private Limited (‘BMPL’).^[1]

Initial Proceedings before Original Side of DHC

In 2011, JCB filed a suit against BMPL in the DHC, alleging copyright infringement and piracy of registered designs for the backhoe loader ‘Bull Smart’. The DHC granted an ex-parte interim injunction on November 25, 2011, restraining BMPL and its dealers from making, selling, or advertising the backhoe loader. BMPL was forced to withdraw its product from an exhibition, and its operations were halted by local commissioners appointed by the DHC. On December 12, 2011, the DHC modified the injunction, allowing BMPL to alter some product designs, facilitating further negotiations.

Proceedings before CCI

During the negotiations, BMPL approached the CCI, alleging that JCB’s litigation was in bad faith, constituting denial of market access in violation of Section 4 of the Competition Act, 2002 (‘Act’). In 2014, the CCI found prima facie merit in BMPL’s claims and ordered an investigation, noting that predatory litigation could harm competition in India.

Proceedings before DHC

JCB challenged the CCI’s investigation Order in the DHC. The DHC granted interim protection, ruling that the CCI could not summon any officers without prior Court permission, and no final report or Order should be issued during the investigation.

Proceedings before SC

In the meantime, BMPL sought summary dismissal of the suit filed against it for allegedly infringing the intellectual property (‘IP’) rights of JCB through a Special Leave Petition (‘SLP’) in the Supreme Court (‘SC’). The SC referred the matter to mediation while the DHC was handling the procedural issues. A settlement was reached in the Mediation Centre of the DHC, recorded on August 26, 2021. The SC subsequently resolved all pending IP disputes and directed the parties to expedite the writ petitions challenging the CCI investigation.

Reasoning and Final Judgment of DHC

The DHC, without adjudicating on the merits of the writ petitions, decided: (i) to set aside the CCI’s prima facie Order and terminate the investigation, holding that the settlement terms between the parties were final and should not be subject to further scrutiny, as investigating them would undermine the settlement process and discourage alternative dispute resolution mechanisms; (ii) to caution the CCI against overstepping its jurisdiction in matters related to IP disputes, emphasizing that its role should complement other regulatory bodies and that it should avoid intervening until the original Court had addressed the main dispute; (iii) to clarify that claims of sham litigation or abusive litigation should only be assessed by the CCI after the original Court had determined the underlying case to be frivolous; (iv) that materials seized by the CCI during its investigation were to be returned to JCB; and (v) that the CCI retains the power to initiate suo moto proceedings.

[1] JCB India Limited v. Competition Commission of India, W.P.(C) 2244/2014 and W.P. (Crl.) 1823/2016.