On July 2, 2019, the National Company Law Appellate Tribunal (‘NCLAT’) dismissed an appeal filed by Mr. Piyush Joshi (‘Appellant’), a third party alleging CCI’s inaction on the information(s) submitted by the Appellant regarding the acquisition of BG Group Plc by Royal Dutch Shell Plc (‘Combination’).[1] The Combination was duly considered and approved by CCI, as not likely to cause any AAEC vide order dated September 17, 2015(‘Order’)[2].

The Appellant filed an information with CCI after the Combination was already approved, alleging that the parties to the Combination had not provided complete  information on the relevant markets involved in the Combination, along with allegations under Section 4 of the Act. The Appellant further alleged that CCI failed to follow the procedure under sections 29 and 30 of the Act (as per which CCI is required to issue a show-cause notice to the parties to the combination, only if CCI is of the prima facie opinion that the combination is likely to cause AAEC), in order to conduct a thorough assessment of a proposed combination.

NCLAT dismissed the appeal and made the following observations:

i.       Procedure Adopted by CCI: NCLAT held that the procedure under sections 29 and 30 of the Act is initiated by CCI only if it first forms a prima facie opinion that a combination has or is likely to cause AAEC. Appreciating the fact that CCI had not formed a prima facie opinion on AAEC in this case, NCLAT held that there is no procedural violation by CCI in approving the Combination without issuing a show cause notice to the parties to the Combination under sections 29 and 30 of the Act.

ii.      Allegations on Abuse of Dominance Cannot be Considered at the time of Approving the Combination: While hearing the Informant on merits of his information, NCLAT held that allegations regarding abuse of dominance under Section 4 can only be heard by CCI after the stage of approval of the Combination under Section 6 of the Act. Therefore, CCI’s dismissal of the information was also upheld by the NCLAT since it could not have been required to assess Section 4 violations while at the stage of approval of the proposed Combination under Section 6 of the Act.

iii.     Maintainability of the appeal and locus standi of the Appellant: NCLAT held that it can hear and dispose of appeals under Section 53B of the Act against any ‘direction issued or decision made or order passed’ by CCI under the relevant provisions under Section 53A(a) of the Act. NCLAT noted that the Appellant did not file the appeal against the Order and that CCI did not consider the information since it had already approved the Combination (‘Intimation’). Considering this, NCLAT held that this Intimation by CCI did not qualify as a ‘direction issued or decision made or order passed’ and was therefore not a valid ground for appeal under Section 53B read with Section 53A(a) of the Act.

iv.      NCLAT also held that the Appellant failed to show that the Combination resulted in AAEC.

[1] TA (AT) (Competition) No. 32 of 2017