[Niti Richhariya is a Research Associate (Legal Division) at Competition Commission of India]
As the Competition Act, 2002 (Act) stands today, no provision contained therein allows parties to an antitrust dispute to voluntarily settle/compromise  their inter se dispute (with CCI’s approval) nor is there any provision expressly empowering CCI to order parties to enter into a settlement. Yet surprisingly, there have been instances in the past where the parties have attempted to withdraw their antitrust dispute pending before the CCI on the ground of them entering into a settlement qua the subject matter of the dispute. In such scenarios, Commission has thus far not entertained the settlement plea of the parties in view of the absence of any explicit provision under the Act dealing with a settlement. In this article, the author briefly examine:
(i) the cases wherein parties settled the disputes among themselves during the pendency of their antitrust dispute and sought closure of their case by CCI based on the settlement;
(ii) the recommendations made by the Competition Law Review Committee (CLRC) Report, 2019 regarding settlement procedure and the settlement provision intended to be inserted by the Draft Competition Amendment Bill, 2020 (Amendment Bill); and
(iii) settlement procedure in EU with its comparative analysis against Indian scenario and conclusion on the entire debate surrounding settlement.
Cases Involving Settlement Between The Parties
In the case of Tamil Nadu Film Exhibitors Pvt. Ltd (TNFEA). & Ors. v. CCI, Madras High Court was faced with a dispute involving a ban imposed by the state theatre owner’s association on the screening of films that released via DTH leading to an alleged violation of Section 3(3)(b) of the Act. Resultantly, CCI ordered an investigation under Section 26(1) of the Act which was challenged before Madras High Court. During the pendency of the case before the Madras High Court, the parties settled and prayed disposal of the case before the Madras High Court based on their settlement. The Court held  that the scheme of the Act permitted parties to compromise or settle the matter, subject to scrutiny by the CCI. The Court reached this conclusion by referring to various provisions of the Act, with major reliance placed on Section 27 of the Act which the Court found to be very wide and conferring jurisdiction upon CCI to pass residuary orders (under clause (g)).
Thereafter in the case of Telefonaktiebolaget LM Ericsson & Anr. v. CCI & Anr., Delhi High Court set aside CCI’s order under Section 26(1) of the Act issued against Ericsson for abuse of dominance by Ericsson against the Informant (M/s Best IT World (India) Pvt. Ltd.) in relation to a patent dispute. CCI’s order was set aside in light of the compromise reached between Ericsson and the Informant and not on merit. In view of the Court , the case before CCI did not survive after the compromise but permitted CCI to take appropriate action, if needed, after considering the effects of the compromise.
Later, in Nhava Sheva International Container Terminal Pvt. Ltd. v. CCI, which concerned cartelization among terminal containers , the Bombay High Court permitted the Informant to withdraw its information filed before CCI based on the settlement agreement reached between the Informant and the opposite parties and also observed that according to the settlement, the dispute before CCI did not survive and orders passed on the CCI so far on such proceedings became inoperative .
CLRC Report, 2019 and Amendment Bill
CLRC, that was constituted on 01.10.2018 to review the existing competition law framework in India published its report on 26.07.2019 and inter-alia recommended the insertion of an explicit provision in the Act enabling CCI to accept settlements from parties in cases relating to the contravention of Section 3(4) and Section 4 of the Act . It also recommended that the settlement application may be filed only after receipt of the DG report and within the timeframe prescribed for the passing of the final order by the CCI. CLRC recommended that such an order of rejection or acceptance of settlement application must be a non-appealable order.
The Amendment Bill proposes to introduce a provision (Section 48A) for settlement in the Act. The suggested provision allows parties under investigation to apply for a settlement. It also provides discretion to CCI to close the investigation if it deems fit. In alignment with the CLRC recommendations, the Amendment Bill proposes filing of settlement application after receipt of the DG report and before passing the final order. It also proposes that such an order of rejection or acceptance of settlement application shall not be appealable.
Settlement Procedure in EU
In the EU, settlement procedure was introduced in 2008 for cartel cases and aims at expediting the process for the adoption of a decision in a cartel case. The procedure begins when parties to a cartel agree with the European Commission’s (EC) Statement of Objections (SO) against such parties, based on the evidence available. Such parties instead of contesting the case can accept EC’s objections and in return accept a reduction in the fine. Notably, the settlement takes place between the EC and the parties and not amongst the parties themselves.
The EC has the discretion to decide which cases are suitable to explore the possibility of a settlement and may also at any time discontinue settlement discussions altogether in a specific case or concerning one or more of the parties. Once EC issues its SO to the parties, the parties can file their settlement submissions and the procedure progresses. This stage appears to be similar to the stage where in India, DG Report is submitted and parties file their objections to it.
Analysis and Conclusion
The preceding discussion shows that in the EU, settlement procedure begins right at the inception of a case, much before EC adjudicates it on merits and gives any findings on the liability of the parties for their antitrust violation. However, under Section 27 of the Act, CCI issues orders after the inquiry are complete and the contravention of Section 3 or 4 by the parties is established. Furthermore, the EU settlement procedure does not lead to the closure of the antitrust dispute by exonerating the parties from their liabilities. Instead, it is defined by expedited disposal and imposition of lesser penalty on the parties as opposed to what they would have been subjected to otherwise. This makes it a mechanism to achieve procedural efficiency and not to limit the role of EC.
However, in India, it reflects from the afore-mentioned cases that the courts have erred in interpreting the scheme of the Act by observing that once a settlement/compromise is reached between the parties, the case before CCI does not survive. The courts may have taken inspiration from settlement procedure in the EU which is not carried out between the parties themselves but between the EC and the parties making it more effective and impactful.
It is imperative to note that the proceedings before CCI have been held to be proceedings in rem and not proceedings in personam and are not affected by the compromise/settlement between the parties. Reason being that both the Preamble and Section 18 of the Act mandate CCI, at all times, to eliminate anti-competitive practices, promote and sustain competition, protect the interests of consumers and ensure freedom of trade and Section 19(1)(a) of the Act enables CCI to achieve these objectives by permitting any person to file information before CCI regarding any alleged anti-competitive conduct.
Further, it would be against the spirit of the Act to suggest that Section 27(g) of the Act allows CCI to issue a settlement/compromise order because, in absence of an explicit provision, it would defeat CCI’s endeavour to achieve the afore-said objectives. The contravening parties must compensate for the damage done to the consumers at large and should not be permitted to settle the dispute between themselves without any accountability to the public. The settlement should only be permitted pursuant to an amendment in this regard, to the Act.
 The term ‘settlement’/’settle’ and ‘compromise’ are used interchangeably.
 This judgment is under challenge in review petition No. 329/2015 filed by CCI and is pending disposal.
 This judgment is under challenge in LPA No. 550/2016 filed by CCI and is pending disposal.
 CCI Case No. 19 of 2018.
 This judgment is under challenge in Review Petition (L) No.25458/2019 filed by CCI and is pending disposal.
 Para 4.6 of the CLRC Report.