Continuing with my comments on contemporary competition case law, on the agenda today is the decision of the Competition Appellate Tribunal in M/s. United Phosphorous Limited and Others v. Competition Commission of India & Others. The decision is well known and has been already debated upon a lot and frankly, I have nothing new to contribute. The C.C.I. will probably file an Appeal in the Supreme Court against the decision. It is an open debate as of today. However, if a wager was in order, the odds are that the concept of “Relevant Turnover” for the calculation of penalty is probably here to stay under Indian Competition Law. But what is frustrating is that the Competition Act just does not help to reach a solution. In fact, truth be told, the C.O.M.P.A.T. has reached it’s conclusion more on the basis of international precedents rather than actual application and interpretation of Indian law. This is not surprising. To quote Section 2(y) of the Act:

“turnover” includes value of sale of goods or services;

Ambiguous and exceedingly broad, to say the least. Furthermore, since Section 2(z) of the Act allows for borrowing definitions from the Companies Act, 1956, then one may try to derive an interpretation through the definition of “Turnover” as given under Section 43A of the same:

“turnover” of a company, means the aggregate value of the realisation made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year;

But not only can this definition not be taken in light of Section 2(y), but also, Section 43A lends the definition on a different context to that of the issue in the case.

Two observations of the Tribunal do deserve a mention. Firstly, the C.O.M.P.A.T. has affirmed and now firmly established that mere price parallelism alone cannot be enough for drawing an inference of cartelisation. Secondly, it has differentiated between the terms of “Restricted Turnover” (as used by it in MDD Medical Systems India Pvt. Ltd. v. Foundation for Common Cause & Ors.; Appeal No. 93 of 2012) and “Relevant Turnover” as delivered in this Order – the discussion can be found on page 48 of the Order.