Competition Commission Of India Must Honour Outcome Of Mediation, Settlements Between Parties: Delhi High Court

The Delhi High Court has recently observed that the Competition Commission of India (CCI) must honour the outcomes of mediation and respect the settlements reached between the parties.

A division bench comprising of Justice Prathiba M Singh and Justice Amit Sharma said regulatory authorities such as the CCI are no exception to mediation process and settlements.

“By doing so, they not only uphold the legitimacy and reliability of the mediation process but also foster a legal environment where parties are encouraged to resolve disputes amicably without fear of subsequent regulatory interference,” the court said.

It added that when regulatory authorities like the CCI respect mediation settlements, it prevents the undermining of negotiated agreements and protects parties from the threat of ongoing inquiries.

“This recognition reinforces the concept that mediation is not merely a preliminary step but a conclusive process that provides binding and enforceable outcomes,” the court said.

The bench made the observations while allowing the plea moved by a manufacturer, JCB India Limited, against another manufacturer, M/S Bull Machines Private Ltd, and the CCI.

The dispute arose after a suit was filed by JCB against BMPL seeking an injunction restraining infringement of copyright, piracy of registered design, passing off etc. BMPL then filed cancellation petitions before the Controller of Designs. However, parallelly, an interim arrangement was arrived at between the parties.

While the settlement talks were underway, BMPL filed Information under Section 19(1)(a) of the Competition Act, 2002, before the CCI which was registered as a case. The CCI the. passed an order directing an inquiry into the matter.

One of the pleas filed by JCB challenged the order directing inquiry. Another plea challenged the investigation searches conducted by the Director General (DG) of CCI.

The bench observed that continuation of CCI's proceedings would mean participation by both parties in the inquiry, production of documents, adducing of evidence, and reports being prepared by the CCI which could also result in various unintended consequences to the parties.

“Such a consequence is not even contemplated under the Act. In essence, the CCI's over-involvement, post-settlement would disrupt the harmony and finality that mediation seeks to achieve, undermining trust in both the mediation process and the regulatory body itself,” the court said.

It added that competition authorities ought to respect the boundaries of their jurisdiction, ensuring that their role complements rather than conflicts with the resolution of disputes, thereby maintaining a fair competitive market environment without overstepping their mandate.

“The examination of settlements is a power which may exist with the CCI, but under the existing scheme of the Act, unless a settlement is alleged as being abuse of dominance, the same would not be liable to be examined under Section 4 of the Act,” the court said.

It added while intellectual property rights recognise, grant and enforce monopoly rights under certain circumstances, competition law does not encourage monopolies.

“Every IP dispute cannot be converted into a competition dispute as it would severely impinge upon statutory rights recognised under various statutes protecting intellectual property. Moreover, any attempt to hijack an IP dispute from the jurisdiction of a High Court or a commercial court to the Competition authority has to be viewed with caution and in a manner so as not to tread upon the forum seized of the IP dispute,” it said.

Allowing the plea, the court said that the infringement action filed by JCB for protection of its registered designs and its suit having itself settled, the CCI proceeding could not continue.

The court took on record the settlement and set aside the CIC order as well as terminated the proceedings before the CCI.

“Needless to add, the powers of the CCI to proceed under its suo moto powers or on the basis of any other information which may be filed before it in accordance with law is fully preserved,” the court said.

Title: JCB INDIA LIMITED AND ANR v. THE COMPETITION COMMISSION OF INDIA AND ANR

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