The Competition Commission of India (CCI) has given a clean chit to the Oil and Natural Gas Commission (ONGC) in a case filed by MG Well Solutions, a MSME providing cementing services, alleging abuse of dominant position by the former.
The main allegation was that ONGC abused its dominant position by way of imposing unfair and additional conditions in the tender for “cementing services”, after the placement of a notification of award which led to the banning of business dealing of ONGC with MG Well for two years.
CCI considered the facts involved and noted that it has not found anything that can be prima facie said to be onerous qua the terms and conditions of award of the contract by ONGC to MG Well. It proposed to not give findings on whether ONGC had stipulated any conditions upfront while awarding the tender or subsequent thereto as they do not merit consideration from a larger competition standpoint.
The CCI noted that though blacklisting clauses in a contract per se are not abominable under competition law, they would be open for scrutiny based on the construct of such clauses and the exploitative and/or exclusionary abuse that it may entail on an objective assessment when applied in a particular factual setting.
The CCI did not find blacklisting clauses of ONGC to be onerous as it has been put in place for a duration of two years without affecting any of the contracts already in vogue inter se the parties, but the disability will likely kick-in with future opportunities with ONGC, for the limited period.
Regarding the process adopted, CCI in the facts and circumstances, prima facie does not find anything amiss on the part of ONGC in relation to the requirements of procedural fairness, as ample opportunity appears to have been provided to the MG Well prior to the imposition of the ban. Accordingly, no case of contravention of provisions of the Competition Act was made out against the ONGC, and the matter was ordered to be closed.
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