Telangana HC puts brakes on CCI probe against GMR

Telangana High Court has stayed for two weeks the CCI’s February 2024 order and recent investigation report against GMR Hyderabad International Airport and GMR Aero Technic Ltd.

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This follows GMR’s plea seeking quashing of proceedings before the CCI on the ground that complainant Air Works, an aircraft maintenance, repair and overhaul (MRO) service provider, had entered into a settlement agreement with GMR Hyderabad International Airport.

CCI had, however, declined to take the settlement between GMR Hyderabad International Airport and Air Works India on record. Accordingly, GMR challenged this CCI stance/order before the Telangana High Court.

“This court is prima facie of the view that once a settlement has been reached between the informant and person against whom the information is filed the very substratum of the proceedings by CCI is lost,”  said the order issued by single judge Bench Surepalli Nanda on March 19.

“….this court opines that the issue needs examination in detail in so far as the jurisdiction of CCI to proceed further in the subject issue is concerned. Therefore, there shall be a stay of all further proceedings …..for a period of two weeks from today,” read the court order.

This is the second time that GMR had approached Telangana High Court on the matter.

Earlier, in October 2022, Telangana High Court had dismissed the writ petition filed by GMR challenging the CCI investigation for alleged abuse of market power. On an information filed by Air Works, the CCI had passed an order in October 2019 finding GMR to have prima facie contravened the provisions of the Competition Act 2002 which prohibit abuse of dominant position.

GMR had challenged the CCI order before Telangana High Court and obtained an interim stay on the probe in 2019.

‘Settlement upheld’

Samir Gandhi, co-founder and partner, Axiom5 Law Chambers said that the order of the Telangana High Court effectively pauses the CCI’s investigation of an alleged abuse of dominance by GMR. 

In doing so, the Telengana HC cites a 2015 judgement of the Madras HC that upheld a settlement arrived at between two parties and held that the CCI had no further role to investigate a complaint once the dispute had been resolved bilaterally. 

“It is debatable whether the role of an informant in a competition proceeding can be equated to a complainant in a civil proceeding since the Supreme Court has held that proceedings under the Competition Act are ‘in rem’ since it affects public interest,” Gandhi said. 

Further, such bilateral settlements may also undermine the recently introduced settlement and commitment mechanism, he added.

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