‘Governing Board’ on cards for competition panel

K.R.Srivats New Delhi | Updated on February 23, 2020 Published on February 23, 2020

Experts concerned over potential threat to independence of body

A ‘Governing Board’ to oversee the direction and management of the Competition Commission of India (CCI) is likely to be set up if the amendments to the Competition Law proposed by Ministry of Corporate Affairs are anything to go by.

This Governing Board will comprise Members of the Commission, Secretaries of the Department of Economic Affairs (DEA) and Ministry of Corporate Affairs (or their nominees) and four part-time members. It will be responsible for the general superintendence, direction, management and affairs of the Commission.

CLRC recommendations

The latest draft Competition (Amendment) Bill 2020 — for which public comments are invited by March 6 — is largely an outcome of the recommendations of the Competition Law Review Committee (CLRC) set up by the government to review and fine-tune the existing competition law framework. A majority of the CLRC recommendations have found their way to the draft law, say competition law experts.

Some experts also feel that any move to set up a Governing Board would raise concerns over the independence of the CCI, although it would be in line with the recommendations of the CLRC.

Abdullah Hussain, Partner, L&L Partners, a law firm, said: “Given that the Commission exercises jurisdiction over government enterprises and departments, the presence of two senior government officials may compromise its independence. Similarly, it is unclear what the qualifications are for appointment of part-time members or what process will be followed for their appointment.”

Appointment of directors

However, a reading of the proposed new Section 18B suggests that directors of companies may also be appointed. Such a company may also find itself the focus of an antitrust investigation or has to obtain merger approval from the CCI, Hussain said.

“Although judicial functions are not part of the Governing Board’s remit, the presence of a director of such a company on the Governing Board (on which the Commission Members that do exercise judicial functions are also on) may again call its independence into question,” Hussain added.

Rahul Goel, Partner, IndusLaw, a law firm, said that significant amendments to the provisions of the Competition Act and restructuring of the CCI have been proposed in the draft Bill. It also proposes to enhance the powers of the Director-General (DG). However, the Commission will have to take responsibility for any misuse of the power or lack of fairness by DG and ensure strict compliance with principles of natural justice and the Constitution of India, he said. “All these amendments require detailed consultation with all stakeholders and the deadline of March 6 may not give sufficient time for deliberations/discussions at all levels,” Goel added.

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Published on February 23, 2020
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