Kingfisher moves SC against CCI probe into tie-up with Jet Airways

New Delhi: Kingfisher Airlines has moved the Supreme Court seeking quashing of an order by the Competition Commission of India (CCI) directing a probe into its strategic alliance with Jet Airways. In August last year, the CCI had restarted the investigations to examine the alliance to rationalise the fares of the two leading private airlines. The commission is investigating if the deal created a monopoly in the aviation sector.
Kingfisher is challenging the authority of CCI to reopen the case that was closed by former anti-trust regulator Monopolies and Restrictive Trade Practices Commission (MRTPC) on September 4 last year or even to investigate the same.
If the case of cartelisation is made out, CCI can impose a heavy fine amounting to three times the profit or 10% of the individual turnover of the firms for the period of cartelisation.
The Kingfisher appeal is against a Bombay High Court judgment of March 31 that dismissed the airlines' plea against the inquiry. The airline headed by Vijay Mallya has contended that the Competition Act was amended after the alliance was formed and as such, the new rules can not have a retrospective effect. The impugned August 4, 2009 notices under the Act which “purported to commence investigation in respect of the proposed alliance were ex-facie illegal and without jurisdiction since the provisions under which the inquiry was sought to be conducted viz., Sections 3, 4, 19, 42 and 43 of the Act came into force only on May 20, 2009 and ex-facie these sections are prospective and not retrospective, and can apply only to agreements entered into after May 20, 2009, ” the petition stated.
10/06/10 Indu Bhan/Financial Express

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Categories: Jet Airways Jun 2010, Kingfisher Jun 2010