Competition Appellate Tribunal Orders Fresh Hearing for Sugar Mills Case

The Competition Appellate Tribunal (CAT) has directed the Competition Commission of Pakistan (CCP) to conduct a new hearing in the case involving the Pakistan Sugar Mills Association (PSMA) and its member mills. This order was issued on Friday.

The CCP stated that this decision came in response to appeals submitted by the PSMA and its constituent mills. The CAT’s directive specifies that the rehearing must be conducted by either the Chairperson or another Commission member who did not previously endorse either of the conflicting opinions.

The tribunal further instructed that a conclusive decision be reached, ideally within a 90-day timeframe. The eventual ruling by the Chairperson or the designated member will resolve the issue and determine whether the PSMA and its member sugar mills violated competition laws.

In 2021, the CCP levied a substantial penalty of approximately Rs44 billion (exceeding US$265 million) on 55 sugar mills, in addition to the PSMA. These penalties were for alleged cartelization, participation in anti-competitive practices, and the collective determination of export volumes, among other violations.

The CCP’s four-member panel was equally divided in its judgment.

While Chairperson Rahat Kaunain Hassan and Mujatba Lodhi supported the imposition of the penalty, Bushra Naz Malik and Shaista Bano voiced dissenting opinions.

To resolve the tie, the Chairperson at the time utilized a casting vote, as permitted under Subsection 5 of Section 24 of the Competition Act, 2010, via a note dated August 13, 2021. This action effectively transformed the deadlock into a majority decision, thus upholding the penalty.

The legality of this decision made by Rahat became the main point of contention in the appeals.

In its verdict, the CAT declared that the chairperson lacks the jurisdiction to cast a deciding vote in quasi-judicial proceedings as defined by the Competition Act of 2010.

Consequently, the Chairperson’s opinion, which was based on the casting vote, has been nullified.