Indian cement firms readying to challenge CCI penalty

The cartelisation charges facing eleven cement companies and a trade body that are being penalised Rs 6,714.83 crore by the Competition Commission of India (CCI) are drawing up plans to question the legality of the case when it comes up for hearing before the Competition Appellate Tribunal (Compat) on 29 January.

Compat is a three-member tribunal, headed by retired judge VS Sirpurkar. The corporate world as well as analysts are keenly watching the case, the first of its kind. The lawyers of the entities are planning to come up with at least half a dozen common points, as directed by judge Sirpurkar in the first hearing in December.

The key argument that the cement makers are planning to make is that the commission did not hear their side of the story and its decision was based on allegations by builders’ associations.

They are also saying CCI relied too much on circumstantial evidence as opposed to direct evidence. In its 20 June order, CCI alleged cement prices shot up after key meetings of the companies in January and February 2012.

The Commission had found cement manufacturers in violation of the provisions of the Competition Act, 2002. It observed that there was price parallelism and that the companies reduced production in a coordinated way so that availability remained low, thus creating an artificial demand.