ABA Int Law Spring ABA Spring 2009 Meeting- Section of International Law Panel on Antitrust in the East Presentation on Indian Competition Act—Combinations Vinod Dhall, DHALL LAW CHAMBERS, India In co-operation with LINKLATERS LLP

ABA Int Law Spring Status of enforcement Act introduced- Jan 2003 Commission established- Oct 2003 Constitutional challenges ended- Jan 2005 Amendments to Act- Sept 2007 Full Commission appointed- Mar 2009 Commission planning early enforcement- to commence draft Regs approval, staffing,etc Enforcement likely to begin in 3m(?);in stages(?) No case law yet

ABA Int Law Spring What is a “combination” ? A merger or amalgamation, or acquisition Only if above given thresholds applied to: Size of parties to transaction– by assets / turnover Local nexus Size of transaction (in draft Regulations)

ABA Int Law Spring Thresholds

ABA Int Law Spring Timelines: filing and initial review N+30 N+60 T+30 (max) “Form 2” filing “Form 1” filing N=Notification T=Trigger event Prepare filing Mandatory filing -within 30 days of relevant trigger event: If Merger or amalgamation : –Last Board approval is trigger event; parties file jointly If Acquisition: –Document conveying bona fide intention to acquire is trigger event; acquirer files NB. Overview here includes parameters of draft Regulations Filing form : Form 1 ( standard) or Form 2 (short); determines initial review period Filing fee : INR 4 million (USD 80,000) Maximum review period : N+210 days; on its own motion inquiry possible until 1 year after closing Fast track process introduced: CCI must establish prima facie within 30/60 days: No action (deemed clearance), or Serve “show cause” notice requesting parties explanation why no (in-depth) review

ABA Int Law Spring In-depth review: Overview N+210 (max) N=Notification In-depth review Initial review After parties’ reply to “show cause” –In-depth review may be initiated –DG’s report may be obtained If CCI of opinion that combination will have AAEC –Parties directed to publish details of combination (prior to this, review has been confidential) –CCI may invite affected persons to file objections CCI can ask for additional information from parties Decision : After consideration (RoR), CCI may prohibit combination approve combination approve subject to modifications Modification should eliminate AAEC Acceptance of modification (remedies) proposed by CCI: Parties can accept remedies or propose amendments If CCI does not accept amendments, parties given further time to accept modification If parties fail to accept, combination deemed to have AAEC Independent trustee may be appointed to monitor implementation of remedies

ABA Int Law Spring De minimis provisions Regulations (draft) effectively exempt from notification Acquisition of shares or voting rights –Below 15%, provided not leading to control –Where acquirer already has over 50%, or within same group, –From underwriting, sub-division, bonus or rights issue (but not renunciation) Amended or renewed tender offer, where notice already filed Acquisition through gift, intestate / testamentary succession, etc Acquisition of asset (unless it is a complete business operation) solely as investment, or in ordinary course of business, not leading to control Others

ABA Int Law Spring Commission’s powers Summon witnesses / documents Record evidence on oath Punish for: failure to comply with any order failure to notify combination furnishing false / incomplete information destruction of evidence

ABA Int Law Spring Observations Broadly similar to EU law, with some differences To avoid in-depth review, prudent to front load review Ensure complete information in filing, to avail 30/ 60 day deadline Invest time to be well prepared-before filing Sanctions not insignificant Some unresolved issues, despite draft Regs

Vinod Dhall, Dhall Law Chambers, Dewan Manohar House, B-88, Sector 51, Noida, U.P., India Phone: , Fax: ABA Int Law Spring