The Delhi High Court has quashed the proceedings initiated by the Competition Commission of India (CCI) against UK-based JCB and its Indian subsidiary over the alleged misuse of its dominant position.
The Division Bench of Justice Prathiba M Singh and Justice Amit Sharma further set aside an order passed by the trial court issuing search warrants against JCB after noting that the informant Bull Machine, an Indian company manufacturing tractors and tractor attachments, had withdrawn its complaint from the CCI after settling the matter with JCB.
The High Court reprimanded CCI for continuing with the investigation against JCB, observing that regulatory authorities such as CCI must honour the outcomes of mediation and respect the settlements reached between parties.
It said that mediation processes and settlements have to be recognised and acknowledged by all Courts/fora where disputes were pending. By doing so, the statutory bodies not only upheld the legitimacy and reliability of the mediation process, but also fostered a legal environment where parties were encouraged to resolve disputes amicably without fear of subsequent regulatory interference.
The decision of CCI to continue an inquiry even after settlement could jeopardise the whole process and lead to a lack of trust in mediation, as the parties may fear that their efforts to settle disputes amicably would be disregarded.
Settlements in general being agreements voluntarily agreed to between parties, unless there wws an extraordinary situation, they could not be permitted to be reopened, so as to ensure finality and closure.
The High Court further said that the threat of continued investigations by the CCI could compel parties to engage in prolonged and costly legal battles, defeating the purpose of settlements.
Upholding the rights of Intellectual Property Rights (IPR) holders to protect their intellectual property, the Division Bench cautioned the CCI on hijacking IP disputes in the jurisdiction of a High Court or commercial court.
The High Court passed the order on two petitions filed by JCB. The UK-based company had moved the High Court against Bull Machine alleging design infringement, copyright violation and passing off.
CCI initiated an inquiry into abuse of dominance by JCB India and its UK-based parent entity in 2014, on the grounds that JCB filed an allegedly frivolous infringement claim against Bull Machine. This was done on a complaint filed by Bull Machine.
JCB moved the High Court against the CCI order, challenging the jurisdiction of the statutory body to examine the frivolity of an infringement claim which was pending before the High Court.
In 2015, JCB also challenged a raid conducted on its premises in India in connection with these proceedings.
Bull Machine and JCB eventually settled their disputes by way of a Supreme Court-directed mediation process in 2021.
Senior Advocate Sandeep Sethi, along with Advocates Karan Singh Chandhiok, Deeksha Manchanda, Uday Bali, Jai Hindocha, Kanika Chaudhary Nayar and Nidhi Singh from Chandhiok & Mahajan and DSK Legal, appeared for JCB.
Bull Machine was represented by Advocates Anurag Ahluwalia, Abir Roy, Vivek Pandey, Aman Shankar, Sasthibrata Panda and Biyanka Bhatia.
CCI was represented by Advocates Samar Bansal and Vedant Kapur.