Rs.44B penalty on sugar mills: CAT remands case to CCP for rehearing

The Competition Appellate Tribunal (CAT), while deciding the appeals filed by the Pakistan Sugar Mills Association (PSMA) and its member mills, has remanded the case to the Competition Commission of Pakistan’s (CCP) for a fresh hearing.

The Tribunal directed that the matter be reheard by either the Chairperson or any other member of the Commission who was not a signatory to either of the earlier conflicting opinions, and that a final decision be issued preferably within 90 days.

The CCP’s original 2021 order was issued by a four-member bench that was evenly split in its opinion.

Two members, including the Chairperson Ms Rahat Kaunain Hassan and Member Mujatba Lodhi, supported the imposition of the penalty, while the remaining two Members including Ms Bushra Naz Malik and Shaista Bano issued a dissenting opinion.

To break the deadlock, the then Chairperson Rahat Kaunain exercised a casting vote under Subsection 5 of Section 24 of the Competition Act, 2010, through a note dated August 13, 2021—effectively converting the stalemate into a majority ruling that upheld the penalty.

The legality of this casting vote became the central issue in the appeals. The Tribunal has now ruled that the Chairperson has no authority to exercise a casting vote in quasi-judicial proceedings under the Competition Act, 2010. As a result, the Chairperson’s opinion based on the casting vote has been set aside.

After the fresh hearing, the decision of the Chairperson or the assigned member will settle the matter and determine the violations of competition law by PSMA and its member sugar mills.

It is worth mentioning that the CAT has recently become fully functional following the federal government’s appointment of a new Chairman, allowing the Tribunal to resume hearings on several long-pending appeals.