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CMA Final · Corporate and Economic Laws · The Competition Act, 2002

Hindustan Fabrics Ltd, an Indian company, entered into an agreement with a foreign supplier in Dubai, and the agreement was signed outside India. The agreement is alleged to have an appreciable adverse effect on competition in a relevant market in India. What is the position under the Competition Act, 2002?

The Commission has power to inquire into the agreement even though it was signed outside India and a party is foreign. The condition is that the agreement has, or is likely to have, an appreciable adverse effect on competition in the relevant market in India.

  1. AThe Commission has no power because the agreement was entered into outside India
  2. BThe Commission can inquire only if all parties to the agreement are located in India
  3. CThe Commission can inquire only after the Central Government grants specific permission
  4. DThe Commission has power to inquire into the agreement, despite it being entered into outside India, if it has or is likely to have an appreciable adverse effect on competition in IndiaCorrect

Explanation

Section 32 gives the Commission power to inquire notwithstanding that the agreement was entered into outside India or that a party is outside India. The condition is that the agreement has, or is likely to have, an appreciable adverse effect on competition in the relevant market in India. No prior Government permission is required.

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