The Delhi High court on Wednesday dismissed plea by Monsanto Holdings Private Limited challenging initiation of probe by Competition Commision of India (CCI). The investigation was directed by CCI over alleged abuse of dominant position.

The pleas by Monsanto Holdings Private Limited (MHPL), Monsanto Company (‘Monsanto’), Mahyco Monsanto Biotech (India) Private Limited (MMBL) had challenged an order of February 2016 passed by the Competition Commission of India (CCI) under section 26(1) of the Competition Act, 2002 where CCI had directed the Director General to investigate the activities of the petitioners and Maharashtra Hybrid Seeds Company (Mahyco).

The investigation was directed by CCI over a complaint of alleged abuse of dominant position.

CCI in its order had prima facie held that MMBL held a dominant position in the relevant market of “provision of Bt. Cotton Technology in India” as well as the downstream market of “manufacture and sale of Bt. Cotton seeds in India”. It had further prima facie held that the stringent conditions imposed in the Sub-licence agreement(s) discouraged the Seed companies from dealing with competitors and also amounted to restricting development of alternate technologies.

The controversy, essentially, relates to the trait fee charged by MMBL and the other terms and conditions imposed by it for using the technology for manufacturing Bt. Cotton Seeds.

“This Court finds no reason to interfere with the impugned order. It is also relevant to note that an order passed by the CCI under Section 26(1) of the Competition Act is an administrative order and, therefore, unless it is found that the same is arbitrary, unreasonable and fails the wednesbury test, no interference would be warranted. A review on merits is impermissible at this stage, and therefore, this court is refraining from examining the merits of the dispute.” The order passed by Justice Vibhu Bakhru reads.

The principal contention advanced on behalf of the petitioners was that there is an implicit repugnancy between provisions of the Competition Act and the Patents Act and, therefore, the applicability of the Competition Act is excluded. It was also contended that the Patents Act occupies the entire field in respect of not only the grant of patents but also exercise of rights granted to a patentee. And, this includes provisions regarding abuse of Patent rights.

Therefore, it is implicit that the Competition Act would have no applicability to agreements that are related to exercise of rights by a Patentee, it was submitted.

“We respect the decision of the Hon’ble Delhi High Court and will decide on the appropriate next steps after receiving the order and studying the same in detail. MMB would however like to reiterate that we have conducted all our business in an appropriate and transparent manner in accordance with the laws of the land and will continue to cooperate with the authorities in the proceedings.The CCI investigation was initiated against the backdrop of bilateral disputes with a few sub-licensee seed companies who were involved in a breach of long-standing bilateral contracts and have intentionally withheld payments that were contractually obligated to pay MMB.” MMB spokesperson told Mint.

News Source: Livemint


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