NATIONAL LAW INSTITUTE UNIVERSITY

BHOPAL

PROJECT ON

“Extra-Territorial Jurisdiction under

Competition Law”

SUBMITTED TO: SUBMITTED BY:

Mr. Vinod Dixit Rashi Ratna Baksh

Assistant Professor Section- A

NLIU, Bhopal ROLL NO. – 2017BALLB51

1
 ACKNOWLEDGEMENT

My vocabulary falls short on words to express our hearty gratitude towards my competition
law professor Mr. Vinod Dixit who gave me the opportunity to work upon such an
astonishing project which helped me in enhancing my thinking skills.

Also, I’d like to thank the prestigious library of NLIU with the material of which I was able
to supplement my project work I want to take out this moment to lastly (but certainly not the
least) thank my parents and The Almighty under whose blessings I am able to conclude this
project. I acknowledge the support of all the aforesaid and start with my project.

Thank you

Rashi Ratna Baksh

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 SYNOPSIS

INTRODUCTION

The Competition Act, 2002 (Act) was enacted to replace the Monopolies and Restrictive
Trade Practices Act, 1969 (MRTP Act), which dealt primarily with the control of monopolies
and the prohibition of monopolistic and restrictive trade practices. The much delayed passing
of the Act is touted by many as the final signs of the Indian economy maturing and in the
process delivering the final blow in unshackling the past of the license raj in India. The very
intent of the Act is to promote and sustain competition in markets, to protect the interests of
consumers and to ensure freedom of trade carried on by other participants in markets in India.
In keeping with this intent, not only is the Competition Commission of India (CCI) vested
with powers to monitor anticompetitive behaviour taking place within the country but under
Section 32 of the Act also empowered to take cognizance of an act taking place outside India
but having an adverse effect on competition within India.1

The concept of extra-territorial jurisdiction is an extension as well as a contradiction to the

concept of sovereignty. Sovereignty, a nation’s exclusive right to govern itself, has its roots
in public international law but has been internalized to the extent that it has become a
cornerstone for the constitutions of various nations around the world. India, in this case, is not
different and has sovereignty mentioned as one of its characteristics in the first line of its
Preamble to the mammoth Constitution. On the other hand, the concept of extra-territoriality
finds its roots under Article 245(2) of the Constitution which reads as "(2) No law made by
Parliament shall be deemed to be invalid on the ground that it would have extraterritorial
operation." Thus, a combined reading of the concept of sovereignty and Article 245(2) leads
to an inference that India not only has the sole right to govern itself by legislating, enacting
and executing various laws and regulations but it also has a right to frame laws that gives it
unbridled powers to govern beyond its territory. However, this inference is unacceptable as it
is in direct contravention to the concept of sovereignty. Can really the powers of a sovereign
state or one of its government body be unbridled? For sovereignty and extra-territorial
operation of laws to co-exist, a balance between the two should be achieved.
1
“Extraterritorial Application of the Competition Act and Its Impact” by Kartik Maheshwari and Simone Reis

3
Where major economic superpowers like, US, UK etc have a long history of competition
regime, very recently in 2002, India entered into this regime. Many more countries are also
likely to adopt legal frame work for competition law to maintain competitiveness in their
domestic market. But as trans-border trade and commerce has now become common
phenomenon, domestic laws having territorial effect is not potent enough to curtail the anti-
competitive practice performed in the foreign country and having adverse effect in that
country. This unfortunate situation insisted the countries to give extraterritorial application of
their competition laws. This unilateral recognition of extraterritoriality has turned the world
into more problematic situation. It is because of the simple reason that neither international
law nor primitive legal principles allow enforcement of the laws of one sovereign into
another sovereign.

Indian competition law also confers such power to the Indian competition authorities. Section 32
of the Competition Act, 2002 specifically empowers the Commission to inquire into any anti-
competitive act taken place outside India but having appreciable adverse effect in the relevant
market in India. The said provision also empowers the Commission to pass such order as it may
deem fit, if inquiry approves anti-competitive practice.

OBJECTIVES

1. To have a detailed understanding of the concept of extra territorial jurisdiction;

2. To analyze its application under US law and EU law;

3. To trace the historical perspective and its present day application under Competition
Act, 2002.

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 RESEARCH HYPOTHESIS

Competition Commission of India has enormous power to exercise its extraterritorial

jurisdiction but the commission does not have such resources which is required for the
recovery of monitory penalty imposed while exercising this power.

RESEARCH QUESTIONS

1. What is extraterritorial jurisdiction and what is the US and UK practice of extraterritorial

jurisdiction?

2. What is the scope and extent of extraterritorial power of Indian Competition Commission?

3. What is the procedure for the enforcement of extraterritorial jurisdiction by the

Commission?

4. How the Commission shall recover monitory penalty imposed while exercising
extraterritorial jurisdiction?

5. What is the role of international organisations for the co-operation and co-ordination
among competition authorities of various countries?

RESEARCH METHODOLOGY

5
The mode of writing this research paper is doctrinal in nature. Secondary and Electronic
resources have been largely used to gather information and data about the topic. Books and
other reference as guided have been primarily helpful in giving this project a firm structure.
Websites, dictionaries and articles have also been referred. Footnotes have been provided
wherever needed, to acknowledge the source.

SOURCES OF DATA

The sources used include books on competition law, case law reporters, and case law
journals. An attempt has been made to consult online case resources like the Supreme Court
Online and Manupatra Online.

MODE OF CITATION

A uniform mode of citation has been followed throughout the project.

REVIEW OF LITERATURE

 “S. M. Dugar, Commentary on MRTP Law, Competition Law & Consumer Protection
Law, Wadhwa and Company Nagpur, Volume I, 4th Edition

This book deals with the concept of extra territorial jurisdiction under competition law in
India under MRTP Act as well as Competition Act, 2002.

The commission is competent to enquire into any agreement or abuse of dominant position or
combination if the same has appreciable adverse effect on competition on the relevant
market in India and it is immaterial whether the agreement has been entered into outside
India or any party to the agreement is outside India, or the enterprise is outside India, or
combination has taken place outside India.

6
  Vinod Dhall, Competition Law Today: Concepts, Issues and the Law in Practice,
Oxford University Press

This book deals with the concept of extra-territorial jurisdiction under different jurisdictions
such as US, UK and EU jurisdiction.

At one time, the question of federal jurisdiction was terribly important to US competition
law, with many leading cases turning on whether a restraint sufficiently affected interstate
commerce. Those days are over; today, as a practical matter, US conduct sufficiently
harmful otherwise to violate the antitrust laws could rarely, if ever, be defended on grounds
that the conduct and its effects were too lacalised.

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 CONTENTS

1. INTRODUCTION……………………………………………..…………………4
2. Concept Of Extra-Territorial
Jurisdiction……………………………………………….……………………...10
3. Extra-Territorial Jurisdiction under US Competition Law…………...
……………………………………………………………………11
4. Extra-Territorial Jurisdiction under EU
Law…………………………………………………………………..…………….12
5. Jurisdiction of CCI……………………………….………………………………….
…...…….….14
6. Application of Extra-territorial jurisdiction under Competition Act...
…………………………………………………………………………….….20
7. International Co-operation for application of Extra territorial
jurisdiction……………………………………………………………………..….24
8. CONCLUSION……………………………………………..……………………..26
9. BIBLIOGRAPHY……………………………………………….….……………..27

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 Concept of Extraterritorial Jurisdiction

The world of economics and trade is becoming increasingly global. Businesses continue to be
organised and structured by mergers, acquisitions and joint partnerships to successfully
complete the international market. In order to keep pace with this constant evolutionary
process, the Community competition authorities must also take action. As a result, numerous
countries and trade blocs have signed deals dealing with the effect of the shifting tide of trade
transition on competition. This agreement offer a reciprocal method to prevent the
burdensome regulatory aggravations and diplomatic instability that can occur as one
government tries to impose the antitrust rules on individuals in another jurisdiction.

Limitations on the jurisdictional competence of the State and therefore on its ability to apply
its competition laws to overseas undertakings are matters of public international law. There
are two aspects of the jurisdictional integrity of the State. First, a State has jurisdiction to lay
down laws, that is, to lay down general or individual rules through its legislative , executive
or judicial bodies. This is defined in different respects as a State administrative, prescriptive
or subject-matter authority. Secondly, a State has authority to enact its rules, that is to say, to
give effect to a general rule or to an individual judgement by means of practical
implementing steps which may also require coercion by the authorities. It is recognised as the
authority of the State to uphold the statute.

Subject-matter authority is widely agreed in public international law that a State has power to
make laws concerning actions within its territories 2 and to regulate the behaviour of its
citizens abroad, citizens for this purpose including companies incorporated under its law.3
The principle of territoriality has been extended in a logical way so that a State is recognised
as having jurisdiction not only where the acts originate in its territory, but also where the
conduct of the objection originates abroad but is completed within its territory..4

2
Territoriality Principle
3
Nationality Principle
4
Principle of objective territoriality

9
For the reason of the subject-matter of regulation, territoriality and nationality concepts are
adequate to encompass a vast range of infringements of competition law, simply because”
an“ offshore undertaking has committed an act-for example, taking over a rival or offering
predatory rates within the territories of the State involved for the operation of its law, or
because an arrangement will apply. In such cases, the declaration by one State of subject-
matter authority over natural or legitimate persons in another does not contribute to
confrontation, given that the former does not attempt to enforce its rule in the territory of
another State. Many of the contentious disputes between States in these matters involved
compliance rather than subject-matter control, and it is against compliance that States have
implemented blocking decisions.5

Enforcement jurisdiction tends to give rise to the most acute conflict between States. It is
widely agreed that, even though the subject-matter of authority occurs in relation to the
actions of someone in another State, it is unlawful to seek to implement the statute in
question within the territory of another State without its authorisation. For all reasons of
compliance, it does not only include the compliance of penalties and the rendering of
definitive decisions, such as permanent injunctions, but applies to other authoritative actions
such as the service of a warrant, a subpoena for evidence or the operation of an inquiry.
Collecting information can be a particular problem for competition authorities, as business is
becoming increasingly global, and the likelihood of a national authority requiring information
outside its jurisdiction is correspondingly increasing The problem is that the jurisdictional
rules developed in the nineteenth century are not particularly suited to the business context or
the information technology of the twenty-first century.

Many legal systems contain provisions which provide for Member States to assist each other in
these matters. For example, the Hague Convention on the Taking of Evidence Abroad, to which
India is also a signatory, provides for one State to assist another in collecting evidence. The
acknowledgment and compliance of global decisions is an essential aspect of international private
law. However, cooperation on evidence and the enforcement of judgments is often not provided
by one State to another where the former takes exception to the latter's attempt to assert its law
extraterritorially, and most legal systems contain restrictions on the disclosure of confidential
information by competition authorities.

5
“ Richard Which, Competition Law, Oxford Univ. Press, 6th Ed., 2009, Pg. 472”

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 EXTRA-TERRITORIAL JURISDICTION UNDER
US
COMPETITION LAW

2.1 Introduction
The United States has one of the longest rules on competitiveness in the world. The key U.S.
antitrust law, the Sherman Act, is a penal law such that the crime is a criminal offence. It can,
however, also be implemented by private intervention. Because the Sherman Act dates back
to 1890, its extraterritoriality had inevitably become a matter before the EEC even existed.
The "Effects Doctrine" introduced to the US courts has provided for the fundamental
principle from which the debate of extraterritoriality in competition law is generally
performed.6

Sections 1 and 2 of the Sherman Act are the two U.S. antitrust clauses that most commonly
give rise to extraterritorial jurisdiction. Section 1 deems unconstitutional 'any deal, Mixing ...
Or a scheme to limit trade or trade with a number of States or with foreign nations. "Section 2
makes it a crime for any person to" monopolise ... or merge or conspire.to monopolise any
portion of trade or trade with a number of States or with foreign nations.

2.2 CASE LAWS

The "territorialist " approach describes the position adopted by the Supreme Court of the
United States in 1909 in American Banana Co. v. United Fruit Co. that "the character of an
act as lawful or unlawful must be determined entirely by the law of the country in which the
act is carried out.7 Justice Holmes, writing for the majority, hold that deposit the fact that both
the plaintiff and defendant were American corporations, the conduct of the defendant was
beyond the reach of the Sherman Act, because the acts in question took place in Panama and

6
Alison Jones and Brenda Surfin, “EC COMPETITION LAW” Second Edition, Oxford University Press,
2004,p.1235.
7
Ibid at 356.

11
Cost Rica. Under the American Banana approach, the reach of domestic law is coextensive
with the geographic territory of the country. Acts that take place within the physical confines
of the country are subject to local law; those acts that occur abroad are not.8
This approach was overruled by the US courts in United States v. Aluminium Company of
America,9 Where U.S. courts have extended U.S. anti-trust legislation to activity that happens
in a foreign state but is meant to impact the United States and does, in practise, bring about
such a consequence.
In the US legal system, federal courts have authority over the applicant corporation if the
corporation is organised or has its principal place of operation in the state where the federal
court is located. A court has general authority over a non-resident corporation if the
corporation has "continuous and systemic" communications with the forum state. 10 In the
event that a court lacks general jurisdiction over a non-resident corporation, the court can
exercise particular jurisdiction over the non-resident corporation under "minimum touch
principle."
In the US legal system, federal courts have authority over the applicant company whether it is
organised or has its principal place of operation in the state where the federal court is located.
A court has general authority over a non-resident company if the contact of the company with
the State of the Platform is "continuous and systematic". 11 In the event that a court lacks
general jurisdiction over a non-resident corporation, the court can exercise particular
jurisdiction over the non-resident corporation under the 'minimum touch theory”.12

8
“Andrew T. Guzman: Is International Antitrust Possible, 73 NYLU Rev 1501, 1507 (1998).
9
148 F 2d 416 (2d Cir 1945).
10
Helicopteros Nacionales de Colombia, S.A. Hall 466 US 408 (1984).
11
Helicopters Nacionales de Colombia, S.A. v. Hall 466 US 408 (1984).
12
International Shoe Co. v. State of Wash., Office of Unemployment Compensation and Placement 326 US 310
(1945).”

12
 APPROACH UNDER EU COMPETITION LAW

3.1 INTRODUCTION
It is difficult to consider the issue of extraterritoriality in EC competition law without first
looking at the position in US law. The key U.S. antitrust law, the Sherman Act, is a federal
statute under which infringements constitute criminal offences. It can also be enforced,
however, through private action. Since the Sherman Act goes back to 1890, its
extraterritoriality became probable before the EEC even existed.13

The practice followed in European courts is much similar to the decision of Hartford case.
The European Court of Justice in A. Ahlostron Osakeytio v. Commission,14 Authorized the
extraterritorial extension of EU antitrust laws to multinational firms, which happened in
foreign countries but affected trade between Member States.

3.2 CASE LAWS

“Wood Pulp” Case15:
This was the case where, for breach of Article 81, the EC levied penalties on those
undertakings making their registered offices outside the EC. The accusations against them
were that they set rates in concert to EC consumers, shared individualised pricing data with
several other wood pulp manufacturers, and made price recommendations through the trade
association. The decision was appealed by the appellants, wood pulp producers and two
groups of wood pulp producers in an appeal to the European Court of Justice.
The Commission based its judgement on the basis that all the addresses of the judgement
were either specifically exported to purchasers within the Community or carrying on business
within the Community by affiliates, subsidiaries, organisations or other institutions within the
Community, and that the operation in concert extended to the vast majority of the sales of
such undertakings to and in the Community. The Commission has concluded:

13
“ R.Y. Jennings, “Extraterritorial Jurisdiction and the United States Antitrust Laws” (1957) 33 BYIC, 146.
14
A. Ahlstrom Osakeytio v. Commission Mkt. Rep.(CCH)- 14,491 (27th September 1988).
15
Ibid”

13
The impact of the agreements and practises on the prices reported and/or paid to consumers
and on the resale of pulp within the EEC was therefore not only significant but also expected,
and was the main and direct product of the agreements and practises.
Any of the appellants also disputed the ability of the Commission to extend the antitrust laws
to them. The point was that actions outside the Society should not be sought to be controlled
solely because the effects of such actions were felt within the Society.

In addition to the objection, the Court held:

'Where the wood pulp producers established in those countries sell directly to the purchasers
established in the Community and engage in price competition in order to gain orders from
those customers, that constitutes competition within the common market. It follows that,
where those producers agree on the prices to be paid to their consumers in the Group and
bring the consultation into effect by selling at prices that are actually organised, they shall
take part in a consultation which has the object and effect of limiting competition within the
popular market within the scope of Article 85 of the Treaty.
The Court observed that such behaviour had two components, one relating to the creation of
an arrangement or decision and the other to execution, and that the position of execution was
the deciding aspect. Holding that, in so far as the position of execution was within the
Community, 'the Community has the right to extend its competition laws to such actions and
is entitled to the presumption of territoriality as generally understood in public international
law, the Court added that it was immaterial whether or not overseas undertakings had taken
decisions within the Community.

14
JURISDICTION OF COMPETITION COMMISSION
OF INDIA

The system for regulating anti-competitive actions carried out by individuals having a place
of business in India and thus immediately subject to the territorial jurisdiction of Indian
courts and tribunals. It is possible for companies who do not have a fixed place of business in
India to monitor the activities of any company in India in a way which is harmful to the
competitive process in India. Shareholding is not appropriate for this reason and may be by
means of a sales deal, a price-fixing scheme or an exclusive trade agreement, the goal of
which is to exclude a rival or to split the market. There are international cartels operating
from various countries and engaging in conspiracies to carry out such anti-competitive
activities that are of severe concern to industrially advanced countries and deal with the issue
of methods of collaboration in making these cartels ineffective, as it is well known that
domestic law has only a territorial impact. The purpose of the establishment is to control
agreements which are likely to have a "appreciable adverse impact on competition" in India.
Such acts can also take place outside of India.16 This applies to the concept of extraterritorial
control. Section 32 of the Act states that the Commission has the right to examine any
arrangement, violation or combination that has, or is likely to have, appreciable adverse
effects on competition in the relevant Indian market.

The Commission has jurisdiction to17:

i) Enquire into Anti-competitive Agreements (eg. Cartel, bid-rigging, etc.);
ii) Enquire into Abuse of dominant position (eg. Predatory pricing, etc.);
iii) Regulate Combinations (mergers/amalgamation, acquisition of shares or controls etc.);
iv) Undertake Competition Advocacy (including advice to the Central Government on
Competition policy issues.
The jurisdiction of the Commission includes seeking to fulfil its mandate by taking
enforcement and non-compliance measures, while enforcement measures extend to enquiries
and regulations, non-compliance includes competition advocacy, public awareness-raising
and training on competition issues. It had to be clearly specified in the section itself.

16
THE COMPETITION ACT, 2002, No. 12 of 2003 $ 32.
17
Dr. Alok Ray, “Globalisation and Competition: The Role of a Professional”, March 2007 The Chartered
Accountant, 1456.

15
In this context, the language of section 14 of the MRTP Act may be considered useful. It is as
follows:
"Where any activity basically follows, within a monopoly, restrictive or discriminatory trade
practise, relating to the manufacture , storage, procurement, delivery or regulation of
products, any description or provision of services, and where any party to such practise does
not engage in business in India, an order may be made in accordance with this Act in respect
of that part of the practise which is carried out;

It is well understood that making any agreement or procedure unconstitutional and limiting
the local business that is a party to such an agreement is sufficiently successful to render the
contract inoperative within a country that enforces its domestic rule. This is how the courts
have so far been helped to give effect to the provisions of any national law in those
circumstances.

ISSUES REGARDING EXTRA-TERRITORIAL JURISDICTION UNDER

COMPETITION LAW
The application of a State’s antitrust laws to conduct outside that state raises several key
issues.18 Some of the key issues being19:
• First, it must be determined whether the law of a particular country (or subdivision) extends
to conduct outside its borders.

• Second, it must be established if a domestic court or tribunal has authority to hear the case.

• Third, where the statute has extraterritorial authority and the domestic court or tribunal has
jurisdiction to hear the matter, logistical difficulties will occur in the application of the law,
including with regard to the receipt of proof and the execution of any damages or penalties.

18
“Calvin S. Goldman, Q.C. and J.D. Bodrug (Co-Editors), “COMPETITION LAW OF CANADA”, Volume 2,
Juris
Publication, 2005, p. 13-3.0
19
Ibid, p 13-14”

16
HISTORICAL BACKGROUND OF EXTRA-TERRITORIAL JURISDICTION
UNDER THE INDIAN COMPETITION LAW

Dramatic changes have taken place in the world economy over a remarkably short period of
time. This advances poses major obstacles to competition law frameworks. The economic
effects of cartels and anti-competitive behaviour on the part of firms with market power and
mergers are not constrained by national boundaries. Until comparatively recently, the
international aspect of competition law was primarily concerned with the matter of whether
one country may apply its competition laws extraterritorially to an undertaking or
undertaking in another country, if the latter acts in an anti-competitive way having adverse
consequences on the territories of the former and whether there should be pre-competition
legislation.20

In Hridas Exports v. All India Float Glass Mrfs. Association,21 The petitioner before the
MRTP Commission against three Indonesian firms claiming that they were making float glass
and selling the same at predatory rates in India, and thus resorted to restrictive and unfair
trading practises. The complaint claimed that the float glass of Indonesian origin was shipped
to India at a cif price of US$ 155 to 180 PMT. At that price, some float glass was shipped to
India between December 1997 and June 1998. It was claimed that these retail prices were
predatory prices, since they were less than not only the cost of production of the product in
Indonesia, but also the variable cost of production of the product.

The plaintiff presented figures showing the approximate cost of float glass in India with a
view to demonstrating that Indian manufacturers of float glass in India were in a position to
demonstrate that Indian manufacturers of float glass would not be able to cope with the price
at which Indonesian manufacturers were currently selling or planning to sell to Indian
consumers. On this basis, it was argued that the selling of float glass by Indonesian
manufacturers at the above stated price of US$ 155 to 180 PMT will limit, distort and deter
competition by removing Indian suppliers from the market. This will have the effect of
lowering the Indian producers' production from the market. This would decrease the output of
the Indian industry, and the resultant idle potential and losses would cause the industry to

20
Richard Whish, “COMPETITION LAW”, Fifth edition, Oxford University Press, 2003, p. 427.
21
AIR 2002 SC 2728.

17
become ill, which would lead to its closing, which would have a direct effect on jobs in the
industry.
The respondent responded that it had never exported glasses to India and that the MRTP Act
includes some long-arm clause in this respect. The case brought an appeal to the Supreme
Court of India, and the Court ruled that:22

The Supreme Court of India, when struggling with the implementation of the "doctrine of
results" in India and the authority of the MRTP Commission for acts and agreements which
have been reached outside India but which have had an adverse impact in India, held that: 23
“This "doctrine of consequences" would entitle the MRTP Commission with authority to
impose an effective order even if a transaction, for example, resulting in the sale of goods to
India at predatory rates, which was in fact a restrictive trade practise, had been carried out
outside the territory of India where the fact of that had resulted in a restrictive trade practise
in India. If the authority of the MRTP Commission is not granted to have jurisdiction with
respect to that part of India's trade practise which is restrictive in nature, it would mean that
individuals outside India can continue to engage in such practises which have an adverse
impact on India. Competition legislation, such as the MRTP Act, is a tool to fight cross-
border economic terrorism. Therefore, even if such an arrangement may be reached outside
India, it may continue to be subject to such activities, the detrimental consequences of which
are viewed with impugnity in India.

Therefore, even if such an arrangement may enter into outside the territorial jurisdiction of
the Commission but if it results in a restrictive trade practise in India then the Commission
would have jurisdiction under section 37 to issue effective orders in respect of such restrictive
trade practise. Finally, the court concluded that:
(a) The MRTP Commission may take action, inter alia, where there is a restrictive trade
practise in India with respect to imports into India and, as a result, matters are beyond the
competence of the MRTP Commission;
(b) Under the MRTP Act, there is no power to stop import;

(c) the MRTP Act does not confer on the MRTP Commission extraterritorial jurisdiction;

22
Ibid
23

18
(d) If a cartel exports products to India and proceeds to make money, it is not in the interest
of the general body of buyers in India to prohibit those commodities from being imported.

It was recognised that, in some ways, the MRTP Act was too limited in nature to resolve
competition concerns, especially in the period of liberalisation and globalisation. The MRTP
Commission received complaints about anti-competitive activities, but was handicapped due
to certain restrictions of the statute. Both restrictions have been sufficiently protected by the
current regulations.
They then lodged an appeal before the Supreme Court of India, which, inter alia, followed the
following order:
• The MRTP Act does not grant additional geographical authority on the MRTP Commission;

As a result of the deficiencies of the MRTP Act Section 32 was incorporated into the
Competition Act 2002 which provides for extraterritorial jurisdiction.

EXTRA-TERRITORIAL APPLICATION AND

ENFORCEMENT OF INDIAN
19
 COMPETITION LAW

Section 32 of the Competition Act, 2002 we find that it makes provision with regard to
extraterritorial jurisdiction of Indian Competition Authority. 24 The provisions of Section 18
provide that the Competition Commission may, with the prior approval of the Central
Government, enter into any agreement or agreement with any entity of any foreign country in
order to discharge its obligations under the provisions of this Act. A convention is
distinguished from a convention of agreement. Thus, the mandate of the Competition
Commission stretches beyond the borders of India.
In case any arrangement that has been entered outside India and is anti-competitive in terms
of sec.3 of the Act; or any party to such an arrangement is outside India; or any company
exploiting the dominant position is outside India; or a combination has taken place outside
India; or any other matter or procedure or action arising out of any agreement or dominant
position or combination is outside India, whether any deal, mixture or violation of dominant
position has or are likely to have a detrimental impact on business in the Indian industry, the
CCI shall have the right to inquire into such agreement, mixture or abuse of dominant
position has or are likely to have an adverse effect on competition in the Indian market, the
CCI shall have the right to inquire into such deal or dominant position or combination if have
or are likely to have an appreciable adverse effect on competition in the relevant market in
India.
By looking at the terminology of Section 32 of the Competition Act , 2002 it can be inferred
that in India too the ‘ Effects Doctrine 'can be enforced as it has been accepted under Section
32. The Commission has notified Regulations 2009 to the Competition Commission of India
(General)25 so the process for the enforcement of extraterritorial jurisdiction shall be
according to this regulation and the Code of Civil Procedure, 1908 wherever applicable.

International Cooperation and Coordination on

extraterritorial application of Competition Laws
24
Here Indian Competition Authority shows the Competition Commission of India
25
2 of 2009
20
The Concepts of Public International Law value the rights of independent States and do not
accept, without their will, the application of the laws of one sovereign to another sovereign
State. It does not provide an adequate response to the problems that arise when there are real
conflicts between competition authorities, and yet the scope for such conflicts could increase
as more States adopt their own competition law codes and as business becomes increasingly
international. In order to solve this problem, some international organisations have
established a global cooperation and coordination network to put a stop to this situation of
discordant disputes arising from the extraterritorial application of the various competition
authorities. Some of these efforts are considered below-ICC action to resolve
extraterritoriality problems26
Over the past two decades, the ICC has expressed public fears about the detrimental impact
of extraterritoriality on global trade and investment. In 1986, the ICC adopted a policy
statement advising governments to avoid extending their rules to circumstances which are not
or are only closely bound to their territories and to encourage intergovernmental dialogue and
collaboration in order to avoid and, where possible, settle extraterritorial conflicts. In 1986,
the ICC also set up an international task force to prepare a report on the various facets of
extraterritoriality and its detrimental impact on international business.27 In recent years, the
ICC has continued its efforts against extraterritoriality, including by serving as an amicus
curiae before courts such as the United States. The Supreme Court in cases where the
extraterritorial enforcement of national regulations posed a danger to foreign trade.

World Trade Organisation

Post-war Havana charter for the International Trade Organisation included an antitrust code.
However, this was not integrated into the Central Trade Deal of 1947, the body from which
the WTO originated. The WTO was established on 1 January 1995 and is mainly concerned
with trade issues, rather than competition policy. The relationship between trade and
competition policy is a key topic I have a right, as is the discussion on the structural
structures required to deal with the current economic order. The WTO rules do not place
duties on undertakings in relation to competition. The WTO Working Group submitted its
report in 2002 to research the interface between International Trade and competition policy.

26
http://www.iccwbo.org/uploadedFiles/ICC/policy/trade/Statements/103-33%205%20Final.pdf, 15/07/09,
01.00 PM”
27
“Extraterritorial Application of National Laws, 1987, Kluwer and ICC Publishing(This report has provided the
basis for continued international dialogue promoting the importance of international comity and consultation
and cooperation to further international trade and investment.)

21
At this point, however, it does not seem feasible for the WTO to initiate a global competition
authority, although it is very feasible that its dispute resolution mechanism could be applied
to competition law.28

International Competition Network

This policy is referred to in the study as the Global Competitive Initiative.' This effort will
promote discussion on a broad range of topics, including multilateralization and deepening of
positive competition; the creation of common rules on best practise in relation to phenomena
such as hard-core cartels; consideration and analysis of the reach of government exemptions
and immunities from competition law; rationalisation of the acquisition notification system;
and In October 2001, the ICPAC report contributed to the creation of the International
Competition Network (ICN) as an international forum for competition law and policy. It is
complementary to that of the UNCTAD, the OEC and the WTO. The ICN is an informal,
virtual network that aims to encourage collaboration between competition authorities and to
foster the procedural and substantive integration of competition laws; to direct the conduct of
its business abroad. Any national or international body responsible for the regulation of
competition law may be a part of that organisation.29

CONCLUSION

28
Ehlermann and Ehring ‗WTO Dispute Sittlement and Competition Law, Fordham International Law Journal,
2003, P-1505.”
29
“Richard Which, Competition Law, , Oxford University Press, 6th edition, 2009, Pg-492.”

22
It is concluded that for affecting the competition in India no specific provisions are
mentioned under the MRTP Act. The newly formed system for regulation of competition law
is more advance to the global powers such as the US, the EU and Canada, and so on.
The basis of this assertion is that the newly drafted Indian Competition Act is silently
unmistakable and resolves any lacunae of competition laws in those countries.
As far as the extraterritorial authority of the Competition Commission is concerned, the Law
grants the Commission, in very plain terms, the right to examine and enact an order which the
Commission finds necessary, irrespective of the geographical limits of the Commission. The
Act also provides that the Commission has the right to control its own practise. The
Commission may also follow every protocol for the successful exercise of its powers. As a
result of these provisions, the Commission has considerable power to regulate the
competitive market in India.
The extraterritorial authority of the Commission, enshrined in section 32 of the Act, renders
the Commission a diverse and effective administrative agency. This is one of the fundamental
clauses of the Act. This Clause has consequences close to those in Articles 81 and 82 of the
EC Treaty and Clause 1 and Section 2 of the US Sherman Act. The Competition Act
undeniably makes the Commission a complex and efficient regulator, but the successful
exercise of such powers can only prove, in fact, that the Commission is a good market
regulator. When it comes to the exercise of extraterritorial authority of the Commission, the
Commission appears a little powerless because extraterritoriality relies more on international
ties with other jurisdictions.
A new regulation is necessary for the recovery of the surveillance penalty levied by the
exercise of extraterritorial authority since it is an extraordinary and new power of the
Commission and, to date, this special regulation is informed by the Commission of General
Regulation 2009 and of the Code of Civil Procedure.

Bibliography

23
 Books
 Competition Law Today: Concepts, Issues and the Law in Practice, edited by Vinod
Dhall (Oxford University Press), 2007
 Richard Which, Competition Law, Oxford University Press; 6th Edition; 2009
 Mehta Pradeep S., Competition Regimes in the World- A Civil Society Report, CUTS
International
 Lloyed P.J. and Vautier M. Kerrin, Promoting Competition in Global Markets – A
Multi-national Approach, Edward Elgar Publishing Ltd., 1999
 Ramappa T, Competition Law in India, Policy Issues and Developments, Oxford
University Press, 2006

Acts and Regulations

 The Competition Act, 2002 (No. 12 of 2003)

 The Code of Civil Procedure, 1908
 The Competition Commission of India (General) Regulations, 2009 (No. 2 of 2009)

Articles

 Fenney, David J., The European Commission‘s Extraterritorial Jurisdiction over

Corporate Mergers, Georgia State University Law Review, Vol. 19, Number 2.
 Sachse Tatjana, Extraterritorial Application of Competition Laws in the US and the
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Law.
 Extraterritoriality, Institutions, and Convergence in International Competition Policy,
Kovacic William E., 77 Chi-Kent L, Rev. 265 (2001)
 Kojima Takaaki, International Conflicts over the Extraterritorial Application of
Competition Law in a Borderless Economy
 Nadelmann Kurt H., Recognition of Foreign Money judgment in France, The
American Journal of Comparative Law, Vol. 5, No. 2 (Spring, 1956), pp. 248-256

24
 Recognition and Enforcement of Foreign Money Judgment in Germany, Schweizer
Kobras Lawyers, Sydney
 OECD Reports 1999, 2003 and 2007

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