CCI | No contravention of Ss. 3 or 4 of Competition Act found on allegations of quid pro quo and corruption

Competition Commission of India (CCI): The Bench comprising of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma (Member) and Bhagwant Singh Bishnoi (Member), decided that no competition issues are made out in the present matter under Sections 3 and 4 of the Competition Act, 2002.

In the present matter, Informant filed the information against Pernod Ricard India Private Limited with respect to the contravention of Sections 3 and 4 of the Competition Act, 2002 under Section 19(1)(a) of the Act.

Facts 

Pernod Ricard India Private Limited (OP)is engaged in the manufacturing, sale and distribution of various alcoholic products in India. Vyn Marketing through its proprietor, i.e. Informant has been a service provider for OP and for the same Informant and OP entered into an agreement whereunder, the former was required to assist the latter in ascertaining the demand-supply position of various alcoholic brands of the OP and to procure orders from distributors/wholesalers.

Informant alleged that OP abruptly and without assigning any reasons, terminated the agreement, despite due discharge of obligations under the Agreement by Vyn Marketing. Such termination was done without providing the 90 days’ notice as required under Clause 21 of the Agreement. Further, adding to the said allegation, OP submitted that after the termination of the Agreement, OP entered into a new agreement with ZK Marketing and thereby appointed it as its new service provider.

It has been alleged that ZK Marketing has no knowledge/experience in the relevant field. The informant stated that such an appointment was done by the OP only with the motive to gain an unfair advantage as it would be able to receive kickbacks from ZK Marketing in lieu of dealership. The said allegation is said to be an anti-competitive agreement between OP and ZK Marketing.

Informant alleged that OP abused its dominant position in violation of the provisions of Section 4 of the Act. The abrupt termination of the Agreement by the OP and subsequent appointment of an agency that has political connections but no relevant experience pieces of evidence such abuse by the OP.

Conclusion

Commission on perusal of the information noted the main grievance of the alleged unilateral termination by the OP of the Agreement and the subsequent appointment of ZK Marketing in its place.

Allegations against the OP essentially pertain to termination of the Agreement without giving 90 days advance notice as per the Agreement, the appointment of ZK Marketing as a service provider by the OP in place of the Informant, due to ZK Marketing having political influence, etc.

Informant pertains to the appointment of ZK Marketing as its new service provider mainly due to its political and bureaucratic connections, alleged quid pro quo, corruption in the government department, violation of french law and Code of conduct by the OP, etc.

Thus, Commission is of the view that no case of contravention of either Sections 3 and 4 of the Act is made out against the OP in the present matter. [Ashok Suchde v. Pernod Ricard (India) (P) Ltd., Case No. 25 of 2019, decided on 16-10-2019]

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