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India – CCI Directs Investigation Against Western Coalfields Limited And Coal India Ltd. For Abuse Of Dominance.

24 March, 2014

 


On January 22, 2014, CCI passed an order stating that a prima facie case existed against Western Coalfields Limited (‘WCL’) and Coal India Ltd. (‘CIL’) for contravention of Section 4 of the Act. Accordingly, CCI directed DG to investigate into the complaint made by Wardha Power Company Limited (‘WPCL’).


WPCL is engaged in the business of power generation and it procures coal for its plant from WCL and CIL. WCL is a company entirely owned and controlled by CIL. The total quality of coal to be supplied under the Fuel Supply Agreements (‘FSA’) was 1,625,000 metric tonnes (‘MTs’) on an annual basis. WPCL and WCL were in correspondence for execution of another FSA for balance quantity of 635,000 MTs on an annual basis.


WPCL alleged that both WCL and CIL delayed the execution of the FSAs, and forced WPCL to enter into a one sided, anti-competitive FSA. WPCL also alleged that WCL and CIL unilaterally and unfairly increased the price as well as imposed conditions, such as requiring compulsory bank guarantees.


Upon examining the allegation, CCI found that WCL and CIL enjoyed a position of dominance, and that there was enough material to suggest that a prima facie case existed. Accordingly, CCI directed DG to investigate the matter.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com


Shuva Mandal, AZB & Partners 

shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com


Percy Billimoria, AZB & Partners 

percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

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