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India – CCI Orders Investigation Against Great Eastern Energy Corporation Ltd. For Abuse Of Dominance.

16 February, 2015


On December 29, 2014, CCI issued an order under Section 26(1) of the Competition Act (‘Initiation Order’) directing the DG to investigate allegations of abuse of dominance against Great Eastern Energy Corporation Ltd. (‘GEECL’). The inquiry was initiated on the basis of a complaint filed by Mr. Saurabh Tripathy, an employee of M/s SRMB Srijan Ltd. (‘SRMB’), a leading steel rolling mill having two rolling units at Sagar Bhanga, Durgapur in Bardhaman district of West Bengal. GEECL is engaged in exploration, development, production, distribution and sale of Coal Bed Methane (‘CBM’) gas.

 

As per the Initiation Order, Mr. Tripathy alleged that GEECL was in a dominant position in the relevant market of ‘supply and distribution of CBM gas in Asansol- Raniganj- Durgapur belt’ and had abused such dominant position by imposing unconscionable terms and conditions in Gas Sale and Purchase Agreement (‘GSPA’) executed between GEECL and the buyers of CBM gas such as SRMB.

 

Based on the evidence and CCI’s previous decision in Faridabad Industries Association (FIA) v. M/s Adani Gas Limited (Case No. 71 of 2012), CCI delineated the market for ‘the supply and distribution of natural gas to industrial consumers in Asansol-Raniganj-Durgapur region in the State of West Bengal’ as the relevant market. CCI further observed that GEECL was having a 100% market share during 2010-11, 88% during 2011-12 and more than 70% market share during 2012-13 in the relevant market and the consumers like SRMB seemed to depend upon it. In view of the above market construct and absence of any countervailing buyer power, CCI noted GEECL prima facie appeared to be in dominant position. Further, CCI was of the opinion that the impugned terms of the GSPA appeared to be tilted in favour of the seller and against the buyer. On this basis, CCI ruled that there existed a prima facie case for further investigation by DG.

 
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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