NCLAT stays CCI order imposing Rs 873 cr penalty on UBL, other beer makers

The National Company Law Appellate Tribunal (NCLAT) has imposed a stay on the orders passed by the fair trade regulator CCI slapping penalties on several beer makers, including United Breweries Ltd that faces a fine of Rs 751.8 crore.

Passing an interim order, a two-member NCLAT bench has directed parties, including United Breweries Ltd, to deposit 10 percent of the penalty amount by way of ‘Fixed Deposit Receipt’ within three weeks.

The Competition Commission of India (CCI) on September 24, 2021, imposed penalties totaling over Rs 873 crore on UBL, Carlsberg India, All India Brewers’ Association (AIBA), and 11 individuals for cartelization in the sale and supply of beer.

The said order was challenged before the NCLAT, which is an appellate authority over the CCI. It hears appeals against any direction issued or decision made or order passed by the CCI.

”… during the pendency of the Appeal, to prevent an aberration of justice and to secure the ends of justice, stays the impugned order dated 24.09.2021 in suo moto case no. 6/2017 subject to the payment of 10 percent of the penalty amount levied by the first Respondent/CCI, by way of ‘Fixed Deposit Receipt’ to and in favour of the Registrar, NCLAT, New Delhi, within three weeks from the date of passing of this order,” said an NCLAT order passed on December 23.

The NCLAT has also directed the CCI and the All India Brewers Association to file replies over the notices issued by it.

The appellate tribunal has directed to list the matter on March 29, 2022, for admission.

Confirming the development, UBL in a regulatory filing said it received an order passed by the NCLAT, staying the CCI order upon a condition of pre-deposit of 10 percent of the penalty amount imposed on the company.

”The company will comply with the directions and the said 10% amount shall be deposited through a fixed deposit receipt within stipulated time as mentioned in the Order,” UBL had said, now controlled by Dutch-based multinational Heineken.

Earlier this year, Heineken had acquired additional ordinary shares in UBL on June 23 taking its shareholding in the company from 46.5 percent to 61.5 percent.

The CCI had passed the final order against United Breweries Ltd (UBL), SABMiller India Ltd, now renamed as Anheuser Busch InBev India Ltd (AB InBev), and Carlsberg India Private Ltd (CIPL), among other entities.

In its 231-page order, which had come nearly four years after ordering a detailed probe, the CCI had also directed the companies, associations, and individuals to ”cease and desist” from anti-competitive practices in the future.

The period of cartelization was considered to be from 2009 to at least October 10, 2018, with Carlsberg India joining in from 2012 and AIBA serving as a platform for facilitating such cartelization since 2013. All three beer companies were lesser penalty applicants before the regulator.