CCI order stayed for Rs 1 cr fine on Kingfisher

India’s fair trade watchdog, Competition Commission of India’s (CCI’s) recent order for a fine of Rs 1 crore on private carrier Kingfisher Airlines has been stayed by the appellate tribunal.

The Competition Commission Appellate Tribunal’s (Compat’s) interim stay is limited to the CCI fine. Compat will hear the matter on January 20.

The decision to fine Kingfisher was taken after CCI said the airline failed to give the information it sought during an investigation into the carrier’s agreement with another private player, Jet Airways. Both the airlines had a code-sharing agreement on domestic and international flights and a joint fuel management, from October 2008.

According to Section 44 (b) of the Competition Act of 2002, if any person, being a party to a combination, “omits to state any material particular knowing it to be material, such person shall be liable to a penalty which shall not be less than Rs 50 lakh but which may extend to Rs 1 crore.” The fine was imposed on the basis of this clause.

The stay order issued last week said it appeared, on the face of the facts, that Kingfisher had complied with the information in time. It also took note of Kingfisher’s counsel’s argument that the showcause notice (for failing to provide information) was issued on September 16, though the company was asked to furnish the details by September 17, through a notice issued in August.

Earlier, the airline had challenged the jurisdiction of CCI to inquire into the agreement with Jet in the Bombay High Court and Supreme Court, but without success.

The agreement between the two airlines had come under the CCI scanner after a flier filed a complaint, saying any pact between two carriers would dominate the market, leading to cartel formation. CCI’s director general (investigations) has been probing the case to ascertain if this was likely.