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Bt cotton: Delhi HC dismisses Monsanto plea against CCI probe

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NEW DELHI: The Delhi High Court has dismissed Monsanto Mahyco Biotech’s (MMB) plea challenging the Competition Commission of India (CCI) order for an investigation into the company.

The fair trade regulator had ordered a probe in 2016 for alleged abuse of Monsanto’s dominant position in India in Bt cotton business, based on a complaint filed by the government and other seed companies. Monsanto main argument that the CCI jurisdiction stood excluded in matter related to exercise of patent rights by the patent holder was rejected.

The court’s single-judge bench of Justice Vibhu Bakhru relied on an earlier judgement in Telefonaktiebolaget L.M. Ericsson case where the court concluded that the Patents Act does not exclude the operation of the Competition Act.

In a 35 page judgement, the court said, “It is also relevant to note that an order passed by the CCI … is an administrative order and, therefore, unless it is found that the same is arbitrary, unreasonable and fails the Wednesbury test, no interference would be warranted”.

Pallav Saxena, legal counsel for CCI, said the issue was whether in view of the provisions of the Patents Act, does the CCI have jurisdiction over the issue, which the party was contesting, or not.

“The high court has decided that merely because Patents Act is applicable, certain aspects of the impugned transaction, the jurisdiction of CCI under the Competition Act is not ousted,” he said

“The decks are now cleared for CCI to move ahead on the basis of information and complaints received against Monsanto,” said Saxena.

MMB spokesperson said the company would study the order before taking the next step. “MMB would however like to reiterate that we have conducted all our business in an appropriate and transparent manner in accordance with the laws of the land and will continue to cooperate with the authorities in the proceedings,” an MMB spokesperson said.

“The CCI investigation was initiated against the backdrop of bilateral disputes with a few sub-licensee seed companies who were involved in a breach of long-standing bilateral contracts and have intentionally withheld payments that were contractually obligated to pay MMB,” added the spokesperson.

However, according to a person in the know of the matter, while the order was a big win for the CCI, it would not be able to proceed in its inquiry against Monsanto until other pending matters in the Supreme Court and Delhi High Court relating to this case were decided.

In February 2016, CCI in its order had said that the commission holds that the conduct of MMB prima facie appears to be in violation of Competition Act and abuse of dominant position by charging unreasonably high fees for Bt cotton seeds. Monsanto challenged the said investigation order before the Delhi High Court, alleging that CCI does not have jurisdiction to deal with issues relating to IPRs (patent).

“The judgment vindicates the initial stand taken by the Government of India that there were prima facie issues of anti-competitive practices and abuse of dominance on the part of Monsanto. The GoI was the first party to refer the matter to the CCI,” said Sunil Mathews, counsel for the ministry of agriculture.

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