NCLAT upholds Rs 873 crore penalty on United Breweries

The National Company Law Appellate Tribunal (NCLAT) ruled in favour of the Rs 873 crore (approx. $105.5 million) penalty imposed by the Competition Commission of India (CCI) on United Breweries (UBL) and other beer makers on 23 December.

CCI imposed penalties on UBL and others for cartelisation in the sale and supply of beer in India on 24 September last year. This was challenged before the NCLAT, an appellate authority over the CCI.

After examining materials and considering the arguments presented, two judicial members on the bench concluded that “since the appellant had already admitted in the leniency application regarding their involvement in the cartelisation, the appellants were not justified to argue on merit of the case or point out any fault in the impugned order”.

Upon examination of petitions moved by the beer makers to seek a reduction in penalty, NCLAT stated: “It can be inferred that lesser penalty application is like admission of guilt in a cartel”.

Justices Rakesh Kumar and Ashok Kumar Mishra added: “Once they have admitted their involvement in application filed under Section 46 read with Regulation 5, they were only entitled to question the imposition of penalty”.

The period of cartelisation outlined in the 81-page order was said to have been from March 2005 to at least March 2017.