DS 503 Appellants PDF

TEAM CODE: DS-503
BEFORE THE HON’BLE AVALON COMPANY LAW APPELLATE TRIBUNAL AT

AVALON
APPEALS FILED UNDER § 53B OF THE AVALON COMPETITION ACT, 2002
APPEAL NO. …/2019
GOLLUM PAPER MILLS’………………………………………………..…………APPELLANT
VERSUS
COMPETITION COMMISSION OF AVALON

AND OTHERS …………………………………………………….………..……RESPONDENTS
Clubbed With
APPEAL NO. …/2019
SHADOWFAX INDUSTRIES………………………………………………………....APPELLANT
VERSUS

AND OTHERS…………………………………………………………………... RESPONDENTS
MEMORIAL FOR APPELLANTS

5TH DSNLU-CCI NATIONAL MOOT COURT COMPETITION, 2019
TABLE OF CONTENTS
INDEX OF AUTHORITIES ........................................................................................................ III
STATEMENT OF JURISDICTION............................................................................................... VI
STATEMENT OF FACTS ......................................................................................................... VII
STATEMENT OF ISSUES ......................................................................................................... IX
SUMMARY OF ARGUMENTS ................................................................................................... X
ARGUMENTS ADVANCED........................................................................................................ 1
1: THAT THE PRESENT APPEALS BY GOLLUM AND SHADOWFAX ARE MAINTAINABLE
BEFORE THE HON’BLE TRIBUNAL. .................................................................................... 1
[1.1] Appellant is an enterprise under § 2(h) of the Act. ................................................ 1
[1.2] The present appeal is preferred by the aggrieved enterprise against the orders
passed under § 53A (a) of the Act. ................................................................................. 2
2: THAT THE AGREEMENT ENTERED INTO BY GOLLUM WITH SHADOWFAX IS NOT ANTI-
COMPETITIVE UNDER §3 OF THE ACT................................................................................ 3
[2.1] The Vertical Agreement is not Anti-Competitive in Nature .................................... 3
[2.2] There has not been an Appreciable Adverse Effect on Competition ....................... 5
[2.3] Alternatively, it is not against the Essential Facilities Doctrine............................. 6
3: THAT GOLLUM HAS NOT ABUSED ITS DOMINANT POSITION UNDER §4 OF THE ACT. ..... 7
[3.1] Gollum does not hold any dominant position in the relevant market ...................... 7
[3.2] Alternatively, Gollum has not abused its dominant position ................................ 11
4: THAT THE PENALTY IMPOSED BY CCA ON GOLLUM IS NOT REASONABLE. ................. 13
[4.1] The imposition of penalty should be on ‘relevant market’. .................................. 13
[4.2] The quantum of penalty is arbitrary .................................................................... 13
5: THAT THE CCA’S ORDER APPROVING THE ACQUISITION OF ASSETS OF GOLLUM BY
BAIN IS NOT JUSTIFIED. ................................................................................................... 14
[5.1] The acquisition is likely to cause an appreciable adverse effect on competition .. 15
[5.2] The combined entity of Gollum and Bain is super-dominant in the market .......... 17
I|Page
[5.3] Pre-acquisition status of Gollum already grants it a dominant status in the market
.................................................................................................................................... 18
PRAYER ............................................................................................................................... XI
II | P a g e
INDEX OF AUTHORITIES
[A.] INDIAN CASES

1. Ajay Devgn Films v. Yash Raj Films Pvt Ltd., 2013 CompLR 903 (CompAT). ......... 4
2. Automobiles Dealers Association Hathras UP v. Global Automobiles Limited and
Pooja Expo India Private Limited, 2012 CompLR 827 (CCI). .................................... 4
3. GKB Hi Tech Lenses Pvt. Ltd. v. Transitions Optical India Pvt. Ltd., Indlaw, Case
No. 55/2012 (CCI). .................................................................................................... 7
4. Hindustan Steel Ltd. v. State of Orissa, A.I.R. 1970 S.C. 253. ................................. 13
5. Jindal Power Steels Ltd. v. CCI, 4628 Appeal No. 45/2012 ..................................... 11
6. M/S Prints India v. Springer (India) Pvt. Ltd, Case 16/2010, (CCI). ......................... 11
7. M/s Santuka Associates Pvt. Ltd. v. All India Organization of Chemists and Druggists
and Ors. Case No. 20/2011. ..................................................................................... 15
8. M/S Shahi Exports Pvt. Ltd v. Lakshmi Machine Works, Case No. 72/2002 (CCI). . 12
9. Saurabh Tripathy v. Great Eastern Energy Corporation Ltd., Case No. 63/2014 (CCI).
................................................................................................................................ 18
10. Prints India v. Springer India Pvt. Ltd., Case 16/2010, (CCI) ............................. 11, 14
11. Saurabh Tripathy v. Great Eastern Energy Corporation Ltd., Case No. 63/2014, (CCI)
................................................................................................................................ 18
12. Central Bank of India v. State of Kerala, (2009) 4 S.C.C. 94. ................................... 12
13. Competition Commission of India v. Steel Authority of India Limited, (2010) 10 SCC
744……………………………………………………………………………………..2
14. Consumers Guidance Society v. Hindustan Coca- Cola Beverages Private Limited,
Case No. UTPE-99/2009 (CCI) ............................................................................... 16
15. M/s Cine PrekshakulaViniyoga Darula Sangh v. Hindustan Coca Cola Beverages
Private Limited, Case No.-RTPE 16/2009 (CCI). ..................................................... 16
16. M/s International Cylinder Pvt. Ltd. v. Competition Commission of India & Ors.,
Appeal No. 21 /2012 (COMPAT). ........................................................................... 13
17. M/s. Excel Crop Care Ltd. v. Competition Commission of India & Ors., Appeal
No.79/ 2012 (COMPAT). ........................................................................................ 13
18. Southern Pipeline Contractors Conrite Walls (Pty) Ltd. and the Competition
Commission (Case No.105/CAC/Dec 10) (106/CAC/Dec 10). ................................. 13
19. Sponge Iron Manufacturers Association v. National Mineral Development
Corporation, Case No. 16/2002 (CCI). ..................................................................... 16
III | P a g e
[B.] INTERNATIONAL CASES

1. American Tobacco Co. et al v. United States, 328 US 781 ......................................... 3
2. IMS Health v. NDC Health, 2004 E.C.R. I-5039...................................................... 13
3. AKZO Chemie v. Commission, 1991 E.C.R. I-3359. ............................................... 16
4. Board of Trade of the City of Chicago v. United States, 246 U.S. 231. .................... 15
5. Brands Co. v. Commission, 1978 E.C.R. 207. ................................................ 3,8,10,11
6. Eastman Kodak Co. v. Image Technical Service Inc., 504 US 451. .......................... 18
7. Industrie des PudresSpheriques v. Comm’n of the Eur. Communities, 2000 E.C.R. II-
3755. ....................................................................................................................... 11
8. MCI Communications Corp. v. ATT. 708 F.2d 1081, 1132 (7th Cir.). ..................... 14
9. McKenzie v. Mercy Hosp. of Independence Kan., 854 F.2d 365 (10th Cir. 1988). ... 14
10. Michelin v. Commission of European Communities, (1983) ECR 3461. .................. 17
11. Microsoft .v Commission , 2007 E.C.R. II-3601. .................................................... 13
12. Oscar Bronner v. Mediaprint Zeitungs- und Zeitschriftenverlag, Mediaprint
Zeitungsvertriebsgesellschaft and Mediaprint Anzeigengesellschaft 1998 E.C.R. I-
7791. ....................................................................................................................... 12
13. Radio Telefis Eireann (RTE) and Independent Television Publications LTD
(ITP) v. Commission (Magill) 1995 E.C.R 743. ....................................................... 13
14. Re Holcim Ltd Combination Registration No C-2014/07/190. ................................. 16
15. Ryanair/DAA-Aer Lingus, Case No COMP/39.886. ................................................ 11
16. Scandlines Sverige AB v. Port of Helsingborg, Case COMP/A.36.568/D3............... 11
17. Sun Pharmaceutical Industries Ltd and Ranbaxy Laboratories Ltd Combination
Registration No. C-2014/05/170. ............................................................................. 17
18. United States v. Colgate & Co., 250 U.S. 300
(SC)…………………………………………………………………………….…….12
[C.] OTHER AUTHORITIES
1. Commission Notice on the determination of the relevant market for the Purpose of
Community Competition Law, 1997, O.J., 97/C 372/03 (EC). ................................. 15
2. Council Regulations (EC) 2010/C Guidelines on Vertical Restraints, 2010, O.J. C
130/1 (EC). .............................................................................................................. 13
3. DG Competition Discussion Paper on the application of Article 82 of the Treaty to
exclusionary abuses (2005). ..................................................................................... 13
IV | P a g e
4. Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to

Abusive Exclusionary Conduct by Dominant Undertakings, 2009, O.J. (C 45)7( EC)
................................................................................................................................ 16
5. Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to
Abusive Exclusionary Conduct by Dominant Undertakings, 2009, O.J.(C
45)7(EC)……………………………………………………………..……………….16
6. BBI/Boosey and Hawkes: Interim Measures, 1987 OJ (L 286) 36, (EC). ................. 17
[D.] JOURNALS
7. A. Massadeh, The Essential Facilities Doctrine under Scrutiny: EU and US
Perspective, UEA Law School Working Paper Series, Working Paper Number UEA
LAW WPS 2011- AM-1, UEA Law School (2011).................................................. 14
8. Barriers to Entry and Exit in Competition Policy, OFT Research Paper 2, Office of
Fair Trading from London Economics, Pg. 57-59. ................................................... 17
9. Dr. Atilano Jorge Padilla, The Role Of Supply-Side Substitution In The Definition of
the Relevant Market In Merger Control, A Report for DG Enterprise A/4, European
Commission (2001). ................................................................................................ 15
10. Geradin, The Necessary Limits to the Control of “Excessive” Prices by Competition
Authorities - A View from Europe, (2010). ............................................................... 12
11. J. S. Venit and J. J. Kallaugher, Essential Facilities: A Comparative Law Approach,
Annual Proceedings of the Fordham Corporate Law Institute, International Antitrust
Law & Policy (1994). .............................................................................................. 14
[E.] BOOKS
1. S M Dugar, Guide to Competition Act 2002 (Sudhanshu Kumar ed, 7th edn,
LexisNexis 2018)
2. Abir Roy, Competition Law in India (2nd edn, Eastern Law House 2014)
3. R S Khemani, A framework for the design and implementation of competition law and
policy (World Bank 1999)
4. D.P. Mittal, Competition Law and Practice (3rd edn, Taxmann Publications 2011)
V|Page
STATEMENT OF JURISDICTION
I. APPEAL NO. ___ OF 2019
The Appellant, Gollum Paper Mills’, has approached the Appellate Tribunal (hereinafter
referred to as “ACLAT”) under §53B of the Competition Act, 2002 which exercises its
jurisdiction to hear appeal against the order of the Competition Commission of Avalon.
II. APPEAL NO. ___ OF 2019
The Appellant, Shadowfax Industries, has approached the Appellate Tribunal (ACLAT)
under §53B of the Competition Act, 2002 which exercises its jurisdiction to hear appeal
against the order of the Competition Commission of Avalon.
VI | P a g e
STATEMENT OF FACTS
BACKGROUND OF DISPUTE
1. Avalon is a republic with 29 states. In 1991, the Government of Avalon enacted the
Avalon Competition Act, 2002; and in the years 2014 – 2015, Avalon Insolvency and
Bankruptcy Code (hereinafter referred to as “AIBC”) was enacted. The Government also
laid heavy emphasis on environmental regulations and made stricter norms for industries
based on forest assets with a view to divert attention to alternatives.
PARTIES TO THE DISPUTE
2. Shadowfax Industries is a leading printing and publishing house in Avalon and started its
paper production unit with its production capacity of 14,000 MTPA which is second only
to Gollum Paper Mills’ capacity of 24,000 MTPA.
3. In 2014, the paper production unit of Shadowfax went through an insolvency process and
was acquired by Bain Industries. This acquisition proved to be a game changer for Bain,
which upgraded its paper production capacity to 18,000 MTPA as a result of the
acquisition.
DISPUTE
4. In November 2017, Shadowfax placed an order for about 4000 MTs (metric tonnes) of a
special quality glazed paper to be supplied in 4 tranches over the course of six months.
Shadowfax had won a contract for Ostrich Publications’ global assignments. Gollum
supplied the first tranche of 1000 MTs of glazed paper in 15 days. Thereafter, Gollum
informed Shadowfax that there has been a breakdown in the machinery which would
lead to delay or entail an increased price of 1.5 times the price originally agreed upon.
Even after negotiations, Gollum did not reduce the price. In the meantime, Shadowfax
also imported some quantity of glazed paper from China to meet the demands of Ostrich
Publications.
5. Shadowfax filed Information before the CCA alleging abuse of dominant position, and
violation of § 3 of the Competition Act. By way of a Supplementary Information, it was
also submitted to the CCA that Ostrich Publications had terminated its contract with
Shadowfax on account of delayed supplies and sub-standard quality and invoked the
arbitration proceedings and instituted claims for damages.
6. The CCA found that there was a prima facie case of contravention of the Competition
Act, and directed the Director General (hereinafter referred to as “DG”) to investigate the
matter.
VII | P a g e
INVESTIGATION BY DIRECTOR GENERAL

7. The DG in its investigation, found that there was a long breakdown in one of the units of
Gollum that resulted in huge losses to it. The DG found that while the unit of Gollum
that had broken down was the only one with the capacity to produce the special quality
of glazed paper required by Shadowfax, Gollum could have easily started production at
any of its other units at a minimal additional cost.
8. The DG found that Shadowfax had reached out for price quotations to other small paper
mills of which Frodo Paper Mills, in their price quotation, had assured that they would be
able to meet the demand. The DG in its report, held Gollum to be dominant in the market
for glazed paper in Avalon, and found them to be liable for charging exorbitant prices.
9. The CCA, after hearing the parties, agreed with the DG and found that Gollum had to be
in contravention of § 3 and 4 of the Competition Act and also imposed a penalty
amounting to 6 percent of Gollum’s average turnover for the preceding three years.
10. Eventually, insolvency process had to commence for Gollum, and Bain got interested in
acquiring the assets owned by Gollum.
11. Bain filed a notice under § 6 of the Competition Act before the CCA for seeking
approval of their proposed acquisition of Gollum. Shadowfax made submissions
opposing the proposed acquisition and submitted that if allowed, the combined entity of
Bain and Gollum would become super dominant in the market. However, the CCA
proceeded to approve the combination unconditionally.
APPEALS FILED
12. The following appeals have been filed in the present matter:
i. Gollum filed an appeal before the Appellate Tribunal (hereinafter referred to as
“ACLAT”) against the order of the CCA penalizing it for abuse of dominance.
ii. Shadowfax filed an appeal before the ACLAT against the CCA’s order approving
the acquisition of Gollum by Bain, stating it to be anti-competitive.
Owing to substantial overlap between the two appeals and keeping in mind the
commonality of the parties, the ACLAT decided to club the two appeals and has listed
both for final hearing on maintainability as well as merits.
VIII | P a g e
STATEMENT OF ISSUES
APPEAL (I)
ISSUE I
WHETHER THE APPEAL IS MAINTAINABLE BEFORE THE HON’BLE TRIBUNAL OR NOT?
ISSUE II
WHETHER THE AGREEMENT ENTERED INTO BY GOLLUM WITH SHADOWFAX IS ANTI-

COMPETITIVE UNDER §3 OF THE ACT OR NOT?
ISSUE III
WHETHER GOLLUM HAS ABUSED ITS DOMINANT POSITION UNDER §4 OF THE ACT OR NOT?
ISSUE IV
WHETHER THE PENALTY IMPOSED BY CCA ON GOLLUM IS REASONABLE OR NOT?
APPEAL (II)
ISSUE V
WHETHER THE CCA’S ORDER APPROVING THE ACQUISITION OF GOLLUM BY BAIN IS

JUSTIFIED OR NOT?
IX | P a g e
SUMMARY OF ARGUMENTS
1. THAT THE PRESENT APPEALS ARE MAINTAINABLE BEFORE THE HON’BLE TRIBUNAL.
The present appeal preferred is maintainable because [1.1] the Appellant is an enterprise
under §2(h) and [1.2] it is preferred against the orders referred to in clause (a) of §53A passed
by the Competition Commission of Avalon (referred as "CCA"), thereby meeting the
requirements of §53B (1).
2. THAT THE AGREEMENT ENTERED INTO BY GOLLUM WITH SHADOWFAX IS NOT ANTI-
COMPETITIVE UNDER §3 OF THE ACT.
The vertical agreement entered into by Gollum with Shadowfax does not violate §3(4) of the
Act because [2.1] the vertical agreement is not anti-competitive in nature, [2.2] the said
agreement has not caused any appreciable adverse effect on competition and [2.3]
alternatively, it is not against the Essential Facilities Doctrine.
3. THAT GOLLUM HAS NOT ABUSED ITS DOMINANT POSITION UNDER §4 OF THE ACT.
The findings of CCA are incorrect and there is no such violation because [3.1] Gollum does
not hold any dominant position in the identified relevant market and [3.2] in arguendo,
Gollum holds a dominant position in the market as found by the DG, it has not abused its
dominant position.
4. THAT THE PENALTY IMPOSED BY CCA ON GOLLUM IS NOT REASONABLE.

The penalty imposed is arbitrary because [4.1] the imposition of penalty should be on
‘relevant turnover’ [4.2] the quantum of penalty is excessive. Based on these two assertions,
it is submitted that CCA did not decide on the matter keeping the relevant factors in mind and
was biased against the Appellants.
5. THAT THE CCA’S ORDER APPROVING THE ACQUISITION OF GOLLUM BY BAIN IS NOT
JUSTIFIED.
The approval given by the CCA to the acquisition of Gollum by Bain is in contravention of §
5 and § 6 of the Act, because; [5.1] the acquisition is likely to cause an appreciable adverse
effect on competition; [5.2] the resultant combined entity will enjoy a super dominant
position in the relevant market which can be easily abused by them and [5.3] the Pre-
combination status of Gollum already grants it a dominant position in the market.
X|Page
ARGUMENTS ADVANCED
1: THAT THE PRESENT APPEALS BY GOLLUM AND SHADOWFAX ARE MAINTAINABLE

BEFORE THE HON’BLE TRIBUNAL.
1. It is most humbly submitted before the Hon’ble Tribunal that the present appeal preferred
by Appellants stands maintainable and is well within the adjudication limits of this
Tribunal. This is within the effect of §53B(1) of the Avalon Competition Act, 2002
(hereinafter, referred as “the Act”) which provides for an appeal to Appellate Tribunal
because [1.1] the Appellant is an enterprise as per §2(h) of the Act and [1.2] it is preferred
against the orders referred to in clause (a) of §53A passed by the Competition Commission
of Avalon (referred as “CCA”), thereby meeting the requirements of §53B(1).
[1.1] APPELLANT IS AN ENTERPRISE UNDER § 2(H) OF THE ACT.
2. It is most humbly submitted that according to §53B(1) of the Act, any ‘enterprise’ can
prefer an appeal to the Appellate Tribunal against any order, decision or direction referred
to in §53A(1)(a) of the Act. An appeal may be preferred by an enterprise against any
direction, decision or order passed under clause (a) of §53A(1).
3. Thus the same applies to the present appeal as well wherein the requirement of the party
appealing before this Tribunal is an enterprise. 1 As has been clearly enunciated in the
factsheet, the Appellant, Shadowfax Industries is a leading printing and publishing house in
Avalon credited with revolutionizing the printing industry in Avalon by continuously
evolving techniques that are cost efficient and innovative. 2 Also, Gollum Paper Mills,
Appellant to the present appeal is also engaged in paper manufacturing, holding the total
production capacity of 24,000 MTPA (metric tonnes per annum). 3 Therefore the Appellants
qualify as enterprise under the Avalon Competition Act, 2002.
4. Since, there was substantial overlap between the two appeals, the Appellate Tribunal
(ACLAT) decided to club the two appeals. 4
1
§ 2(h) Competition Act, 2002, No. 12, Acts of Parliament, 2002(India).
2
¶ 6, PAGE 1, STATEMENT OF FACTS, 5TH DSNLU-CCI MOOT COURT COMPETITION, 2019.
3
4
1|Page
[1.2] THE PRESENT APPEAL IS PREFERRED BY THE AGGRIEVED ENTERPRISE AGAINST THE
ORDERS PASSED UNDER § 53A(1)(a) OF THE ACT.
5. §53B(1) which involves an appeal to be filed only by an aggrieved must conform to the
idea that the order or direction or decision tends to cause legal injury to the aggrieved by
affecting his right.5
6. The present appeal has been preferred by the aggrieved enterprises against the order of the
Competition Commission of Avalon (CCA) which held Appellants to be in contravention
of §3 and §4 of the Act and imposed a penalty amounting to 6 percent of average turnover
for the preceding three years.6 Additionally, the order of Competition Commission of
Avalon (CCA) which approved the combination of Gollum Paper Mills and Bain
Industries unconditionally also became subject of the present appeal. 7
7. Since §53B(1) of the Act provides for a redirection to §53A(1)(a) for any order or
direction or decision. §53A(1)(a) of the Act allows the Appellate Tribunal to hear and
dispose appeals against the CCA for any direction, order or decision under §27 and §31 of
the Act.
8. A combined reading of §53A(1)(a) and 53B (1) of the Act, indicates the restricted scope of
the appeals that shall be maintainable before this Tribunal. If the legislature intended to
enlarge the scope and make orders, other than those, specified in §53A(1)(a), then the
language of the §53(B)(1) ought to have been quite distinct from the ones used by
legislature.8
9. The Hon’ble Supreme Court held, “In terms of §53A(1)(a) of the Act appeal shall lie only
against such directions, decisions or orders passed by the Commission before the Tribunal
which have been specifically stated under the provisions of §53A(1)(a). The orders, which
have not been specifically made appealable, cannot be treated appealable by
implication.”9 The Court further held that the provisions of §26 and §53A of the Act
clearly depict the legislative intent that the framers never desired that all orders, directions
and decisions should be appealable to the Tribunal.10
5
SM DUGAR , GUIDE TO COMPETITION LAW, (Sudhanshu Kumar ed., 7th edn, LexisNexis 2018).
6
7
8
Jindal Power Steels Ltd. v. CCI, 4628 Appeal No. 45/2012; M/S Prints India v. Springer (India) Pvt. Ltd, Case
16/2010, (CCI).
9
Competition Commission of India v. Steel Authority of India Limited, (2010) 10 SCC 744.
10
Id.
2|Page
10. The said orders passed by the CCA as enunciated in the factsheet conform to the limited
scope of specified §s provided in § 53A (1)(a) of the Act under §27(b) and § 31(1) of the
Avalon Competition Act, 2002 which have both been expressly covered in the §
53A(1)(a).
It is, thus, humbly submitted that the present appeal stands maintainable because of the
Appellants being identified as enterprises under § 2(h) of the Act and the orders passed
by the CCA under §27(b) and 31(1) which are expressly mentioned in § 53A(1)(a)
against being appealable under § 53B of the Act.
2: THAT THE AGREEMENT ENTERED INTO BY GOLLUM WITH SHADOWFAX IS NOT

ANTI-COMPETITIVE UNDER §3 OF THE ACT.
11. Any vertical agreement made under §3(4) of the Act would be anti-competitive if it, in
accordance with §3(1), causes an appreciable adverse effect on competition. It is most
humbly submitted before the Hon’ble Tribunal that the vertical agreement entered into by
Gollum with Shadowfax does not violate §3(4) the Act because [2.1] the vertical
agreement is not anti-competitive in nature [2.2] the said agreement has not caused any
Appreciable Adverse Effect on Competition and [2.3] alternatively, it is not against the
Essential Facilities Doctrine.
[2.1] THE VERTICAL AGREEMENT IS NOT ANTI-COMPETITIVE IN NATURE.
12. It is most humbly submitted that Gollum’s liability under §3(4) for ‘refusal to deal’ holds
no good because firstly, there was not an agreement and secondly, there was no refusal to
deal.
[2.1.1] There was no agreement.
13. It is most humbly submitted that for an act to fall within the ambit of §3, there must be an
agreement between two or more parties. Agreement, in common parlance, means meeting
of two or more minds. CCI also notes that an agreement always envisages two or more
parties or enterprises. 11 Though the scope of §2(b) is wider in scope, yet there is a
11
Reliance Big Entertainment Limited v. Karnataka Film Chamber of Commerce, 2012 CompLR 0269 (CCI).
3|Page
legislative intent in differentiating between an agreement between two parties and a

unilateral decision.
14. In the instant case, there was no instance of an agreement, actual or implied, between
Gollum and any other enterprises. It was a unilateral decision taken by Gollum and, thus,
cannot be subject to §3 of the Act.
[2.1.2] Alternatively, there was no ‘refusal to deal’.
15. A vertical agreement could be anti-competitive if it results in refusal to deal. 12 Refusal is

when an agreement restricts, or is likely to restrict, by any method the persons or classes
of persons to whom goods are sold or from whom goods are bought. 13 In the instant case,
the agreement is not anti-competitive in nature because Gollum has neither outrightly nor
constructively refused to deal with Shadowfax.
16. A constructive refusal to deal means that one party is outwardly prepared to deal with the
other party, but the terms on which it chooses to operate are so onerous that until the other
party suffer losses, it is not possible to have a proper business relation with the party. In
the instant case, the actions of Gollum cannot fall into the ambit of constructive refusal to
deal since they were necessitated by the prevailing circumstances and justiciable business
reasons.14
17. It is a settled principle that any undertaking, whether dominant or not, should have the
right to choose its trading partners and to dispose freely off its property. 15 The European
Commission also considers claims by the dominant undertakings that their own innovation
will be negatively affected by the obligation to supply, or by the structural changes in the
market conditions that imposing such an obligation will bring about, taking the risk of
failed projects into account.16
18. The charging of a higher price of 1.5 times the original price and that too only for the
second tranche of supply17 has no bearing on constructive refusal to supply. The price
charged was for covering the risks incurred in diverting the supplies from its other
production units on account of a breakdown. Moreover, to maintain the quality of its
12
§3(4)(d), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
13
Explanation (d), §3(4)(d), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
14
United States v. Colgate & Co. 250 U.S. 300 (1919, Supreme Court of the US).
15
Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive
exclusionary conduct by dominant undertakings, 2009, O.J. (C.45)7 (EC).
16
Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive
exclusionary conduct by dominant undertakings, 2009, O.J. (C- 45)7(EC).
17
4|Page
product, recoup its losses and bear structural changes on account of heavy regulations
entailed by the government on forest assets,18 it was not possible for Gollum to keep the
prices normal. Hence, the prices were fairly negotiated. Furthermore, the price variation
clause was a part of a regular business transaction which was upto Shadowfax whether to
accept or not19 when it already had other options to choose between different suppliers.
[2.2] THERE HAS NOT BEEN AN APPRECIABLE ADVERSE EFFECT ON COMPETITION.
19. That under §19(3),20 the Act specifies certain conditions to assess the negative and
positive effects on the market.21 And all the factors should be looked at together to analyse
the net impact on competition as entailed by the language of the Act.22 Further, in Oscar
Bronner v. Mediaprint,23 the essential aspects therein considered for refusal to deal were:
whether the product refused was indispensable; whether all competition is eliminated from
the firm that has been refused the access.
[2.2.1] Gollum’s product was not indispensable to Shadowfax.
20. Objective Necessity of product does not mean that, without the refused input, no
competitor could ever enter or survive on the downstream market.24 Rather, an input is
indispensable where there is no actual or potential substitute on which competitors in the
downstream market.25 In this regard, the Commission will normally make an assessment
of whether competitors could effectively duplicate the input by efficient supply produced
by the dominant undertaking in the foreseeable future.26 It is not, however, necessary that
a substitute for the refused input be as efficient as the refused input. It suffices that it
enables effective competition to take place.27 In the instant case, other suppliers existed in
the market; hence, Gollum’s product was not indispensable.
18
19
Ajay Devgn Films v Yash Raj Films Pvt Ltd 2013 CompLR 903 (CompAT).
20
§19(3), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
21
ABIR ROY, COMPETITION LAW IN INDIA, 146 (2nd edn, Eastern Law House 2014).
22
Automobiles Dealers Association Hathras v. Global Automobiles Ltd, 2012 CompLR 827 (CCI).
23
Oscar Bronner v. Mediaprint Zeitungs- und Zeitschriftenverlag, Mediaprint Zeitungsvertriebsgesellschaft and
Mediaprint Anzeigengesellschaft 1998 E.C.R. I-7791.
24
Microsoft .v Commission , 2007 E.C.R II-3601.
25
Radio Telefis Eireann (RTE) and Independent Television Publications LTD (ITP) v. Commission
(Magill) [1995] ECR 743. Oscar Bronner v. Mediaprint Zeitungs- und Zeitschriftenverlag, Mediaprint
Zeitungsvertriebsgesellschaft and Mediaprint Anzeigengesellschaft 1998 E.C.R. I-7791;
Microsoft v. Commission 2007 E.C.R II-3601.
26
Mediaprint Anzeigengesellschaft 1998 E.C.R I-7791; IMS Health v. NDC Health 2004 E.C.R I-5039.
27
Mediaprint Anzeigengesellschaft 1998 E.C.R I-7791.
5|Page
[2.2.2] Gollum’s conduct did not hinder competition in the relevant market.
21. The agreement does not create entry barriers to, does not drive out existing competition &
does not foreclose the competition by hindering entry into the market. 28 The existing
agreement cannot be said to drive existing competition out of the market since other
suppliers who are not a part of this agreement are free to supply their products to
Shadowfax. This assertion is bolstered from the fact Shadowfax was getting its suppliers
from other manufacturers, including China. 29 Entry barriers at the supplier level are
relevant to establishing whether there is real foreclosure.30
22. Gollum has charged a higher price only for the second tranche of supply and not for a
‘significant period of time’. 31 The Appellants, infact, supplied the first tranche of supply
on time and in regards to the terms and conditions originally agreed upon. Hence, there are
no entry barriers to the market to cause foreclosure & there is no appreciable adverse
effect.
[2.3] ALTERNATIVELY, IT IS NOT AGAINST THE ESSENTIAL FACILITIES DOCTRINE.
23. The essential facilities doctrine obliges a firm controlling an essential facility whose
duplication is not possible or feasible to deal with its competitors with the goal of
providing them access to such a facility. 32 Cases involving the essential facilities doctrine
are a subset of the refusal to deal cases. 33 This doctrine can only be invoked if the
"plaintiff can show more than inconvenience, or some economic loss; he must show that
an alternative to the facility is not feasible”, rather than asserting that the facility is
essential because it is economical. 34
24. In MCI Communications Corp v. ATT,35 the US Court laid down 4 tests for cases
grappling with the essential facilities doctrine. The factors are: Control of the essential
facility by a monopolist; a competitor's inability practically or reasonably to duplicate the
essential facility; the denial of the use of the facility to a competitor; and the feasibility of
28
29
30
Council Regulations Guidelines on Vertical Restraints 2010, O.J. C 130/1 (EC).
31
DG Competition Discussion Paper on the application of Article 82 of the Treaty to exclusionary abuses
(2005).
32
A. Massadeh, The Essential Facilities Doctrine under Scrutiny: EU and US Perspective, UEA Law School
Working Paper Series, Working Paper Number UEA LAW WPS 2011- AM-1, UEA Law School (2011).
33
J. S. Venit and J. J. Kallaugher, Essential Facilities: A Comparative Law Approach, Annual Proceedings of
the Fordham Corporate Law Institute, International Antitrust Law & Policy (1994).
34
McKenzie v. Mercy Hosp. of Independence Kan., 854 F.2d 365 (10th Cir. 1988).
35
MCI Communications Corp. v. ATT. 708 F.2d 1081, 1132 (7th Cir.).
6|Page
providing the facility. In the instant case, alternative options were not only available to
Shadowfax but were indeed exploited for meeting its requirement.
Hence, it is most humbly submitted before the Hon’ble Tribunal that Gollum has not
violated §3(4) the Act because the agreement is neither anti-competitive in nature nor
does it result in Appreciable Adverse Effect on Competition.
3: THAT GOLLUM HAS NOT ABUSED ITS DOMINANT POSITION UNDER §4 OF THE ACT.
25. §4(1) of the Act states that no enterprise or group shall abuse its dominant position. 36 The
CCA has found Gollum to have contravened §4(2)(a)(ii) of the Act by charging exorbitant
price from Shadowfax. 37 It is submitted that the findings of CCA are incorrect and there is
no such violation because [3.1] Gollum does not hold any dominant position in the
identified relevant market and [3.2] in arguendo, Gollum holds a dominant position in the
market as found by the DG, it has not abused its dominant position.
[3.1] GOLLUM DOES NOT HOLD ANY DOMINANT POSITION IN THE RELEVANT MARKET.
26. It is most humbly submitted that the DG has erred in defining the relevant market. The
dominant position of the enterprise or a group within an identified ‘relevant market’ has to
be established first.38
[3.1.1] The DG has erred in defining the relevant market.
27. It is most humbly submitted before this Hon’ble Tribunal that the DG has given a very
narrow definition of relevant market. By segmenting the market for production of paper
into a smaller market, the DG has overemphasised the market power of the Appellant in
the market so defined by him. For the identification of the correct relevant market, various
factors such as the “relevant product market”39 and the “relevant geographic market”40
have to be duly considered.41
36
§4(1), Competition Act, 2002, No. 12, Acts of Parliament, 2002 (India).
37
38
Explanation 2, §4(2), Competition Act, 2002, No. 12, Acts of Parliament, 2002 (India); Prints India v.
Springer India Pvt. Ltd., Case 16/2010 (CCI).
39
§2(t), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
40
§2(s), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
41
§19(5), Competition Act, 2002, No. 12, Acts of Parliament, 2002 (India).
7|Page
28. In the instant case, the relevant product market is the ‘market for paper’ and cannot be
taken as a narrowly demarcated market as that of a ‘market for glazed paper’. In the
guidelines issued by the European Commission, 42 the factors required to assess the
relevant product market were underlined as:
 From the buyer’s point of view i.e. Demand Substitution, and
 From the seller’s point of view i.e. Supply Substitution. 43
29. Substitutability on the demand side involves identifying the range of products which in the
event of a price rise for one good a consumer would consider to be close (although not
necessarily perfect) substitutes.44 Substitutability on the supply side involves ascertaining
all alternative sources of supply available, including the firms who are able to switch
production to supply the relevant product within an accessible geographic area for the
firm’s customers’ in the event of a rise in the price of a product. In Torras/Sarrio,45 the
European Commission held that even when consumers may not view different grades of a
product as substitutes, they will still constitute the same relevant market based on supply
substitutability.
30. In the instant case, there were many suppliers who were engaged in the business of
manufacturing of close substitutes to Gollum’s product. Moreover, Frodo Paper Mills also
agreed to “develop the capacity to meet Shadowfax’s requirement and would meet the
demand through imports, if required.”46 Thus, there was an existence of substitutability on
the supply side within the market for paper which was ignored by the DG in demarcating
the relevant market.
31. Narrow definition of relevant market overemphasises market share and takes away the
focus from market power which is a true indicator of dominant position of an enterprise. 47
The same was also observed in the Coca Cola48 cases. Thus, in the instant case, the
relevant product market should be a broader ‘market for paper’, instead of a narrowly
defined ‘market for glazed paper.’
42
Commission Notice on the determination of the relevant market for the Purpose of Community Competition
Law, 1997, O.J. C 372/03 (EC).
43
GKB Hi Tech Lenses Pvt. Ltd. v. Transitions Optical India Pvt. Ltd., Indlaw, Case No. 55/2012 (CCI).
44
Dr. Atilano Jorge Padilla, The Role Of Supply-Side Substitution In The Definition of the Relevant Market In
Merger Control, A Report for DG Enterprise A/4, European Commission (2001).
45
Torras / Sarrio, Case IV/M.166.
46
47
Sponge Iron Manufacturers Association v. National Mineral Development Corporation, Case No. 16/2002
(CCI).
48
Consumers Guidance Society v. Hindustan Coca- Cola Beverages Private Limited, Case No. UTPE-99/2009
(CCI); M/s Cine PrekshakulaViniyoga Darula Sangh v. Hindustan Coca Cola Beverages Private Limited, Case
No.-RTPE 16/2009 (CCI).
8|Page
[3.1.2] Gollum is not dominant in the relevant market.
32. It is most humbly submitted that Gollum does not hold any dominant position in the
relevant market because firstly, Gollum does not operate independently of competitive
forces prevailing in the relevant market, and secondly, Gollum cannot affect its
competitors or consumers or the relevant market in its favour.49
(i) Gollum does not operate independently of competitive forces prevailing in the
relevant market.
33. It is an established principle that a firm would be able to behave independently of

competitive forces, if it has acquired a position of economic strength. 50 This position of
economic strength can be understood to be one of substantial market power.51 In the case
of AKZO Chemie v. Commission,52 the European Court of Justice held that 50 percent of
the market is a very high market share but that is only a presumption. Despite having such
market power the undertaking might not have a market power because it also essentially
depends upon the size and market power of the others operating in the market.
34. In the instant case, Gollum does not hold any dominant position in the identified relevant
market even if it has the largest production capacity53 because it does not have any
substantial market power due to the presence of other players active in the production of
papers. This can be inferred from the following:
1. Bain Industries (hereinafter, Bain) had a paper production capacity of 18000 metric
tonnes per annum54 which was close to the production capacity of 24000 MTPA of
Gollum. 55
2. Paper import was close to 20% of total consumption of paper in Avalon.56
3. Frodo Paper Mills had the capacity to produce paper.57
4. Existence of Other suppliers.58
49
Explanation (a), §4(2), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
50
Brands Co. v. Commission, 1978 E.C.R. 207.
51
Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to Abusive Exclusionary
Conduct by Dominant Undertakings, 2009, O.J. (C 45)7(EC).
52
AKZO Chemie v. Commission, [1991] E.C.R. I-3359.
53
54
55
56
57
58
9|Page
35. Furthermore, dominance or substantial market power has also been held to mean that the
undertaking faces no effective competitive constraint and is able to keep the prices above
the competitive level for a ‘significant period of time’.59
36. In the instant case, Gollum faces an effective competitive constraint from other players.
Moreover, the rise in prices of the paper offered by Gollum was on account of special
circumstances, that is, breakdown in its production unit,60 and increased duties imposed on
forest assets by the government.61 Thus, the increase in price was not for a ‘significant
period of time’ but only for a particular time period and merely for the second tranche of
supply. Another important consideration to be taken into is that Gollum had to lose on
several orders; a contention put forth before the CCA but was rejected by it.62 Had Gollum
been able to operate independently, it could have been able to maintain its supply
regardless of the existing market conditions.
(ii) Gollum cannot affect competitors, consumers or the relevant market in its favour.
37. Market power is the power to force a purchaser to do something that he would not do in
competitive markets.63 In the instant case, even by exercising all the market power
available to Gollum, it did not have a significant power to force Shadowfax to procure
glazed paper from it since there were other options available to Shadowfax to meet its
requirement. Shadowfax, indeed, met its requirement from other suppliers, including
imports from China. 64
38. Further, dominant position under §4 should be tested on the anvil of other factors like
countervailing buying power.65 The buyers have countervailing buying power because of
the competitive market.66 In the instant case, as argued above, the presence of other
significant players in the identified market who produce close substitute to the Appellant’s
product ensure that the buyers are shielded from the significant price rise, if any.
Furthermore, the buyer, that is, Shadowfax, infact, had approached other sellers, and
particularly Frodo Paper Mills for price quotations, which in turn, agreed to meet
59
DG Competition Discussion Paper on the application of Article 82 of the Treaty to exclusionary abuses
(2005).
60
61
62
63
Eastman Kodak Co. v. Image Technical Service Inc., 504 US 451.
64
65
§ 19(4)(i) Competition Act, 2002, No. 12, Acts of Parliament, 2002(India).
66
Saurabh Tripathy v. Great Eastern Energy Corporation Ltd., Case No. 63/2014 (CCI).
10 | P a g e
Shadowfax’s requirement of glazed paper, 67 apart from meeting its demand from imports
from China.68 It follows that any anti-competitive practices by the Appellant, if any, will
not affect the buyers as there are other substitutes available to the buyers in the identified
market and the buyer, in the instant case, has infact exercised the option of approaching
the Appellant’s competitors.
[3.2] ALTERNATIVELY, GOLLUM HAS NOT ABUSED ITS DOMINANT POSITION.
39. It is most humbly submitted before the Hon’ble Tribunal that Gollum has not abused its
dominant position under §4(2)(a)(ii) even if the market identified in the DG report is taken
to be the relevant market and the Appellants are found to be dominant in the said market.
40. In United Brands Co. v. Commission of the European Communities69 for an uncompetitive
behaviour, the price has to be abusive which can be determined by a two-fold test that
considers whether (1) the price-cost margin is excessive and (2) the price imposed “is
either unfair in itself or when compared to competing products.” This is a settled principle
of law. 70
[3.2.1] The price-cost margin is not excessive.
41. A producer, even in a dominant position, is not obliged to sell its products below its
manufacturing costs.71 In the instant case, Gollum had to incur the additional production
cost by diverting the supplies from their other production facilities to meet Shadowfax’s
demand72 due to the breakdown in one of its unit. Moreover, Gollum was already running
into losses. 73 Diverting supplies from other production facilities would have entailed an
additional burden on Gollum which is reasonably recovered from the prices charged by it
in the second tranche of supply.
42. It was opined by the US Supreme Court in the case of American Tobacco Co. et al v.
United States74 that material condition in determining abuse is that there exists the power
to raise prices or to exclude competition when it is desired to do so. In the instant case, the
main cause of price increase was breakdown in one of the units of Gollum which was an
“unforeseen circumstance”. Notably, Gollum could have charged excessive prices for its
first tranche too; the very fact that it didn’t do so and charged higher price for the second
67
68
69
United Brands Co. v. Commission, 1978 E.C.R. 207.
70
Ryanair/DAA-Aer Lingus, Case No COMP/39.886.
71
Industrie des PudresSpheriques v. Comm’n of the Eur. Communities, 2000 E.C.R. II-3755.
72
73
74
American Tobacco Co. et al v. United States, 328 U.S. 781.
11 | P a g e
tranche only impinges upon the fact that the changed prices were owing to the changed
circumstances, i.e., breakdown in one of its units.
[3.2.2] The price charged is not unfair.
43. According to the European Court of Justice, an unfair high price should be higher than
monopoly price. Thus, monopoly price may be considered as having more than a
“reasonable relation to the value of the product supplied.”75 In Scandlines Sverige AB v.
Port of Helsingborg, the European Commission considered that in assessing the
"economic value of the product supplied" account must be taken not only of the costs of
production, but also additional factors, “especially as regards the demand-side aspects of
the product/service concerned”.76 Thus, high prices imposed by a dominant firm may
simply reflect the value that the product or service has for its customers rather than being
unfair. In the instant case, Gollum’s product was superior to their competitor which is
evident from the fact that Shadowfax, itself, chose Gollum, despite its additional charge,
over other suppliers even when it had the options available. Moreover, a common thread
to all the European cases concerning excessive pricing is that prices had exceeded costs by
more than 100%.77 In the instant case, the price rise is only of 50% which is a permissible
limit.
44. The price increase to 1.5 times itself has been used to show independence of the
Appellants which has further been used to establish dominance. Mere increase in prices by
the Appellant for valid economic reasons for all of its customers cannot amount to
imposing of unfair or discriminatory conditions in purchase or sale of goods or services. 78
It is, thus, most humbly submitted before the Hon’ble Tribunal that Gollum is not
dominant in the identified relevant market, that is, market for paper in Avalon.
Alternatively, a higher price which is charged is for the valid economic reasons and is a
prudent reaction to the market forces of demand and supply. Hence, it has not abused
its dominant position, if any.
75
United Brands Co. v. Commission, [1978] E.C.R. 207.
76
Scandlines Sverige AB v. Port of Helsingborg, Case COMP/A.36.568/D3.
77
Geradin, The Necessary Limits to the Control of “Excessive” Prices by Competition Authorities - A View from
Europe, (2010).
78
M/S Shahi Exports Pvt. Ltd v. Lakshmi Machine Works, Case No. 72/2002 (CCI).
12 | P a g e
4: THAT THE PENALTY IMPOSED BY CCA ON GOLLUM IS NOT REASONABLE.
45. It is most humbly submitted before the Hon’ble Tribunal that the penalty of 6% on average
turnover for the preceding three years imposed on Gollum was unreasonable because, as
proved above, Gollum, in the first place did not violate § 3 and § 4 of the Act. Moreover,
the penalty imposed is arbitrary because firstly, [4.1] the imposition of penalty should be
on ‘relevant turnover’, and, secondly, [4.2] the quantum of penalty is excessive. Based on
these two assertions, it is submitted that CCA did not decide on the matter keeping the
relevant factors in mind and was biased against the Appellants.
[4.1] THE IMPOSITION OF PENALTY SHOULD BE ON ‘RELEVANT MARKET’.
46. The Hon’ble Supreme Court in Central Bank of India v. State of Kerala,79 observed that
the finding of violation of §3 and §4 of the Act recorded by the competent authority i.e.
the Commission cannot be made applicable to the other products, goods or services qua
there is no allegation of abuse of dominant position and the turnover of other products and
services cannot be clubbed with the one qua which a finding of violation of the provisions
of the Act is recorded. In M/s. Excel Crop Care Limited v. Competition Commission of
India & Ors,80 the appellate Tribunal held that it was important to articulate the reasons as
to why a particular percentage of penalties were being imposed and secondly, what would
be the relevant turnover for such imposition.
47. This was also observed by the COMPAT wherein it said that, when a particular concern is
a multi-commodity company, the relevant turnover should be considered and not the total
turnover.81 It was further reiterated in the case of Southern Pipeline Contractors Conrite
Walls (Pty) Ltd. and the Competition Commission. 82
48. Imposition of penalty of 6% on the average turnover is arbitrary, especially when Gollum
is a multi-commodity enterprise and the alleged infringement is with regard to its glazed
paper.
[4.2] THE QUANTUM OF PENALTY IS ARBITRARY.
49. It is most humbly submitted that the quantum of penalty is unjustified and arbitrary. The
CCA did not take into considerations certain relevant factors while imposing the penalty.
79
Central Bank of India v. State of Kerala, (2009) 4 S.C.C. 94.
80
M/s. Excel Crop Care Ltd. v. Competition Commission of India & Ors., Appeal No.79/ 2012 (COMPAT).
81
M/s International Cylinder Pvt. Ltd. v. Competition Commission of India & Ors., Appeal No. 21 /2012
(COMPAT).
82
Southern Pipeline Contractors Conrite Walls (Pty) Ltd. and the Competition Commission (Case
No.105/CAC/Dec 10) (106/CAC/Dec 10).
13 | P a g e
In M/s. Excel Crop Care Limited v. Competition Commission of India & Ors,83 the
appellate Tribunal held that while penalty must be imposed only after having carefully
weighed all the relevant factors such as the financial health of the company, the necessity
of the product. It should be borne in mind that there should be proportionality between the
infringement and the penalty imposed. 84
50. In the instant case, the quantum is unjustified because firstly, there have been no violations
of § 3 and § 4 of the Act by Gollum; secondly, Gollum is already suffering massive
financial crisis, as affirmed by the DG report85 but rejected by CCA while hearing the
matter86; and, thirdly, the price charged is only for the second tranche of supply, rather
than a mal-practice adopted by Gollum for a significant period of time.
It is, therefore, most humbly submitted before the Hon’ble Tribunal that CCA, in the
first instance, should not have imposed any penalty on the Appellant because there have
not been a prima facie violations of §3 and §4 of the Act by the Appellant. However,
even if the penalty of 6% on average turnover for preceding three years is imposed, it is
arbitrary and unreasonable.
5: THAT THE CCA’S ORDER APPROVING THE ACQUISITION OF ASSETS OF GOLLUM BY

BAIN IS NOT JUSTIFIED.
51. It is most humbly submitted before the Hon’ble Tribunal that the approval given by the
CCA to the acquisition of Gollum by Bain is in contravention of §5 and §6 of the Act
which states that “combination which causes or is likely to cause an appreciable adverse
effect on competition within the relevant market in India”87 shall be void. This assertion is
based on the arguments that firstly, [5.1] the acquisition is likely to cause an appreciable
adverse effect on competition; secondly, [5.2] the resultant combined entity will enjoy a
super dominant position in the relevant market which can be easily abused by them and
thirdly, [5.3] the Pre-combination status of Gollum already grants it a dominant position in
the market.
83
M/s. Excel Crop Care Ltd. v. Competition Commission of India & Ors., Appeal No.79/ 2012 (COMPAT).
84
Hindustan Steel Ltd. v. State of Orissa, A.I.R. 1970 S.C. 253.
85
86
87
§ 6(1), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
14 | P a g e
[5.1] THE ACQUISITION IS LIKELY TO CAUSE AN APPRECIABLE ADVERSE EFFECT ON

COMPETITION.
52. It is most humbly submitted before the Hon’ble Tribunal that the acquisition of Gollum by
Bain will result in an Appreciable Adverse Effect on Competition because firstly, the
combined entity will lead to a substantial increase in the market share; and, secondly, there
is a likelihood that the combination would result in the parties to the combination being
able to significantly and substantially increase prices. 88
53. Ordinarily, the word ‘Appreciable’ means capable of being perceived or recognized by the
senses.89 The factors related to combinations which are likely to cause an appreciable
adverse effect on competition have been expounded under §20(4) of the Act. Once
existence of the prohibited agreement, practice or decision enumerated under the afore-
mentioned section is established there is no further need to show an effect on competition
because then a rebuttable presumption is raised that such conduct has an Appreciable
Adverse Effect on Competition (AAEC) and is therefore anti-competitive. 90
54. In the case of Board of Trade of the City of Chicago v. United States91, it was held if the
expression “appreciable adverse effect on competition” was not defined abstractly or in
general terms in the Competition Act, every case has to be examined individually and facts
are to be considered peculiar to the business condition before and after the restraint was
imposed.
55. In order to determine whether a proposed combination will have AAEC, the CCI will first
delineate the Relevant Market92 for the commodity93. The relevant market is ascertained
on the basis of relevant product market 94 and relevant geographic market 95. Among the
factors used to delineate the relevant product market are the “physical characteristics and
end use of the goods96” and “the existence of specialized producers97.” In the instant case,
the relevant product market is the “market for paper” and the relevant geographic market
is Avalon. Hence, the relevant market, in the instant case, is the market for paper in
Avalon.
88
89
BLACK’S LAW DICTIONARY, 101 (6th Edn, 1996).
90
M/s Santuka Associates Pvt. Ltd. v. All India Organization of Chemists and Druggists and Ors. Case No.
20/2011.
91
Board of Trade of the City of Chicago v. United States, 246 U.S. 231.
92
§2(r), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
93
94
§2(t), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
95
§2(s), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
96
§19(7)(a), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
97
§19(7)(e), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
15 | P a g e
56. Furthermore, it is most humbly submitted that the Hon’ble Tribunal takes forth the
following factors in consideration:
[5.1.1] Substantial increase in the market share.

57. It is most humbly submitted that the combined entity will lead to a substantial increase in
the market share in the relevant market. 98
58. In certain situations, the production capacity is helpful for calculating the market share.
For example, in a mining industry, the firm’s reserves may best reflect its current and
future competitive presence 99. Similarly, in the paper production market, the quantum of
paper that a firm will be able to produce with its acquired resources will determine its
position in the market. In the present case, Gollum Paper Mills’ initially had the highest
production capacity (24,000 MTPA) followed by Shadowfax (14,000 MTPA). Alongside
this, Bain industries, after acquiring one of the production units of Shadowfax, upgraded
its paper production capacity to 18,000 MTPA as a result of the acquisition 100. Therefore,
the combined entity of Gollum and Bain will have a total production capacity of 42,000
MTPA which is the maximum in the country by far. With such a tremendous increase in
the total production capacity of the combined entity, it will be in a position from where it
will effectively control the production of the commodity.
[5.1.2] Likelihood of significantly and substantially increasing the price because of the
pre-combination degree of competition.
59. It is also pertinent to note here that another parameter of determining whether the
agreement will result in AAEC is the pre-combination degree of competition between the
parties101. Both the parties are premium players and close competitors in the relevant
market. Their ability to charge high prices together with their control over substantial
production capacity in the region suggests the possibility of AAEC, post the proposed
combination102.
60. In the present scenario, Gollum and Bain individually had substantial production capacity
which gives them the ability to charge exorbitant prices from their consumers. In an
agreement, Gollum was unable to fulfil the terms of the contract it entered into with
Shadowfax on the decided prices. It, therefore, quoted an increased price (1.5 times the
98
99
100
101
Re Holcim Ltd Combination Registration No C-2014/07/190.
102
Ibid.
16 | P a g e
original) to fulfil the contract. After a series of negotiations Shadowfax had to pay the
increased amount, thereby, establishing exorbitant price charging capability of Gollum 103.
On the other hand, Bain was also able to upgrade its paper production capacity
substantially to be only second highest in the market, highest being Gollum. Therefore, it
is submitted that pre-combination, the entities were premium players in the relevant
market with significant production capacity which tremendously increases the possibility
of AAEC post the combination.
[5.2] THE COMBINED ENTITY OF GOLLUM AND BAIN IS SUPER-DOMINANT IN THE

MARKET.
61. Dominance has been defined in terms of: firstly, the enterprise’s ability to operate
independently of competitive pressure; and secondly its ability to appreciably affect the
relevant market, customers and competitors.104 In the present scenario, both the
aforementioned criteria are satisfied and, therefore, the combined entity of Gollum and
Bain will be dominant in the market.
62. It is an established principle that a firm would be able to behave independently of
competitive forces, if it has acquired a position of economic strength105 which gives the
enterprise the power to obstruct the maintenance of effective competition in the market
concerned. 106 This position of economic strength can be understood to be one of
substantial market power107 and the exercise of such power and position will lead the
dominance on the part of the entity. Due to the acquisition in dispute, the resultant entity
will have a combined production capacity of 42,000 MTPA which will result in it being in
a position of economic strength for the resultant entity, therefore, giving it a dominant
position in the market.
63. Secondly, an enterprise, to be considered as dominant, should have the ability to engage in
conduct that excludes competition or prevents the entry of newcomers into the relevant
market108, and should be able to influence the relevant market in its favour.109 It has been
held by the CCI that it would be prudent to examine an action in the backdrop of a number
103
¶ 8-9, PAGE 2, STATEMENT OF FACTS, 5TH DSNLU-CCI MOOT COURT COMPETITION, 2019.
104
Explanation(a), §4(2), Competition Act, 2002, Act No. 12, Acts of Parliament, 2002(India).
105
United Brands Co. v. Commission, [1978] E.C.R. 207.
106
Michelin v. Commission of European Communities, [1983] E.C.R. 3461.
107
Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to Abusive Exclusionary
Conduct by Dominant Undertakings, 2009, O.J. (C 45)7(EC).
108
Sun Pharmaceutical Industries Ltd and Ranbaxy Laboratories Ltd Combination Registration No. C-
2014/05/170.
109
BBI/Boosey and Hawkes: Interim Measures, 1987, O.J. (L 286) 36 (EC).
17 | P a g e
of factors110. It has been explained in an OFT report (Office of Fair Trading)111 that under
modern industrial organization theory, economies of scale can operate as strategic entry
barriers which can be a grave deterrent to market entry. It was recognised by the ECJ in
the United Brands112 that economies of scale operate as a barrier to entry.
64. In the instant case, the proposed combination will eliminate a significant competitor, i.e.,
Gollum, by its acquisition by Bain and the accumulated resources and the present
customers will consequently enable the combined entity to have an appreciable adverse
effect on competition in this relevant market.
[5.3] PRE-ACQUISITION STATUS OF GOLLUM ALREADY GRANTS IT A DOMINANT STATUS

IN THE MARKET.
65. It is most humbly submitted that the CCA, on finding a prima facie case of contravention
of the provisions of the Act, had directed the DG to conduct a thorough investigation in
the matter. In the report submitted by the DG it was held that Gollum was dominant in the
market and was liable for charging exorbitant prices113.
66. The combination of an already dominant entity with another entity will only lead to
increase in the ability of the dominant entity’s to control and influence the market. In the
present case, Gollum has already been adjudicated as being dominant in the relevant
market. It is pertinent to note here that Bain is second to Gollum in the relevant market.
The combination of these 2 already significant players of the market will only create a
dominant, if not a super dominant, entity which will be in violation of the provisions of the
Act.
Therefore, it is most humbly submitted before the Hon’ble Tribunal that this
combination of Gollum and Bain will have an appreciable adverse effect on competition
in the market and thus, the order approving this combination, unconditionally, is liable
to be set aside.
110
Automobiles Dealers Association Hathras UP v. Global Automobiles Limited and Pooja Expo India Private
Limited 2012 CompLR 827 (CCI).
111
Barriers to Entry and Exit in Competition Policy, OFT Research Paper 2, Office of Fair Trading from
London Economics, Pg. 57-59.
112
Brands Co. v. Commission, [1978] E.C.R. 207.
113
18 | P a g e
PRAYER
APPEAL [I]
Wherefore, in the light of the facts stated, issues raised, authorities cited and arguments
advanced, it is most humbly prayed and implored before the Hon’ble Tribunal that it
may be graciously pleased to adjudge and declare that -
1. Gollum’s conduct is not in contravention to § 3 of the Act;

2. Gollum has not contravened §4(2)(a)(ii) of the Act;
3. The penalty imposed by CCA was arbitrary and hence, liable to be set
aside;
And/or Pass any other Order, Direction, or Relief that it may deem fit in the best
interest of Justice, Equity and Good Conscience.
All of which is humbly and respectfully submitted.
APPEAL [II]
Wherefore, in the light of the facts stated, issues raised, authorities cited and arguments
advanced, it is most humbly prayed and implored before the Hon’ble Tribunal that it
may be graciously pleased to adjudge and declare that -
1. The acquisition of Gollum by Bain is anti-competitive under §5 and §6 of

the Act and hence, should be declared void.
And/or Pass any other Order, Direction, or Relief that it may deem fit in the best
interest of Justice, Equity and Good Conscience.
All of which is humbly and respectfully submitted.
Sd/-
(Counsel on behalf of the Appellants)
XI | P a g e

DS 503 Appellants PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

DS 503 Appellants PDF

Uploaded by

Copyright:

Available Formats

TEAM CODE: DS-503

BEFORE THE HON’BLE AVALON COMPANY LAW APPELLATE TRIBUNAL AT

APPEALS FILED UNDER § 53B OF THE AVALON COMPETITION ACT, 2002

APPEAL NO. …/2019

GOLLUM PAPER MILLS’………………………………………………..…………APPELLANT

COMPETITION COMMISSION OF AVALON

APPEAL NO. …/2019

COMPETITION COMMISSION OF AVALON

MEMORIAL FOR APPELLANTS

INDEX OF AUTHORITIES ........................................................................................................ III

STATEMENT OF FACTS ......................................................................................................... VII

STATEMENT OF ISSUES ......................................................................................................... IX

SUMMARY OF ARGUMENTS ................................................................................................... X

1: THAT THE PRESENT APPEALS BY GOLLUM AND SHADOWFAX ARE MAINTAINABLE

BEFORE THE HON’BLE TRIBUNAL. .................................................................................... 1

[1.1] Appellant is an enterprise under § 2(h) of the Act. ................................................ 1

[2.1] The Vertical Agreement is not Anti-Competitive in Nature .................................... 3

[2.3] Alternatively, it is not against the Essential Facilities Doctrine............................. 6

4: THAT THE PENALTY IMPOSED BY CCA ON GOLLUM IS NOT REASONABLE. ................. 13

[4.1] The imposition of penalty should be on ‘relevant market’. .................................. 13

[4.2] The quantum of penalty is arbitrary .................................................................... 13

5: THAT THE CCA’S ORDER APPROVING THE ACQUISITION OF ASSETS OF GOLLUM BY

BAIN IS NOT JUSTIFIED. ................................................................................................... 14

[5.1] The acquisition is likely to cause an appreciable adverse effect on competition .. 15

[A.] INDIAN CASES

[B.] INTERNATIONAL CASES

4. Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to

I. APPEAL NO. ___ OF 2019

II. APPEAL NO. ___ OF 2019

INVESTIGATION BY DIRECTOR GENERAL

WHETHER THE APPEAL IS MAINTAINABLE BEFORE THE HON’BLE TRIBUNAL OR NOT?

WHETHER THE AGREEMENT ENTERED INTO BY GOLLUM WITH SHADOWFAX IS ANTI-

WHETHER THE PENALTY IMPOSED BY CCA ON GOLLUM IS REASONABLE OR NOT?

WHETHER THE CCA’S ORDER APPROVING THE ACQUISITION OF GOLLUM BY BAIN IS

4. THAT THE PENALTY IMPOSED BY CCA ON GOLLUM IS NOT REASONABLE.

1: THAT THE PRESENT APPEALS BY GOLLUM AND SHADOWFAX ARE MAINTAINABLE

[1.1] APPELLANT IS AN ENTERPRISE UNDER § 2(H) OF THE ACT.

2: THAT THE AGREEMENT ENTERED INTO BY GOLLUM WITH SHADOWFAX IS NOT

[2.1] THE VERTICAL AGREEMENT IS NOT ANTI-COMPETITIVE IN NATURE.

[2.1.1] There was no agreement.

legislative intent in differentiating between an agreement between two parties and a

[2.1.2] Alternatively, there was no ‘refusal to deal’.

15. A vertical agreement could be anti-competitive if it results in refusal to deal. 12 Refusal is

[2.2.1] Gollum’s product was not indispensable to Shadowfax.

[3.1.1] The DG has erred in defining the relevant market.

[3.1.2] Gollum is not dominant in the relevant market.

33. It is an established principle that a firm would be able to behave independently of

[3.2.2] The price charged is not unfair.

4: THAT THE PENALTY IMPOSED BY CCA ON GOLLUM IS NOT REASONABLE.

5: THAT THE CCA’S ORDER APPROVING THE ACQUISITION OF ASSETS OF GOLLUM BY

[5.1] THE ACQUISITION IS LIKELY TO CAUSE AN APPRECIABLE ADVERSE EFFECT ON

[5.1.1] Substantial increase in the market share.

[5.2] THE COMBINED ENTITY OF GOLLUM AND BAIN IS SUPER-DOMINANT IN THE

[5.3] PRE-ACQUISITION STATUS OF GOLLUM ALREADY GRANTS IT A DOMINANT STATUS

1. Gollum’s conduct is not in contravention to § 3 of the Act;

1. The acquisition of Gollum by Bain is anti-competitive under §5 and §6 of

You might also like