FOR : IS ARBITRABLE:

1. Section 53 N of the Competition Act, 2002 clears that any aggrieved party can also
individually claim for the compensation from the appellate tribunal. This provision
has thrown a light that competition law is not a rigid act but the matters can be
adjudicated by the arbitration process.
2. In the case of Eco Swiss China Time Ltd. vs. Benetton International N.V. 1 where
the European Court of Justice upheld:
The authority of the arbitral tribunal that the competition law disputes matter can
also be heard and adjudged by this forum. The arbitration which is part of the
alternative dispute resolution procedure is fast track mechanism to adjudicate the
dispute and pass the award.
3. The U.S. Supreme Court’s decision in Mitsubishi Motor Corp. v. Soler Chrysler
Plymouth (Mitsubishi)2 and the European Court of Justice’s decision in Eco Swiss
China Time Ltd. v. Benetton International N.V. (Supra) held that an arbitral
tribunal could also arbitrate upon competition law issues.
4. In the Mitsubishi case, the allegation was that Mitsubishi had conspired to divide the
markets in restraint of trade practices and had purposefully tried to replace Soler as a
distributor. In this case the Hon. US Supreme Court observed that the arbitration
clause was wide and broad enough to provide for the arbitration of all disputes,
controversies, and differences between the parties in relation to the agreement.
5. It is pertinent to note here that the arbitration agreement between the parties in this
instant case is very broadly worded, to quote, Clause 25.2.1 of the BDA states, “Any
dispute, controversy, claim or disagreement of any kind whatsoever between or
among the Parties in connection with or arising out of this Agreement or the breach,
termination or invalidity thereof”. This agreement in its fullest includes any and all
disputes arising out of, in connection with and in relation to the agreement. This
suggests that the dispute was contemplte4d by the parties when they entered into the
agreement and that they mutually intended its resolution through arbitration as was
held in the Mitsubishi (Supra) case.

1
Eco Swiss China Time Ltd. v Benetton Int’l NV (1999) ECR I- 3055.
2
Mitsubishi Motors Corp v. Soler Chrysler Plymouth, 473 U.S. 614 (1985).
AGAINST: NOT ARBITRABLE

1. Competition law matters for example is associated with the larger public interest and
hence it is believed that adjudication of the competition law disputes through
arbitration proceedings will harm public interest.
2. In the case of Booz-Allen & Hamilton Inc. v. SBI Finance Ltd.3, it was stated by
the apex court that:
Matters involving right in personam are arbitrable while those involving right in rem
are non-arbitrable.
The fact that despite involving only right in personam in certain situation, Indian
courts have time and again discouraged the arbitration adjudication in the competition
law claims.
The Bombay High Court in the case of Kingfisher Airlines Ltd. v. Captain Prithvi
Malhotra, stated that:
that even if a dispute involves 'action in personam' it would still be non-arbitrable if
its resolution is reserved for public forums as a matter of public policy.
3. Section 2(3), which states that the Act would be consistent with the laws that exclude
certain disputes from being arbitrable. Further, sections 38(2)(b) and 48(2) elaborate
upon the power of national courts to set aside or disapprove enforcement where “the
subject-matter of the dispute is not capable of settlement by arbitration under the law
for the time being in force” or “if the award is in conflict with the public policy of
India.”
4. The Bombay High Court, in the case of Central warehousing corporation v.
Frontpint Automotive Pvt. Ltd4 observed that Section 5 of the Arbitration and
Conciliation Act is not to be read in isolation of Section 2(3) of the Arbitration Act
1996. Thus, making it clears that the provisions of the Arbitration Act shall not
influence any other law thereby precluding certain disputes from reaching the
arbitration forum. It is also not to be forgotten that the Competition disputes call for
remedies of penalty for anti-competitive conduct rather than damages or
compensation as regards to contractual remedies which are usually adjudicated by the
arbitration forums.

3
Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 S.C.C. 532.
4
(2017) ibclaw.in 320 HC.
5. The arbitrability of competition law matters was discussed in the case of Union of
India v. Competition Commission of India wherein a group of parties which
entered into an agreement with the railways sued the Railway Ministry. They further
alleged that the Ministry was abusing their dominant position and were creating
strategic barriers. Thereafter the parties went on to file this application under the
Arbitration and Conciliation Act, 1996 under a valid clause. However, the CCI was
allowed by the Delhi High Court to deal with the instant dispute. The Court observed
that, the arbitral tribunal neither has the expertise nor sufficient resources to
adjudicate the matter.
6. The basic issues prohibiting the Arbitrability of Competition law matters are:
a. The Matter Deals with Rights in Rem: It is pertinent to note here that the very
object of Anti-Trust Law is to prevent market distortion and protect
consumers’ welfare and thus it undeniably involves a substantial element of
public interest in it (‘in rem’). Further, in a recent case of Samir Agrawal v.
Competition Commission of India and Ors., the Supreme Court reiterated
the position that inquiries by CCI are in Rem, and Not in Personam. Thus, it is
can be concluded that arbitration is not the appropriate dispute resolution
mechanism for the competition law cases.