The Lahore High Court (LHC) has dismissed a petition by Honda Atlas Cars (Pakistan) Limited and upheld the Competition Commission of Pakistan’s (CCP) authority to investigate alleged anti-competitive practices in the automobile sector, Tribune reported.
Background
The LHC earlier fixed April 15 for hearing a petition by Honda Atlas Cars (Pakistan) Limited, which challenged the Competition Commission of Pakistan’s (CCP) jurisdiction in a 2018 inquiry into alleged anti-competitive practices in the auto sector.
The CCP began its probe after taking notice of alleged consumer exploitation, price hikes, and unfair sales terms, seeking data from Honda on pricing, production, localisation, and dealer arrangements.
In June 2023, Honda argued that trade and industry regulation shifted to provinces under the 18th Amendment, challenging the CCP’s authority. The court granted a stay order, halting the inquiry. The case is expected to clarify the CCP’s powers and set a precedent for future enforcement actions.
Between 2018 and 2022, the CCP issued at least five notices to Honda, requesting detailed information on its pricing, production volumes, localization ratios (the percentage of the car made locally), and dealer arrangements.
However, Honda did not fully comply; it repeatedly requested extensions and eventually challenged the CCP’s authority to conduct the inquiry.
LHC Upholds CCP’s Jurisdiction Under Federal Law
In in the latest judgment, Justice Raheel Kamran rejected Honda’s claim that the CCP lost jurisdiction after the 18th Constitutional Amendment, ruling that the Competition Act, remains a federal law applicable throughout Pakistan.
The judge observed that Honda had already been informed of the reasons for the inquiry and that its claim of being unaware was “entirely misplaced.” The court added that the notices issued in 2022 were a continuation of the ongoing inquiry and did not impose any penalty or determine rights, serving only as requests for information.
The judgment clarified that inquiries under Section 37 of the Competition Act are preliminary fact-finding steps. If sufficient evidence of a possible contravention of Chapter II is found, the CCP may proceed with further action.
The court further stated that such an inquiry is not mandatory before initiating proceedings if the CCP already has adequate information.
Concluding that the petition was “devoid of merit,” the LHC dismissed Honda’s plea, allowing the CCP to continue its investigation.
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