LHC Affirms CCP’s Authority in Regulating Competition, Dismisses Legal Challenge

The Lahore High Court, under the leadership of Justice Jawad Hassan, has upheld the validity of show-cause notices issued by the Competition Commission of Pakistan (CCP) regarding price-fixing of day-old chicks in the poultry sector.

This ruling reinforces the CCP’s authority to conduct investigations and take action against monopolistic practices, thereby ensuring a competitive market environment, as stated in a press release on Friday.

Justice Hassan emphasized that a show-cause notice based on an inquiry report cannot be contested prematurely in the High Court. He referred to the legal doctrine of “ripeness,” asserting that cases should be resolved through CCP hearings before any appeals can be made following the Commission’s final decision.

The judgment clarifies the CCP’s jurisdiction and protects its autonomy to enforce competition laws without unwarranted interference. The court highlighted that obstructing the CCP’s functions could impede its ability to prevent anti-competitive practices and promote fair business competition.

Justice Hassan underscored the judiciary’s responsibility to support regulatory bodies like the CCP in maintaining competitive integrity across industries.

In response to the petitioner’s claims of procedural lapses in the inquiry report, the CCP’s legal team, including Barrister Asad Ullah Chatha and advisors Barrister Ambreen Abbasi, Hafiz Muhammad Naeem, and Hassan Raza, successfully argued for the petition’s dismissal, reinforcing the maintainability of the show-cause notices.

The CCP’s investigation uncovered evidence of collusion and price-fixing by eight hatcheries for day-old broiler chicks between 2019 and June 2021. Forensic analysis indicated that prices were coordinated through SMS and WhatsApp communication by an official from one of the member firms.

Additionally, the Pakistan Poultry Association (PPA) was identified as potentially violating Section 4 of the Competition Act due to its involvement in pricing discussions.

Despite this, poultry companies Sadiq Poultry and Islamabad Feeds challenged the show-cause notices, obtaining a stay order that temporarily halted the CCP’s proceedings. This comprehensive 21-page judgment now serves as a precedent, bolstering the CCP’s authority to enforce anti-trust laws and foster fair competition within Pakistan’s economic landscape.