LHC dismisses industries’ pleas challenging CCP formation

LAHORE: The Lahore High Court (LHC) Monday dismissed a long pending set of petitions by almost all industries, challenging establishment of the Competition Commission of Pakistan (CCP) and the competence of the parliament to enact a law on the subject of competition.

The industries including cement, oil & gas, energy, fertilisers, healthcare, education, telecom and real estate also moved the high court on the same grounds and got stay against the commission’s actions.

A full bench comprising Justice Ayesha A Malik, Justice Shahid Jamil Khan and Justice Sajid Mahmood Sethi held the hearing on the petitions in June this year and reserved its judgment on July 16.

The petitioners’ case was that there was no entry in the Federal Legislative List (FLL) which allowed the parliament to enact a law on the subject of competition. They argued that parliament did not have the power to make laws on matters which were not enumerated in the FLL as all residue power was vested with the provinces after the 18th Amendment to the Constitution. They said the FLL did not contain any entry on the subject of competition or monopolies or in any manner with reference to anti-trust restrictions.

The attorney general had argued that competition was a federal subject and fell within parliament’s legislative authority under the provisions of the Constitution.

The bench, in its judgement, authored by Justice Malik, did not agree with the petitioners and observed that the parliament could legislate on the subject of trade, commerce, industry and intercourse so as to keep it ‘free’ throughout the country and in the interest of free competition. On the question of parallel judicial system in terms of Competition Appellate Tribunal (CAT), the bench observed that establishment of administrative courts and tribunals for federal subjects was provided for in the FLL of the Constitution, which authorised the parliament to establish administrative courts and tribunals in relation to federal subjects.

“We do not agree with the petitioners’ contentions that a parallel judicial system has been created or that administrative tribunals cannot be established for any other purpose other than Article 212 of the Constitution or that CAT is a ‘court’ under Article 175 of the Constitution,” it added.

About the appellate jurisdiction of the apex court, the bench remarked that the subject of enlargement of jurisdiction of the Supreme Court under the FLL was a subject which exclusively fell within the parliament’s domain, so the parliament could confer jurisdiction on the SC, by law, if the Constitution permits it.

The bench also observed that the show-cause notices and the proceedings by the CCP would remain intact as legal cover had been given to them under Section 62 of the Act.

Justice Khan, in additional note, said the question whether the parliament had powers to legislate on the competition law was answered in affirmative. He said the parliament though had power to legislate for ensuring “free competition” through Competition Act 2010 but only to the extent of inter-provincial trade and commerce. On the point of parallel judicial system, Justice Khan agreed with the finding in the main judgment that the CCP and the appellate authority were performing administrative functions, therefore, were not covered under Article 175(3), but he did not agree with the conclusion that CAT was an administrative tribunal.

In a short note, Justice Sethi expressed his agreement with the conclusions drawn by Justice Ayesha A Malik on issues of “appellate jurisdiction of Supreme Court” and “validation clause in the Competition Act of 2010” and concur with the opinion and decision on the issues of “federal and provincial legislative competence” and “parallel judicial System”, rendered by Justice Khan.