IHC upholds constitutionality of Competition Act 2010

Hamza Habib Our Correspondent

20th Sep, 2021. 08:19 pm
IHC

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ISLAMABAD: The Islamabad High Court (IHC) has issued an order upholding the constitutionality of the Competition Act, 2010 and the Competition Commission of Pakistan.

The decision was announced in the court by Justice Babar Sattar. The order was issued in WP 4942/2010 titled “Islamabad Feeds and others vs Federation of Pakistan and others.”

On the constitutionality of the competition law, the court has held that the Parliament is the competent legislature to promulgate laws to regulate trade, commerce and intercourse across provinces and within any part of Pakistan under Article 151 of the Constitution.

Since the Competition Act, 2010 is a law that regulates the individual right to engage in trade and business in the interest of competition to provide for free trade, commerce and intercourse throughout Pakistan, the Parliament is the competent authority to promulgate such law.

In other words, the Federation of Pakistan has the legislative competence to promulgate the Competition Act, 2010 and consequently the Competition Act, 2010 is intra vires the constitution.

This order of the Islamabad High Court adds on to the unanimous view of a three-member Lahore High Court bench that had already declared, through its decision in WP 9518/2009, titled ‘LPGAP vs Federation of Pakistan, the Competition Act, 2010 as within the legislative competence of the Parliament. As a result, there remains no doubt as to the constitutionality of the Competition Act, 2010. This is a welcome outcome of an otherwise protracted constitutional litigation imposed on the Federation of Pakistan and the Competition Commission of Pakistan since the latter’s inception in 2007 by various business undertakings that were facing action under the law for anti-competitive behaviour.

The conclusion of this and other long-standing cases in various courts have been made possible due to the constant support of the federal government and the Attorney General of Pakistan who has personally appeared before various High Courts of Pakistan to plead the case of the Federation.

Since its inception in 2007, the CCP has imposed an amount of Rs29 billion penalties on cartels, which have now gone up to Rs75 billion with the penalty imposed on sugar mills. But the cartels have not paid those penalties to the commission and instead challenged the CCP’s constitutionality in different courts.

Earlier, the Lahore High Court had decided the cases in CCP’s favour by upholding the act as constitutional. These court decisions are expected to pave the way for recovery of penalties.

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