SHC vacates stay order in KSE, PBA petitions against CCP

A two-member bench of Sindh High Court on Monday vacated the stay order in two writ petitions filed by Karachi Stock Exchange and Pakistan Banking Association saying the Competition Commission of Pakistan (CCP) is now free to pass final order.The bench heard the petition of KSE (Guarantee) Ltd. against the CCP. Khalid Anwar, senior advocate supreme court consented to vacation of the stay order granted earlier by the SHC. “CCP is now free to proceed and to pass a final order on the show cause notice issued to KSE for its alleged abuse of dominant position in the relevant market thereby violating the Competition Ordinance, 2007,” high court order said.

The writ petition filed by Pakistan Banks Association (PBA) and its member Banks was also taken up for hearing by the same bench. PBA and its member Banks have been directed to file an appeal before the appellate bench of CCP under Section 41 of the Competition Ordinance, 2007. In KSE case: CCP had initiated proceedings on a complaint lodged by Islamabad Stock Exchange (Guarantee) Ltd. (ISE) under section 30 of the Competition Ordinance 2007 for alleged contravention of section 3 of the Ordinance, which relates to abuse of dominant position. KSE, instead of appearing before CCP and to defend its position, filed a writ petition, before the Sindh High Court inter alia challenging the jurisdiction of CCP and obtained a stay order restraining the commission from final adjudication in the matter. ISE being aggrieved by the stay order of the Sindh High Court preferred an appeal before the supreme court for vacation of Sindh High Court’s stay order, and in terms of the order passed by the supreme court on November 13, 2008, Counsel of KSE consented to the vacation of the stay order earlier passed by the Sindh High Court.

This has enabled the CCP to proceed with the show cause notice and to issue final orders. In the banking case: The division bench of the Sindh High Court on Monday heard the matter and now PBA and its member Banks are required to file an appeal before the appellate bench of CCP under Section 41 of the Competition Ordinance, 2007. Earlier, CCP, after due process and affording the Banks and PBA a full hearing, passed an order against them imposing a cumulative penalty amounting to Rs 205 million. The Banks and the PBA, instead of filing an appeal before the appellate bench of CCP, filed a writ petition in the Sindh High Court challenging, inter alia, the order passed by CCP.

The Sindh High Court granted an interim injunction against CCP thereby restraining it from taking any adverse action against the PBA and its member banks. CCP being aggrieved by the stay order of Singh High Court preferred an appeal before the supreme court keeping in view the availability of efficacious remedy to the banks and the PBA under Sections 41 and 42 of the Competition Ordinance, 2007, and the fact that the stay order had been issued without giving notice to CCP. The interim injunction was vacated by the Supreme Court with directions to the Sindh High Court to hear the case on day to day basis. As a result of proceedings in the Singh High Court, PBA and its member banks are now required to file an appeal before the appellate bench of CCP under Section 41 of the Competition Ordinance, 2007. CCP after issuance of the show cause notice passed a final order thereby imposing penalty on PBA and its member banks for acting in a cartel like manner in violation of the Competition Ordinance, 2007.