Delhi High Court Halts CCI Probe Against JCB, Stresses Importance of Mediation

In a landmark decision, the Delhi High Court has halted an investigation by the Competition Commission of India (CCI) against UK-based JCB and its Indian subsidiary over alleged abuse of dominant position. The Court emphasized the need for regulatory bodies to respect mediation processes and the settlements reached between parties.

The Division Bench, comprising Justices Prathiba M Singh and Amit Sharma, set aside the CCI proceedings and nullified an order issued by the trial court that permitted search warrants against JCB. This decision came after the informant, Bull Machine, an Indian manufacturer of tractors and tractor attachments, withdrew its complaint against JCB following a settlement between the two companies.

The Court criticized the CCI for continuing its investigation despite the settlement, highlighting that statutory authorities must honor mediation outcomes. "Mediation processes and settlements must be recognized and respected by all courts and forums where disputes are pending," the Court stated. "Regulatory authorities like the CCI are no exception."

The judgment further noted that allowing CCI to proceed with its inquiry post-settlement could undermine trust in the mediation process, deterring parties from pursuing amicable dispute resolutions.

The Bench also reaffirmed the rights of Intellectual Property Rights (IPR) holders to protect their intellectual property and warned against CCI's overreach into disputes typically within the purview of High Courts or commercial courts.

JCB, represented by Chandhiok & Mahajan and DSK Legal, had originally filed a suit against Bull Machine for design infringement, copyright violation, and passing off. The dispute escalated when CCI launched an inquiry in 2014, alleging abuse of dominance by JCB. However, a Supreme Court-directed mediation process led to a settlement in 2021, rendering the CCI's continued investigation redundant.

This ruling underscores the judiciary's support for mediation as a viable means of dispute resolution and serves as a reminder to regulatory bodies to respect the finality of such agreements.