Crackdown on cartelization

Senior advocates Jimmy Pochkhanawalla and Prof Homer D. Pithawalla were instrumental in deriving a "benchmark judgment” from the Competition Commission of India (CCI) in November 2015. CCI is a government of India body responsible for preventing activities that have an adverse effect on competition in the country.

Jimmy Pochkhanawalla (left) and Prof Homer Pithawalla

As reported in the Daily News and Analysis (DNA) on November 18, 2015, the CCI "imposed a penalty totaling Rs 258 crores ($ 38.9 million) on three domestic carriers — Jet Airways, IndiGo and SpiceJet — for "fixing and revising fuel surcharge for cargo transport through concerted action.” The order comes after a complaint was filed by the apex courier industry body Express Industry Council of India against five airlines, including Air India and Wadia owned Go Air. No penalties were imposed on Air India and Go Air, as the former was found not to be acting in concert with the other airlines and the latter had given out its cargo space to other vendors with no control on pricing.
Pochkhanawalla writes to Parsiana in an email dated November 18 that the judgment "establishes that even if parties act in secret agreement and even if there is no ‘paper trail’ available, such agreement can be established by going into all surrounding evidence and behavior of the concerned parties.” The pair of Bombay based legal luminaries submitted to the Commission that the airlines imposed the surcharge in tandem and for the same amount despite their individual cargo revenues being different and that surcharge was increased even when fuel prices dropped. Another argument before CCI was that under the guise of fuel surcharge, the airlines had loaded other items "which had nothing to do with fuel surcharge, thereby duping the customers who consigned cargo through these airlines,” all this having been done in secret without any paper evidence.
The penalty, which is 1% of the last three year’s average turnover of each airline, is more than the airlines’ profit for a single quarter. A spokesperson of SpiceJet has been quoted as saying that they would "challenge it.”
The DNA report further states that the Commission has issued a cease and desist order against the airlines and has also reprimanded them for undermining the "economic development of the country.”