November 27, 2017
The Ministry of Corporate Affairs on November 22 has issued a notification stating that the Central Government in the public interest hereby exempts all cases of combinations under section 5 of the Act involving the Central Public Sector Enterprises (CPSEs) operating in the Oil and Gas Sectors under the Petroleum Act, 1934….. from the application of the provisions of sections 5 and 6 of the Act, for a period of five years from the date of publication of this notification in the Official Gazette.
Regulation of Combinations under the Competition Act, 2002
Sections 5 and 6 of Competition Act, 2002 enumerates provisions for combinations and regulation of combinations in India. Combination under the Competition Act refers to acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises. The Act provides that any person or enterprise that proposes to enter into a combination i.e. merger or acquisition shall notify the Competition Commission of India (CCI) about the proposed combination and thereafter the CCI would investigate combinations which are likely to have an appreciable adverse effect on competition (AAEC) within the relevant market in India. Thereafter, if on investigation, the CCI is of the opinion that the combination is likely to have an AAEC then CCI shall under Section 31 of the Act order that such combination shall not take effect.
Thus, subject to any law in this regard as a general norm every merger or acquisition in India has to be scanned by the CCI for any anti-trust issues. However, this notification issued by the Ministry of Corporate Affairs relieves the CPSEs operating in the oil and gas sectors from this process of approval under the Act for a period of five years.