Competition Law Review Committee Recommends Automatic CCI Approval For Cases Under Insolvency Law

The Competition Law Review Committee appointed by the Ministry of Corporate Affairs has recommended what it calls a “de facto green channel route” for merger notification and approval for a majority of cases by the Competition Commission of India (CCI).

Under the Competition Act, combinations (mergers and acquisitions) beyond a certain threshold require clearance from the Competition Commission of India (CCI).

Combinations arising out of the insolvency resolution process under the Insolvency and Bankruptcy Code (IBC) should be eligible for the green channel, the Competition Law Review Committee has recommended.

Accordingly, parties to the combination may self-assess, based on specified criteria and pre-filing consultation with the CCI, whether they qualify for notification under the green channel, according to a Competition Law Review Committee report, uploaded on the Ministry of Corporate Affairs website.

A mandatory 30-days timeline for completion of the first phase of review of combination cases should be included in the Act itself, the report has stated, adding that the timeline would continue to govern combinations that are not eligible for the proposed green channel.

Another recommendation is that all permissible time exclusions from the 210-day timeline for assessment of mergers have to be codified in the Act itself in order to provide certainty and transparency in the process.

The panel also suggested that the regulator's power be enhanced to impose penalty for false statements.

Another suggestion is for having a dedicated bench of the National Company Law Appellate Tribunal (NCLAT) to hear appeals under the Act.

Setting up of a governing board comprising a chairman, six whole time and six part time members has also been recommended.