ISLAMABAD: The Supreme Court intends to examine the Competition Act of 2010, along with a set of ordinances, to determine whether it violates the Constitution by creating a parallel judicial system as it invests the Competition Commission of Pakistan (CCP) and appellate tribunals with judicial powers.

Headed by Justice Maqbool Baqar, a three-judge Supreme Court bench took up a set of appeals against an Oct 26, 2020, Lahore High Court (LHC) judgement, but ignored a request to grant stay against the high court order when Attorney General (AGP) Khalid Jawed Khan opposed the suggestion by arguing that the respondent companies were already on stay since 2009 and another stay would adversely affect the entire scheme of things.

Instead of issuing a stay order, it would be better for the apex court to decide the matter today, the AGP argued. “The companies always get stay from the high court whenever the CCP seeks an explanation from them.”

The respondent company, the LPG Association of Pakistan, was represented by Makhdoom Ali Khan.

The apex court, however, decided to determine whether the Competition Act and related ordinances had created a parallel judicial system in violation of Articles 175 and 203 of the Constitution.

Article 175 deals with the establishment of superior courts while Article 203 empowers high courts to supervise and control subordinate courts.

The points to be considered by the Supreme Court include whether or not the federal government enjoyed the “legislative competence” to enact or promulgate the competition ordinances of 2009 and 2010 and whether the power to enact the law was exclusive or had to be shared with the provinces.

Likewise, the SC will consider whether sections 43 and 44 of the Competition Act are unconstitutional as they envisage appeal to the apex court instead of moving a high court first.

The CCP was established through the Competition Ordinance of 2007 and given permanence through the 2010 Competition Act.

During this period, the commission took action against anti-competitive practices in the sugar, cement, telecom, banking, fertiliser, paints and automotive sectors to ensure a level playing field for all players in business and industry.

A law was enacted to protect the consumer by clamping down on anti-competitive behaviour, for instance mergers between major players to kill competition.

The petition moved by the federal government stated that different petitions, including the one filed by the LPG Association of Pakistan with the Lahore High Court challenging the parliament’s legislative competence to legislative the competition ordinance 2007, 2009, 2010 and the act of 2010 since the law allows the CCP to exercise judicial power against the constitution.

The high court was approached when the CCP issued a show cause notice on March 20, 2009, under section 30 of the 2007 ordinance alleging cartelisation and exclusionary conduct in the liquefied petroleum gas (LPG) sector by the LPG Association.

The petition said the total amount of penalties imposed by CCP in cases in which writ petitions were filed amounted to Rs12.4 billion.

The appeal explained that the federal government was unhappy with the majority view given about the federal and provincial governments’ legislative competence and whether the powers enjoyed by CCP amounted to a “parallel judicial system”.

The appeal argued the Lahore High Court had failed to appreciate that there can be no effective regulation of trade, commerce and industry unless the CCP, established under a federal law, was entrusted with not only regulating inter-provincial trade but also intra-provincial movement of goods.

The appeal contended that the regulation of competition was inherently national and although provinces could make pro-competition laws, the power to regulate competition would remain national.

It said the high court judgement had failed to appreciate that the Competition Act allowed an ultimate appeal before the apex court as provided in other enactments like the Election Act of 2017.

Therefore, the argument regarding creation of a parallel judicial system was totally misconceived, the petition contended.

The appeal went on to explain that since Pakistan was a member of the United Nations, it was bound by rules and principles laid down by the world body to ensure free and fair competition.

It said the competition act was in line with UN principles and similar to regulatory regimes the world over that promote free and fair competition.

Published in Dawn, February 24th, 2022