Appeals authority to review cartel fines on Indian tire makers

NEW DELHI, India—India's National Company Law Appellate Tribunal (NCLAT) has referred back for review of a decision to fine a number of Indian tire makers for "cartelization" activities dating back about 10 years ago.

The ruling, issued on Dec. 1, follows a series of appeals in the case involving Apollo Tyres Ltd.; Birla Tyres, a division of Kesoram Industries Ltd.; Ceat Ltd.; MRF Ltd; JK Tyre & Industries; and the Automotive Tyre Manufacturers Association.

Having considered the highly detailed appeals, NCLAT decided to "remand back the cases for review" by the Competition Commission of India (CCI), which had previously found the tire makers guilty of cartelization.

NCLAT's decision—essentially a retrial—was based on technical and other errors identified in CCI's original review and findings, as well as the potential impact of the penalties on the domestic tire industry.

In February, CCI imposed a total penalty of about $237 million against Apollo Tyres, MRF, Ceat, JK Tyre and Birla Tyres, as well as a penalty of $11,200 on ATMA for alleged price-fixing activities during 2011-12 and 2013-14.

At that time, CCI stated that the companies had been acting 'in concert to increase the prices of cross ply/bias tires variants sold in the replacement market and limiting and controlling production and supply in the said market.'

Individual penalties for the tire makers are $56.5 million on Apollo Tyres; $82.7 million on MRF; $33.5 million on Ceat; $41.1 million on JK Tyre and $23.7 million on Birla Tyres, according to February exchange rates.

In a Dec. 2 statement reporting the NCLAT decision regarding the appeal, Ceat said that it had "never indulged in any cartel or anti-competitive practices."