JSA represented a leading paper manufacturer before the CCI in a cartel case

JSA represented Shweta Paper Private Limited (“Shweta Paper”), a leading paper manufacturer before the Competition Commission of India (“CCI”) in a case initiated against the 115 paper manufacturers and their associations (collectively referred to as “Opposite Parties”) for indulging in cartelization.

The case was initiated by the CCI pursuant to a complaint by associations of corrugated box manufacturers alleging cartelization amongst the Opposite Parties to: (i) increase the price of the kraft paper to be sold to the buyers; and (ii) creating a condition of shortage to enforce the unjust price increase and shutting the operation of the paper mills in a region collectively.

In August 2017, the CCI passed a prima facie order directing the Director General (DG) to investigate the matter. During the course of the investigation, Shweta Paper filed a leniency application disclosing the existence of alleged cartelization between the paper manufacturers.
Upon investigation, the DG found the Opposite Parties indulging in cartelization in its investigation report. In response to the investigation report, JSA filed detailed submissions and argued before the CCI that no penalty should be imposed on Shweta Paper.

On 12 October 2022, the CCI passed its final order holding the Opposite Parties (including Shweta Paper) guilty of cartelization, however, refrained from imposing a monetary penalty on Shweta Paper. While passing the final order, the CCI took various mitigating factors into consideration such as: (i) most companies are MSMEs and first-time offenders; (ii) the COVID–19 pandemic led to several kraft paper mills being sold/ closed or were experiencing economic and financial stress; and (iii) admission of wrongdoing during the course of the investigation.

This is the largest cartel investigation (in terms of the parties involved) undertaken in India.

JSA Competition Team Partner & Head of Practice (Competition Law) – Vaibhav Choukse and Senior Associate – Nripi Jolly.