Case No. 13/2012. Case: All Odisha Steel Federation Vs Orissa Mining Corporation. Competition Commision of India

Case Number:Case No. 13/2012
Party Name:All Odisha Steel Federation Vs Orissa Mining Corporation
Judges:Ashok Chawla (Chairperson), R. Prasad, Member (R), Geeta Gouri, Member (GG) Anurag Goel, Member (AG), M.L. Tayal, Member (T), H.C. Gupta, Member (G) and Shiv Narayan Dhingra, Member (D)
Issue:Competition Act, 2002 - Sections 19, 19(1), 2(r), 26(2), 4
Judgement Date:June 18, 2012
Court:Competition Commision of India
 
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Order:

  1. The information has been filed under section 19(1) of the Competition Act, 2002 (`the Act') by All Odisha Steel Federation (`the informant'), an association of manufacturers of steel and related industries in the State of Odisha, against the Orissa Mining Corporation Ltd. ('opposite party'), a Government of Orissa undertaking for alleged contravention of section 4 of the Act. It is submitted that iron ore is an important natural resource mainly used in the manufacture of steel and is available in abundance in the State of Odisha compared to other States where it is found scarcely. According to the informant, the opposite party was abusing its dominant position by fixing arbitrary and unreasonable price of iron ore. It is contended that upto the year 2009, the opposite party was empanelling buyers for supply of iron ore and these empanelled buyers were assured of regular allotted/quota of iron ore based on their production and selling capacity even if they did not participate in the tender floated by the opposite party for determining the prices of the ore. Post 2009, the opposite party changed its method and stopped empanelling buyers.

  2. It was further contended that the opposite party tendered a small quantity of iron ore through Price Setting Tender (PST) and the highest price quoted by some bidder was accepted as F11 and the same was treated as the benchmark price. This mode of price fixing, according to the informant, was unfair since only a small quantity, not representing the total quarterly production of iron ore, was kept for sale and the companies were allowed to participate in the tender process regardless of their capacity, size or past lifting record. In the said process, in order to out-bid others, some companies would quote unreasonable prices which later becomes the listed price and the entire industry is forced to accept the said rates. While doing that these companies, sometimes do not even lift the tonnage of iron ore for which they successfully bid through an auction.

  3. The informant further submitted that clause 9 of PST provided a discretion to the management to either accept the quoted price or fix suitable price considering the market scenario. This eventually frustrated the entire exercise of calling tenders in an open auction. Instance of unfair practice being adopted by the opposite party were highlighted by the informant wherein the opposite party allegedly offered 15,000 MT iron ore for sale through PST during the first...

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