CCP Appellate Tribunal scraps decision of Rs 40 billion fine on sugar mills, remands case for rehearing

ISLAMABAD : The Competition Appellate Tribunal has ruled on the appeals filed by the Pakistan Sugar Mills Association (PSMA) and its member mills against the Rs. 44 billion fine, and has referred the case back to the Competition Commission of Pakistan (CCP) for a rehearing.
To recall, in 2021, the CCP had imposed a fine of Rs. 44 billion on the Sugar Mills Association and its member mills for forming a cartel, fixing sugar prices, and manipulating the market through various tactics. The Sugar Association and its member mills had challenged this decision before the tribunal.
In its brief ruling, the tribunal directed that the case should be reheard by the CCP under the chairmanship of an individual who was not part of the earlier proceedings. The tribunal also ordered the Commission to complete the rehearing and issue a decision within 90 days.
It should be noted that in 2021, a four-member CCP bench had issued its decision following an inquiry into the rise in sugar prices. The bench was split 2-2 in its opinion. Then-Chairperson Rahat Kaunain and member Mujtaba Lodhi supported the imposition of the fine, while the other two members, Shaista Lodhi and Bushra Naz, dissented. To break the tie, Chairperson Rahat Kaunain exercised her casting vote under Section 24(5) of the Competition Act, thereby turning the decision into a majority ruling, which resulted in a collective fine of Rs. 44 billion on the Sugar Mills Association and 72 sugar mills.
However, in their appeals, the Sugar Mills Association and the sugar mills challenged the legal validity of the chairperson’s casting vote. In its decision, the tribunal ruled that the Chairperson of the Competition Commission does not have the legal authority to use a casting vote in judicial or quasi-judicial proceedings. Consequently, the tribunal invalidated the casting vote. With the casting vote declared void, the Commission’s decision is now evenly split again, two votes for and two against.
Therefore, the tribunal has instructed the current Chairperson of the Competition Commission to conduct a rehearing of the case and issue a new decision, which will help reach a conclusive outcome in the matter.
Following the federal government’s appointment of a new chairperson, the tribunal has become fully operational again, and hearings on several long-pending appeals have resumed.