The Madras High Court has asked the Competition Commission of India to not enforce any penalty on Hyundai until further orders are passed.
The Competition Commission of India (CCI) had ordered Hyundai as well as many other manufacturers to pay huge penalties because these companies were not selling spare parts over the counter while also prohibiting sales of spares in the open market. Customers were forced to service their vehicles at the company’s service stations only, else their warranty would get void. The CCI then fined Hyundai, among other companies, to pay a penalty of Rs. 420 crores which is calculated as 2% of the company’s average annual turnover over a period of three years.
Also, the Madras High Court had put a stay on such orders and had stated that the CCI may carry on its investigations but may not levy a fine on anyone without the court’s order. Hence, Hyundai moved the court to ask for a stay on the order while also initiating contempt of court proceedings against the CCI itself. Therefore, the CCI today passed an undertaking that it will not enforce the fine on Hyundai until the court passes an order and stated that it was unaware about the court’s statement to not enforce any fines in the anti-trust hearing.
In August 2014, the CCI had fined a lot of manufacturers like Fiat, Honda, BMW, Mercedes-Benz, Hyundai, Maruti Suzuki, Mahindra, Tata Motors, Hindustan Motors, Ford, Skoda, Nissan, Toyota and General Motors to pay a total fine of Rs. 2544.64 crore in a similar case. Hyundai had asked the CCI to reduce its penalty but in vain. Only REVA and Premier got exempted from the fine. Hyundai was asked to make available its spares in the open market without any restrictions. All orders passed by the CCI can also be challenged before the Competition Appellate Tribunal.
