Lahore High Court to Review Honda Atlas’s Challenge to CCP Inquiry on 15 April

A pivotal legal proceeding looms! The Lahore High Court (LHC) has fixed 15 April for adjudicating a petition lodged by Honda Atlas Cars (Pakistan) Limited, contesting the authority of the Competition Commission of Pakistan (CCP) in a probe scrutinising alleged anti-competitive conduct within the automobile industry, as reported by The Express Tribune.

The CCP commenced its investigation in November 2018, prompted by apprehensions over consumer exploitation, recurrent price escalations, and unfair commercial practices by prominent automotive firms. Honda Atlas found itself under scrutiny for potential breaches of Sections 3 and 4 of the Competition Act 2010, which address abuse of market dominance and collusive arrangements.

From 2018 to 2022, the commission issued several directives to Honda Atlas, seeking particulars on vehicle production, pricing strategies, booking conditions, imports, vendor contracts, and localisation initiatives.

Yet, the company repeatedly requested extensions to comply. Moreover, the CCP inquiry team conducted inspections at Honda’s manufacturing plant in July 2019 and March 2021 to amass additional evidence.

In October 2022, a comprehensive request was issued, demanding details of investments by Honda Japan and Honda Atlas, alongside financial statements, dealer notices, and pricing frameworks.

In December 2022, Honda Atlas raised legal objections, asserting that the 18th Constitutional Amendment rendered trade and industry a provincial matter, thereby undermining the federal regulator’s jurisdiction.

The firm pursued multiple legal avenues, including a challenge to the CCP’s authority filed in the LHC in June 2023. The court issued an interim injunction, pausing the inquiry, which has since been deliberated in over 15 hearings.

Judicial precedents, notably the Supreme Court’s verdict in the CCP vs Dalda Foods case, affirm the CCP’s mandate to regulate market practices and conduct investigations, underscoring firms’ obligations to adhere to regulatory mandates without premature recourse to courts.

When the CCP inquiry began, only three auto manufacturers operated in Pakistan’s market; today, 13 compete, underscoring the critical need for equitable competition.

The LHC’s forthcoming decision will delineate the scope of the CCP’s powers and may establish a significant benchmark for future regulatory oversight in vital industries.