2022 CLD 790 COMPETITION COMMISSION OF PAKISTAN

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VS S. 4--- Prohibited agreements--- Concession agreement---Scope---Complainant made a complaint against the Civil Aviation Authority (CAA) and three companies (respondents) that they were engaged in anti-competitive activities as the CAA had granted exclusive rights in respect of the use of fueling facility at an airport to the respondents due to which they enjoyed a favourable position at the cost of healthy competition within the industry---An agreement in 1961 was entered into by the respondents among themselves for the ownership and operation of fuel tanks constructed and developed by them at the airport---1961 Agreement was to remain enforceable for an indefinite period of time---In 1994, an agreement was entered into between the respondents and CAA for the exclusive use of fuel hydrant system at the airport---Under the 1994 Agreement the respondents were granted absolute exclusivity in respect of the operational management of the fuel hydrant system while the land in question was governed by a separate lease agreement which was signed for a period of 30 years starting from 1992---Validity---1961 Agreement prevented other Oil Marketing Companies (OMCs) to compete for operation and maintenance of fuel farms whereas the 1994 Agreement prevented competition for other OMCs willing to supply jet fuels to airlines at the airport---When both the agreements were looked at in conjunction, they had the effect of excluding competitors for refueling purposes which was prohibited under S. 4 of the Competition Act, 2010---Parties to the agreements were directed to apply to the Commission for retrospective and prospective exemption under S. 5 of the Competition Act, 2010, failing which the exclusivity clauses would be void as S. 4(3) of the Competition Act, 2010---CAA was directed to ensure that operation and maintenance of fuel farms and fuel hydrant system was opened for competition after expiry of the lease agreement---Show cause notice was disposed of accordingly.

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