3 August, 2017
On June 29, 2017, the Ministry of Corporate Affairs (‘MCA’ ) issued a notification (‘Notification ’) whereby the requirement of necessarily notifying a combination within 30 calendar days of the trigger event, as specified under Section 6(2) of the Competition Act, was done away with. . The measure has been taken to alleviate the concerns of stakeholders who felt constrained by the deadline stipulated under the Competition Act. The key takeaways from the Notification are set out below.
The Notification does away with the 30-day filing requirement and provides parties the flexibility to file combinations when they are ready to file a notice with CCI . The Notification also puts an end to the possibility of penalties for delayed filing. This means that the transaction parties will no longer be constrained to decide on the strategy, collect information and make the filing within the short window of 30 calendar days. Parties to global transactions requiring notification in multiple jurisdictions can now make the filing in India, contemporaneous with
other jurisdictions.
The Notification will not only help the parties align their strategy, but also help CCI align its review timelines with other jurisdictions. Notably, the requirement to file a notice with CCI is still mandatory and the suspensory regime (i.e., requirement to receive CCI approval prior to closing) still applies. Accordingly, any breach of these requirements will still lead to penalties under Section 43A of the Competition Act. However, removal of the 30-day deadline makes it significantly easier for businesses to comply with the merger notification requirement in India and is in line with international best practices in merger control.
For further information, please contact:
Rahul Rai, AZB & Partners
rahul.rai@azbpartners.com
