17 January, 2020
On November 25, 2019, NCLAT dismissed an appeal filed against an order of CCI[1] dated May 30, 2018 which rejected allegations of abuse of dominance against BMW India Private Limited (‘BBMW’) and BMW India Financial Services Private Limited (‘BBMW IIFFSSPPLL’). [2]
The appeal was filed by Parsoli Motors Works Private Limited (‘Appeellllaantt), which was a dealer for BMW vehicles for Gujarat
since 2011. The Appellant inter alia contended that BMW abused its dominant position by
(i) terminating the Appellant’s dealership without affording it sufficient time to exit; and
(ii) allowing dealers from outside Gujarat to sell BMW’s cars in Gujarat which led to a financial loss to the Appellant as well as the state exchequer.
NCLAT found that BMW cannot be said to be a dominant player in the passenger car segment in India, which is characterized by formidable competitors like Maruti Suzuki, Hyundai, TATA, etc. Further, while the act of refusal to renew the dealership agreement may have caused pecuniary loss to the Appellant, it did not raise any competition concern.
[1] Parsoli Motor Works India Private Limited v. BMW India Private Limited and Ors., Case No. 11 of 2018.
[2] Competition Appeal (AT) No. 52 of 2018.
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
