The IUP Journal of Law Review
Trigger and Time: The Role of Competition Commission in Insolvency and Bankruptcy

Article Details
Pub. Date : Apr, 2020
Product Name : The IUP Law Review
Product Type : Article
Product Code : IUPLR10420
Author Name : Disha Jain R
Availability : YES
Subject/Domain : Law
Download Format : PDF Format
No. of Pages : 09

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Abstract

The Competition Act 2002 and the Insolvency and Bankruptcy Code 2016 evolved as two separate systems of law, each seeking to make significant reforms in their area. However, there is an interesting point of interplay between the two, as one aims to provide freedom to continue business and its regulation, and the other aims to provide freedom for discontinuance. In order to understand the dichotomy between the two, the factual matrix of combination agreements has to be understood. A proposed combination with an enterprise undergoing insolvency needs mandatory competition assessment from the Competition Commission to check the appreciable adverse effect. The crux of such interplay being the 'trigger event' and 'time threshold', this paper analyzes the potential conflict between the same. The paper attempts to study the contours of economic freedom in the light of the failing firm defense for acquisition of stressed assets under the corporate insolvency resolution process with special reference to the US and European Union position. Also, it examines the effect of the Second Amendment to the Insolvency Code, 2018 which mandates approval of the Competition Commission prior to the approval of Committee of Creditors, analyzing its merits, role and its impact in the future.


Description

The analysis of competition trends at all times requires an assessment of market powers. To assess and understand the same, economic concepts play a major role.1 The evolution of competition law followed by major changes in political thinking and law reform has contributed to the central concerns of companies. The development of business at international levels, coupled with rapid technological advancements, has unleashed powerful economic forces which affect individuals and the society. The Competition Commission of India (CCI) acts as a regulator to prevent superior market forces from having an adverse effect on competition and protects the interests of the consumer.2 Superior market resources are contributing factors which may have appreciable adverse effect3 on the balance, thus attracting the attention of the Competition Act. Such economies of scale are indicators of significant power which may eventually lead to dominance. CCI keeps a check on all such activities as one of the major objectives of the act is economic equity rather than economic efficiency.4

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