Can Two Parties Settle What Belongs to the Market? Antitrust Arbitrability and the CCI's Settlement Powers

Introduction: ADR Promise and Anti-trust paradox

A Puerto Rican car dealership found itself compelled to arbitrate upon an antitrust matter before a panel of Japanese lawyers in Tokyo in 1985. In 1999, a Dutch court was told by the European Court of Justice that it had to annul an arbitral award that had ignored a foundational competition law prohibition. Further, in 2025, an Indian company under investigation for abuse of dominance could walk into the Competition Commission of India and propose a settlement for the first time, rather than waiting for the judgement.

The above three movements, separated by four decades of legal evolution and geography, sketch the arc of one of the most contested questions in modern commercial law: Can a private dispute resolution mechanism involving bilateral logic, confidential proceedings and a party determined outcome can ever be the right instrument for enforcing a law whose purpose is to protect markets?

Competition law is not a set of statutory rights that parties may vindicate between themselves. It is a public law regime and prohibitions under this law are owed to the market at large. This blog examines how the United States, the United Kingdom, and the European Union have answered the question of arbitrability of anti-trust matters. Further the blog also delves into India’s Competition (Amendment) Act, 2023 which represents a meaningful institutional precursor. It is the first formal acknowledgement within Indian competition law that enforcement under the 2002 Act need not always be adversarial.

The case of Arbitration

The appeal for arbitrating competition law disputes is genuine. Majority of competition issues are born inside contractual relationships like distribution agreements, licensing arrangements, joint ventures etc. In such situations, arbitration offers expert adjudicators, confidentiality and resolution in shorter duration. Arbitration has a certain logical tidiness when it comes to competition issues that arise as a defence within bilateral commercial claim.

However, the counterargument is even stronger. Anti-trust operates in rem. Its prohibition generates deterrence and market conditions that extend far beyond the parties at the table. A confidential arbitral proceeding compensates one party while leaving underlying market condition completely unaddressed.

The problem with arbitrating a competition dispute is not that the arbitrators are unqualified. It is that they are asked to be resolved between two parties, a wrong that belongs to the market.

United States’ Mitsubishi and the Second look Doctrine

The United States was the first major jurisdiction to allow arbitration in anti-trust matters. In Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), by a 5-3 majority the Supreme Court held that claims under the Sherman Act, 15 U.S.C. §§ 1–7 (1890) could be submitted to international arbitration under the Federal Arbitration Act, 9 U.S.C. §§ 1-16. There was a franchise dispute between Mitsubishi and Soler, a Puerto Rican dealership whose relationship deteriorated into allegations of territorial market allocation. This conduct was previously held as non-arbitrable in American Safety Equipment Corp. v. J.P. Maguire & Co., 391 F.2d 821 (2d Cir. 1968).

However, the court did not abandon the public interest concerns but relocated them. Footnote nine in Mitsubishi articulated the “second look doctrine”. As per this, the US courts retained power to refuse enforcement of arbitral awards that was against public policy. This practice has proven to be more theoretical than operational as the New York Convention, 1958 sets a narrow public policy exception and courts have rarely exercised it. What Mitsubishi established is the foundational proposition that arbitrability and antitrust enforcement are not structurally incompatible provided adequate safeguards exist at the enforcement stage.

The United Kingdom: A third Path

The United Kingdom built a specialist quasi-judicial institution that renders arbitrability questions largely secondary. The Competition Act, 1998 prohibits anti-competitive agreements (Chapter I) and abuse of dominance (Chapter II). This is enforced by the Competition and Markets authority with fines up to 10% of global turnover.

The true innovation lies in the private enforcement architecture of the Enterprise Act, 2002. Section 47A of the Competition Act 1998, as expanded by the Consumers Rights Act, 2015, permits any person who suffered loss from a competition infringement to raise claims before the Competition Appellate Tribunal (CAT). CAT is a specialised body composed of High Court judges and economists. Section 47B goes further to provide opt-out collective proceedings that aggregate claims on behalf of thousands of affected consumers.

This is precisely what bilateral arbitration cannot do, that it systematically represents market harm that a private proceeding excludes. For India to build its own institutional architecture, this model of CAT is the most instructive precedent on offer.

Eco Swiss and Mandatory Review in the European Union

In Eco Swiss China Time Ltd v. Benetton International NV, Case C-126/97 [1999] ECR I-3055, the European Court of Justice held that Articles 101 and 102 TEFU, which prohibits anti-competitive agreements and abuse of dominance are fundamental provisions of internal market constituting matters of public policy. A National Court is obligated to annul an arbitral award inconsistent with public policy, even when competition issue was never raised during arbitration.

The contrast with Mitsubishi is instructive. The American second look doctrine is permissive in nature whereas European review mechanism is mandatory. This distinction matters acutely for India as the Competition Act, 2002 was modelled substantially on former Articles 81 and 82 of EC Treaty. Therefore, if India ever constructs a judicial review mechanism for arbitral awards involving competition law, Eco Swiss provides the most coherent normative justification as well as the strongest precedent.

What all three-jurisdiction share is a recognition that the binary choice between full arbitrability and absolute regulatory exclusivity is structurally inadequate. So, the real question is not whether private resolution has any role but is, under what condition it can operate without compromising public enforcement.

India’s Pre-reform Position- The CCI as the only room

The pre-reform position in India was doctrinally unambiguous. The Competition Act, 2002 vested exclusive jurisdiction in CCI to investigate into contraventions of Section 3 and 4 of the Act. It also gave them power to pass cease and desist orders under Section 27 and impose penalties up to 10% of average turnover. In Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd, (2011) 5 SCC 532, the Supreme Court’s distinction between rights in rem and rights in personam placed competition law firmly on the non-arbitrable side. This exclusivity was strategically necessary for a regulatory institution building credibility in a newly liberalised economy.

The 2023 Amendment: Negotiation enters the Building

The Competition (Amendment) Act, 2023 did not answer the arbitrability question. What it introduced was a mechanism for consensual resolution within a framework that previously admitted only adversarial adjudication. The CCI, however, retained its exclusive statutory authority.

The distinction must be stated precisely. Settlement under Section 48A is not arbitration and it does not involve any neutral third party, no equal procedural standing and no party determined outcome. The CCI being a statutory authority exercises discretion over whether a proposed resolution adequately serves the public interest. The settlement terms are proposed by the entity and disposed off by the Commission. Hence it can be termed as a regulated negotiation.

Under Section 48A an enterprise under inquiry may apply in writing to settle after the Director General’s report under Section 26(4) but before the final order is passed. The CCI evaluates the offer against the nature, gravity and market impact of the alleged contravention. Accepted settlements require payment credited to the Consolidated Funds of India under Section 48A (8). Further, a settlement order does not extinguish the victim’s right to compensation. Non- compliance with the above provision will lead to revocation of settlement under Section 48C with costs imposed up to Rs. 1 Crore. So, this is for the first time that a party participation in shaping an enforcement outcome is structurally provided for and this marks a meaningful departure from the original enactment of the Act.

Section 48A was implemented for the first time on 21st April 2025 in the case of Kshitiz Arya v. Google LLC, Case No. 19 of 2020 wherein the CCI accepted Google LLC’s settlement proposal in the Android TV abuse of dominance case. It was the Commission’s first ever order under Section 48A (3).

The 2024 Regulation

The CCI (Settlement) Regulations, 2024 gave Section 48A its procedural architecture. It prescribes a fee, Director General’s inputs, third party submissions, CCI hearings and compliance monitoring. The third-party participation mechanism separates this process from arbitration. Under the settlement framework, complainants and affected market participants retain a participatory voice reflecting that a settlement between CCI and an enterprise cannot bind the market actors who were never part of negotiation.

This distinction extends to confidentiality as well. In arbitration, confidentiality is a right under the Section 42A of the Arbitration and Conciliation Act, 1996. However, in settlement before CCI, confidentiality is a regulated privilege, and the commission may order disclosure of information in public interest. Hence the difference in source, that is contract versus statute, produces a difference in scope that goes to the heart of what distinguishes private dispute resolution from public enforcement.

Way Forward

The 2023 amendment demonstrates that Indian Competition law is no longer conceptually hostile to consensual dispute resolution. The proposals below treat Section 48A as an institutional precursor and a foundation from which limited arbitrability may be built.

The first and most urgent reform is mandatory judicial review modelled on the basis of Eco Swiss. The public policy ground under Section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996 should be legislatively extended to violations of the Competition Act, 2002. This would create an enforceable safeguard operative whenever a competition issue surfaces in any arbitral proceeding.

Secondly, Section 48A (7)’s complete exclusion of NCLAT appellate review is structural vulnerability which was exposed in the Kshitiz Arya case. The settlement was accepted at Rs. 20.24 crore with a dissenting member flagging an unresolved competitive harm. However, the same is not reviewable by any tribunal now. A contested, high stakes settlement with a live dissent should not be immune from appellate scrutiny.

Once these safeguards are operational, partial arbitrability for bilateral competition defences where competition issue arises as defence within contractual dispute and does not cause any market wide harm, will become one of the most effective long-term reforms. Similarly, a targeted amendment to the Arbitration and Conciliation Act, 1996, modelled on Mitsubishi and UK’s contractual arbitration framework will be the most appropriate vehicle. Finally, India should consider a collective enforcement mechanism modelled on Section 47B of the Competition Act, 1998. This is the only instrument that will allow consumers and small market participants to aggregate claims arising from competition law violations.

Author: Pragyan Sucheta Panda, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

Endnotes

1. Competition Act, 2002, No. 12 of 2003, §§ 3, 4, 48A–48C (as amended by the Competition (Amendment) Act, 2023), India Code.

2. Competition Commission of India (Manner of Recovery and Holding of Settlement Amount and Commitment Amount) Regulations, 2024, Gazette of India, Extraordinary, pt. III, sec. 4 (2024).

3. Vidya Drolia v. Durga Trading Corp., (2021) 2 S.C.C. 1 (laying down the Supreme Court's test for arbitrability and distinguishing disputes involving rights in rem from rights in personam).

4. Competition Law Review Committee, Report of the Competition Law Review Committee (Ministry of Corporate Affairs, July 2019), recommending the introduction of settlement and commitment mechanisms under the Competition Act.