Metro Cash & Carry Holding BV (Metro) and Thal Limited (Thal) filed a joint application under Section 5 for exemption of JV Agreement from Section 4. Although the competitive effects of the JV were already considered in the premerger application already filed and approved, this proceeding primary related to reviewing the non-compete clause in the JV Agreement.

Essentially, the parties, through the clauses in question, sought to impose restrictions upon themselves and their affiliates not to directly or indirectly own, manage, operate, join, control or participate in the ownership, management, operation or control of any company firm or person carrying on competitive business in or from Pakistan or to provide technical or other information to any third party concerning the setting up of any competitive business.

For the purposes of the application, the Commission defined the relevant market as that of hyper-markets, retail food stores and supermarkets selling food and non-food items with a shop floor area in excess of 1,500 square meter within the territorial limits of Pakistan.

The Commission found that the restriction contained in the JV Agreement was reasonably necessary to achieve the intended efficiencies. Similarly, it was found appreciable that the non-compete was not absolute and issued an exemption certificate accordingly.