Background of the Case:

CCP received information from Pakistan Paper Merchant’s Association that indicated that PSAA may be involved in collusive practices. On enquiring from PSAA, it was learnt that PSAA recommends ancillary charges pertaining to shipping services. CCP appointed an Enquiry Committee to conduct an enquiry in the matter and also authorized them to conduct a search and inspection of PSAA’s premises. The enquiry team submitted the Enquiry Report which concluded that PSAA, by recommending a range of charges to its members to levy on ancillary shipping services had, prima facie, violated Section 4 of the Act.

The documents recovered upon search of PSAA’s premises established that PSAA did engage in the practice of regularly circulating a range of charges for ancillary services of ship’s agents which amounted to fixing the selling price of the provision of a service.

The undertaking, inter alia, took the defense that all documentary evidence was dated before the provision of the Act and as such, the Act was not applicable. This was dispelled by the Commission by tracing out the validation clause in Section 62. On the question of pressure from trade organizations, the Commission held this is no defense to act outside of the law. On the question of state action compulsion, the Commission held that none of the conditions outlined in the Commission’s KSE, LSE and ISE order were met. Although the Commission did find the pressure from state intervention but no binding rules were promulgated as a mitigating factor.

The Order:

Based on the recommendation of the Enquiry Report a show cause notice was served to PSAA. During hearing PSAA contended that it was constantly pressurized by the government to regulate prices and expressed its desire to conform to the competition laws. PSAA gave undertaking to pass a resolution affirming its commitment to adhere to the Act and to refrain from taking any decision in violation of the latter. The Bench, while passing its order, appreciated PSAA’s approach and, despite rejecting governmental pressure as a state action defense, took the mitigating factors into consideration and imposed a token penalty of Rs. 1 Million on PSAA.

Current Status:

PSAA has filed a writ petition against the Order of the Commission in the Honourable Sindh High Court at Karachi. The Honourable Sindh High Court suspended the operation of the Order of the Commission subject to deposit of the penalty amount i.e. Rs. 1 Million in Court. The Penalty has been deposited in the Court.