Competition Act and Arbitration Act

Question 1

▪ Objective of Competition Act,

Answer 1

▪ Objective of Competition Act, 2010 states is “to ensure free competition in all spheres of
commercial and economic activity to enhance economic efficiency and to protect consumers
from anti-competitive behaviour and to provide for the establishment of the Competition
Commission of Pakistan to maintain and enhance competition”.

Question 2

Establishment of Competition Act 2010

Answer 2

The Act established the Competition Commission of Pakistan (CCP) which is an independent
quasi-regulatory, quasi-judicial body with task to help ensure healthy competition between
companies for the benefit of the economy.

Question 3

Goods

Answer 3

Includes any item, raw material, product or by-product which is sold for consideration.

Question 4

Retailer

Answer 4

In relation to the sale of any goods, means a person who sells the goods to any other person
other than for resale.

Question 5

Wholesaler

Answer 5

In relation to the sale of any goods, means a person who purchases goods and sells them to
any other person for resale.

Question 6

Relevant market

Answer 6

Market which shall be determined by CCP with reference to a product market and a
geographic market
Product market comprises of all products/services which are regarded as
interchangeable or ‘Substitutable by consumers by reason of the products’
characteristics, prices and intended uses.
A geographic market comprises the area in which the undertakings concerned are
involved in the supply of products or services and in which the conditions of
competition are sufficiently homogenous and which can be distinguished from
neighboring geographic areas because, in particular, the conditions of competition
are appreciably different in those areas;

Question 7

Prohibitions under the Competition Act

Answer 7

There are 4 common prohibtions imposed by CCP under this Act
▪ Abuse of Dominant Position
▪ Certain Prohibited Agreements
▪ Deceptive Marketing Practices
▪ Mergers lessening competition

Question 8

Abuse of dominant position also give Examples

Answer 8

An abuse of dominant position consists of practices which prevent, restrict, reduce or distort
competition in the relevant market98.
Examples of such practices (include but are not limited to):
▪ Limiting production, sale and unreasonable increase in prices or other unfair trading
conditions.
▪ Charging different prices from different customers for the same goods or services without
any objective justification (price discrimination).
▪ Making sale conditional with purchase of other goods or services (tie-ins).
▪ Making the conclusion of contract subject to acceptance of other parties of supplementary
obligations which by their nature or according to commercial usage, have no connection with
the subject of the contract
▪ Applying dissimilar conditions to equivalent transactions for different parties (placing them
at a competitive disadvantage).
▪ Driving the competitor out of market, preventing new entry and creating monopoly in the
market by predatory prices.
▪ Boycott, exclude other undertaking from production, distribution or sale of goods or
services.
▪ Refusal to deal.

Question 9

Prohibited agreements also give Examples

Answer 9

▪ An undertaking or an association of undertakings shall not enter into a contract or take a
decision for production, supply, distribution or control of goods or services to prevent,
restrict or reduce competition in the relevant market except when granted exemption under
this Act.
▪ A contract entered into in contravention of this section shall be void.
Examples of Prohibited agreements (include but are not limited to):
▪ Fixing prices or imposing restrictive trading conditions for purchase, sale and distribution
of goods & services99.
▪ Dividing market by territories, volume of sale or purchase, type of goods and services or by
any other means.
▪ Fixing or setting the quantity of production, distribution or sale with regards to goods
▪ Fixing manner or means of providing any services.
▪ Limiting technical development for production and sales of goods or services.
▪ Collusive tendering or bidding for purchase and sale of goods and procurement of services.
▪ Applying different conditions for equivalent transactions to different parties.
▪ Making the conclusion of contract subject to acceptance of other parties of supplementary
obligations which by their nature or according to commercial usage, have no connection with
the subject of the contract

Question 10

Deceptive marketing practices

Answer 10

Deceptive marketing practices shall be deemed to be continued in following circumstances:
▪ Distribution of false/misleading information capable of harming business interests of other
undertaking.
▪ Distribution of false/misleading information to customers lacking reasonable basis about
prices, character, method or place of production, properties, suitability for use or quality of
goods
▪ False or misleading comparison of goods in advertising
▪ Fraudulent use of another’s trademark, firm name, product labeling or packaging

Question 11

Define Arbitration and also give its importance

Answer 11

▪ Arbitration is a method, through which, parties resolve their disputes outside court by
avoiding technicalities of procedural law.
▪ It is one of the modes of Alternate Dispute Resolution.
▪ There are limited rights of review and appeal of arbitration awards.
▪ Although Arbitration Act 1940 is a very old law, it still serves as a clear and well settled piece
of law with consistent chain of judicial precedents backing the interpretational aspects
particularly in trade and commercial matters.

Question 12

Arbitration agreement

Answer 12

means a written agreement to submit present or future differences
to arbitration, whether an arbitrator is named therein or not.

Question 13

Legal representative

Answer 13

Legal representative means a person who in law represents the estate of a deceased person,
and includes any person who intermeddles with the estate of the deceased, and, where a
party acts in representative character, the person on whom the estate devolves on the death
of the party so acting.

Question 14

Reference and umpire

Answer 14

Reference means reference to arbitration.
An umpire is a 3rd-party appointed by arbitrators to settle differences between arbitrators

Question 15

Provisions implied in arbitration agreement

Answer 15

An arbitration agreement, unless a different intention is expressed therein, shall be deemed to
include following provisions (set out in First Schedule of the Act):
▪ Reference shall be normally to a sole arbitrator (Unless otherwise expressly provided)
▪ If reference is to an even number of arbitrators, arbitrators shall appoint an umpire not later
than 1 month from the latest date of their respective appointments.
▪ Arbitrators shall make their award within:
- 4 months of Entering on reference or
- 4 months of Written notice from any party to arbitration or
- Such extended time as the Court may allow.
▪ If arbitrators have allowed their time to expire without making an award or have delivered
to any party to the arbitration agreement or to the umpire a notice in writing stating that
they cannot agree, the umpire shall forthwith enter on the reference in place of arbitrators.
- Umpire shall make his award within 2 months of entering reference or within such
extended time as the Court may allow.
▪ Parties to reference and all persons claiming under them shall submit for examination by
arbitrators or umpire on oath or affirmation in relation to the matters in difference and shall
produce before them all books, deeds, papers, accounts writings and documents within their
possession or power do all other things which are required by arbitrators or umpire
▪ Award shall be final and binding on parties and persons claiming under them respectively.
▪ Cost of reference and award shall be discretion of arbitrators or umpire who may direct to,
and by whom, and in what manner, such costs or any part thereof shall be paid, and may tax
or settle the amount of costs to be so paid or any part thereof and may award costs to be paid
as between legal practitioner and client.
▪ Parties to an arbitration agreement may agree that any reference shall be to an arbitrator or
arbitrators to be appointed by a person designated in agreement either by name or as the
holder for the time being of any office or appointment100
▪ Authority of an appointed arbitrator or umpire shall not be revocable except with leave of
Court (unless otherwise agreed in the arbitration agreement).
▪ Where in any suit all the parties interested agree that any matter in difference between them
in suit shall be referred to arbitration, they may at any time before judgment of case apply in
writing to the Court for an order or reference101.

Question 16

Common Powers of arbitrators or umpire

Answer 16

▪ Administer oath to the parties and witnesses appearing;
▪ State a special case for the opinion of Court on any question of law involved, or state the
award, wholly or in part, in the form of a special case of such question for opinion of Court;
▪ Make the award conditional or in the alternative;
▪ Correct in an award any clerical mistake/error arising from any accidental slip or omission;
▪ Administer to any party to arbitration such interrogatories as may be deemed necessary