CCI Rejects Abuse of Dominance Allegations Against Hindalco and Vedanta; Finds No Prima Facie Case in Copper Supply Market Dispute
Pranav B Prem
The Competition Commission of India (CCI), comprising Chairperson Ms. Ravneet Kaur and Members Mr. Anil Agrawal and Mr. Deepak Anurag, dismissed allegations of abuse of dominant position against Hindalco Industries Limited and Vedanta Limited in the Indian refined copper market. The CCI concluded that the allegations did not warrant an investigation under Section 4 of the Competition Act, 2002, as no prima facie case was made out against the opposite parties (OPs).
Factual Background
The information was filed by M/s Airen Metals Pvt. Ltd. and M/s Airen Copper Pvt. Ltd. (collectively referred to as “Informants”), who were purchasers of copper wire rods and copper cathodes from Hindalco and Vedanta (the OPs), which together account for nearly 75% of India’s refined copper market. The informants alleged that the OPs acted in concert to impose unfair terms through their marketing policies and to prematurely invoke bank guarantees, which led to insolvency proceedings against the Informants.
The Informants stated that their purchase orders from Bharat Heavy Electricals Ltd. (BHEL) and Central Organization for Railway Electrification (CORE) required them to lift 2061 MT of copper. However, due to the COVID-19 pandemic, they failed to lift the entire booked material—933.13 MT from Hindalco and 92.28 MT from Vedanta. The OPs invoked bank guarantees (BGs) amounting to ₹50.35 crore in July 2020, despite the BGs being valid and invoices within permissible periods. The Informants argued that this action was a concerted move that violated competition law and forced them into insolvency.
It was also alleged that the marketing policies of both Hindalco and Vedanta were identical, requiring buyers to place orders at unknown prices linked to the London Metal Exchange (LME), and included clauses allowing the suppliers to liquidate orders and recover losses if materials were not lifted on time. The Informants contended that these clauses were discriminatory and resulted in unfair gains for the OPs.
Contentions of the Informants
The Informants alleged that:
Both OPs exercised their duopoly to impose identical marketing policies on copper buyers.
The invocation of BGs was premature, excessive, and conducted simultaneously by both OPs, amounting to an abuse of dominance.
Their inability to lift copper orders due to pandemic-related disruptions was exploited by the OPs to unjustly enrich themselves by de-pricing the booked material without passing on the benefits to the Informants.
The OPs' conduct led to overdrafts, freezing of bank accounts, and ultimately insolvency proceedings against the Informants under the Insolvency and Bankruptcy Code, 2016.
Observations and Findings of CCI
The CCI carefully examined the submissions and materials on record. It noted that:
The Indian refined copper market exhibits duopolistic features but the concept of collective dominance is not recognized under the Competition Act, 2002. Hence, allegations based on joint conduct could not be entertained under the Act.
The email correspondences from Hindalco to the Informants revealed that the company repeatedly sought a liquidation plan regarding the booked material. Only after failing to receive any response did Hindalco proceed to de-price the material as per its stated marketing policy.
The clauses permitting de-pricing and recovery of losses were part of standard commodity market practices, where price volatility is a known risk. These terms were applicable only when buyers defaulted on their contractual obligations.
Gains made by the OPs from de-pricing the copper bookings were permissible under the agreed contractual framework, and there was no evidence to suggest the Informants were entitled to share in these gains.
The invocation of BGs, even if deemed premature by the Informants, was a contractual matter and fell outside the scope of competition law as per the Commission’s jurisdiction.
The CCI further noted that FIRs filed by the Informants on the matter were closed by the police as civil disputes, and that the insolvency proceedings faced by the Informants under the IBC were a result of their own contractual defaults.
Final Decision
The Commission concluded that no prima facie case of abuse of dominance under Section 4 of the Competition Act was made out. It found no merit in the claims of unfair or discriminatory practices by the OPs. Accordingly, the CCI dismissed the case under Section 26(2) of the Act without ordering an investigation. The Informants' prayer for interim relief under Section 33 of the Act was also rejected. The matter was closed with directions to communicate the order to the parties.
Cause Title: Airen Metals Private Limited & Anr. V. Hindalco Industries Limited & Anr.
Case No: Case No. 31 of 2024
Coram: Ms. Ravneet Kaur [Chairperson], Mr. Anil Agrawal [Member], Mr. Deepak Anurag [Member]
[Read/Download order]
