CCI decided that the inclusion of a grandfathering clause setting a fictitious date for operational control of a target asset prior to CCI`s approval date would likely distort competition by discouraging the target company from competing. A sanction was also imposed if the actual resumption of activities did not take place before the merger of CCI was authorised. As regards the exchange of information between economic operators involved in a concentration, the CADE Guidelines recommend avoiding any unnecessary exchange of competitively relevant information between the parties25, as such exchanges may affect competition between them if the concentration has not yet been implemented (either due to a lack of agreement by CADE, or because of problems related to the negotiation itself). In line with its decision-making practice, CCI clarified that parties are not allowed to operate under the merger while the merger is under review, which may lead to even partial implementation of the concentration. The above restriction is imposed on the parties in order to ensure that competition on the relevant market is not affected during the transitional period, i.e. when the transaction is examined. In this respect, the parties are required to compete with each other during this period. The Jet/Etihad case[5] was one of the first in a series of substantial arms jumps in India. The acquirer, Etihad, had informed CCI of the acquisition of a 24% stake in Jet Airways. However, some parts of the transaction had not been notified, namely: (a) a commercial cooperation agreement and; (b) Purchase of jet take-off/landing times at Heathrow Airport, London. The buyer argued that such agreements occur regularly in the ordinary course of business in the aviation sector. CCI rejected the above-mentioned request. CCI found that the purchaser had made the two ancillary transactions without prior authorization and imposed a penalty for violation of the law.

A merger between Titan International and Titan Europe[1], which took place outside India, also resulted in the indirect acquisition of an India-based subsidiary of one of the parties. Since CCI`s merger regime was still in its infancy, CCI had to be lenient with the parties. The ICC acknowledged that Indian competition law was not known at the time and imposed a lesser penalty on parties who jump the gun. In order to understand the basic contours of pistol jumping, it should be noted that the law provides for ex ante regulation of combinations. Article 6(1) of the Act prohibits concentrations which have or are likely to have significant adverse effects on the concentration and Article 6(2) of the Act requires the parties to the concentration to notify the Commission of their proposed concentration. In addition, Article 6(2A) of the Law provides that a concentration notified to the Commission does not take effect within 210 days of the date of notification or approval by the Commission, whichever is earlier. In a recent reversal of an authorization previously granted by decision of 28. In November 2019 (“Order of Approval”) on the now famous Amazon-Future Group transaction, India`s fair market watchdog not only suspended its approval in response to a complaint from Future Group, but also imposed a penalty of INR 202 crore on Amazon Inc. , mainly for the “Gun Jumping”, which receives approval by removing important facts, in particular by the ICC, while the ex ante notice of approval of the transaction is filed in July 2019. This article deals with the development of the concept of firearm jumping as a provision of Indian competition law.

It provides a focused analysis of how merger control provisions continue to evolve in the Indian legal framework. The impact of judicial decisions on the process of codification of acts considered a leap of arms in terms of aspects such as timing, documents, communications to be presented and even the criminal regime. The constant changes testify to the Commission`s ability to respond to changing socio-political conditions. Ronald Dworkin`s jurisprudential principles have been applied to test development so far. On the basis of these principles, the authors also proposed recommendations for future action, taking into account the objectives of competition law. One of the buyer`s main arguments was that CCI`s theory of injury relating to agreements between the parties was purely hypothetical, i.e. CCI merely analysed the potential impact of the transaction documents without taking into account the actual effects. In order to refute this argument, the ICC relied on the Hindustan Cola decision[4] to conclude that the firearm jump (i.e. an assessment of the effective date of the transaction) included an assessment of the “potential distortions of competition” resulting from the parties` behaviour during the transitional period, for example if the target company`s intention and incentive to compete with each other was reduced.

if there was a reason to access confidential information or if a situation resembling collusion was created. Since then, much of the confusion surrounding the procedural leap of arms has been dispelled by publishing various notifications and FAQs that facilitate M&A transactions, including demystifying the position on intra-group mergers, the applicability of the de minimis exception to mergers, and the calculation of revenues. However, cases of large arms jumps were more complex from the regulators` point of view. While CCI has attempted to shed light on the “leadership position” in dealing with these cases, there is always the possibility of an unintentional leap of arms, as the jurisprudence is not fully developed. In this regard, legislators have been proactive and key legal issues have largely been resolved by subsequent amendments aimed at simplifying merger control requirements and preventing shootings. This was clearly contrary to commercial interests in general. The strict timetable was not appreciated at best and hindered corporate restructuring at worst. As a result, it was finally suspended in 2017 for a period of five years in order to provide late relief to businesses. In the new scenario, while it is not necessary to notify CCI of a proposed combination within 30 days of the triggering document or approval of a merger by the Board of Directors, it is imperative to be notified before the transaction is completed, closed or completed. While some flexibility has been provided to avoid the same errors, the strict compliance requirement remains. In addition, the number of cases dealing with this issue before CCI has also increased, highlighting the identification of “trigger documents” to avoid a violation of Article 6.

Unfortunately, issues like these were not an isolated case. Although this development and the general awareness of the rules of competition have reduced the cases of procedural jumping, the intensive firearm jump is another complex story. An M&A transaction typically requires various approvals from the company`s boards of directors, as well as various regulators and courts. In the specific area of competition law, a merger and acquisition transaction is classified as a combination that is assessed under various provisions of the Competition Act 2002 (Competition Act 2002, `the Act`). In this context, any transaction likely to have appreciable adverse effects on competition (`the AACE`) in India is likely to be modified or disapproved by the Competition Commission of India (ICC). On July 26, 2019, the Competition Law Review Committee, set up under the aegis of the Ministry of Corporate Affairs, presented its report,38 which contains certain proposals and amendments to the law, particularly on the aspect of gun jumping. In order to evaluate these transactions, each M&A transaction above a certain threshold must be reported to CCI for review. It should be noted that the competition law framework applicable to mergers has suspensive effect. This means that the parties to a transaction must necessarily suspend completion of the merger until CCI has approved. Otherwise, the parties are allowed to proceed with the merger after 210 days from the date of filing of the notice and the ICC has not adopted a decision corresponding to the concentration.