ISLAMABAD: In a significant development, the Competition Appellate Tribunal (CAT) has remanded the high-profile sugar industry cartelisation case back to the Competition Commission of Pakistan (CCP) for a fresh hearing, ruling that the CCP chairperson had no authority to exercise a casting vote in quasi-judicial proceedings under the Competition Act, 2010. The decision impacts almost 72 sugar mills and the Pakistan Sugar Mills Association (PSMA), who were named in the original order.
The Tribunal’s ruling stems from appeals filed by the PSMA and its member mills challenging the CCP’s 2021 decision, which had imposed a record penalty of nearly Rs44 billion—approximately over $265 million—on 55 sugar mills and the PSMA. The penalty was based on findings that the mills had allegedly engaged in cartel-like behavior, including price manipulation, collective decision-making on sugar exports, and other anti-competitive practices.
The original CCP order had come from a four-member bench that was split in its opinion. Chairperson Rahat Kaunain Hassan and Member Mujtaba Lodhi supported the imposition of penalties, while Members Bushra Naz Malik and Shaista Bano issued a dissenting view. To break the deadlock, the then Chairperson exercised a casting vote on August 13, 2021, under Subsection 5 of Section 24 of the Competition Act, thereby making it a majority decision in favor of the penalties.
However, the legality of the chairperson’s casting vote became the core issue of the appeals. On Friday, the CAT held that the use of a casting vote in quasi-judicial proceedings was not permitted under the law, thereby setting aside the chairperson’s vote and the resulting penalty order.
The CAT has now instructed that the case be reheard by either the current CCP chairperson or another member who was not a signatory to either of the conflicting original opinions. It further directed that a final decision be issued preferably within 90 days.
The remand now places the onus back on the CCP to re-evaluate one of its most consequential enforcement actions to date—both in terms of financial impact and industry scope. The sugar sector, long accused of price-fixing and hoarding, will again face scrutiny under competition law, but now under a new legal framework without the precedent of the casting vote.
