Introduction

Private settlements in competition disputes just got a new twist. In a recent judgment, Competition Commission of India v. Monsanto Holdings Private Limited and Ors., the Supreme Court upheld the Delhi High Court’s Monsanto (2023), which ruled that once parties settle privately, the Competition Commission of India (CCI) is effectively out of the picture. This suggests that the court’s reasoning leans towards private interests. On the surface, this seems like a win for efficiency and alternative dispute resolution. But what about the larger public interest and the role of regulatory oversight? At the very centre of this development we see a deeper concern, the tension between private autonomy and public oversight. While private settlements promise speed and discretion, they undermine the objectives of competition law, which are meant to protect market integrity and public oversight, not just individual parties. Catering to the objectives, we saw Madras High Court back in 2015 through Tamil Nadu Film Exhibitors Association v. Competition Commission of India (Tamil Nadu Film Exhibitors), long insisting that CCI’s scrutiny is essential even in private settlements, which is a more balanced approach. The authors through this blog unpacks these contrasting judicial approaches, examines the risks private settlements pose to competition enforcement, and evaluates why the Tamil Nadu Film Exhibitors perspective might still hold lessons for safeguarding fair markets.

Divergent Judicial Views on CCI’s Role

The Delhi High Court has, as we will now see in a couple of decisions, adopted a stance that curtails the CCI’s jurisdiction once parties reach a private settlement. Back in 2023, through Monsanto, the Delhi High Court held that in disputes concerning patent licensing, the Patents Act and the Controller of Patents take precedence over the CCI. The Court stated that the Patents Act is a special statute, some powers and responsibilities of the Controller of Patents are also within the jurisdiction of the CCI, and in such matters CCI cannot intervene. In paragraph 58 of the judgment, the court stated that once the informant and the opposing party settle, there’s essentially no case left for the CCI to examine. Thereafter in the case of JCB India Limited and Anr. v. Competition Commission of India (JCB decision), the Delhi High Court reasoned that when parties privately settle a dispute (via mediation), the CCI’s ongoing preliminary investigation must be terminated once a settlement between parties is reached. Under JCB, the court treated a private settlement as effectively foreclosing competition enforcement, even if the CCI had not examined the settlement’s terms or its potential market impact. 

By contrast, the Madras High Court’s Tamil Nadu Film Exhibitor in 2015 adopted a more nuanced approach. Court argued that parties may enter into a compromise or settlement but such settlements must be recorded and scrutinized by the CCI to ensure they are not mere cover-ups and that competition concerns are adequately addressed. The Court recognized that an inquiry before the CCI transcends a private dispute, carrying a broader public interest dimension, noting that an investigation assumes larger proportions beyond the individual complainant. In doing so, the Madras High Court preserved the CCI’s supervisory role and resisted a complete exclusion of its regulatory authority.

From the two High Courts, we see two different views. The Delhi High Court mostly favoured a blanket exclusion of the CCI of disputes involving a private settlement or compromise, while the Madras High Court provides for a more symmetrical, middle view. The Supreme Court, in effect, favoured the Monsanto ruling, diminishing the effective outcome of the Madras judgment. The Monsanto case was primarily about the relationship between the Controller of Patents and the CCI, however the reasoning can be applied to questions regarding exclusionary effects in regards to private settlements, approved by the apex court.

Unpacking the Implications

Though the Supreme Court upheld the Delhi High Court’s decision, it restrained itself from providing a clear explanation for adopting this position. With the Delhi High Court too having provided little justification in its ruling, the position leaves significant uncertainty. While the Supreme Court has clarified that the CCI’s role is curtailed in cases involving private settlements, the lack of a reasoned justification for this approach leaves the regulatory position opaque.

Private settlements carry with them a number of issues that the judgment in question leaves unaddressed, thereby opening a wide lacuna in the existing jurisprudence. The first and foremost concern is that settlements will become the default mechanism for resolving disputes, thereby allowing parties to evade scrutiny under the Competition Act and the 2024 Settlement Regulations. Under section 48A, an enterprise subject to an inquiry for contraventions of s.3(4) or s.4 may apply for settlement after the Director-General’s report (s.26(4)) but before the CCI issues a final order under section 27 or section 28. The CCI, after hearing objections (including the DG’s), may impose a settlement amount and compliance terms. If accepted, then the inquiry is closed and the settlement is final and binding on the applicant, and therefore not appealable under section 53B. Private settlements therefore risk sidestepping section 48A and avoiding consideration of the Director-General’s views and objections. So, if this becomes a norm, dominant players could easily “pay off” complainants while persisting with anti-competitive conduct, squarely attracting liability under Sections 3 and 4 of the Act.

The second issue is moral hazard, the risk that people might misuse the system. Imagine a party filing a complaint just to pressure a larger firm into a payout, without any real interest in fixing anti-competitive practices. That turns competition law into a bargaining chip, not a tool for fair markets. This shifts the very purpose of competition law away from being a tool of public enforcement and reduces it to a mere bargaining device in commercial disputes. Thirdly, if stakeholders begin to perceive that complaints are routinely disposed off through private settlements without any systemic correction, they may be dissuaded from approaching the CCI altogether. Such an approach undermines the whistleblower role envisioned by the Act and defeats the rationale behind making these provisions in the first place. Finally, private settlements undeniably introduce uncertainty. They raise the troubling question of whether firms should opt for the “regulator route,” with its defined discounts and penalties, or pursue a private deal that allows them to bypass regulatory scrutiny, an option that, in many cases, is a commercially more attractive option.

Given the range of problems private settlements can create, the apex court’s silence on its reasons for excluding CCI scrutiny offers little relief. On one hand, the Madras High Court  identified concrete factors the CCI should consider when reviewing private settlements, ensuring checks on competitive practices and safeguarding public interest, thereby adopting a more balanced approach considering the risks such settlements carry. Contrary to this, entirely excluding CCI from the equation places us in a situation where private settlements risk becoming the norm, thereby undermining the very purpose behind the inclusion of settlement and compromise mechanisms in the Competition Act. Proceedings before the CCI are inherently in rem in nature. Interestingly, while the Delhi High Court in the JCB decision upheld the primacy of private settlements, it also appeared to retain CCI’s authority to act suo motu or on the basis of fresh information, even after a private settlement has been reached. However, this residual power appears more theoretical than practical, especially when settlements deter complainants or dilute incentives for further reporting. 

In the case (see here) discussed above, we have seen that considerable emphasis is placed on ADR mechanism, particularly mediation, in the context of such settlements. Yet, what cannot be overlooked is the interest of the larger public, which stands to be adversely affected when CCI’s scrutiny is entirely absent from these arrangements. While mediation may be promoted through this approach, it risks, on a broader scale, failing the very public interest it seeks to serve, as it can also at the same time enable dominant firms to use private settlements as a shield against obligations to maintain fair market practices. Because the Madras High Court has already outlined a framework for CCI review of private settlements, the Supreme Court’s exclusion of CCI oversight weakens those safeguards and diminishes the mechanisms intended to protect broader public interests.           

Conclusion

The Supreme Court's approval of the Delhi High Court's reasoning in Monsanto does not explain why the CCI's jurisdiction over private settlements should be entirely disregarded. In fact, this lack of explanation fuelled ambiguity around striking the right balance between private autonomy and the policy objectives of public interest enforcement in the Competition Act. While ADR and private settlements may enhance efficiency, the Court's silence ignores the systemic risks they pose; moral hazard, regulatory evasion, deterrent effect of competition law and chilling whistleblowers to name a few.

By ignoring the more balanced approach of the Madras High Court, the Supreme Court has clearly prioritised expediency over regulatory scrutiny. A more balanced regulatory approach would not reject private settlements outright but would preserve CCI's residual oversight, particularly where dominant firms are involved or where the agreement has potential market-wide effects. Such an approach could draw from the Tamil Nadu Film Exhibitors’ model, requiring that settlements be disclosed and reviewed by the Commission to ensure they are not tools for regulatory evasion. This preserves both the efficiency of alternative dispute resolution and the integrity of competition enforcement.

About the Authors

Sarvika Singh and Tathaagat S Siddharth are fourth-year law students at the School of Law, Bennett University.