PARALLEL PASTS, DIVERGENT DESTINIES A COMPARATIVE ANALYSIS OF TRANSFERRING AND IMPLEMENTING COMPETITION LAWS IN INDIA AND PAKISTAN AMBER DARR DOCTOR OF PHILOSOPHY UNIVERSITY COLLEGE LONDON 2017 DECLARATION I, Amber Darr, confirm that the work presented in this thesis is my own. Where information has been derived from other sources, I have indicated this in the thesis. Signed ________________________ AMBER DARR 2 ABSTRACT In this thesis, I compare the impact of processes through which India and Pakistan adopted their competition laws, on the subsequent implementation of these laws in the countries. To this end, I construct a theoretical framework by integrating principles from Legal Transplant, Policy Diffusion and Policy Transfer and Development Economics literatures, which allows for the examination of the adoption process from deliberation to formal adoption through to the implementation stage, in a single continuum. I also develop a typology of mechanisms through which laws may be transferred, particularly from developed to developing countries. In reviewing the adoption processes for competition laws in India and Pakistan, I examine and identify the transfer mechanisms and political and legal institutions, engaged by the two countries. I argue that the Indian competition law, that has been acquired through socialization and by engaging a wide range of bottom-up, participatory and inclusive institutions is more likely to be compatible with the context of the country and to have greater legitimacy in it, than the Pakistani competition law, which has been acquired through coercion and by engaging only a limited range of top-down and exclusive institutions. At the implementation stage I focus on the independent performance of the national competition authorities created by the competition laws and the interaction of these authorities with the courts pre-existing in the countries. This analysis confirms that the Indian competition law is more compatible with and enjoys greater legitimacy in India than its Pakistani counterpart does in Pakistan. However, it also indicates that no transfer mechanism is unequivocally superior to another and that in settling upon transfer mechanisms and institutions for adopting competition laws, it is important for countries to understand the trade-offs they may be making with respect to the implementation of these laws. 3 ACKNOWLEDGEMENTS I am deeply grateful to my supervisors, Drs. Iaonnis Lianos and Riz Mokal, for their insight, guidance and support throughout the PhD: I have learnt more from you than is reflected on these pages and feel very privileged to have you in my life. A very special thank you to Professor Noel Farley and Edwin Glasgow QC for being my greatest champions; to Mr. Ikram-ul-Haque Qureshi, former member Competition Commission of Pakistan for responding to all impossible queries with alacrity; to Mr. Per-Olof Busch from the University of Potsdam for introducing me to Policy Transfer Literature and to Mr. Percival Billimoria, Partner Cyril Amarchand Mangaldas, Delhi for his tremendous help in organising my research trip to India. I am also immensely grateful to all persons I interviewed in India and Paksitan: In India, Dr. Aditya Bhattacharjea, Mr. Percival Billimoria, Dr. Geeta Gauri, Dr. Seema Gaur, Mr. John Handoll, Mr. Dhanendra Kumar, Mr. M S Sahoo, Mr. K. K. Sharma, and Mr. Udai Mehta. And, in Pakistan, Mr. Ijaz Ahmed, Mr. Uzair Karamat Bhandari, Mr. Bilal Hamid, Ms. Rahat Kaunain Hassan, Mr. Ejaz Ishaq Khan, Major General (Retd.) Rehmat Khan, Mr. Salman Akram Raja, Mr. Asif Saad, Dr. Joseph Wilson and Ms. Vadiyya Khalil. Thank you for taking the time out to meet me and for sharing your invaluable insights. A very special thank you to my former colleagues at Haidermota BNR Karachi and ABS & Co. Islamabad for their administrative support; the PhD staff at UCL for handling all panicked emails calmly and quickly. Thank you also to the BRICS Competition Law and Policy Forum; UCL Work in Progress Forum; University of Reading, Institute of Business Administration Karachi; School of Law Lahore University of Management Sciences and Research Society of International Law, Islamabad for providing me a platform to share my research with their students and members. To my parents Humaira and Mansoor Darr who have been my anchors as well as my wings, I can only say that words of thanks are inadequate to acknowledge everything you do for me. The same goes for sister Aisha and for Maryam, Amnah and Hassan who always welcome me in their home and hearts and for my brother Umer and for Taimur, Haider and Dana who have been great rocks in difficult times. My most heartfelt gratitude to my dear friends: Tijen for being more than family; Caroline for reminding me that all work and no play is not good for work; Anjum for always being only a phone call away; to Gareth for reading a part of the PhD and to Florence Thepot, Azza Raslan, Deni Mantzari, Lea Raible and Mariko Fukasaka—my comrades-in-arms—for making this journey so pleasurable! To the many other friends who are too numerous to name: thank you for your love, friendship and understanding. I could not have made it without you! Lastly, I would like to remember my grandmother, Razia Hameed Wyne, who I lost last year: thank you for being my best friend, for always believing in me and for your prayers. This is for you. 4 TABLE OF CONTENTS List of Tables _____________________________________________________________________ 8 List of Figures ____________________________________________________________________ 9 Map of India and Pakistan __________________________________________________________ 10 1. Introduction _________________________________________________________________ 11 2. The Integrated Theoretical Framework ____________________________________________ 20 2.1. Legal Transplants Literature: Relevance and Limitations _________________________ 21 2.1.1. Legal Transplants and the Relevance of ‘Context’ ___________________________ 21 2.1.2. Different Meanings of ‘Context’ in Legal Transplant Literature _________________ 23 2.1.3. Limitations of Legal Transplant Literature _________________________________ 26 2.2. Insights from Diffusion and Transfer Literatures ________________________________ 31 2.2.1. Why Diffusion and Transfer and Whether Diffusion or Transfer ________________ 31 2.2.2. Understanding Mechanisms of Transfer and their Outcomes ___________________ 34 2.2.3. Adapting Transfer and Diffusion Literatures ________________________________ 41 2.3. The Contribution of Development Economics __________________________________ 48 2.3.1. Significance of Institutional Analysis _____________________________________ 48 2.3.2. Identifying Links between Adoption Process and Implementation _______________ 49 2.3.3. Lessons of Development Economics for Understanding Adopted Laws ___________ 52 2.4. The Theoretical Framework ________________________________________________ 54 2.4.1. Selecting Relevant Concepts from the Three Literatures _______________________ 54 2.4.2. Integrating Principles and Concepts for a Step-wise Analysis __________________ 55 2.5. Concluding Remarks _____________________________________________________ 58 3. A Comparison of the Adoption Processes In India and Pakistan ________________________ 59 3.1. ‘Pre-conditions of Transfer’ in India and Pakistan _______________________________ 59 3.1.1. 1947: Creation of India and Pakistan as Independent States ____________________ 60 3.1.2. 1969 & 1970: Enactment of the Anti-monopoly Laws ________________________ 62 3.1.3. 2002, 2007, 2010: Adopting the Competition Laws __________________________ 65 3.2. The Adoption Process in India ______________________________________________ 69 3.2.1. India’s Motivation for Acquiring the Law __________________________________ 69 3.2.2. Deliberating, Adopting and Amending the Indian Competition Law _____________ 70 3.2.3. Evolution of the Indian Competition Law __________________________________ 73 3.3. The Pakistani Competition Law Experience ___________________________________ 77 3.3.1. Motivation for adopting Competition Law in Pakistan ________________________ 77 3.3.2. Deliberations, the Ordinances and Finally the Act ___________________________ 79 3.3.3. The Progress of the Pakistani Competition Law _____________________________ 83 3.4. Unpacking the Adoption Processes in India and Pakistan _________________________ 88 3.4.1. Transfer Mechanism(s) and Institutions employed by India ____________________ 88 3.4.2. Transfer Mechanism(s) and Institutions in Pakistan __________________________ 90 5 3.5. Impact of Adoption Processes on Competition Laws in India and Pakistan ____________ 94 3.5.1. Adoption Processes and the Content of Competition Laws _____________________ 94 3.5.2. Adoption Process and Compatibility and Legitimacy of the Laws _______________ 104 3.6. Concluding Remarks _____________________________________________________ 105 4. Implementing Competition Laws in India and Pakistan: An Overview __________________ 107 4.1. The Implementation Stage and Orders as Proxies for Implementation _______________ 108 4.1.1. The Implementation Stage ______________________________________________ 108 4.1.2. Reasons for which Orders of the NCAs are Appropriate Proxies ________________ 111 4.2. Analytical Framework for Examining Orders of CCI and CCP ____________________ 114 4.3. Examining and Comparing the Indicators _____________________________________ 116 4.4. Links between the Implementation Stage and Adoption Processes _________________