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ARTICLE · 19 MARCH 2020

NCLAT Affirms That The De Minimis Exemption Should Have Always Applied To The "True" Target

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Thus, the proposer is obligated to notify to the CCI.

IndiaAntitrust/Competition Law

The National Company Law Appellate Tribunal (NCLAT), in its judgment dated 12 March 2020, has set aside the order of the Competition Commission of India (CCI) imposing a penalty of INR 10,000,000 (Indian Rupees Ten million) on Eli Lilly and Company (Eli Lilly) for not notifying the acquisition of Novartis Animal Health business in India (NAH) (a business division of Novartis India Limited) to the CCI or what is popularly known as 'gun jumping'.

The CCI had earlier concluded that Eli Lilly was in contravention of Section 6(2) of the Competition Act, 2002 (Competition Act) for not notifying its acquisition of NAH. As a background, the Central Government had issued a notification dated 4 March 2011 whereby it exempted from merger control notification obligations an "enterprise" that was being acquired and whose value of assets and turnover in India fell below a certain defined threshold (De Minimis Exemption). The CCI held that whether De Minimis Exemption is applicable

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