The proceedings in Competition Commission v Multisoft Ltd and Ors [2024] HKCT 2 relate to contraventions of the Competition Ordinance whereby various undertakings engaged in practices including cover bidding when providing quotations for IT solutions in applications for government subsidy under the Distance Business Programme. The Competition Commission (“Commission”) commenced proceedings against 5 undertakings and 3 individuals said to be involved in the contraventions.
In the decision, the Competition Tribunal (“Tribunal”) granted three Kam Kwong applications made pursuant to rule 39 of the Competition Tribunal Rules (Cap. 619D) (“CTR”) for approval to dispose of the proceedings between the Commission and three sets of respondents by agreement. This procedure, explained and adopted by the Tribunal in Competition Commission Engineering Co Ltd and Ors [2020] 4 HKLRD 61, has already been applied on a number of occasions in relation to liability, declarations of contravention, pecuniary penalties and disqualification orders alike to dispose of proceedings by agreement.
More importantly, for the first time, the Tribunal also granted the relief sought in an application made by the Commission against two respondents pursuant to rule 76 of the CTR, as those respondents failed to file a response to the Originating Notice of Application within the specified time limit of 28 days from the day on which the Originating Notice of Application was served.
Rule 76 of the CTR provides that, inter alia: (1) if the respondent fails to file a response within the time specified in rule 75, the applicant may apply to the Tribunal for an order granting the relief sought in the application against the respondent; and (2) the Tribunal may make an order granting the relief sought, proceed to hear and determine the application, or give any directions that the Tribunal thinks fit.
In this case, the 6th and 7th Respondents have defaulted in filing a response within the time limit required in rule 75, and have not filed any response to date despite the lapse of about a year.
In granting the relief sought in the application, the Tribunal accepted the following submissions by the Commission:
- Rule 76 envisages the provision to operate like the default judgment procedure coupled with a mechanism for an application for setting it aside, which is borne out by the wording of the provisioned in conjunction with other provisions of the Competition Ordinance and the CTR;
- The availability of a “default judgment procedure” is consistent with the observation made in the Report for the Subcommittee to study the Proposed Subsidiary Legislation on the Procedures to be Adopted by the Competition Tribunal, that “ given the commercial nature and the importance of competition cases to the relevant industry or the general public, cases before the Tribunal should be dealt with as expeditiously as is reasonably practicable ”.
- In this case, it is appropriate for relief to be granted at this stage because, inter alia: (1) any directions or adjournment are unlikely to further facilitate disposal of the matter, as the 6th and 7th Respondents clearly do not have any intention to contest or participate in these proceedings, despite being given ample opportunity to do so; (2) the Commission’s case against the Respondents, including the 6th and 7th Respondents, is clear, which is also reflected in the other Respondents’ readiness to admit liability and consent to the disposal of proceedings; and (3) insofar as the Tribunal is willing to dispose of the proceedings between the Commission and the other Respondents by consent, it would not be an effective use of the Commission’s and judicial resources to direct the Commission to continue with a full hearing against the 6th and 7th Respondents alone, still less to insist that the Commission produce further evidence to prove its case against them.
This ruling sets a welcome example of the operation of rule 76 of the CTR, and confirms the importance of having cases before the Tribunal dealt with as expeditiously as is reasonably practicable where the respondents default in responding and where the Commission’s case is sufficiently clear. It remains to be tested when the Tribunal will, notwithstanding a respondent’s default, proceed to hear the application or make other directions.
The full judgment is available at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=161668&currpage=T
Mr Jenkin Suen SC and Ms Tinny Chan, instructed by MinterEllison LLP, acted for the Competition Commission.
