LHC backs CCP in Mezan Beverages marketing practices dispute

June 28, 2024 (MLN): Lahore High Court has dismissed the writ petition filed by Mezan Beverages Pvt. Ltd against a show-cause notice issued by the Competition Commission of Pakistan (CCP) on alleged deceptive marketing practices.

Under section 37(2) of the Act, CCP initiated the enquiry after receiving a complaint from Pepsi Co Inc.

The complaint stated that Mezan was copying the overall packaging of Pepsi’s energy drink ‘Sting’ for its own energy drink ‘Storm’.

The subsequent completion of enquiry report recommended the issuance of show-cause notice to Mezan Beverages.

Mezan swiftly responded with legal maneuvers, filing a writ petition against the CCP’s enquiry process and issuance of show-cause notice.

In August 2021, Lahore High Court in its order suspended the show-cause notice, therefore, proceedings before the CCP were stalled.

However, after hearing the parties at length, the Hon’ble LHC held that the Supreme Court of Pakistan in its judgement rendered in ‘CCP v. Dalda Foods ltd’, unanimously, upheld the statutory powers of the CCP relating to initiation of enquiries and gathering of information.

It is pertinent to mention here that on the issue of CCP’s jurisdiction vis-à-vis the Tribunal created under Intellectual Property Organization of Pakistan Act, 2012 (IPO Act), it has been held that both the enactments i.e. the Act and IPO Act have conspicuously distinct in purpose, scope, and mandate.

The Act relates to competition law, whereas, the IPO Act pertains to intellectual property laws.

Each enactment has created a specialized regulatory body and has put in place a self-contained regulatory framework to administer duties and obligations imposed by law.

The IPO Act consciously excludes the Act from its Schedule and as such, the legislature has intentionally kept the Act beyond the purview of the IPO Act.

Hence, ‘deceptive marketing practices’ under section 10 of the Act constitute a necessary and essential element of competition law, jurisdiction of which is vested with the CCP under the Act.

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