PNJ in Anti Dumping investigations : Sandisk International vs DA

By Hansa Sinha

All of us who have read even a bit of Administrative law are aware that a quasi judicial authority has to act within the contours of Principles of Natural Justice (PNJ). This age old legal truth was displayed very recently in a Delhi High Court Judgment.

All the anti dumping matters go to the DGAD under Ministry of Commerce. Here the Designated Authority (Quasi Judicial Authority) gives its decision. This decision or final findings is then confirmed by the Ministry of Finance and thereby imposing the duties. Presently, the matter at hand is an investigation pertaining to USB Flash Drives. After completing its investigation the Designated Authority recommended its final findings on 19th December 2014. This was challenged by Sandisk International Ltd, a company based in Ireland whose related companies were affected herein by the Final Findings. The final findings were challenged on the ground that a new evidence of imports was relied upon towards the end of investigations. The parties were not given sufficient time to review or comment on the same. The petitioner alleged that this was a violation of his right to hearing and thus the final findings should be quashed.

Before we move to the arguments a slight summary of the procedure at DGAD is in order. When a petition is filed at DGAD, other parties are intimated and their responses are invited. Further a public hearing is held in the presence of Designated Authority, the domestic industry and other interested parties. Subsequent to this written submissions and rejoinders are submitted by the relevant parties. After this the Disclosure Statement follows which is a premature version of the Final Findings. This is circulated for comments of interested parties and after incorporating these views the Final Findings recommending or not recommending duties are issued. To establish that a product was being dumped imports are taken into account. There are many sources of imports that maybe relied upon and which became the major contention for the case at hand.

In the case of Sandisk International Limited vs The Designated Authority, the Designated Authority relied on a source of import statistics from DGCI&S (Directorate General of Commercial Intelligence and Statistics). This reliance only became evident to parties when they received the Disclosure Statement for comments. The petitioner requested a non-confidential summary of the information relied on but was not provided any such information. The Delhi High Court has held that the DA is required to make information made available to it by one party to other interested parties and also the material sourced by DA from other sources. It held that “Unless the data being relied upon is shared with the interested parties, there cannot be an effective opportunity of hearing.”

In their defense the respondents argued that since the Final Findings are recommendatory in nature the petition is premature. Further, they provided an alternative that the matter could be remanded to DA for post decisional hearing. However, the HC bench found no merits in these arguments. They were further convinced that anti dumping proceedings are time bound and such statutory periods must be complied with. Thus, there was found a clear violation of the principles of natural justice which in effect resulting is quashing of the Final Findings.

Since many years the Principles of Natural Justice as enshrined in the Indian Constitution has been the contention of various anti dumping disputes. The domestic industry has often used it on account of non-issuance of notice under Rule 6(2) of the Custom Tariff Rules. The use of principles of natural justice has developed a nice body of research. Next topic for a college project or paper presentation anyone? It’s a good idea.

Thank you for reading! Read the entire judgment here.


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