Taking away the Attorney-Client Privilege: Competition Amendment Bill, 2022

[Shubham Gandhi is a 5th year student at NLU, Jabalpur and Hricha Gandhi is an Advocate at Rajasthan High Court]

The concept of Attorney-Client privilege (“ACP’’) has become one of the quintessential principles across all global jurisdictions. It simply enunciates that the communication made by the client to its attorney during the course of employment or any document shared will be inadmissible in court, as an evidence. The reason is to advance the free and open communication between the client and the attorney regarding the pending suit.

In the latest draft of the Competition Amendment Bill, 2022, this principle has been put on trial, as the bill grants unrestricted power to Director General (“DG”) to carry out a search and seizure. Moreover, the bill further extends the already unbridled power and allows DG to admit into proceedings any communication or document which may form part of legal privilege.

In this post, the authors will delve into the status of protection to privileged communication in dawn raids before and after the amendment bill, protection granted to privileged communication in other jurisdictions, and comment upon whether the amendment is apt or needs necessary changes.

The Competition Amendment Bill, 2022

The Competition Act, 2002, under the provision of section 41, mentions the power of the DG to conduct a dawn raid if it apprehends that the parties may attempt altering, hide, destroying, mutilating, falsifying or tampering with the physical documents as well as the documents stored in desktops/laptops/servers/phones which would be irretrievable in due course. In order to carry out the dawn raid, the DG must file an application before the Chief Metropolitan Magistrate, New Delhi, and obtain a warrant.

There are only five incidents in the Indian Competition Regime wherein the DG has conducted dawn raids. In none of these five matters, the issue of protection of ACP became the question of law.

It is interesting to note that the present law nowhere expressly talks about whether the DG’s power to investigate extends to confiscating and using the documents and communication made during the privilege; hence the law is ambiguous with this aspect.

However, the new amendment made via section 26 of the Amendment Bill, 2022, amending section 41 of the present act, in clear terms states that the :

“(3) Without prejudice to sub-section (2), it shall be the duty of all officers, other employees and agents of a party which are under investigation—

(a) to preserve and to produce all information, books, papers, other documents and records of, or relating to, the party which are in their custody or power to the Director General or any person authorised by it in this behalf; and

(b) to give all assistance in connection with the investigation to the Director General.

Explanation. —For the purposes of this section, —

(a) “agent,” in relation to any person, means, any one acting or purporting to act for or on behalf of such person, and includes the bankers and legal advisers of, and persons employed as auditors by, such person;

The plain meaning of the section reasoned out that it is the duty of the agents of the party, i.e., legal advisers of the party, to produce “all information, documents, and records relating to the party,” which includes privileged communication and the documents used during the course of employment.

The amending section does not contain any exceptions; hence, the legislature intends to include ACP communication and documents in the purview of the investigation carried out by the DG.

ACP and Evidence Act, 1872

In the Indian legal system, the ACP or professional communication privilege is mentioned in section 126 of the Indian Evidence act. The act prescribes that: –

“No barrister, attorney, pleader or vakil shall at any time be permitted, unless with his client’s express consent, to disclose any communication made to him…or to state the contents or condition of any document with which he has become acquainted in the course and for the purpose of his professional employment, or to disclose any advice given by him to his client in the course and for the purpose of such employment.”

Further, by section 129, this privilege is extended to legal advisers, as it states, “No one shall be compelled to disclose to the Court any confidential communication which has taken place between him and his legal professional adviser.”

It is to be noted that the present amendment via section 26 of the bill is in direct contravention of the Evidence act. However, one has to keep in mind the age-old principle of construction that the special law can be made in violation of the general law, i.e., the legislature is competent to frame a special law overriding the general law.

ACP in Global Competition regimes

The Swiss Competition Commission, in accordance with section 42, may request a search and seizure. However, this power does not extend to the seizure of any communication of documents that may constitute Legal Professional Privilege (“LPP”). Communications that are protected only include those with lawyers (i) listed in the Swiss cantonal bar register or (ii) listed in member states of the EU or EEA and are qualified to practice law in their home country.

In the European Union, LPP safeguards correspondence between attorneys and clients. In the case of AM & S Europe Limited v. Commission of the European Communities, where the Court of Justice ruled that the confidentiality of written communications between attorneys and clients should be safeguarded at a community level, this privilege was established. In the case of Akzo Noble chemicals and Akcros Chemicals v. Commission, the European Court of Justice formally upheld the abovementioned position.

According to Hong Kong law, LPP applies to conversations between attorneys and clients made with the intention of receiving advice. The privilege mentioned above also covers communications with in-house attorneys offering independent legal services. To ensure that LPP concerns occurring in the context of dawn raids are handled impartially and quickly, the Hong Kong Competition Commission has produced guidelines titled Investigation Powers of the Competition Commission and Legal Professional Privilege.”

The Commission aims to accomplish this by: (a) minimizing the possibility that Commission staff members involved in the investigation will unintentionally read privileged material; (b) making sure that any disputed material found during a search is correctly identified, isolated, and securely stored pending resolution of the dispute; (c) endeavoring to ensure that disputes relating to LPP are resolved by agreement between the commission and the investigated parties to the extent possible; and (d) ensuring the prompt return of any material or information to its rightful owner as soon as it is determined that LPP protects the material or information.

Regarding professional privilege before competition authorities, Mexico has no explicit legislation. However, the investigative division of the Federal Economic Competition Commission (“COFECE”) is authorized to request any information or documents relevant to their ongoing investigations under Article 73 of the Federal Law on Economic Competition. In addition to the foregoing, Article 75 provides that COFECE has the authority to authorize the execution of dawn raids and on-site inspections to gather information and documents pertinent to the inquiry. Regarding the use of client-lawyer communications, it is, however, absolutely quiet.

Recently, COFECE announced guidelines for handling interactions between attorneys and clients that are remarkably similar to those released by Hong Kong.


The change suggested by the Amendment Bill 2022 is one of significant importance. The privilege granted to Attorney-client communication is one of great importance, and by taking away that privilege, the parliament is causing unjust to the parties, who may seek advice from the lawyer without fully disclosing the contents of the disputes.

Also, the section prescribes that the search and seizure are to be carried out as per the Code of Criminal Procedure, 1973 (“CrPC”), which is a fallacy, as the CrPC is framed to facilitate search and seizure in a criminal proceeding, whereas, the Competition Act is of a civil nature. The parameters, parties, and the object of search and seizure in CrPC differ in comparison to the Competition act.

Furthermore, there is no opportunity, prescribe in the act, for the party to dispute or challenge the search carried out by the DG. It is to be borne in mind that the proceedings directly contradict the individual’s privacy as per Article 21. Hence, the law lacks proper safeguards for individual and corporation privacy rights, and it does not grant any opportunity to object to the search carried out by the DG.

In the author’s opinion, the power granted to DG is without limitation, which can lead to indulgence in an arbitrary action. Also, there can be certain cases wherein the DG may admit documents or communication made by the party to its attorney, which may result in self-incrimination, directly violating the mandate of Article 20(3) of the Indian Constitution.

In conclusion, the amendment provision in the present state can be utilized by the DG to conduct illegal and arbitrary searches. The provision must be reformed, respecting privacy and allowing the party to object to the search or seizure.

– Shubham Gandhi & Hricha Gandhi

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