Confidentiality in anti-dumping investigations: Supreme Court interprets Rule 7

A key feature of anti-dumping investigations is the protection available to commercially sensitive information that interested parties provide to an investigating authority.  The idea is that such sensitive information should remain in the safe hands of the authority and must not fall in the hands of opposing parties, who may gain commercial advantage from such information. However, this protection is available with some conditions.  Rule 7 of the Anti-dumping Rules [see end note 1] (“AD Rules”) provides that a party may claim confidentiality on information, and further, the conditions to be fulfilled when such a claim is made.  Rule 7 has been borrowed in the AD Rules from Article 6.5 of the WTO Anti-dumping Agreement. Before we discuss Rule 7, let us look at the following situations that may arise in anti-dumping investigations:

Situation 1:In an anti-dumping investigation, the investigating authority uses the domestic industry’s confidential data to arrive at the non-injurious price of the domestic industry.  The authority decides to withhold the calculations of non-injurious price from the domestic industry, stating that the calculations could not be disclosed as they were confidential.

Situation 2: In an anti-dumping investigation, the investigating authority decides to use international price of raw materials to construct normal value for an exporter.  The authority procures such international raw material price from a third party that has no interest in the anti-dumping investigation.  The authority decides to treat such international raw material price confidential from the exporter.

Situation 3: The domestic industry files a confidential version and non-confidential version of an anti-dumping complaint with the investigating authority.  The domestic industry claims confidentiality on its annual financial reports and does not provide them with the non-confidential version of the complaint.  The domestic industry is a public limited company and listed on the national stock exchange.  Despite protests by opposing parties, the authority accepts the confidentiality claim of the domestic industry on the annual financial reports.  Annual financial reports of the domestic industry are available in the public domain and can be accessed from the website of the Registrar of Companies on payment.

To assess the legality of the authority’s actions in the above situations, it is relevant to look at the Supreme Court judgment in Union of India v. Meghmani Organics Ltd.[see end note 2] (“Meghmani”).  Meghmani presented an opportunity to the Supreme Court to interpret Rule 7 of the AD Rules.  The Supreme Court’s various observations in Meghmani are summarised below:

1.  Confidentiality under Rule 7 is not something which must be automatically assumed.
2.  The parties that provide information to the authority must claim that such information is confidential, and the authority must be satisfied that the information is indeed confidential, and disclosure of this information to other parties will cause adverse effects to the party claiming confidentiality.
3. The authority will then require the party who is claiming confidentiality to give a meaningful non-confidential summary of such information so that the other party can reasonably and meaningfully rebut such summarised information.  This will also aid the other party to make an effective appeal later.
4. If it is not possible to provide the non-confidential summary of the confidential information, the party concerned should give reasons as to why such confidential information could not be summarised in non-confidential manner, and the authority should be satisfied with the reasons.
5. If the party that provided the information did not claim confidentiality on the information, the authority on its own cannot hold that the information is confidential in nature.
6. In cases where it is not possible to accept the claim of confidentiality, Rule 7 hardly leaves any option with the authority but to ignore such confidential information if it is of the view that the information is not confidential and still the party concerned does not agree to it being made public.  In such a situation, the information cannot be made public but has to be simply ignored and treated as non est.
7. The reasons or findings of the authority cannot be equated with the information supplied by a party claiming confidentiality in respect of such information.  Rule 7 does not empower the authority to claim any confidentiality in respect of reasons for its finding given against a party.
8. When the authority duly accepts confidentiality claim of a party providing information, the authority can take precautions in not disclosing such information.  But the authority can adopt a sensible approach in indicating reasons on major issues so that other parties in general terms have the knowledge as to why their case or objection has not been accepted in preference to a rival claim.
9. In the garb of unclaimed confidentiality, the authority cannot shirk from its responsibility to act fairly in its quasi-judicial role and refuse to indicate reasons for its findings.
10. When two competing public interests are involved, one is to supply all relevant information to the parties concerned and the other not to disclose information which is held to be confidential, it would be better to take an approach that is least restrictive of individual’s rights.

Now, let us revisit the three situations and see if the authority’s hypothetical actions would confirm with the above Meghmani principles.

Situation 1:The authority’s action is illegal.  Calculations of non-injurious price are based on the confidential data provided by the domestic industry.  Such data may be confidential, which means opposing parties do not have access to such data.  But the authority cannot keep calculations based on such data confidential from the domestic industry, which had provided such data to the authority in the first place.

Situation 2:If the facts show that the third party, even though non-interested in the investigation, has claimed confidentiality on the international raw material price, it is to be seen if a non-confidential summary of such price was provided to the authority.  In the absence of a non-confidential summary, it is to be seen that reasons for not providing a non-confidential summary were provided by the third party.  If not, request for confidentiality must be rejected and the information is to be simply ignored.  In a different scenario, if the third party has not claimed confidentiality on the international raw material price, the authority has no locus to treat this information as confidential on its own account.

Situation 3:The authority’s action is illegal.  Confidentiality claim on annual financial reports which are in public domain, that too of a listed public limited company, is unwarranted.  The authority should not have allowed the confidentiality claim of the domestic industry.  Further, the logic that opposing parties can easily access the annual financial reports of a listed public limited company from the website of the Registrar of Companies is no excuse to let patent illegality prevail in an anti-dumping investigation.

Meghmani has settled the law on Rule 7.  The investigating authority, Directorate General of Anti-dumping & Allied Duties, will do well to follow the Meghmani principles.  The author hopes that the case specific-officer specific approach to confidentiality issues followed in anti-dumping investigations is soon replaced by a consistent approach that confirms to the principles laid down by the Apex Court in the above discussed case.

[The author is a Senior Associate, International Trade Practice, Lakshmikumaran & Sridharan, New Delhi]