In International Shipping News 14/03/2016
With the exemption, shipping industry entities would not have to seek approval from the Competition Commission for VSAs.
In a significant move, the government has decided to exempt vessel sharing agreements from the ambit of Competition Commission for another year.
The Corporate Affairs Ministry has decided to give exemption for such pacts, which are common in the shipping industry, after concluding that they are unlikely to adversely impact competition.
To ensure that the agreements do not result in unfair business practices, the Shipping Ministry would monitor them.
Vessel Sharing Agreement (VSA) allows entities to share space in each other’s vessels. The earlier exemption given for one year expired recently.
In a notification, the Ministry said that in public interest it was exempting “vessels sharing agreements of liner shipping industry from the provisions of section 3 of the said (Competition) Act, for a period of one year”.
Section 3 pertains to anti-competitive agreements.
It would be applicable for carriers of all nationalities operating ships of any nationality from any Indian port. The exemption would be in place till March 1, 2017.
However, such agreements should not entail “concerted practices involving fixing of prices, limitation of capacity or sales and the allocation of markets or customers”.
Competition Commission of India (CCI) comes under the administrative control of the Corporate Affairs Ministry.
During the exemption period, the Director General of Shipping would monitor the agreements.
“Persons responsible for operations of such ships in India shall file copies of existing VSAs or VSAs to be entered into with applicability during the said period along with other relevant documents,” with the Director General, as per the notification dated March 2.
These documents have to be submitted within 30 days of the notification or ten days from signing of such agreements, whichever is later.
Source: Business Standard
