Govt exempts shipping vessel sharing pacts from CCI purview

Exemption, for the period starting from Dec 11, 2013, will be applicable for carriers of all nationalities operating ships of any nationality from any Indian Port

The government has exempted vessel sharing agreements among shipping companies from the ambit of Competition Commission for a period of one year.

Vessel Sharing Agreement (VSA), which allows entities to share space in each other's vessels, is a common practice in the shipping industry.

The shipping industry has been seeking exemption for these pacts from the purview of Competition Commission of India (CCI), which keeps a tab on unfair trade practices at market place.

"... The central government, in public interest, hereby exempts the Vessel Sharing Agreements (VSAs) of Liner Shipping Industry from the provisions of Section 3 of the Competition Act, for a period of one year," according to the gazette notification issued by the Corporate Affairs Ministry.

Section 3 relates to anti-competitive agreements among enterprises.

The exemption, for the period starting from December 11, 2013, would be applicable for carriers of all nationalities operating ships of any nationality from any Indian Port.

During the exemption period -- when shipping industry entities would not have to seek approval from CCI -- VSAs would be monitored by the Director General of Shipping.

CCI comes under the administrative control of the Corporate Affairs Ministry.

Earlier a government official had said that renewal of the exemption would be decided after joint review by Director General Shipping and CCI, after looking into whether such pacts have caused any appreciable adverse effect on competition.