Shipping vessel sharing pacts get exemption from CCI lens

Corporate Affairs Ministry recently decided to keep VSAs out of Competition Commission of India purview for one more year

The government has exempted vessel sharing pacts among shipping companies from the ambit of fair trade watchdog CCI for one more year after finding that such agreements are unlikely to hurt competition.

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

The Corporate Affairs Ministry recently decided to keep VSAs out of Competition Commission of India (CCI) purview for one more year.

Now shipping companies would not be required to seek the watchdog's nod before implementing such pacts.

In case of liner shipping industry, which provides services of ocean transport against payment by advertising in advance the schedule, the government has decided to exempt vessel sharing agreements from the CCI purview, according to the ministry's latest monthly newsletter.

The exemption is subject to certain conditions, such as that these agreements should not include practices involving fixing prices, limitation of capacity or sales and the allocation of markets or customers.

These aspects, with respect to vessel sharing pacts, would be monitored by the Shipping Ministry.

CCI, which keeps a tab on unfair trade practices across sectors, comes under the Corporate Affairs Ministry.

After CCI and Director General of Shipping reviewed the situation during the last exemption period, it was found that such pacts did not cause any appreciable adverse impact on competition.

A one-year exemption, which was earlier provided by the government, expired in December 2014. That exemption was applicable for carriers of all nationalities operating ships of any nationality from any Indian port.