India's MCA reviewing continuation of CCI exemption for shipping pacts
The Ministry of Corporate Affairs (MCA) is reviewing comments on whether to continue with exemption granted to certain pacts by the shipping industry players from the purview of fair-trade regulator Competition Commission of India (CCI), Hindu Business Line reports.
Vessel Sharing Agreement (VSA) and Voluntary Discussions Agreement (VDA) are common practices in the shipping industry.
While VSA allows for entities to share space in each other’s vessels, VDA provides for exchange of market information between the parties.
“We have received public comments on the issue and are looking into it,” a Ministry official said.
Various aspects such as whether the exemption should be extended further, are all being looked into, the official said.
In September last year, the Corporate Affairs Ministry had exempted these two kinds of pacts from the purview of fair trade regulator, CCI for a period of one year.
Even though, VSAs and VDAs are common practices, they are perceived to be anti-competitive since these pacts facilitate sharing of vessels and market information, among others.
Entities that are not part of an agreement could be at a disadvantage in the market.
Following requests from the shipping industry, the Ministry allowed the one-year exemption along with some conditions.
“... during the said period of one year, the Directorate General of Shipping (DG-Shipping) shall monitor operations of the agreements and for that purpose shall require compulsory lodging of the relevant documents in its offices,” the Ministry had said in September.
Upon completion of the one year period, DG (Shipping) would hold a joint review of such agreements with the CCI “to see if these agreements have caused any appreciable adverse effect on competition”.
According to the official, the overall outcome of the exemption and related issues would be analysed in detail while deciding the next course of action after the one-year period.
CCI keeps a tab on anti-competitive practices in the market across sectors.
