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The Competition Commission of India (CCI) recently ordered an investigation into allegations of anti-competitive behaviour levelled against Danish company AP Moller-Maersk and Dubai-based DP World at a port in Mumbai.
The informant, Singapore-based PSA International, had alleged that Maersk and DP World were indulging in anti-competitive behavior through price fixing and by creating entry barriers hindering the growth of its terminal at the Jawaharlal Nehru Port (JN Port).
The PSA terminal, inaugurated in February, is planned to be the largest, expected to nearly double JNPT’s capacity and help fulfil the government’s vision of boosting India’s economic growth by modernising its ports.
The CCI in its order examined the claim of the parties in relation to the handling and transportation of exports and import boxes to and from mixed trains at the JN Port. It was alleged that Maersk and DP World were imposing a higher fee on shipping companies for handling containers that arrived at their terminals through mixed trains, but were meant to be shipped from PSA’s terminal.
The Commission was of the prima facie view that the justification offered by the opposite parties for imposition of differential charges was unconvincing, and deemed it an issue that required investigation.
It was further contended that PSA trucks were being detained and refused entry by Maersk and DP World when PSA went to collect its containers. When the mixed train arrived at PSA’s terminal, Maersk and DP World refused to collect the containers meant for their terminals.
Moreover, it was noted that Maersk and DP World were issuing advisories to customers warning them of the consequences of dealing with PSA, when it came to transportation through mixed trains. Thus, the Commission noted in its order,
“…It appears that the advisories sought to achieve twin objective of deterring the terminal operators from routing cargo through/to Informant and as a result, for foreclosing the business of the Informant as about 90% of the rail cargo comes through mixed trains. Therefore, it does appear that, given the timing of the advisories and co-ordinated conduct of the Opposite Parties to exclude the Informant from ITT has the potential to bring about an anti-competitive effect upon the competition between the container terminals at JN Port.”
The Opposite Parties contended that the present dispute was a tariff dispute to be regulated by the Tariff Authority for Major Ports (TAMP) of the Union Ministry of Shipping, and thus does not fall under the domain of the CCI. This argument was not tenable in the view of the CCI, which stated that a major part of the Informant’s argument dealt with non-cooperation on the part of the Opposite Parties.
“…the impugned matter pertains co-ordinated conduct amongst the Opposite Parties…In this regard, the Commission, therefore observes that the present issue under examination in the matter is the co-ordinated conduct and not tariff fixation. The Informant has alleged that the resultant effect of the said conduct of the Opposite Parties would dissuade the shipping lines from availing its services due to the differential charges being incurred by the shipping lines when dealing with the Informant’s terminal in case of transportation by mixed trains…”
Thus, the CCI noted that the allegations were reasonable enough to carry the prima facie view that the Opposite Parties indulged in anti-competitive behavior under Sections 3(3)(a) and (b) r/w Section 3(1) of the Competition Act.
The Director General was directed to carry out an investigation into the allegations and submit a report within 60 days.
Somasekhar Sundaresan (briefed by Trilegal Partner Nisha Kaur Uberoi) argued for PSA International. Senior Counsel AS Chandhiok and Balbir Singh argued for DP World; they were briefed by a team from J Sagar Associates led by Partner Amitabh Kumar.
Senior Advocate Arun Kathpalia represented Maersk. He was briefed by a team from Economic Laws Practice led by Partner Ravishekhar Nair.