The Hindu Business Line : Chennai co drags DG Shipping to court on foreign vessel charter licence issue

The Director General of Shipping has been dragged to the court by a little known Chennai-based logistics firm, Caravel Logistics, for denying permission to in-charter a foreign flag vessel for coastal operations. In a petition filed in the Mumbai High Court, the firm has alleged that the DGS is encouraging ‘monopoly’ of a group of operators in coastal service and discouraging new entrants. The petitioner said the DGS has refused the company a licence to charter a foreign vessel even though the vessel of the required size was not available on charter within the country. Caravel Logistics has appealed to the court to direct the DGS to issue a licence to enable it to charter a foreign ship.

Charter rules

According to the rules, a domestic company is allowed to charter a foreign ship provided an Indian ship of the required size is not available with in the country. To ensure the non-availability of Indian ship, the charterer has to get an NOC from the Indian National Shipowners Association, whose members own around 90 per cent of Indian shipping tonnage. According to Caraval, despite repeated requests, the maritime authority has refused to issue the licence on the pretext that it has not received an NOC from INSA. In its writ petition, Caravel alleged that INSA is reluctant to give the NOC as one of its members, Shreyas Shipping- a Mumbai based coastal shipping operator — has raised an objection against Caravel seeking to in-charter a foreign vessel.

When the petitioner wanted the DG’s permission to charter a ship at $4,650 a day, Shreyas had offered its vessel on charter at $8,000 a day. This — quoting much above the market rate — was only to thwart the Caravel’s plans, the petitioner alleged. “INSA and its members, for their vested interests, cannot prevent other Indian companies to come into coastal container shipping business,” the petition said. The petition is expected to come up for hearing next week, a lawyer for the petitioner said. Meanwhile, it is learnt, that efforts are also being made to bring the parties together and persuade Caravel to withdraw the petition.

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