CCI orders DP World and APM Terminals to with draw their advisories at JNPT

India’s anti-trust regulator has ordered terminals run by DP World Ltd and APM Terminals Management BV at Jawaharlal Nehru Port Trust (JNPT) to withdraw their trade advisories issued in January 2018, backing a complaint brought by Singapore’s PSA International Pte Ltd alleging that they were aimed at creating cost barriers, prejudicing the interests of its new terminal.

“DPW (Opposite parties No. 1 and 2) and opposite party No. 3 are directed to withdraw their respective advisories/communication to container train operators issued on 18 January 2018 by DPW and issued on 11 January 2018 by opposite party No. 3. The Commission, in this regard, definitely apprehends, on the basis of facts and circumstances on record, that such advisories, if not withdrawn, can have adverse effect on competition between the terminals at JNPT,” the Competition Commission of India (CCI) wrote in its interim order.

The opposition parties No. 1 and 2 are the two terminals run by DP World at JNPT — Nhava Sheva International Container Terminal (NSICT) and Nhava Sheva (India) Gateway Terminal (NSIGT) — while the opposition party No. 3 is Gateway Terminals India (GTI), the facility run by APM Terminals.

Feud

In its complaint, Bharat Mumbai Container Terminals (BMCT), a new facility opened by PSA in February 2018, alleged that anti-competitive practices by NSICT and GTI were hindering its operational effectiveness.

In a preliminary order on November 9, the CCI decided to probe the case further.

The feud between the top global container operators relates to the inter-terminal transfer of containers, a system that is unique to JNPT, whereby container train operators run mixed trains that carry boxes designated for more than one container terminal.

In their advisories, NSICT and GTI have said that the inter-terminal transfer of containers from their terminals to BMCT and vice-versa would be “operationally unfeasible and commercially unviable” given the considerable distance between their terminals and BMCT. They have asked customers (shipping lines) to make their own arrangements for the inter-terminal transfer of boxes and also started levying extra charges from them.

‘Adverse impact’

“If the advisories are not withdrawn, irretrievable damage or losses will not only accrue to Informant (BMCT) but even to the shipping lines and customers of the Informant and the opposition parties alike as cargo meant for export/import is likely to get stranded in the railway yards, rather then reaching their intended destination either inbound or outbound, as the case maybe,” the CCI wrote in a rare case of an interim order.

“Further, these losses or damages sustained may not be quantifiable. This is likely to generate unwarranted uncertainty, chaos, discontent and anxiety amongst shipping lines and customers, and present operational difficulties for train operators, which will not augur well in the all-round development of the port,” it said.

“The advisories, if not stayed, have the potential to adversely impact inter se movement of containers arriving through mixed trains in the port to the ultimate detriment of shipping lines and their customers. Even though, the opposite parties have contended that such advisories have not brought the desired effect as train operators have not paid heed to it, but on the face of it, the expressions used in the advisories smacks of anti-competitive and exclusionary conduct on the part of the opposite parties,” the CCI said.

“However, the parties herein, shall be at liberty to issue any plain operational clarifications to the container train operators, as are required to facilitate smooth conduct of operations, till final disposal of the matter by the Commission,” it added.

These orders shall be implemented by the parties subject to and in accordance with the December 18, 2018 order passed by the Bombay High Court in a writ petition filed by DP World seeking to stay the preliminary order of CCI. The High Court declined to grant a stay and the case is slated to be heard again next week.

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