India watchdog orders DP, Maersk units to withdraw some notices to clients at Mumbai port

By Aditya Kalra

NEW DELHI (Reuters) - India's antitrust watchdog has ordered Denmark's A.P. Moller-Maersk and Dubai's DP World to withdraw certain customer advisories which it said could hamper growth of the country's largest container port in Mumbai, a document seen by Reuters showed.

The Competition Commission of India (CCI) last year ordered a probe into suspected antitrust violations by DP World DPW.DI and Maersk (MAERSKb.CO) units at the terminals they operate at state-owned Jawaharlal Nehru Port Trust (JNPT).

Handling 66 million tonnes of cargo in the last fiscal year to March, JNPT is critical to India's international trade. The port handles more than half of India's traffic in shipping containers each year.

The probe was ordered as the CCI found merit in a complaint filed by Singapore's PSA International Pte Ltd, which alleged the rival duo had created barriers to hinder the growth of PSA's terminal by colluding on certain charges they levy at the port.

Though the terminal operators handle each other's containers to help boost the port's efficiency, PSA had alleged that DP World and Maersk last year issued advisories aimed at discouraging port users from sending PSA's containers to their terminals.

In an order issued by the CCI on Jan. 15, the watchdog ordered Maersk and DP World units to withdraw those advisories, saying it "smacks of anti-competitive" conduct.

The advisories, if not withdrawn, would cause "irretrievable damage or losses" not only to PSA, and would not augur well for the port's development, according to the order. It has not been made public.

"This is likely to generate unwarranted uncertainty, chaos, discontent and anxiety amongst shipping lines and customers," the CCI said.

The order is only an interim measure, and the wider probe continues.

A DP World spokesperson said the company had not received any such order from the Indian watchdog, but it was "committed to ensuring" it complies with all laws.

A.P. Moller-Maersk, the world's biggest container shipping group, did not respond to queries. PSA, which is owned by Singapore government-owned investment fund Temasek Holdings, declined to comment.

The antitrust dispute at the JNPT is based on so-called inter-terminal transfers.

Under the system, freight trains arriving at JNPT typically carry containers destined for several terminals, but stop at just one that handles all the cargo on a given day. Other operators then collect their containers by truck for loading at their own terminals. A similar procedure is followed, in reverse, when imported containers are unloaded.

DP World's advisory had said the inter-terminal operations with PSA were "inefficient and unviable". Maersk had said its terminal "shall not be responsible" for handling containers to and from PSA-terminal bound trains.

Both the companies denied PSA's allegations while arguing to the CCI that the advisories were based on "commercial justifications", the order said.

Units of Maersk, DP World and PSA operate four of the JNPT port's five terminals, with the fifth owned by the government. The PSA terminal, inaugurated in February, is planned to be the largest, expected to nearly double JNPT's capacity.