Kuala Lumpur, May 15 - The Malaysia Competition Commission (MyCC) proposes to renew the Block Exemption Order (BEO) for the Vessel Sharing Agreements (VSA) and the Voluntary Discussion Agreements (VDA) in respect of liner shipping services for another two years. Previously, the MyCC granted a three year block exemption for liner shipping agreements which is due to expire on 6 July 2017.
The publication of the Proposed Renewal of BEO is pursuant to the MyCC’s consideration of an application for the renewal of block exemption for the VSA and VDA in respect to liner shipping services which was submitted by the Malaysia Shipowners Association (MASA) and the Shipping Association of Malaysia (SAM).
The MyCC in exercise of the powers conferred by subsection 8(1) of the Competition Act 2010 (“the Act) may grant a block exemption provided all the conditions under section 5 of the Act are satisfied:
(a) There are significant identifiable efficiency benefits arising from the liner shipping agreements;
(b) The benefits could not reasonably have been provided by the parties to the liner shipping agreement without the agreement having the effect of preventing, restricting or distorting competition;
(c) The detrimental effect of the liner shipping agreements on competition is proportionate to the benefits provided; and
(d) The liner shipping agreement does not allow liner operators to eliminate competition completely in respect of a substantial part of the liner shipping services.
Pursuant to section 9 of the Act, the MyCC shall publish the details of its Proposed Renewal of BEO on its website at www.mycc.gov.my for at least thirty days up until 5 p.m. on 9 June 2017 to allow the public to view and make any submission directly via the same website.
The MyCC shall give due consideration to any submission made. The Proposed Renewal of BEO does not exempt or provide immunity in respect of any abuse of a dominant position under the section 10 of the Act. Therefore, parties to a liner shipping agreement can still be found liable for an infringement if they are found abusing their dominant positions in the liner shipping market.
The Proposed Renewal of BEO does not cover inland carriage of goods and warehousing of goods. In addition, the Proposed Renewal of BEO allows liner shipping operators to offer, on the basis of individual confidential contracting, their own service arrangements, upon certain conditions (refer to Annexe A for more details).