UNDER SECTION 26(6) OF THE COMPETITION ACT, 2002

The present information has been filed under Section 19 of the Competition Act, 2002 (hereinafter referred to as 'the Act') against Mundra Port and Special Economic Zone Limited, Ahmedabad (hereinafter referred to as 'opposite party') under section 19 of the Act.

2. The facts in brief, as stated in the information are as under:-

2.1 Opposite party is the Port Service Provider, promoted by the Adani Group and is the owner and the administrator of the Mundra Port. It is India's largest private port.

2.2 In a port there are container terminals which provide services like stevedoring, container storage at terminal yard, shifting of cargo etc. There are two container terminals in Mundra port, one operated by opposite party itself which commissioned its operations in 2007. The other terminal, established in 2003, is operated by Mundra International Container Terminal (MICT).

2.3 As the opposite party is a port owner, it provides the pilotage and berthing services to all the vessels calling at Mundra Port. The charges for these services are collected by opposite party as Port Administrator port owner. The pricing of services forms a critical component for shipping line when determining whether to call at a particular port or not.

2.4 The opposite party is the only Service Provider at Mundra Port for Marine and infrastructure services for the ships coming into Mundra Port. The tariff published periodically by opposite party for usage of these services at Mundra Port is applicable to both terminals equally.

2.5 It has been alleged by the informant that the opposite party, as the provider of port services, though ostensibly charging the same tariff to shipping lines for both terminals, has started giving shipping lines rebates on these charges if they opt to call at its terminal. This practice is persuading, distorting and manipulating the market.

2.6 The informant has alleged that the opposite party is abusing its dominant position in one market i.e. the market for supplying services like pilotage, birth hiring for incoming ships at Mundra Port to affect another vertical market i.e. purchaser market.

2.7 The informant has alleged that the opposite party has;

(a)By imposing an unfair and discriminatory condition in the purchase of goods or services contravened provisions of section 4(1) and 4(2)(a)(i) of the Competition Act, 2002;

(b)By imposing a limitation or restriction in the production of goods or provisions of services or market therefore contravened provisions of section 4(1) and 4(2)(b)(i) of the Competition Act, 2002;

(c)Used its dominant position in one market to unfairly enhance and distort another vertical market in its favour.

ORDER UNDER SECTION 26 (1) OF THE ACT AND INVESTIGATION BY DIRECTOR GENERAL

3. The Commission considered the matter in its meeting dated 30.03.2010 and having formed an opinion under Section 26(1) of the Act that there exists a prima facie case, referred the matter to the Director General (DG) for investigation vide order dated 30.03.2010. DG was directed to submit his report within 45 days of the receipt of the Commission's order.

4. The DG after receiving the direction from the Commission got the matter investigated and submitted his report dated 18.10.2010 to the Commission.

REPORT OF DG

5. Keeping in view that the issue in instant case is related to the abuse of dominant position by an enterprise, the DG identified following issues for investigation :-

(a)Fact finding about the dominant position enjoyed by the opposite party including delineation of relevant market.

(b)Examination of the abuse of dominant position by the opposite party on account of its action of giving shipping line rebates on port/marine charges to those who call at its own container terminal at Mundra Port.

(c)Violation of the provisions of the Act relating to abuse of dominance.

6. The DG has delineated the relevant market in the present case as the market for port services covering the geograp