CCI Dismisses Allegations of Abuse of Dominance by Chettinad International Coal Terminal Pvt. Ltd.

On April 9, 2021, CCI dismissed allegations of imposition of unfair conditions and requirement of accepting supplemental obligations against Chettinad International Coal Terminal Pvt. Ltd. (‘Chettinad Coal’) and Kamarajar Port Limited (‘Kamarajar’). [1]

The Informant, an independent financial service advisor focused on infrastructure sectors such as power, ports, roads, etc., alleged that Chettinad, a terminal operator at Kamrajar Port providing coal terminal services, forced users to pay a part of the coal terminal charges in the name of ‘charges for coordination and liasoning services’ to third party service providers. The Coordination and Liasoning Charges (‘C&L Charges’) were required for availing the services of Chettinad despite these charges not being a part of the ‘Published Tariff’ of Kamarajar Port.

Before defining the relevant market, CCI noted that the informant did not file any specific allegation against Kamarajar. Accordingly, CCI allowed Kamarajar’s request of being exonerated from the proceedings.

On relevant market, relying on the fact that dedicated/captive coal terminal services are not open for third parties/common users, CCI concluded the relevant product market to be ‘the market for provision of common user coal terminal services at sea-ports’. Further, CCI held that Krishnapatnam Port did exercise some competitive price constraints on Chettinad. Thus, the relevant market was held to be ‘provision of common user coal terminal services at sea-ports in and around Kamarajar Port which includes CICTPL and common user coal terminals at Krishnapatnam Port’.

CCI did not find Chettinad dominant in the relevant market because of the competitive constraints that Krishnapatnam Port posed. Based on the DG’s investigation, CCI concluded that there was a significant percentage of common users and while the quantity of coal imported at Chettinad and Krishnapatnam increased, the overall share of Chettinad decreased since 2013-14. As such, in terms of total coal handling capacity, Krishnapatnam was far larger than Chettinad.

CCI also referred to the DG’s finding that Krishnapatnam enjoyed a higher degree of size and resources and held considerable assets. In fact, while the assets of Chettinad declined from 2011-12 to 2015-16, the assets of Krishnapatnam Port increased during the same period. The DG also found that in terms of revenue, net income/ profit, return on assets etc., Krishnapatnam was ahead of Chettinad.

Based on the above, CCI found that Chettinad was not dominant in the relevant market, and therefore, dismissed the case.

 

[1] Case No. 73 of 2015

Published In:Inter Alia Special Edition - Competition Law - May 2021 [ English
Date: May 31, 2021