KUALA LUMPUR (June 21): The Malaysia Competition Commission (MyCC) has decided to grant a block exemption for liner shipping agreements in respect of Vessel Sharing Agreements (VSA) and Voluntary Discussion Agreements (VDA) made within Malaysia or which have an effect on liner shipping services in Malaysia.

The Block Exemption Order (BEO), scheduled to commence on July 7, 2017 for a period of two years, is subject to condition that there is no element of price fixing, price recommendation or tariff imposition on transport users, MyCC said in a statement today.

The decision was made following feedback from various parties over the past 30 days, after the Malaysia Shipowners Association (MASA) and the Shipping Association of Malaysia (SAM) submitted applications for renewals of the VSA and VDA on March 6.

“The BEO does not exempt or provide immunity in respect of any abuse of a dominant position under Section 10 of the Competition Act 2010. 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 statement said.

The block exemption also does not cover inland carriage and warehousing of goods.

“In addition, the BEO allows liner shipping operators to offer, on the basis of individual confidential contracting, their own service arrangements, upon certain conditions,” MyCC added.

These conditions include prohibited horizontal and vertical agreements that may distort or restrict competition.

In 2014, the MyCC had granted a three year block exemption for liner shipping agreements, which is due to expire on July 6, 2017.