Commission accepts out-of-court settlement

The National Business

By CLARISSA MOI
The court’s inability to fast-track cases has led to Independent Consumer and Competition Commission (ICCC) accepting Steamships’ offer to settle matters outside court, Commissioner Paulus Ain says.
Ain said ICCC accepted Steamships’ offer of settlement because of the delay it took for the courts to progress the matter for which they filed legal proceedings on Nov 10, 2011.
They were against PNG Main Port Liner Services Ltd (Mainport), Steamships Trading Ltd, Steamships Ltd, Kambang Holdings Ltd and Consort Express Line on acquisition of shares of Kambang in Consort by Mainport.
Mainport, up to the time of the acquisition, was a subsidiary of Steamships Ltd.
On Nov 12, 2009, Mainport entered into a share acquisition agreement with Kambang to acquire 17.6 per cent of the 33.3 per cent shares that Kambang held in Consort.
Prior to the acquisition, Kambang, Steamships and Anton Lee Transport Ltd each had equal shares in Consort.
However, on Aug 31, 2009, before Mainport acquired the 17.6 per cent shares Kambang held in Consort, Mainport was amalgamated into Steamships and legally ceased to exist.
“In our view, this was in breach of Section 69 of the ICCC Act 2002, at that time.”
Ain said Section 69 of the ICCC Act 2002 provided that a person should not acquire assets or shares of a business, if the acquisition would have or would be likely to have, the effect of substantially lessening competition in a market.
“At that time, we believed that Consort Express Ltd was the closest and most-competitive rival to Steamships and its subsidiaries in PNG’s shipping industry,” he said.
“Therefore, we brought legal actions to enforce the provisions of the ICCC Act.
“Unfortunately, it took the court years to determine the type of proceedings applicable to this case.”
Ain said ruling on the motion was delayed by the court for more than six years and was handed down on March 27, 2018.
“Since 2018 to date, ICCC and Steamships lawyers have been going to and from the court preparing for trial,” he said.
Ain said the delay by the courts had significantly impacted the ICCC’s evidence, and by the time the courts handed down a decision last March:

  • Most of their source of evidence had either been lost or misplaced by respective Government agencies;
  • a number of key witnesses that agreed to provide crucial testimonies had either moved on or could not be located;
    and,
  • A number of key witnesses had passed on.

“This outcome made it very difficult for the ICCC to progress the matter and required it to consider other options,” Ain said.
“On March 1, Steamships made an offer to ICCC for settlement.”
Ain said this was the first-ever case brought up by the ICCC on competition so the lessons they learnt has prepared them for the next journey.