Tribunal overturns UK competition ban on Eurotunnel's SeaFrance vessel buy

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The ongoing battle between Eurotunnel, and group of ex-SeaFrance workers and the Danish ferry and ro-ro group DFSD has taken a new turn this morning after the UK’s Competition Appeal Tribunal (CAT) ruled that the UK’s anti-trust regulator did not have the jurisdiction to rule on Eurotunnel’s purchase three ex-SeaFrance vessels in 2012.

Following the bankruptcy of the state-owned SeaFrance in 2011, the fixed link operator had its €65m bid for the three SeaFrance vessels Berlioz, Rodin and Nord-pas-de-Calais accepted by the SeaFrance administrators. The vessels were subsequently leased to Societe Cooperative de Production SeaFrance (SCOP), a collective of ex-SeaFrance employees who have since been operating them on Dover-Calais ferry services under the MrFerryLink brand.

DFDS, which also operates Dover-Calais services following its acquisition of Norfolkline from Maersk, challenged the deal purchase on anti-monopoly grounds. Although France’s version of the Competition Commission upheld Eurotunnel’s argument that it was simply purchasing distressed assets which have subsequently been leased to a third-party operator, its UK counterpart judged earlier this year that “Eurotunnel decided to acquire the SeaFrance ferries in order to prevent ferry operator DFDS from buying them. Eurotunnel was concerned that if DFDS obtained the assets cheaply, it could drive down prices for customers”.

In June, the Competition Commission further ordered the three vessels to cease trading, which led to Eurotunnel’s appeal to the CAT.

At the time, Competition Commission deputy chairman Alasdair Smith, said: “It cannot be good for competition when Eurotunnel, which already holds a market share of over 40%, moves into the ferry business—particularly when it did so to stop a competitor from buying the ferries.”

However, today’s ruling from the CAT said that the Competition Commission had failed to determine whether Eurotunnel was effectively purchasing a “going concern” or three vessels which represented distressed assets.

“We remit to the Commission the question of whether Eurotunnel/SCOP acquired an “asset” or an “enterprise”. To this extent, and for that reason alone, we unanimously quash the decision,” the CAT ruled.

A Eurotunnel spokesman told The Loadstar: “The UK Competition Commission made an assumption that when we bought these vessels there had also been a transfer of enterprise – that we had bought the company, including such things as the brand and goodwill as well as the vessels – whereas the French commission ruled that we had simply bought the vessels as assets, just as we could have bought another three vessels elsewhere and leaded them to the operator.

“Today’s decision says that the process by which the Competition Commission came to that decision was incorrect and has asked that it review the question of whether it has the jurisdiction to rule on the issue.”

The MyFerryLink vessels will continue to trade and the cross-Channel rivals will wait for the Competition Commission’s response.

“That will take place over an indeterminate amount of time,” the Eurotunnel spokesman said.