FMC rejects Japanese lines' Tripartite Agreement

MAY 3, 2017 — The Federal Maritime Commission (FMC) yesterday rejected the "Tripartite Agreement" (FMC Agreement No. 012475), an agreement between the three major Japanese carriers to form a joint container shipping service.

The FMC rejected determined that the parties to the Tripartite Agreement — Kawasaki Kisen Kaisha, Ltd (K Line), Mitsui O.S.K. Lines (MOL), and Nippon Yusen Kaisha (NYK) — were ultimately establishing a merged, new business entity

The Shipping Act does not provide the FMC with authority to review and approve mergers. .

The Tripartite Agreement was filed at the Commission on March 24, 2017. The parties were seeking authority to share information with each other in advance of a new business entity being formed under the agreement next year. Absent yesterday’s vote, or a Request for Additional Information, the agreement would have gone into effect on May 8.

Now, the proposed merger will come under the scrutiny of the Department of Justice.

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