Channel tunnel operator Eurotunnel announced Thursday it will end its partnership with MyFerryLink in shuttling travellers between France and Britain by sea, amid looming legal challenges.
Eurotunnel said it would not renew contracts expiring on July 2 under which it leased three ferries it had acquired in 2012 from bankrupt maritime transporter SeaFrance to MyFerryLink for its Dover to Calais service.
Under the liquidation agreement, Eurotunnel bought SeaLink's assets and leased them to a cooperative of employee-owners of the re-baptised MyFerryLink line operating under an appointed management team.
But potential legal challenges to MyFerryLink's 200-plus weekly crossings led Eurotunnel to renounce the activity despite recent favourable court rulings.
On May 15, a British appeals court supported MyFerryLink's challenge to a decision by Britain's Competition and Markets Authority (CMA) banning the company's service.
The CMA had argued Eurotunnel's partnership with MyFerryLink allowed the cross-Channel operator to dominate the competition, but in rendering its ruling the appeals court said the regulator was not competent to deal with non-merged companies.
Despite that initial defeat, the CMA indicated it would likely take its complaint to a higher court, creating an atmosphere of uncertainty Eurotunnel said it took into account in ending its MyFerryLink contract.
"The Competition and Markets Authority continues to maintain a position against the presence of Eurotunnel on the channel's maritime market... (and) as a private company with private shareholders, we cannot work in this uncertainty," a Eurotunnel spokesman told AFP.
The official said MyFerryLink had been formally notified of the decision not to renew the leasing agreement despite what he called MyFerryLink's "great commercial success," and indicated Eurotunnel had received several offers to buy the ferries.
But union officials say the threat of further action by British regulators may be secondary to conflicts within MyFerryLink's management.
On April 10, the company was placed under protection from creditors after MyFerryLink's deputy director general and president were ousted by the board following internal clashes within a company long plagued by both internal and external turbulence.
Despite fears by workers and unions that a sale of the three ferries would leave MyFerryLink high and dry, Eurotunnel officials have said they rejected initial purchase offers as insufficient, and remained mindful of employment at the company.
MyFerryLink, which employs some 533 people in France and 71 in Britain, operates up to 24 daily crossings between Dover and Calais.