The British government will pay Eurotunnel a €38 million settlement for violating the bloc’s competition law.

The compensation comes after the UK came to an agreement with three ferry companies to provide extra services in the event of a no-deal Brexit.

The contract awarded to Brittany Ferries (France), DFDS (Denmark), and Seaborne Freight (UK) would, in theory, allow them to provide additional cargo capacity and alternatives routes, easing the pressure on specific ports on both sides of the Channel.

The UK’s Department of Transport was planning to look for capacity beyond Dover, particularly in Poole, Portsmouth, Plymouth, Immingham, and Felixstowe. However, the contract appeared scandalous when it was revealed that Seaborne Freight did not have its own vessels and that some of the ports in question were inadequate.

Moreover, Eurotunnel objected to not being able to take part in the tender for emergency capacity. The CEO of the Paris-based parent company of Eurotunnel, Jacques Gounon saw the €114 million contract as market distortion. The deal with Seaborne Freight was seen as particularly scandalous as the company was to be paid €16 million without even owning its own vessels.

In a letter to Britain’s transport secretary, Chris Grayling, on January 2, the CEO of Eurotunnel accused the British government of “distortionary and anti-competitive” measures breaching the Eurotunnel’s Concession Agreement, as well as its existing competition and state aid law.

On March 1, the British government agree to a settlement rather than facing the company in court. As part of the settlement, Eurotunnel will make some improvements to its terminal.