CAT 7
31 Mar 2006
Judgment of the Tribunal on an appeal by Albion Water Limited (“Albion”) against a decision of the Director General of Water Services (the “Director”) that Thames Water Utilities Limited (“Thames”) had not infringed the Chapter II prohibition in section 18 of the Competition Act 1998 in respect of Thames’ conduct in responding to requests by Albion or its former parent company for the common carriage of water through Thames’ supply network.
The first issue in the case concerned the initial access price quoted by Thames to Albion of 27p/m3. This price was subsequently revised to 13.6p/m3 following some 15 months later the intervention of the Director.
The Director’s decision that in providing an indicative access price of 27p/m3 Thames had not infringed the Chapter II prohibition was set aside by the Tribunal. That decision could not formally stand on the grounds that such a decision was inconsistent with the Director’s stated view, expressed in the contemporaneous correspondence, that that price was potentially in breach of the Competition Act 1998.
The second issue in the case concerned Thames’ refusal to give credit to Albion for water surplus to the requirements of its own customers and thus available to Thames for supply to its own customers. This issue involved two separate submissions by the appellant: (a) Thames should give credit for the total amount of the water introduced to its system by Albion on the grounds that all such water was valuable to Thames given that Thames was in a position of “supply zone deficit” in the London area; and (b) that credit should be given to Albion for any over supply in circumstances where Thames proposed to charge Albion for any under supply (the “overs and unders” issue);
In respect of the first submission (credit for total supply) the Tribunal ruled that the appellant’s submissions had not been raised in its complaint to the Director and it was not, in the circumstances of the case, appropriate to permit Albion to enlarge the ambit of its complaint before the Tribunal.
In respect of the second submission (overs and unders) the Director’s decision that Thames had not infringed the Chapter II prohibition was set aside on ground of insufficiency of reasoning. There was no reasoning in the Director’s decision dealing with the appellant’s complaint that its inputs of water were intended to be predictable and constant. Furthermore the Director’s consideration of whether the over supplies to Thames had a value in all the circumstances had not sufficiently been considered, especially in circumstances where Thames had a potential supply deficit.
The matter was not remitted by the Tribunal to the Director as the provisions of the Water Act 2003 had, in the intervening period, entered into force and for the future issues of over and under supply will have to be addressed in that context, subject to the application of the Chapter II prohibition and EC law.
This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.