Judgment (Remedy and costs)

Neutral citation:

[2009] CAT 12

Published:

9 Apr 2009

Download:

Summary:

Judgment on the issues raised by the applications of Albion and Dŵr Cymru, both dated 24 November 2008, for final relief.

Albion appealed against a decision of the Water Services Regulation Authority finding that Dŵr Cymru had not infringed the Chapter II prohibition of the Competition Act 1998. On appeal the Tribunal found and held otherwise. Having set aside the decision, the Tribunal unanimously decided that the disputed price for common carriage of non-potable water via the Ashgrove system imposed a margin squeeze and was excessive and unfair in itself.

Following the Tribunal’s principal judgments, Albion and Dŵr Cymru applied for final relief. Their applications raised three main issues: the first two issues concerned the Order the Tribunal should make to remedy the unfair pricing and margin squeeze abuses respectively. While the parties agreed that Albion should be awarded its legal costs, the third issue concerned their disagreement about the assessment of costs and the amount of any interim payment in respect of costs.

All sides accepted that the Tribunal should make a Declaration that Dŵr Cymru had abused its dominant position in the manner described in the Tribunal’s earlier judgments. Accordingly, the Tribunal so ordered.

As regards the unfair pricing abuse, the Tribunal ordered that Dŵr Cymru bring the infringement it had identified to an end and refrain from any conduct having the same or equivalent effect. The Tribunal ordered that any common carriage access price offered by Dŵr Cymru to Albion not exceeding 14.4p/m3 in 2000/2001 prices shall not be conduct having the same or equivalent effect as the infringement identified by the Tribunal.

The case for Albion to remedy the unfair pricing abuse principally focused on the so-called “Bulk Supply Price” since that was the price which it was paying Dŵr Cymru for the supply of non-potable water at the material time. Albion sou ght an order modifying the Bulk Supply Price. However the Tribunal concluded that it could not give a Direction in respect of the Bulk Supply Price because it has had made no finding (expressly or by necessary implication) as to whether that price was an abuse of a dominant position. The Tribunal’s power to give final Directions in accordance with paragraph 3(2)(d) of Schedule 8 of the Competition Act is limited to Directions which the Authority could have made.

As regards the margin squeeze abuse, the Tribunal ruled that setting a minimum retail margin was not an appropriate direction to bring to an end the infringement found by the Tribunal.

Finally, the Tribunal ordered that Albion’s reasonably incurred legal costs from 8 January 2007 to 30 January 2009 shall be paid by the Authority and Dŵr Cymru. In addition, the Tribunal directed the Authority and Dŵr Cymru to pay two-thirds of the costs claimed by Albion, by way of an interim payment.

This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.