“[It] is important that parties seeking to appeal to this court should isolate within the criticised decision what is an issue of law, and what is merely a determination, by a specialist Tribunal, of a matter of fact or judgment. In order to clarify the question that this court has to decide, and to facilitate its task, it will be desirable in future if an applicant, in his Grounds or in Grounds supplemented by a short skeleton, sets out his case as follows:
“These findings do not and could not involve points of law, at least unless it were to be contended that the conclusions had been arrived at on the basis of no evidence at all: something that is not and could not possibly be said. They cannot therefore be reviewed in this court. But even if we did have authority to review such findings, as the conclusion of an expert and specialist tribunal, specifically constituted by Parliament to make judgments in an area in which
“981. For the reasons given above we have reached the following conclusions:
“For the reasons given above the Tribunal unanimously:
“The evidence taken as a whole strongly suggests to the Tribunal that the First Access Price was excessive, in relation to the economic value of the services to be supplied” (paragraph 637 of the judgment of6 October 2006 ); and
“It is implicit in the main judgment that the evidence at present before the Tribunal… shows, on the balance of probabilities, that the First Access Price bore no reasonable relation to the cost of the service to be provided, when judged by reference to the costs actually incurred by Dŵr Cymru and the price charged.” (paragraph 245 of the judgment of18 December 2006 )
“At the stage of an appeal to the Tribunal we accept that Albion bears the burden of persuading the Tribunal that it is necessary to set aside the Decision, in whole or part, on one or more of the grounds set out in Freeserve . We note, however, that in this particular case most of the relevant information is in the hands of the Director and Dŵr Cymru, and that Albion has had access only to information which is publicly available, or has been obtained by disclosure in these proceedings.
“631. The Tribunal’s examination has been made under four different heads namely: (1) certain costs drivers; (2) the LIT justification; (3) the raw water
“245. It is implicit in the main judgment that the evidence at present before the Tribunal, summarised above, shows, on the balance of probabilities, that the First Access Price bore no reasonable relation to the cost of the service to be provided, when judged by reference to the difference between the costs actually incurred by Dŵr Cymru and the price charged.”
‘For the reasons given above, the evidence before the Tribunal regarding actual costs incurred or attributable, strongly supports Albion’s contention that a calculation of the actual costs attributable to the Ashgrove system would show that both the distribution cost of 16p/m³, and the total cost of 19.2p/m³, found in the Decision on an average accounting basis, were not related to “the costs actually incurred” by Dŵr Cymru and accordingly were excessive.’”
“(1) The Tribunal may at any time, on the request of any party or its own initiative, at a case management conference, pre-hearing review or otherwise, give such directions as are provided for in paragraph (2) below or other directions as it thinks fit to secure the just, expeditious and economical conduct of the proceedings.
“(4) Tribunal rules may make provision enabling the Tribunal to refer any matter arising in any proceedings (other than proceedings under section 47A or 47B of the 1998 Act) back to the authority that made the decision to which the proceedings relate, if it appears that the matter has not been adequately investigated.”
“If the appellant challenges a decision by a regulator, and establishes, on grounds taken in the notice of appeal, that the decision was wrong, whether as a matter of procedure or because of some misdirection of law or because the CAT takes a different view of the facts on the evidence before it, the Tribunal has a choice of a number of courses open to it. It may set aside the decision and remit the case to the regulator. It may feel able to decide itself what the correct result should have been, so that no remission or reference back is necessary. It may wish to retain for itself the task of deciding the eventual outcome but require further findings from the regulator, in which case it will not remit but may refer all or part of the decision back under rule 19(2)(j), with a view to deciding the appeal with the benefit of the result of that referral.”
“276. It appears from that judgment that, if the Tribunal sets aside the decision under appeal and remits the whole matter to the regulator under paragraph 3(2), first sentence, of Schedule 8, the appeal may no longer be subsisting, and the Tribunal may have no power to give consequential directions: see paragraph 28 of Floe . It is true that Lloyd LJ said at paragraph 28 that there may be cases, on unusual facts, where the setting aside of the decision and remittal of the matter to the regulator would not dispose of the appeal entirely.
“It may wish to retain for itself the task of deciding the eventual outcome but require further findings from the regulator, in which case it will not remit but may refer all or part of the decision back under rule 19(2)(j), with a view to deciding the appeal with the benefit of the result of that referral.”
“On the basis of Albion’s estimate of distribution costs of around 2p/m³ and the range of some 1.6p/m³ to 3.2p/m³ for treatment costs, on Albion’s figures the First Access Price should have been in round figures no more than 4p/m³ to 5p/m³ . Even doubling Albion’s figures to take account of elements possibly understated or omitted would produce a price broadly in the range of 8p/m³ to 10p/m³, less than half the First Access Price of 23p/m³. The evidence taken as a whole strongly suggests to the Tribunal that the First Access Price was excessive, in relation to the economic value of the services to be supplied, applying the United Brands test, by reason of the absence of any convincing justification for the “distribution” costs included in the average accounting cost calculation”
“However, it has not been seriously disputed by the Authority and Dŵr Cymru that, if the Decision is correct, Albion’s common carriage proposal is dead. Albion is expected under the Director’s ECPR calculation to supply Shotton at a margin of 0 per cent. Whatever the debate about the size of the margin needed by Albion, it is not seriously suggested that it could survive on a zero margin, and it has only done so, so far, because of the support of Shotton Paper and the interim relief ordered by the Tribunal.”
“6.1 A margin squeeze may occur in an industry where a vertically integrated undertaking is dominant in the supply of an important input for a downstream market in which it also operates. The vertically integrated undertaking could then harm competition by setting such a low margin between its input price (e.g. wholesale price) and the price
“117. Where the operator is dominant in the product or services market, a price squeeze could constitute an abuse. A price squeeze could be demonstrated by showing that the dominant company’s own
“106. The Commission's practice in previous decisions has been to hold that there is an abuse of a dominant position where the wholesale prices that an integrated dominant undertaking charges for services provided to its competitors on an upstream market and the prices it itself charges end-users on a downstream market are in a proportion such that competition on the wholesale or retail market is restricted.
“In the present case, Albion does not, in our view, seek a subsidy, but a proper opportunity to compete on an equal footing with Dŵr Cymru’s own “retail” activities. Self-evidently, a zero or negative margin prevents that competition. Dŵr Cymru has not shown any objective justification for that margin. It has not shown that its own retail activities could make a normal profit in the downstream market at the margin in question; nor that any other competitor could do so, nor that Albion is inefficient. Dŵr Cymru has made no attempt to identify the costs properly to be allocated to the service of transportation, as distinct from the “distribution” function as a whole, which we understand to include, besides transportation, a range of other costs including notably retail costs, as well as other heads of costs discussed at paragraphs 503 to 546 of the main judgment. Moreover, Dŵr Cymru submitted inconsistent arguments on the issue of avoided costs. In its calculations Dŵr Cymru did not deduct the costs which it said towards the close of the hearing were also to be treated as avoidable, namely the costs of its retail function as a whole (e.g. paragraph 785 of the main judgment). It provided no information capable of substantiating the figure of 16p/m³ for “distribution” costs. The Director found in the Decision that 4p/m³ had been wrongly allocated to treatment costs. In all those circumstances, it is not a question of Dŵr Cymru being called upon to “subsidize” Albion. It is simply that the zero or negative margin which Dŵr Cymru imposed on Albion called for an objective justification, and Dŵr Cymru has failed to provide any such justification.”
“In those circumstances, if Albion were now to cease trading for lack of an interim solution, that, in our view, would send an appalling signal to customers, potential entrants and incumbents alike, to the effect that the 1998 Act and the Authority as a regulator were entirely ineffective. We express our regret that the Authority has seen fit to raise technical objections to the Tribunal’s efforts to maintain the status quo. We make it clear that, for its part, the Tribunal is not prepared to run the risk that Albion might not survive pending the final determination of these proceedings and/or the proposed re-determination of the Bulk Supply Price.”
“321. Paragraph 22 of Schedule 4 to theEnterprise Act 2002 provides:
‘(1) Tribunal rules may provide for the Tribunal to make an order, on an interim basis –
‘(1) This section applies if the OFT has begun an investigation under section 25 and not completed it (but only applies so long as the OFT has power under section 25 to conduct that investigation).
‘(1) If the OFT has made a decision that conduct infringes the Chapter II prohibition or that it infringes the prohibition in Article 82, it may give to such person or persons as it considers appropriate such directions as it considers appropriate to bring the infringement to an end.’
“In our judgment, on the above basis the Tribunal should, if necessary, take its own decision rather than remit if (i) it has or can obtain all the necessary material (ii) the requirements of procedural fairness are respected and (iii) the course the Tribunal proposes to take is desirable from the point of view of the need for expedition and saving costs. Such an approach in our view is compatible with the overriding objective of deciding cases justly”.
“…To remit that issue [of dominance] to be decided by the Authority would serve no useful purpose, merely adding to the delay and cost of these proceedings. We bear in mind that Albion is a small company which has already suffered very serious delays in this case. Dŵr Cymru, which is very well resourced and ably advised, has drawn no point to our attention which could, even arguably, merit further scrutiny on the issue of dominance. We do not think that Dŵr Cymru can have it both ways: having argued extensively before the Tribunal that the construction of an alternative pipeline
“As to procedural fairness, at the hearing in June 2006 the Tribunal made it clear to Dŵr Cymru that the Tribunal considered that it was in a position to decide the issue of dominance (Day 6, pp. 94 to 97), and by letter of20 June 2006 invited submissions on that issue. The response of Dŵr Cymru (and the Authority) was to raise procedural objections. The Tribunal again indicated in its judgment of6 October 2006 that it wished to consider how the issue of dominance should be handled (paragraph 984) setting out in Annex A certain matters particularly relevant to that issue. Having heard further argument, the Tribunal gave a ruling on24 October 2006 [2006] CAT 25 to the effect that it proposed to consider the issue of dominance, and offered a hearing. At Dŵr Cymru’s suggestion, the matter was dealt with in writing, by consent. Dŵr Cymru has principally argued that the issue of dominance would require further investigation, a submission which we have already rejected. Dŵr Cymru did not answer, on the substance, the submissions made by Albion.”
“The words ‘any decision the OFT could itself have made’ in paragraph 3(2)(e) of Schedule 8 seem to us to refer to the kinds of decisions the OFT can make (i.e. infringement/non infringement etc.) rather than to the procedure by which it makes them. The OFT could not, for example, apply section 66E of the WA03 because that is outside the OFT’s jurisdiction, and the Tribunal
“117. If and when a matter moves to the judicial stage before this Tribunal, what was previously an administrative procedure, in which the Director combines the rôles of ‘prosecutor’ and ‘decision maker’, becomes a judicial proceeding. There is, at that stage, no inhibition on the applicant attacking the Decision on any ground he chooses, including new evidence, whether or not that ground or evidence was put before the Director. The Tribunal, for its part, is not limited to the traditional role of judicial review but is required by paragraph 3(1) of Schedule 8 of the Act to decide the case ‘on the merits’ and may, if necessary and appropriate, ‘make any other decision which the Director could have made’: paragraph 3(2)(e). If confirming a decision, the Tribunal may nonetheless set aside a finding of fact by the Director: paragraph 3(4) of Schedule 8. Unlike the normal practice in judicial review proceedings, the Act and the Tribunal Rules envisage that the Tribunal may order the production of documents, hear witnesses and appoint experts (see Schedule 8, paragraph 9 of the Act, and Rule 17 of the Tribunal’s Rules) and may do so even if the evidence was not available to the Director when he took the decision: see Rule 20(2) of the Tribunal’s Rules.
‘It is our intention that the tribunal should be primarily concerned with the correctness or otherwise of the conclusions contained in the appealed decision and not with how the decision was reached or the reasoning expressed in it. That will apply unless defects in how the decision was reached or the reasoning make it impracticable for the tribunal fairly to determine the correctness or otherwise of the conclusions or of any directions contained in the decision. Wherever possible, we want the tribunal to decide a case on the facts before it, even where there has been a procedural error, and to avoid remitting the case to the director general. We intend to reflect that policy in the tribunal rules. This is an important aspect of our policy, and I shall explain the rationale behind our approach. The Bill provides for a full appeal on the merits of the case, which is an essential part of ensuring the fairness and transparency of the new regime. It enables undertakings to appeal the substance of the decision including in those cases where it is believed that a failure on the part of the director general to follow proper procedures has led him to reach an incorrect conclusion. The fact that the tribunal will be reconsidering the decision on the merits will enable it to remedy the consequences of any defects in the director general’s procedures.’
“the Tribunal should take a decision of infringement, after hearing the parties, only if the facts are agreed, uncontested, or plain and obvious. That was the case in Burgess and in the Tribunal’s earlier decision in IIB and ABTA v. Director General of Fair Trading[2001] CAT 3 . In such cases, the Tribunal’s task is to apply the law to the facts and there is an appeal on a point of law to the Court of Appeal. In Office of Communications v. Floe Telecom Limited[2006] EWCA Civ 768 (“ Floe ”) the Court of Appeal was considering a case where the regulator had reached a non-infringement decision. We see nothing in the judgment of the Court of Appeal in that case – considered further below – to preclude the course we propose in circumstances where the Tribunal feels able to decide for itself what the correct result should have been ( Floe , at paragraph 25).”