R (GNER) v ORR [2006] EWHC 1942 (Admin)

High Court judgment (about 20 pages) dismissing GNER's application for a judicial review of ORR's Grand Central decision.

Mr Justice Sullivan found that the imposition of fixed track access charges on franchised operators and not on open-access passenger train operators did not amount to discrimination within the meaning of the EC railway directives, the Article 87 prohibition on State aid or the Article 82/Article 86 prohibition on discriminatory abuse. He did not endorse ORR's argument that GNER and Grand Central were in different market segments, but held that ORR was entitled to allow fixed charges to be levied (as a "mark-up", in the directive's terminology) on franchised operators only, because these fixed charges were a "wholly artificial construct" designed to recover Network Rail's residual revenue requirement rather than related to any costs attributable to each train operator, and because the wider circumstances of franchises and open access operators were sufficiently different to defeat the claim of discrimination. He also found that any alleged imperfections in recovery of relevant costs through variable usage charges could be attributed to the absence of better information to set these charges, and that ORR's decision to continue operating its charging regime despite such alleged imperfections was "not in any way unreasonable". On the question of relief, he accepted ORR's argument that, even if there had been discrimination, he would not have quashed the March 2006 decision, because GNER "could, and should have challenged the charging regime" and its potential application to Grand Central much earlier.

GNER has said that it is considering seeking permission to appeal from the Court of Appeal and/or complaining to the European Commission.

For further information or advice please contact Franck Latrémolière.

Filed under ECML, ORR, Public transport, State aid, UK courts.

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