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Water access CAT cases

This page provides information and links related to disputes about access to facilities operated by UK water service undertakers, focusing on cases brought at the Competition Appeal Tribunal under the Competition Act 1998 or Article 82.

The only active litigation in early August 2007 was the long-running appeal by Albion Water against an Ofwat non-infringement decision relating to the Shotton Paper site (Dwr Cymru). Ofwat's decision has been quashed and an exclusionary abuse (margin squeeze) has been declared by the Tribunal, but an appeal to the Court of Appeal against these judgments is under way. Questions related to a possible exploitative abuse have been referred by the Tribunal to Ofwat for further investigation.

This page also contains links to material about previous decisions and cases and to other pages and articles. For an overview see Ofwat's report on competition complaints 2005/2006 (15 pages, PDF).

Shotton Paper site (Dwr Cymru)

These notes are broadly in chronological order. Latest: CAT judgment 7 November 2008.

The Shotton case is an appeal by Albion Water (originally supported by Aquavitae) against Ofwat's May 2004 decision (121 pages, 1.8M PDF) that Dwr Cymru's common carriage and bulk supply charges for supply to the Shotton Paper site were not abusive.

Case details can be found on the CAT website. Links are to Reckon archive pages, as it appears to be impossible to make links to case pages on that website (which remains in a sorry state after hacking attacks). The cases are:

A three-day hearing took place in the week starting Monday 9 May 2005:

On 22 December 2005 an interim judgment (125 pages, PDF) was handed down by the tribunal. This stated that further evidence was required on cost issues and on the applicability or otherwise of ECPR.

A six-day hearing took place on:

The points advanced by Albion in respect of exploitative abuse have also been used by Corus in its own litigation against Welsh Water over allegations that its charges were excessive and constituted an abuse of a dominant position.

A judgment quashing Ofwat's non-infringement decision was handed down to the parties on Friday 6 October 2006 and published on Thursday 12 October 2006.

A second judgment was issued on Monday 18 December 2006. This confirms the parts of Ofwat's decision which are quashed, declares that Welsh Water held a dominant position and committed an exclusionary margin squeeze abuse, and refers questions relating to Welsh Water's costs and possible exploitative abuse to Ofwat for further investigation. Interim measures in favour of Albion (a bulk supply) are maintained during this investigation, which is due to complete by Monday 18 June 2007.

The Tribunal awarded costs to Albion in January 2007, and refused Welsh Water's application for permission to appeal on 6 February 2007. On 26 July 2007 the Court of Appeal gave permission to appeal on the tests to be used for a margin squeeze and on the question of whether the Tribunal was in a position to find that Welsh Water had a dominant position.

Ofwat submitted its report on exploitative abuse to the Tribunal on 18 June 2007. The report appears to be confidential. Albion objected to aspects of Ofwat's analysis. A timetable (4 pages, PDF) leading to a one- or two-day trial on this issue on Thursday 14 February 2008 was set by the Tribunal following a hearing (60 pages, PDF) on Tuesday 23 October 2007.

A CAT ruling on disclosure was handed down on Thursday 17 January 2008.

A two-day hearing on Ofwat's report to the CAT on exploitative abuse took place on 14 and 15 February 2008.

Welsh Water's appeal against the Tribunal's judgments on dominance and margin squeeze failed on 22 May 2008.

A judgment on the exploitative abuse / unfair pricing issue was handed down on Friday 7 November 2008.

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Aquavitae's access price squeeze allegation (Anglian Water)

Aquavitae published a statement on 16 August 2007 stating that it had complained to the competition authorities about alleged margin squeezes by Anglian Water in its offer for wholesale access under the Water Act 2003's water supply licensing regime.

Ofwat made a determination under the Water Act 2003 in March 2008. Ofwat decided not to investigate the matter under competition law.

Aquavitae went out of business in June 2008.

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Weston Road development (Bristol Water)

This was an appeal by Independent Water Company Limited, a putative inset appointee for a new greenfield development built by George Wimpey, against Ofwat's decision not to investigate Bristol Water's alleged conduct in negotiations for a bulk supply agreement for a greenfield site, which Independent Water claims amounted to a pattern of exclusionary abuse including margin squeeze, delay and procrastination.

The summary of appeal (2 pages, PDF) was published on 25 January 2006. The Tribunal has ordered at a case management conference on Monday 20 February 2006 that the question of admissibility of the appeal should be tried as a preliminary issue.

Ofwat contends that the appeal is not admissible because the issue, in Ofwat's view, is its refusal to issue an insert appointment (on the basis of lack of financial credibility), and that this was a decision under the Water Industry Act 1991 and can only be attacked through judicial review. Independent Water's case is that Bristol Water's conduct in negotiations whilst Independent Water was seeking to satisfy Ofwat about its suitability to hold the inset appointment should have been investigated under the Competition Act 1998 or Article 82.

A one-day hearing (85 pages, PDF) on admissibility took place on 9 June 2006. The Tribunal ruled that the appeal was not admissible on 26 January 2007.

Case details and full list of documents from the CAT website:

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Bath House site (Thames Water)

Albion Water appealed against Ofwat's refusal to make a decision that Thames Water had abused a dominant position through its conduct in response to requests for access to its network (common carriage) to enable Albion Water to transfer water from a new resource to its customer sites. The dispute relates to the price level and to the treatment of top-up and spill (known as "unders and overs"), particularly the remuneration that Albion might receive for putting more water into the Thames Water system than it takes for its customers.

The main hearing took place on Monday 20 June 2005 and Tuesday 21 June 2005. The Tribunal's judgment (83 pages, PDF) was issued on Friday 31 March 2006. The Tribunal decided that Ofwat had made no appealable decision on whether Thames' first access price offer constituted a price squeeze. It also ruled that the question of whether Thames should pay Albion for a reliable supply of excess water had not been sufficiently raised in the complaint to warrant its inclusion within the scope of Ofwat's inquiry or of the appeal. It set aside Ofwat's decision that Thames' proposals for asymmetric treatment of overs and unders other than bulk supplies (e.g. seasonal variations) was not an abuse, on grounds of lack of reasoning, because Ofwat had relied on a misconception that the overs would be unpredictable, and on the alleged existence of significant "balancing and buffering costs" whereas there was no evidence of any such costs arising from the provision of access to Albion. No aspect of the case has been remitted to Ofwat as the coming into force of the Water Act 2003 has changed the rights and obligations of the parties and the issues will have to be considered afresh.

Costs were dealt with in early 2007 together with costs for the Shotton Paper site (Dwr Cymru) case.

Case details and full list of documents from the CAT website:

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Network Access Code (Severn Trent)

Aqua Resources appealed against an Ofwat decision relating to the requirements set out in Severn Trent's access code in the past, seemingly in an attempt at seeking financial compensation if it could obtain a decision that Severn Trent's conduct was an infringement. The appeal was withdrawn on 11 July 2005.

Case details and full list of documents from the CAT website:

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Aquavitae: wholesale supply of water

The CAT dismissed this appeal against Ofwat's closure of the file on Aquavitae's complaints against Northumbrian Water, Severn Trent Water, Thames Water, United Utilities and Yorkshire Water, finding that it did not have jurisdiction to overrule Ofwat's administrative allocation of its resources in the circumstances of this case.

Case details and full list of documents from the CAT website:

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Landfill leachate disposal (United Utilities)

The Ofwat decision (PDF, 80 pages) on this case, issued on 20 May 2005 finds against the complainant Quantum Waste Management Limited in a dispute about terms and charges for access to United Utilities treatment facilities for the disposal of tankered landfill leachate.

See Disposal of landfill leachate | viewpoint: Franck for a critique of the Ofwat decision.

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EuroKent site (Southern Water)

This Ofwat non-infringement decision (22 pages, PDF) in response to a complaint by Mid Kent Water was not appealed.

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Other pages and articles

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This page is managed by Reckon LLP. Users are encouraged to contribute relevant views and links. Use the "Edit this page" or "Add a comment" button above to edit the text or to add comments and notes. Advice on making contributions (including trackback) is in the Guidelines.

Last changed by Franck at 11:13 AM on Friday 7 November 2008.

Reference for this page:
Reckon Open "Water access CAT cases" 2008-11-07T11:13:12
Link within Reckon Open: [[Water access CAT cases]]