Competition Law Case [JCRA] C1117J: Review of Article 16

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A decision made 20 March 2018:

Ministerial decision reference MD-C-2018-0055
Decision summary title Review of Article 16 Competition Law case [JCRA] C1117J
Decision summary author	Director Strategic Development	Is the decision summary public or exempt?		Public
Report title: Review of the JCRA decision that ATF fuels had abused a dominant market position. Terms of Reference.
Report author or name of person giving report	Director Strategic Development	Is the report public or exempt?		Public
Decision and reason for the decision The Assistant Chief Minister approved the terms of reference for a review of the circumstances leading up to a decision by the JCRA that ATF fuels had abused a dominant market position. The Royal Court overturned a decision of the JCRA that ATF fuels had abused a dominant market position. It is now appropriate to seek an independent evaluation of the circumstances surrounding the case including whether the JCRA has discharged its legal duties appropriately and whether there are any significant deficiencies in how the competition law has operated.
Resource implications There will be a cost associated with securing expert legal advice to conduct the review. The cost will be met from within existing budgets.
Action required The Chief Minister’s Department to ask the Law Officers to secure expert legal advice to carry out a review as set out in the Terms of Reference.
Signature			Position Senator Paul Routier M.B.E. Assistant Chief Minister

Date signed			Effective date of the decision

Competition Law Case [JCRA] C1117J: Review of Article 16

Review of the JCRA decision that ATF fuels had abused a dominant market position.

Approval of Terms of Reference.

Background

The JCRA is charged with administering and enforcing the Competition (Jersey) Law 2005 to promote competition in the supply of goods and services. In practice this means the JCRA oversees the operation of the prohibitions on abuse of a dominant position and anti-competitive arrangements and operates merger controls.

On 30 March 2016 the JCRA issued a Final Decision under the Law that ATF Overseas Holdings Limited trading as ATF Fuels (“ATF”) had abused a dominant market position as prohibited by Article 16 of the Law. The finding was the conclusion of an investigation into the supply of aviation fuel at the airport, following a complaint from a third party.

ATF appealed the decision and the case was heard by the Royal Court in October 2017. The Royal Court overturned the decision of the JCRA.

The case ran from March 2015 to January 2018 when the Judgment of the Royal Court was handed down. This covered a period approaching 3 years and involved additional government funding to the JCRA of £508,605. Costs are set to rise further as the JCRA reviewed the judgment to determine whether there were grounds for an appeal and the appellant has been awarded costs on the standard basis. The final amount is yet to be determined.

The petroleum sector is an important feature of the Jersey economy touching the lives of all islanders and businesses. This is reflected in the number of reviews conducted by the JCRA over the years into heating oil, road fuel, marine and aviation fuel and the LPG gas sector.

Fuel sector issues have been raised by States Members on a number of occasions in the States Assembly. There is a significant level of media comment about competition, pricing and operations in the market not just around the abuse of dominance case but also around aspects of the La Collette fuel farm.

The current level of speculative comment on the performance of the regulator means that it may be difficult to be confident that the competition system, including the institutions that operate it, is working in the interests of the economy and consumers.

It is therefore thought appropriate to commission an independent review covering:

the circumstances leading up to the JCRA’s decision:
whether the Regulator has discharged its legal responsibilities and duties appropriately, and
whether there have been any significant deficiencies in the operation of the competition law.

A terms of reference is attached for the review of the decision.

The case has also highlighted that it may be useful to assess the options available in Jersey to settle competition disputes. Therefore advice will also be sought on extra judicial approaches to the settlement of competition disputes, including mediation, arbitration and expert determination.

Recommendation

The Assistant Chief Minister is recommended to confirm the terms of reference by Ministerial Decision.