British Telecommunications Plc (Respondent) Office of Communications (Appellant) Hutchison 3G UK Ltd ("Three") (Intervener)
|England & Wales
|Court of Appeal (Civil Division)
|Lord Justice Toulson,Lord Justice Sullivan,The Chancellor of the High Court
|10 March 2011
| EWCA Civ 245
|10 March 2011
|Case No: C3/2010/2254
 EWCA Civ 245
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COMPETITION APPEAL TRIBUNAL
Marcus Smith Qc, Peter Clayton and Professor Paul Stoneman
Before: the Chancellor of the High Court
Lord Justice Toulson
Lord Justice Sullivan
Case No: C3/2010/2254
1115/3/3/10  Cat 17
Ms D Rose QC, Mr J Herberg and Mr T Jones (instructed by Ofcom) for the Appellant
Mr G Read QC, Ms M Lester, Mr R Eschwege (instructed by BT Legal) for the Respondent
Mr B Kennelly (instructed by Baker & McKenzie) for The Intervener Three
Hearing dates: 22–23 February 2011
Lord Justice Toulson:
This appeal is against a procedural decision of the Competition Appeal Tribunal ("CAT"). The CAT is due to consider an appeal brought by BT (the present respondent) from a decision of Ofcom (the present appellant), relating to a dispute between BT and various mobile network operators ("MNOs"). The dispute was referred to Ofcom under section 185 of the Communications Act 2003 ("CA 2003") by four MNOs – T-Mobile, Orange, Vodafone and O2. Ofcom made a determination under section 188 in favour of the MNOs against which BT has appealed. The MNOs are technically interveners in the appeal to the CAT. Another MNO, Three, is also an intervener because its interests are similarly affected, although it did not make a separate referral of the dispute to Ofcom.
Ofcom's complaint in this appeal is that the CAT has agreed in a preliminary ruling to allow BT to introduce evidence on the appeal which it had not presented to Ofcom. Ofcom is concerned about the effect of the ruling in the present case but it is still more concerned about the general principles involved. The parties have advanced wide ranging arguments supported by nearly 2000 pages of case law.
The questions at the heart of the appeal are whether there is a general exclusionary principle which the CAT failed to recognise and whether, in so far as it had a discretion, it exercised that discretion unlawfully. Appeals from the CAT to this court lie only on a point of law.
Mr Read QC for BT drew attention to what he said were significant ways in which the general principle advanced by Ofcom had shifted as the case has progressed. Refinement is not uncommon as a case progresses. It is, however, essential to identify with clarity the foundation and ambit of the suggested general exclusionary principle, as it is now presented.
The CAT considered that Ofcom's approach "would cause the Dispute Resolution Process, and the determination of appeals arising out of it, to be slower and more cumbersome than it otherwise would be". Among other things, it was concerned that Ofcom's approach would add a round of procedural argument. Its warning needs to be heeded. The CAT is an experienced and expert tribunal. If this court is to lay down a general principle of the kind for which Ofcom contends, it must be careful that such a ruling does not bring about the state of affairs which the CAT fears, i.e. more procedural argument about the precise scope and application of the principle identified by this court, with the potential for further appeals. This underscores the need for clarity both as to the foundation of the principle and as to its scope.
Ofcom's core argument, as put in its skeleton argument and in Ms Rose's oral submissions, is that "an appellant on an appeal against a section 188 decision should not, save in exceptional circumstances, be entitled to adduce fresh evidence before the Tribunal". It became apparent as the argument developed that two sources for the principle are relied upon. Their practical effect may be similar but they are different in nature and require separate examination.
One involves a question of statutory interpretation. It is said that on a proper interpretation of the CA 2003, the grounds of appeal are limited to showing that Ofcom erred, on the material which was before it or which it ought to have considered, on a matter of fact or law or discretion. If so, additional facts or new expert reasoning is self evidently inadmissible because it is irrelevant to the question whether Ofcom erred on the material before it. No true question of discretion arises.
The other involves the rule in . This is a common law rule, which it is submitted should be applied to an appeal from Ofcom to the CAT, because it is a rule of general application to appeals and because the reasons for it apply as much in the case of an appeal to the CAT as they do in ordinary civil litigation.
The UK electronic communications industry is highly regulated. The European regulatory framework is established by Directive 2002/21/EC ("the Framework Directive"). The UK regulatory framework is established by the CA 2003. Ofcom is the UK "national regulatory authority" for European and UK regulatory purposes.
The Framework Directive and the CA 2003 provide, among other things, for the resolution of disputes between entities involved in the industry.
Article 20 of the Framework Directive provides:
"1. In the event of a dispute arising in connection with obligations arising under this Directive or the Specific Directives between undertakings providing electronic communications networks or services in a Member State, the national regulatory authority concerned shall, at the request of either party, …issue a binding decision to resolve the dispute in the shortest possible time frame and in any case within 4 months except in exceptional circumstances. The Member State concerned shall require that all parties co-operate fully with the national regulatory authority."
Effect is given to article 20 by sections 185 to 191 of the CA 2003. Section 185(3) gives a right to bodies providing electronic communications networks or services to refer disputes with one another to Ofcom. Section 186 requires Ofcom to accept jurisdiction over such a dispute, unless it considers that some other form of dispute resolution would be appropriate. If it decides that it is appropriate to handle the dispute, section 188(5) requires Ofcom to make a determination within 4 months thereafter, except in exceptional circumstances. If it is practicable for the determination to be made before the end of the 4 month period, section 188(6) requires it to be made as soon as practicable.
Article 4 of the Framework Directive provides for a right of appeal:
"1. Member States shall ensure that effective mechanisms exist at national level under which any user or undertaking providing electronic communications networks and/or services who is affected by a decision of a national regulatory authority has the right of appeal against the decision to an appeal body that is independent of the parties involved. This body, which maybe a court, shall have the appropriate expertise available to it to carry out its functions. Member States shall ensure that the merits of the case are duly taken into account and that there is an effective appeal mechanism…. (Emphasis added).
2. Where the appeal body referred to in paragraph 1 is not judicial in character, written reasons for its decision shall always be given. Furthermore, in such a case, its decision shall be subject to review by a court or tribunal within the meaning of Article 234 of the Treaty."
The contrast between paragraph 1 and paragraph 2 is instructive. Paragraph 1 requires a right of appeal to a body which has the "appropriate expertise" to ensure that "the merits of the case are duly taken into account". If that body is not judicial, there must be a right of "review" by a court, which need not have the same expertise and whose remit will be narrower. In the UK the CAT has the dual characteristics of having the appropriate expertise to ensure that the merits of the case are fully taken into account when hearing an appeal and of being judicial in character.
Article 4 is given effect by section 192 of the CA 2003. This section, and in particular subsection (6), are of central importance in this appeal. The section provides:
"(1) This section applies to the following decisions –
(a) a decision by Ofcom under this part or any of parts 1 to 3 of the Wireless Telegraphy Act 2006 that is not a decision specified in Schedule 8;
(2) A person affected by a decision to which this section applies may appeal against it to the Tribunal.
(3) The means of making an appeal is by sending the Tribunal a notice of appeal in accordance with Tribunal rules.
(4) The notice of appeal must be sent within the period specified, in relation to the decision appealed against, in those rules.
(5) The notice of appeal must set out –
(a) the provision under which the decision appealed against was taken; and
(b) the grounds of appeal.
(6) The grounds of appeal must be set out in sufficient detail to indicate –
(a) to what extent (if any) the appellant contends that the decision appealed against was based on an error of fact or was wrong in law or both; and
(b) to what extent (if any) the appellant is appealing against the exercise of a discretion by Ofcom, by the Secretary of State or by another person."
Ms Rose submitted that section 192(6)(a) on its proper interpretation limits the role of the CAT under that paragraph to considering whether, on the material before Ofcom and/or which it ought to have considered, the decision was based on an error of fact or was wrong in law or...
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