Société Coopérative De Production Seafrance S.A. (Respondent/Appellant) v Competition and Markets Authority (Applicant/First Respondent) DFDS A/S (Second Respondent)
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden,Sir Colin Rimer,Lord Justice Tomlinson |
| Judgment Date | 10 July 2015 |
| Neutral Citation | [2015] EWCA Civ 768 |
| Date | 10 July 2015 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | C3/2015/0226(A) |
[2015] EWCA Civ 768
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE COMPETITION APPEAL TRIBUNAL
(MR JUSTICE ROTH)
Royal Courts of Justice
Strand
London, WC2A 2LL
Lady Justice Arden
Lord Justice Tomlinson
Sir Colin Rimer
C3/2015/0226(A)
Paul Harris QC and Ben Rayment (instructed by CMA Legal) appeared on behalf of the Applicant CMA
The Respondents SCOP and DFDA A/S did not attend and was not represented
I will ask my Lord, Sir Colin Rimer, to give the first judgment.
On 15 May 2015 this court handed down its judgment on the appeal by Société Coopérative de Production SeaFrance SA ("the SCOP") against the dismissal by the Competition Appeal Tribunal ("the CAT") by its order of 9 January 2015 of the challenge by the SCOP and Groupe Eurotunnel SA ("GET") to the determination by the Competition and Markets Authority ("the CMA") by its Report dated 27 June 2014 that a "relevant merger situation" for the purposes of the Enterprise Act 2002 had arisen as a result of the acquisition in 2012 by GET in association with the SCOP of three vessels (the Rodin, the Berlioz and the Nord Pas-de-Calais) and other assets from liquidator of the insolvent SeaFrance SA.
The effect of the CMA's determination was to reinstate the findings of its predecessor, the Competition Commission ("the Commission"), in an earlier report of 6 June 2013 in which the Commission, having also determined that a "relevant merger situation" had arisen, had proceeded to exercise its claimed jurisdiction by finding that the creation of such a situation might be expected to result in a "substantial lessening of competition" ("SLC") within the market for the supply of transport services on the "short sea", namely the Dover/Calais crossing, and that there was an anti-competitive outcome. The lawfulness of that prior determination by the Commission had also been the subject of challenge by the SCOP and GET before the CAT and the CMA's subsequent 2014 report was the fruit of a remittal to it for further consideration made to it by the CAT upon those appeals. Having made the finding in its 2014 report as to there being a "relevant merger situation", the CMA also proceeded to exercise its claimed jurisdiction by making a Remedies Order on 18 September 2014, one directed at remedying, mitigating or preventing the risk of the SLC that the Commission had earlier found.
The outcome of the appeal to this court was that by a majority, Arden LJ dissenting, the court allowed the SCOP's appeal. The court held that the CMA had been irrationally wrong to find that SeaFrance's "activities" had come under the ownership or control of GET/SCOP and that therefore it had no jurisdiction to find that a "relevant merger situation" had arisen. It followed both that the 2014 report did not reinstate the earlier findings by the Commission that a situation had arisen that might be expected to result in an SLC and that the CMA had no jurisdiction to make the Remedies Order. I add (i) that DFDS A/S had intervened in the SCOP's appeal in order to support the CMA's resistance to it, and (ii) that whilst GET had also been an unsuccessful appellant before the CAT against the CMA's 2014 determination, it had not renewed its challenge in the Court of Appeal. The court's order on the appeal, however, operated to GET's benefit.
I shall not rehearse the issues the subject of the court's decision on the appeal but shall, for present purposes, being the consideration of an interim application by the CMA, take the court's judgments as read: they are publicly available on BAILLI (see [2015] EWCA Civ 487). Following the hand-down of those judgments and the receipt by the court of written submissions from the parties, the court made an order dated 15 May 2015 of which the main substance was as follows. By paragraph 1, it allowed the SCOP's appeal. By paragraph 2, it set aside the order of the CAT in paragraph 97 of its judgment of 9 January 2015. By paragraph 3, it quashed (i) the Commission's report of 6 June 2013, (ii) the CMA's report of 27 June 2014 and (iii) the Remedies Order of 18 September 2014. By paragraph 4, it refused the applications by the CMA and DFDS for permission to appeal to the Supreme Court. By paragraph 5, it granted interim relief to the CMA, to which I shall return, but which was, in short, directed at giving limited protection to the CMA pending the disposal of its proposed application for permission to appeal to the Supreme Court. Finally, by paragraphs 6 to 13 inclusive, the court made orders in relation to the costs of the SCOP's appeals to the CAT and to this court, to which it is unnecessary to refer.
Before returning to paragraph 5 of the court's order, I shall summarise the essential effect of the Remedies Order. Article 2 prohibited GET from operating ferry services from Dover with any of the three vessels for a period of two years from (in the events that happened) 10 July 2015, which is today, and, as regards the Rodin and the Berlioz, for a period of ten years from that date. Those prohibitions are referred to in the Order as "the Prohibition Remedy". The Order provided for them to come into effect six months after the "Effective Commencement Date", being the day following the final determination by the CAT of GET's and the SCOP's challenges to the CMA's 2014 report. That six-month period therefore began to run on 10 January 2015, with the consequence that the Prohibition Remedy was destined to take effect today. In the meantime it was open to GET, under Article 3, to sell or lease the vessels to a purchaser or lessee approved by the CMA, that is to say one that was independent of GET and on terms that would not raise additional or other competition concerns. The consequence of any such sale or lease would be to modify the potential effect of the Prohibition Remedy.
The provisions of direct present relevance are in Article 5 of, and Schedule 2 to, the Remedies Order. These imposed interim measures directed at preventing the integration of the GET and MyFerryLink SAS ("MFL") businesses during a defined "Specified Period", which means, again in the events that happened, the period from 10 January 2015 to today, which is when the Article 2 Prohibition Remedy was due to take effect. The interim measures included (inter alia) a requirement for the MFL business to be carried on separately and under a separate brand identity from GET's business and the maintenance of separate sales; a bar on any further integration of the information technology systems of MFL with those of GET; the operation and updating of separate customer lists for the MFL and GET businesses; and a bar on the flow of confidential information between MFL and GET. The explanation behind these provisions was the CMA's assessment that if GET and MFL were to become integrated at a business information level, the SLC that the Commission had assessed was likely to be caused by what it had held to be a "relevant merger situation" was likely to come to pass; and, if the CMA obtains leave to appeal to the Supreme Court and succeeds in its appeal and is then able to enforce the Remedies Order in full, it asserts that any such integration at the business information level that may in the meantime by then have taken place will be impossible to undo. To that extent, it claims that the public interest in achieving the avoidance of the SLC that had been determined by the Commission's report will or may be materially affected.
Arguments to this effect were advanced to the court following the hand-down of its judgments and the court accepted that they were of sufficient force to justify the grant of limited protection for the CMA during the currency of its proposed application for permission to appeal to the Supreme Court, although the court did not assume that such protection would survive until after the disposal of that application. Whilst, therefore, the court made the quashing orders to which I have referred, including of the Remedies Order, it also imposed a limited stay of such quashing by paragraph 5 of its order, which reads as follows:
"Until and including 10 July 2015 or the determination by the Supreme Court of any application for permission (whichever first occurs), the quashing of the following provisions in Schedule 2 to the Remedies Order is stayed — namely paragraph 1, paragraph 2(a), paragraphs 2(d), 2(e), 2(f), 2(g) and paragraph 3, with Schedule 2, paragraph 2(f) to be applied as if the words 'in accordance with the requirements of Article 2' were deleted. For the avoidance of doubt, it will be for the CMA to seek from the Supreme Court, if so minded, any continued stay of the quashing of the Remedies Order pending the determination of any appeal for which permission may be given. In the event that it appears unlikely that any decision from the Supreme Court as to permission will be received before 10 July 2015, the CMA is at liberty to apply to the Court of Appeal on notice to the other parties on an oral hearing for any further interim protective relief to which it considers it ought to be entitled."
The significance of the cut-off date of 10 July for the operation of the stay was that that was the end date prescribed by the Remedies Order for the operation of the interim measures: see Article 5.1 and paragraphs 1 and 2 of Schedule 2. In the CMA's skeleton argument for this application, it is suggested that the court's choice of 10...
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