AUSTRALIAN COMPETITION TRIBUNAL
IN THE AUSTRALIAN COMPETITION TRIBUNAL
ACT 2 of 2018
APPLICATION BY PORT OF NEWCASTLE OPERATIONS PTY LTD UNDER SECTION 44ZP OF THE COMPETITION AND CONSUMER ACT 2010 (CTH) FOR REVIEW OF THE ARBITRATION DETERMINATION BY THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION IN RELATION TO AN ACCESS DISPUTE BETWEEN GLENCORE COAL LTD AND PORT OF NEWCASTLE OPERATIONS PTY LTD
PORT OF NEWCASTLE OPERATIONS PTY LTD (ACN 165 332 990)
ACT 3 of 2018
APPLICATION BY GLENCORE COAL PTY LTD UNDER SECTION 44ZP OF THE COMPETITION AND CONSUMER ACT 2010 (CTH) FOR REVIEW OF THE ARBITRATION DETERMINATION BY THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION IN RELATION TO AN ACCESS DISPUTE BETWEEN GLENCORE COAL LTD AND PORT OF NEWCASTLE OPERATIONS PTY LTD
GLENCORE COAL ASSETS AUSTRALIA PTY LTD (ACN 163 821 298)
DR D ABRAHAM (Member)
PROF K DAVIS (Member)
DATE OF DIRECTIONS:
THE TRIBUNAL DIRECTS THAT:
1. By 26 February 2021, Port of Newcastle Operations Pty Ltd (PNO) is to file and serve any application for the Tribunal to issue a notice pursuant to s 44ZZOAAA(5) of the Competition and Consumer Act 2010 (Cth) (CCA) together with:
(a) a copy of the proposed notice;
(b) in so far as the proposed notice is addressed to PNO or a related company, any affidavits and documents referred to in the notice that it wishes the Tribunal to have regard to pursuant to s 44ZZOAA(a)(ii) of the CCA in the review (upon remittal of the review by the Federal Court of Australia); and
(c) submissions and any evidence to be relied upon in support of the application.
2. By 12 March 2021, Glencore is to file and serve submissions and any evidence to be relied upon in opposition to PNO’s application.
3. By 19 March 2021, the Australian Competition and Consumer Commission is to file and serve any submissions to be relied upon in relation to PNO’s application.
4. The matter be listed for the hearing of PNO’s application and further case management on a date to be fixed.
REASONS FOR DIRECTIONS
1 This matter has been remitted to the Tribunal for re-determination in accordance with the conclusions of the Full Court of the Federal Court of Australia in its decision made on 24 August 2020: Glencore Coal Assets Australia Pty Ltd v Australian Competition Tribunal (2020) 382 ALR 331.
2 The parties disagree about the timing of the re-determination, in light of the application that has been filed by Port of Newcastle Operations Pty Ltd (PNO) in the High Court of Australia seeking special leave to appeal from the decision of the Full Federal Court. In short, Glencore Coal Assets Australia Pty Ltd (Glencore) seeks to press on with the hearing of the remitted review while PNO argues that the hearing should await the finalisation of its application for special leave to appeal and, if special leave is granted, the hearing of the appeal. PNO has also foreshadowed an application to seek to adduce further evidence at the hearing of the remitted review (more technically, an application for the Tribunal to exercise its powers under s 44ZZOAAA(5) of the Competition and Consumer Act 2010 (Cth) (CCA) to request the provision of further information).
3 The matter came before the Tribunal for case management on 6 October 2020 at which time procedural directions were made. At that time, it was contemplated that PNO’s special leave application might be determined by the time the matter was next listed before the Tribunal.
4 The matter returned before the Tribunal for further case management on 10 December 2020. At that date, and as at the date of these reasons, PNO’s special leave application has not been determined. The parties remained apart on the appropriate course that should be followed by the Tribunal in these circumstances and advanced arguments in favour of their preferred course. At the conclusion of the case management hearing, the Tribunal reserved its decision.
5 For the reasons explained below, the Tribunal has come to the view that the remitted review should not be listed for hearing at this time, while the decision of the Full Federal Court remains subject to an application for special leave to appeal to the High Court. Nevertheless, practical steps can be taken in the meantime to resolve any procedural or preliminary disputes relating to the hearing of the remitted review so that, once the appellate process has been completed, any necessary re-determination can be conducted promptly.
6 On 4 November 2016, Glencore notified the Australian Competition and Consumer Commission (ACCC) under s 44S of the CCA of an access dispute in relation to the declared shipping channel service provided by PNO, which activated the ACCC’s arbitration powers under Part IIIA of the CCA. In part, the dispute concerned the rates of the Navigation Service Charge and Wharfage Charge levied by PNO.
7 On 18 September 2018, the ACCC made a final determination of the dispute under s 44V of the CCA. Significantly, clause 1.2 of the ACCC determination provided that the Navigation Service Charge and Wharfage Charge, as determined by the ACCC, would be backdated so as to apply from 8 July 2016 with interest being payable on any amount overpaid to PNO by Glencore having regard to the ACCC determination.
8 On 8 October 2018, PNO filed an application for review of the ACCC's determination pursuant to s 44ZP of the CCA (ACT 2 of 2018). On 9 October 2018, Glencore also filed an application for review (ACT 3 of 2018). By virtue of s 44ZO(1) of the CCA, the determination of the ACCC did not come into effect (by reason of the application for review made to the Tribunal).
9 On 30 October 2019, the Tribunal (constituted by Middleton J, Mr R Shogren and Dr D Abraham) made a determination under s 44ZP of the CCA by which it varied the determination of the ACCC in two respects. The first concerned the vessels using the shipping channels that were within the scope of, and were able to benefit from, the determination (the “scope” issue). The second concerned the calculation of the applicable Navigation Service Charge payable by Glencore to PNO, and specifically whether “user contributions” should be taken into account in the calculation (the “user contribution” issue).
10 On 24 August 2020, the Full Federal Court set aside the determination of the Tribunal and remitted the applications to the Tribunal for re-determination according to law. As a consequence of the Full Court’s decision, there is no longer an arbitration determination in effect.
11 On 25 September 2020, PNO filed an application with the High Court of Australia seeking special leave to appeal from the whole of the decision of the Full Federal Court.
Whether the review should be conducted before the determination of the appeal
12 Glencore argues that PNO’s position on the remittal involves a procedural irregularity in that PNO has not sought a stay of the decision of the Full Federal Court but asks the Tribunal to stay its own proceeding. Glencore submits that, in the absence of any order staying the orders made by the Full Federal Court, the Tribunal is bound to give effect to the decision of the Full Court and should proceed to conduct the review by way of remittal. Glencore further submits that it will suffer prejudice by reason of delay by the Tribunal in conducting the remitted review because of uncertainty with respect to the final determination of the scope of the shipping services that will become subject to the access arrangements. Glencore argues that there may be practical difficulties in backdating the determination to apply to the broader scope of shipping services for which Glencore will contend in the remitted review.
13 The Tribunal accepts the submission of Glencore that the decision of the Full Federal Court is binding on the Tribunal. However, the Tribunal does not consider that PNO’s position on the remittal involves a procedural irregularity, or that the fact PNO did not seek a stay of the Full Court’s decision in some manner disentitles it from making case management submissions to the Tribunal. The Full Court’s decision has come into effect which means that the Tribunal’s determination has been set aside and there is currently no effective determination of the notified dispute. The dispute is now before the Tribunal. However, the proper management and conduct of proceedings before the Tribunal is a matter for the Tribunal in the discharge of its functions and powers under the CCA. In exercising those powers, the Tribunal is conscious that the review that is to be conducted under Subdivision F of Division 3 of Part IIIA of the CCA is a re-arbitration in which the Tribunal has the same powers as the ACCC, and that s 44ZF directs the ACCC to act as speedily as a proper consideration of the dispute allows. Nevertheless, the Tribunal does not consider that speed is the only factor to consider in the management of this proceeding. The Tribunal also regards as relevant the costs of the proceeding on the parties and the public (through the work of the Tribunal) and the desirability of avoiding wasted costs, as well as the potential for prejudice to be caused to a party by delay.
14 Having considered the evidence and submissions filed by the parties, the Tribunal considers that, in the circumstances of the present matter, it is appropriate for the Tribunal to await the determination of the High Court appeal process before conducting the remitted review. That is for three primary reasons. First, the Tribunal accepts the submission of PNO that the remitted review will involve complex issues of fact and economic principle and that the remitted review will involve the consideration of a large body of documentary evidence and occupy at least 5 hearing days. That will impose substantial costs on the parties and the Tribunal (and thereby, the public). Second, if the Tribunal were to conduct the review before the High Court appellate process is completed, there is a prospect that the remitted review would be nullified in whole or in part by the High Court. In a worst case scenario, if the High Court were to set aside the decision of the Full Court but determine the issues in a different way to the Tribunal's original decision, the Tribunal may be required to conduct a third review of the same issues. Such a course would impose wasted costs on the Tribunal and the parties. Third, the Tribunal considers that awaiting the conclusion of the High Court appellate process will not cause any substantive prejudice to Glencore. Both the original ACCC determination and the Tribunal's determination provided for the backdating of the relevant charges that were determined as part of the dispute. The Tribunal also accepts PNO’s submission that the monetary value in dispute between the parties is not large in comparison to Glencore's revenues from the sale of coal that is shipped from the Port of Newcastle.
15 For those reasons, the Tribunal will not list the remitted review for hearing immediately, but will nevertheless seek to progress the preparation of the proceeding for a hearing as soon as practicable after the completion of the appellate process.
PNO's application to adduce further evidence
16 Section 44ZZOAA of the CCA limits the material to which the Tribunal may have regard in conducting a review of an ACCC arbitration determination under Part IIIA of the CCA. In general terms, the Tribunal is confined to the information that the ACCC took into account in connection with the making of the arbitration determination (see ss 44ZZOAA(a)(i) and 44ZZOAAA(3)(c)). However, the Tribunal may issue a written notice to a person requesting that person to give to the Tribunal such information that the Tribunal considers reasonable and appropriate for the purposes of making its review decision (see ss 44ZZOAAA(4) – (7)). Any information given to the Tribunal pursuant to such a notice must be taken into account by the Tribunal in conducting the review (see s 44ZZOAA(a)(ii)).
17 The considerations that would ordinarily inform the exercise of the Tribunal's discretion to give a notice under s 44ZZOAAA(5) were the subject of consideration by the Tribunal in the original review. The Tribunal observed ( ACompT 1 at -):
105 As a starting proposition, where a party before the Tribunal urges it to request information that could reasonably have been made available to the ACCC before it made a final determination, it would not be reasonable for the Tribunal to request such information. This is because in order for the arbitration before the ACCC to have meaning, it is critical that the parties place before the ACCC all of the material that they consider to be relevant to the determination of the access dispute.
106 In considering making any request for information, the Tribunal should also keep firmly in mind that the CCA provides for the Tribunal to make a decision within 180 days from when the application for review is made: s 44ZZOA. Although this period can be lengthened, either by agreement of relevant persons or by the Tribunal extending the time in which it has to make a decision, it is an indication that the Tribunal should be able, and should endeavour, to make decisions within that period unless there are exceptional circumstances. In this way, the time period in which it is intended that a decision will be made (referred to as the ‘expected period’ or the ‘consideration period’) should inform whether any request for ‘new’ information is reasonable and appropriate.
107 Therefore, whether it is ‘reasonable and appropriate’ to request information will be necessarily informed by a consideration of the text and context of the ss 44ZZOAAA(4) and 44ZZOAA, including:
• that the primary material on which the review is to be based is that which was before the ACCC when it made the determination, which indicates that the review process before the ACCC is to be a meaningful one, and one in which the parties have every incentive to place the material that they consider to be relevant to the resolution of the dispute before the ACCC; and
• the limited timeframes in which the Tribunal has to make a decision, which indicates that it is not intended that there be any material broadening of the information that was before the ACCC when it made its final determination.
18 PNO has filed evidence and submissions indicating that it considers that there may be information relevant to the Tribunal's remitted review that was not before the ACCC in the original arbitration determination. Some of that material appears to be historical, while some of the material appears to be more recent and post-dates the ACCC determination.
19 At the case management hearing on 6 October 2020, the Tribunal gave directions for PNO to make any application for the issue of a notice under s 44ZZOAAA(5) of the CCA by 13 November 2020. PNO complied with that direction in relation to the “scope” issue but seeks an extension of time in relation to the “user contribution” issue. In support of the application for an extension of time, PNO has filed evidence explaining why it has taken longer to investigate the availability of potentially relevant material on that issue than PNO originally anticipated.
20 Having considered that evidence, the Tribunal is satisfied that it is reasonable to afford PNO an additional period of time in which to make an application to the Tribunal for the issue of a notice pursuant to s 44ZZOAAA(5) of the CCA. The Tribunal considers that it is reasonable to give PNO until 26 February 2021 to bring forward any such application. The Tribunal then proposes to hear any such application as a preliminary issue. The application is unlikely to cause additional delay in the hearing of the remitted review because the Tribunal has concluded that it is preferable not to conduct the remitted review until the appellate process has been concluded.
21 In so far as PNO intends to request the Tribunal to issue a notice to produce information to PNO itself, the Tribunal will also direct that any affidavits or documents that are the intended object of the notice must also be filed and served by 26 February 2021, so that they can be considered in the course of hearing the application.