Jersey Unreported Judgments

Appeal (Civil) - appeal against decision of the Jersey Competition and regulatory Authority of 30 March 2016.

[2018]JRC004

Royal Court

(Samedi)

8 January 2018

Before     :		Sir William Bailhache, Bailiff, and Jurats Crill and Ramsden.
Between	ATF Overseas Holdings Limited		Appellant
And	Jersey Competition and Regulatory Authority		Respondent

Advocate J. D. Kelleher for the Appellant.

Advocate N. M. Sanders for the Respondent.

judgment

the bailiff:

Introduction

1.        The Appellant appeals against a decision of the Jersey Competition and Regulatory Authority ("JCRA") dated 30th March, 2016, ("the Decision").  In the Decision the JCRA found that the Appellant had abused a dominant position in the supply of Jet A1 aviation fuel ("aviation fuel") at Jersey Airport contrary to the Competition (Jersey) Law 2005 ("the Law") by

(i)        Refusing to supply aviation fuel to Aviation Beauport Limited ("ABP") for the purposes of re-sale by ABP at Jersey Airport; and

(ii)       Charging prices to ABP that were higher than those paid by customers purchasing similar volumes and were therefore discriminatory.

2.        These two abuses found by the JCRA to have existed therefore concerned a refusal to supply and the issue of price discrimination.

3.        Article 53 of the Law provides, in so far as is material:-

"(1)     A person may appeal to the Court against -

(a)       a decision by the Authority that the person is in breach of Article 8(1), 16(1) or 20(1);

...

(3)       In determining an appeal under this Article the Court is not restricted to a consideration of questions of law or to any information that was before the Authority.

(4)       When determining an appeal under this Article the Court may -

(a)       confirm the decision of the Authority appealed against, revoke the decision or substitute for the decision any decision the Authority could have made;"

4.        A full discussion of the nature of an appeal against a decision of the Authority is to be found in JT (Jersey) v JCRA [2013] JRC 238.  That case considered the right of appeal contained in Article 12 of the Telecommunications (Jersey) Law 2002, but the conclusions of the Court in that case appear to us to be conclusions which should be read across to an appeal under Article 53 of the Law, that Article being drawn in very substantially similar terms.  In that case, Sir Michael Birt, B, said this:-

"73.    These observations [of Ereaut, Bailiff in Habin v Gambling Licensing Authority 1971 JJ 1637] are particularly apt in relation to decisions made by the JCRA as regulator of the telecommunications industry.  This is a complex and technical area.  Decisions as to, for example, the level of competition which should be introduced, and the speed at which this should occur and the nature of measures which should be introduced will bring into play many competing considerations and will call for a considerable level of expertise.  It is the JCRA which has been appointed by the States to regulate the industry, not the Court.  This is not surprising.  The JCRA consists of members who may be expected to have expertise in the area of business or competition which the Court does not have and they will also have easy access to further assistance from industry experts.  To adapt the observations of Lord Millett, it seems to us that, on an appeal of the nature which is before us now, the Court will accord a considerable measure of respect to the judgment of the JCRA.  Nevertheless, having done so, the Court will intervene if it is persuaded that the decision of the JCRA was wrong.

74.      In summary, adapting what was said in Interface to reflect our decision in this case, the Court will look at three aspects on an appeal:-

(i)        It will consider whether the decision was one which the JCRA was empowered to make i.e. was the decision ultra vires? 

(ii)       It will look at the correctness and fairness of the procedure in order to decide whether the proceedings of the JCRA were in general sufficient and satisfactory.

(iii)      It will look at the merits of the decision (as well of course as considering matters such as whether the JCRA took into account any irrelevant factors or failed to have regard to relevant factors) and decide whether the appellant has satisfied it that the decision was wrong. In reaching its conclusion, it will give due weight to the decision of the JCRA bearing in mind its expertise and experience.  

Where an appeal is allowed because of procedural errors or unfairness of sufficient gravity, the likely remedy will be that the decision is quashed and the matter remitted to the JCRA for reconsideration.  Where, on the other hand, the appeal is allowed because the Court considers the decision to be wrong, it will make such order as it thinks fit.  This may be to remit the matter to the JCRA for a new decision to be taken or it may be that the Court will, in accordance with Article 12(5)(c) make a decision itself as to the exercise of the specified regulatory function." 

5.        This approach is very similar to the approach which is described in British Sky Broadcasting Limited and others-v-Office of Communications [2012] CAT 20, a decision of the Competition Appeal Tribunal.  The Appeals Tribunal said this at paragraph 84:-

"Having regard to the parties' submissions and the authorities to which our attention was drawn, we consider that the following principles should inform our approach to disputed questions upon which Ofcom has exercised a judgment of the kind under discussion:

(a)       Since the Tribunal is exercising a jurisdiction "on the merits", its assessment is not limited to the classic heads of judicial review, and in particular it is not restricted to an investigation of whether Ofcom's determination of the particular issue was what is known as Wednesbury unreasonable or irrational or outside the range of reasonable responses. 

(b)       Rather the Tribunal is called upon to consider whether, in the light of the grounds of appeal and the evidence before it, the determination was wrong.  For this purpose it is not sufficient for the Tribunal simply to conclude that it would have reached a different decision had it been the designated decision-maker. 

(c)       In considering whether the regulator's decision on the specific issue is wrong, the Tribunal should consider the decision carefully, and attach due weight to it, and to the reasons underlying it.  This follows not least from the fact that this is an appeal from an administrative decision not a de novo rehearing of the matter, and from the fact that Parliament has chosen to place responsibility for making the decision on Ofcom. 

(d)       When considering how much weight to place upon those matters, the specific language of Section 316 to which we have referred, and the duration and intensity of the investigation carried out by Ofcom as a specialist regulator, are clearly important factors, along with the nature of the particular issue and decision, the fullness and clarity of the reasoning and the evidence given on appeal.  Whether or not it is helpful to encapsulate the appropriate approach in the proposition that Ofcom enjoys a margin of appreciation on issues which entail the exercise of its judgment, the fact is that the Tribunal should apply appropriate restraint and should not interfere with Ofcom's exercise of a judgment unless satisfied that it was wrong."

6.        This approach is also consistent with the approach of the European Court of Justice.  In Microsoft Corp-v-The Commission, a decision of the Grand Chamber on 17^th September, 2007, in case T-01/04, the court considered the extent of the review of decisions of the Commission by the community courts.  At paragraph 87 of its judgment, the court said this:-

"87.    The court observes that it follows from consistent case law that, although as a general rule the community courts undertake a comprehensive review of the question as to whether or not the conditions for the application of the competition rules are met, their review of complex economic appraisals made by the Commission is necessarily limited to checking whether the relevant rules on procedure and on stating reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of assessment or misuse of powers. ...

88.      Likewise, insofar as the Commission's decision is the result of complex technical appraisals, those appraisals are in principle subject to only limited review by the court, which means that the community courts cannot substitute their own assessment of matters of fact for the Commission's ...

89.      However while the community courts recognise that the Commission has a margin of appreciation in economic or technical matters, that does mean that they must decline to review the Commission's interpretation of economic or technical data.  The community courts must not only establish whether the evidence put forward is factually accurate, reliable and consistent but must also determine whether that evidence contains all the relevant data that must be taken into consideration in appraising a complex situation and whether it is capable of substantiating the conclusions drawn from it....".

7.        We agree and apply that approach to our consideration of the appeal in this case.  We have noted that questions over vires and the fairness of the adopted procedure have not been raised and that this is a merits based appeal.  We take the opportunity, however, of adding this.  Advocate Sanders submitted that the JCRA has been entrusted by the States with the vital role of regulating competition for the benefit of consumers.  He drew attention to the curriculum vitae of the members of the JCRA, all of which show men and women of distinction and ability.  There was left lurking the suggestion, probably implied, that the Court should do more than give "due weight" to the decision of the JCRA having regard to its expertise and experience, and rather should be very loath to interfere with it on the merits.  With respect, if that were the underlying submission, we do not think it is consistent with the authorities, nor is it consistent with the statute.  It is true that the JCRA have been entrusted by the States with the role of regulating competition; but equally the Court has been entrusted with the obligation of adjudicating upon a merits based appeal, and one must assume that the Court is considered by the States to be the appropriate body for that purpose.  For our part, we do not see such a position as inappropriate in this small jurisdiction - the Court brings, or should bring, independent rationality to the assessment of the arguments and in any event is best placed to consider issues of vires and fairness, and to the extent that the Court errs in its conclusions, there is a higher court to put us right.  We think the approach of this Court in JT (Jersey) v JCRA (supra at paragraph 4), of the Competition Appeal Tribunal in the Ofcom case and of the European Court of Justice in the Microsoft case properly reflects the balance which is to be applied in considering an appeal. 

The facts

8.        We have had put before us for the Appellant six affidavits sworn by Mr Hiren Patel, a lawyer for and now a director of the Appellant, and two affidavits sworn by Mr James Douglas Bannister, the Chief Executive at Ports of Jersey Limited which runs Jersey Airport.  On behalf of the Respondent, there have been produced three affidavits, and a corrective affidavit, from Ms Margaret Barnes, formerly of ABP, two affidavits of Mr de Breyne, of Rubis SCA ("Rubis"), and an affidavit of Ms Sarah Livestro and Mr Michael Byrne of the JCRA.  We also have expert reports, one from a Mr Ridyard for the Appellant and one from a Mr Wynne Jones for the Respondent.  Finally we have had an amount of correspondence and other material to consider.  

9.        The parties agreed that this was not a case in which live cross-examination of the deponents of affidavits should be permitted.  Accordingly, to the extent that there is conflict between what is set out in the affidavits, we have had to resolve such conflict by reference to the documents. 

10.      By a licensing agreement dated 27^th June, 2014, between the Appellant and Jersey Airport, the Appellant was engaged to supply aviation fuel at the Airport and it in fact commenced supplies on 1^st October, 2014.  Prior to that date, aviation fuel at Jersey Airport was provided by Fuel Supplies Channel Islands Limited ("Fuel Supplies"), a subsidiary of Rubis. 

11.      ABP is a private company incorporated and registered in Jersey.  It was a fixed based operator ("FBO") at Jersey Airport whose business was to charter and operate private aircraft for passengers wishing to travel to and from the Airport and, quite separately, to provide ground handling services as an FBO to private aircraft and passengers arriving at and departing from Jersey Airport.  These services included aircraft handling, ramps services, hangarage, passenger processing, parking, provision of private lounge facilities and, until October 2014, aircraft fuelling.  Prior to 1^st October, 2014, ABP had purchased aviation fuel at Jersey Airport from Fuel Supplies/Rubis for use in the aircraft that ABP chartered and operated; it also procured refuelling services from Fuel Supplies/Rubis for the private aircraft for which ABP provided ground handling services.  ABP was not, however, able to access fuel stored in the fuel tanks at the Airport and it relied upon Fuel Supplies/Rubis to deliver the aviation fuel to ABP's customers at wing-tip.  It was at wing-tip that the title to the aviation fuel in question passed from Fuel Supplies/Rubis to ABP, and then moments later, to ABP's customer when the aircraft was fuelled.  It is clear from the facts provided that although ABP was the seller of aviation fuel to its customer, it was not in fact able to deliver the fuel directly and it relied upon Fuel Supplies/Rubis to do so.  ABP's service to its customers does not appear to have been unprofitable to ABP which was able to purchase the fuel from Fuel Supplies/Rubis at a discounted price before selling it on with a mark-up, perhaps a substantial mark-up. 

12.      It is apparent from this description that private aircraft operators could either purchase fuel directly from Fuel Supplies/Rubis as the airport fuel supplier, or as part of a bundle of ground handling services from ABP.  In the latter case they would receive a single invoice for these from ABP.  It is also apparent therefore that, as we shall see when we come to look at the issues arising in this case, there are in effect two different markets which have to be considered.  The first is the market for the sale of aviation fuel; and the second is the market in ground handling services.  In this connection, as we shall see later, the argument before us was wider than is apparent from the Decision. 

13.      There has been agreement before us that, as is set out in the Decision, there are two approaches to pricing aviation fuel, both in Jersey and elsewhere.  The Posted Airfield Price ("PAP") is typically paid by customers who purchase small volumes of aviation fuel.  The other pricing standard, described as "Platts based" or "Platts plus" price refers to pricing which specifies a mark-up, usually given in pence per litre to a reference price published by Platts.  Platts is a provider of energy, petrochemicals, metals and agriculture information, and a premier source of benchmark price assessments for commodity markets, including information on European fuel products markets.  Platts reference price is a relevant wholesale market price, and is largely determined by movements in the international energy markets.  The PAP is set by the fuel provider.  Its calculation is not normally disclosed to customers, and it will be varied by the supplier from time to time.  It does not necessarily have a direct relationship to the wholesale market price or indeed to the Platts price.  Usually Platts plus is lower than the PAP, and in addition, because there is publicity around its ascertainment, the Platts based price is more transparent, more stable and provides an amount of risk mitigation allowing customers to hedge their future purchases of fuel against movement in oil prices and exchange rates.  Unsurprisingly, the larger consumers of aviation fuel are in a better position to drive a bargain with the aviation fuel supplier around a Platts based pricing system, and that is apparent from the figures which we have seen. 

14.      In order to establish itself as a viable supplier of aviation fuel, we accept the evidence that the Appellant had to start its business from scratch, including the setting up of a temporary fuel farm, a new supply route for fuel that avoided the use of La Collette terminal and the modification of ISO tanks and trailers that could operate between the United Kingdom and Jersey.  The Appellant's estimate of the set-up costs has not been challenged by the JCRA, and the costs were very substantial.  We also accept that the particular risks which the Appellant faced included the risk that it would not be able to sell sufficient volumes of aviation fuel to recover the investment costs, including depreciation charges and the risk that Rubis would be able to continue to supply aviation fuel in Guernsey even though it had ceased to supply aviation fuel at Jersey Airport.  The Court accepts that most of the larger purchasers of aviation fuel have the choice to buy their fuel elsewhere, including at airports that do not have the additional costs of importing aviation fuel by sea. 

15.      The licensing agreement which was secured on 27^th June, 2014, was not an exclusive agreement.  Indeed, the Appellant did not achieve exclusivity of supply until 2016, and to that extent was always at risk of a new entrant onto the market in the intervening period.  Given the set-up costs which the Appellant had incurred and the probability that the market for the supply of aviation fuel in Jersey could not sustain two principal aviation fuel suppliers, we accept that it was unlikely that there would be a further entrant onto the market in the intervening period - unlikely but not impossible. 

16.      It is apparent from what we have seen that discussions between the Appellant and West Atlantic Aviation ("West Atlantic") in relation to a fuel supply agreement were concluded by the end of September.  The Appellant regarded West Atlantic as entitled to an appreciable discount in relation to fuel supply because it was what the Appellant regarded as an early adopter.  We will return to this later.  Negotiations between the Appellant and ABP were not however successful.  They appear to have begun in July or early August 2014 but the first meeting apparently took place on 12^th September.  The actual content of that meeting is disputed, but we do not find that anything turns on the rival versions of the account.  If the position is, as Ms Barnes indicated it was, that it was clear at that time that ABP wanted the ability to re-sell the aviation fuel it was purchasing and the Appellant made no objection in principle at that time, subsequent email correspondence made it plain that that was not on offer.  The progress of negotiations indicated clearly that from the Appellant's perspective, there were three issues of significance:-

(i)        What were the volumes of aviation fuel to which ABP was prepared to commit as a purchaser?

(ii)       Was ABP licensed to deliver fuel at wing-tip?

(iii)      Sale to ABP for onward re-sale was not going to be on offer.

17.      In the event, the negotiations ultimately failed.  It appears from the chronology supplied by the JCRA that ABP contacted the JCRA in January 2015 to express concerns on the Appellant's conduct, and then made a formal complaint.  On 2^nd March, 2015, the JCRA opened its investigation into the supply of aviation fuel at Jersey Airport by the Appellant. 

18.      As will be apparent later in this judgment, the question as to whether ABP required a licence for the re-sale of aviation fuel at Jersey Airport is one on which we need to make a finding.  The Appellant contends that it did not reserve to itself the market for the supply of aviation fuel; on the contrary it was for Ports of Jersey Limited, the operator of the Airport to decide who was authorised to operate as a supplier of aviation fuel, and, despite discussing the need for approval with the Ports of Jersey, ABP never applied to be authorised.  The Appellant has further contentions to make on this subject, but the first point is the question as to whether any licence was necessary.  The Appellant's position was supported by the evidence of Mr Bannister, the Chief Executive of Ports of Jersey, who indicated that Ports of Jersey Limited had to be satisfied with the arrangements for the supply of aviation fuel between the appointed primary fuel supplier and any re-sellers or agents they might wish to appoint.  This was the position from May 2016 onwards.  He stated on affidavit that if the Appellant and a proposed fuel re-seller sought approval from Ports of Jersey Limited to allow the re-seller to provide re-fuelling services at the Airport, "we would review the proposed arrangements in detail, and if satisfied as to their compliance with our aims and requirements around compliance, safety and integrity of the supply chain, we would approve them and thus allow that re-seller to operate".

19.      Mr Bannister says in his affidavit that the position prior to May 2016 was the same as described for post 2016 - the drafting of the fuel operating agreement issued to prospective operators as part of the tender process in August 2015 and taking effect from May 2016, reflected Ports of Jersey Limited's view that approval was required for the re-sale of aviation fuel.  Mr Bannister's evidence, appearing in his second affidavit, was that Ports of Jersey Limited did have the legal basis for insisting on any such approval in that Ports of Jersey Limited was not only the landlord and in control of the land at the Airport from which any aviation fuel re-sale would take place, but was also the licensed aerodrome operator.  Whether to grant any permission to a seller or re-seller of aviation fuel would have required him to have regard to the UK Civil Aviation Authority (CAA) CAP 748 Aircraft Fuelling and Fuel Installation Management.  The communications between the JCRA and Ports of Jersey Limited on this subject were perhaps not as constructive as they might have been and indeed we think this might have caused a misunderstanding on the part of the JCRA as to what the Ports of Jersey Limited contentions were in relation to that company's power to license re-sellers of aviation fuel.  Nonetheless, whatever the position in the early stages, the evidence before us persuades us that whether as landlord or as the licensed operator of the Airport, Ports of Jersey Limited did in practice have an ability to require re-sellers of aviation fuel to be licensed.  That is an unsurprising conclusion in the sense that as licensed operators of the aerodrome, Ports of Jersey Limited would be expected to approve on safety grounds any arrangements for the sale or re-sale of aviation fuel on the aerodrome, and we find that as a fact. 

20.      However, that is not to say ABP would not have been approved as a re-seller of aviation fuel if the delivery arrangements had been the same as they were when that company purchased from Fuel Supplies/Rubis and property to the fuel passed at wingtip on delivery by the Appellant.  That question does not seem to have been raised; in our view, there is no obvious reason why ABP should not have been so licensed albeit that Ports of Jersey Limited might have laid down some transparency conditions on its terms of trading. 

21.      We will come later to the specific objections in relation to pricing, but we think it is also relevant at this stage to indicate that we have reviewed and indeed accepted the evidence put before us as to the different pricing structure which resulted from the Appellant taking over the primary responsibility for the sale of aviation fuel at the Airport.  We have noted that the Platts price per litre between December 2013 and September 2014 varied from a low point of 45.24 to a highpoint of 49.54 pence per litre.  The Jersey PAP for that same period when Fuel Supplies/Rubis had the licence, varied from a low of 81.5 pence per litre to a high of 87 pence per litre, giving margins of between 36 - 37 pence.  The moment the Appellant had the licence to sell aviation fuel, the margins were reduced considerably and the figures demonstrate a reduced PAP in February 2015 at 21.59 pence over Platts price, and the previous month of 29.70.  The Platts price per litre varied over this period from 27.80 to 44.26, and the Jersey PAP from 53 to 66.5.  The most stark comparison is between September 2014, when the previous operators were selling fuel at a Jersey PAP of 81.5 pence per litre against a Platts price per litre of 45.28, followed by the month of October 2014 where, under the Appellant's operation, a Jersey PAP gave a price per litre of 66.5 against a Platts price per litre of 44.26.  We will return to the figures in more detail, but the primary finding for these purposes is that, from the moment the Appellant took over the responsibility for the sale of aviation fuel, the price of that fuel dropped considerably, notwithstanding that it was the only supplier in the market. 

The investigation

22.      The JCRA opened an investigation on 2^nd March, 2015, into whether certain practices of the Appellant were anti-competitive in contravention of the Law.  It did so having received a complaint from a third party whose identity was at its request not disclosed on the basis that disclosure could further damage its commercial operations and harm its relationship with the Appellant and with Jersey Airport.  It is clear from subsequent information and evidence that the complainant was, perhaps unsurprisingly, ABP.  That ABP was the complainant is not relevant to the question as to whether the Appellant had behaved anti-competitively.  Having received the complaint and decided that there was cause to investigate, the JCRA made a formal request for information under Article 27 of the Law.  Such a notice was issued first to the Appellant and then later in January 2016 to Ports of Jersey Limited. 

23.      Following the initial investigation, the JCRA reached a draft decision, a copy of which was sent to the Appellant on 11^th September, 2015, inviting its response.  Paragraph 45 of the draft decision stated that:-

"To the extent that ATF does not agree with the JCRA's finding and conclusions, you should set out clearly any factual inaccuracy in the decision above, providing evidence as to why any findings are incorrect, and where the findings may be correct but ATF's view is that there is a justifiable reason for the behaviour which would otherwise constitute a breach of competition law, this should be clearly set out in the response."

24.      The Appellant did make a number of comments on the JCRA's draft decision in a document attached to a letter from the Appellant dated 12^th October, 2015.  It was clear that the response was in four sections - the background, to provide what was said to be relevant context, an executive summary, highlighting the reasons for rejecting all the JCRA's conclusions, detailed comments on the draft decision, and some appendices.  One of the statements made in the draft decision was as follows:-

"40. Over the relevant period, the PAP has varied from 9 PPL above the Platts based price (in October 2014) to 24 PPL above the Platts price in November 2014 to 29.6 PPL above the Platts based price (in February 2015). Thus the PAP increased significantly relative to the Platts based price over this relevant period."

25.      The Appellant's comment on the draft decision in relation to this paragraph is to be found at page 18 of its response where the Appellant said this:-

"The PAP in October 2014 was the equivalent of Platts plus 22 PPL."

Although not amplified, it is clear that the Appellant was informing the JCRA that the draft decision contained an error in this respect and that the PAP range was considerably narrower than was being suggested and accordingly did not increase over the relevant period as suggested.

26.      It is pointed out by the Appellant that in the Decision, to which we will come shortly, the same error in the JCRA's analysis appears, and indeed that the JCRA expert Mr Wynne Jones adopts the faulty analysis in his witness statement; thus the Decision and the witness statement carry less weight.

27.      The JCRA held an oral hearing on 3^rd December, 2015, which was attended by representatives of the Appellant.  Many of the points which have been made in the hearing before us were made at the JCRA's oral hearing.  It is fair to say that the Appellant took, and continues to take, significant objection to the action of the JCRA, not least because in the Appellant's view its performance has been so immeasurably better than that of its predecessor in providing a better quality of fuel at much cheaper prices, a matter to which we return later. 

The Decision

28.      The Decision was handed down on 30^th March, 2016, by order of the JCRA Board.  In it, the JCRA reached the following conclusions (in this paragraph the references to the paragraph numbers are to the paragraph numbers of the Decision):-

(i)        The relevant product market was the into-plane supply of jet A1 aviation fuel (paragraph 37).

(ii)       The relevant geographic market for the into-plane supply of aviation fuel was limited specifically to Jersey Airport (paragraph 38).  In consequence, the JCRA rejected the argument (paragraph 41) that the geographic market was wider than Jersey Airport, and in particular that an aircraft landing at or taking off from Jersey Airport has the option of refuelling at its airport of origin/destination.

(iii)      Although it did not have an exclusive licence from Ports of Jersey Limited until after the Decision, the Appellant was in fact a monopolist supplier of aviation fuel at Jersey Airport.  The JCRA accepted it was unlikely that a competitive supplier would consider entering the market for the supply of aviation fuel at Jersey Airport (paragraph 46).  Accordingly ATF was dominant in the market for into-plane supply of aviation fuel.

(iv)      No objective justification had been provided by the Appellant for its restriction on sales to third parties by ABP, nor for its discrimination in pricing (paragraph 54).  The restriction on onward sales had been a practical one in that the Appellant refused ABP's requests that the Appellant refuel ABP's customers' aircraft unless the aircraft owners had a direct contract with the Appellant.  By so refusing, the Appellant had limited ABP's activities in the fixed based operators market for ground-handling services.

(v)       Contrary to its treatment of ABP, the Appellant had permitted the Jersey Aero Club to procure fuel on behalf of third parties and also World Fuel Services, which acted as agent on behalf of clients to manage fuel services and fuel price risks, had also been able to purchase fuel for its third party clients.  This had been discriminatory.

(vi)      As a consequence (paragraph 61) the Appellant's refusal to supply had harmed the business of ABP by removing a significant part of the ground-handling services that company had previously been able to offer.  The Appellant had "harmed competition and the market by eliminating a source of potential competition in the market.  By preventing third party customers from purchasing fuel from the local FBO, [the Appellant] has reserved the market to itself.  This has harmed customers by removing their ability to choose how they purchased services and removed their ability to purchase a comprehensive bundle of ground handling services from a single supplier at Jersey Airport."

(vii)     The JCRA also concluded that there had been discriminatory pricing which showed that, compared with other purchasers of aviation fuel, ABP had suffered unfair discriminatory prices which were up to 12 pence per litre more expensive than other customers of the Appellant.  The Decision concluded that no evidence had been provided by way of objective justification for this price discrimination (paragraphs 80 - 82).

(viii)    By reason of the refusal to supply and the price discrimination, the Appellant had abused its dominant position.

29.      The notice of appeal was served on 26^th April, 2016, and the matter accordingly has come before us.

Contentions of the parties

30.      Very full skeleton arguments were filed on behalf of the Appellant and the Respondent and we have accordingly concentrated our focus on those contentions.  We commend both parties and their advisors on the quality of the skeleton arguments submitted and we also commend counsel for their helpful oral contributions.

Refusal to supply

31.      The Appellant's summary was that the JCRA was wrong to find an abuse because ABP required not only the supply of aviation fuel but also the provision of a delivery service to move the aviation fuel from storage tanks at the Airport to the aircraft in question.  In particular it was said that the JCRA was wrong to find an abuse where:-

(i)        The criteria in the leading case on refusal to supply delivery services, namely C-7/97 Oscar Bronner v Mediaprint were not met;

(ii)       The Appellant was appointed by Ports of Jersey on an interim basis to maintain continuity of supplies of aviation fuel pending a competitive tender.  In order to do that, the Appellant was forced to set up a new supply chain and it invested heavily in the construction of its network in order to maintain supplies.

(iii)      The Appellant in fact lowered prices providing significant benefits to purchasers of aviation fuel, and it incurred losses during the period covered by the Decision. 

(iv)      It was open to ABP to seek and obtain authorisation from Ports of Jersey to supply aviation fuel at Jersey Airport, although it chose not to do so.

(v)       It was not accepted industry practice for suppliers of aviation fuel to provide delivery services to re-sellers at wing-tip and at all times ABP has in fact been able to offer its ground handling customers the ability to purchase aviation fuel by arrangement via the Appellant.

32.      In the alternative it is contended that the Appellant was objectively justified in refusing to supply upon the basis that ABP required to have, but did not have, authorisation from Ports of Jersey to operate as a re-seller of aviation fuel.  It was said that it was not an abuse for a supplier to refuse to supply aviation fuel for re-sale to a supplier that is not authorised by Ports of Jersey to operate as a re-seller.

33.      On the question of price discrimination abuse, the Appellant contended that the JCRA wrongly compared the Appellant's prices to ABP with an arbitrary and incomplete set of other customers.  It was contended that on a fair comparison, there was no discrimination.  Alternatively it was said that the JCRA has wrongly fastened on a comparison with an operator of scheduled cargo flights, which was not comparable to ABP.  It was also said that contrary to the approach taken in the Decision, the price for aviation fuel does not depend simply on the total volumes purchased each year but on the nature of the deliveries - delivering large volumes at predictable times to scheduled aircraft is less costly than making larger numbers of deliveries of smaller volumes at unpredictable times because fuel staff are required and aviation fuel can be sourced at lower cost.  Finally in this connection it was contended that the Appellant charged ABP's competitors the same prices as ABP for aviation fuel and therefore ABP was not placed at a competitive disadvantage.

34.      The JCRA's case, summarised in the skeleton was as follows:-

(i)        The Appellant had a dominant position on the market as the sole aviation fuel supplier at Jersey Airport;

(ii)       As a consequence, the Appellant had a special responsibility not to erode competition any further either by exploiting its customers or by unfairly excluding its actual or potential competitors from the market.

(iii)      The Appellant had in fact refused to supply ABP with Jet A1 aviation fuel for re-sale to ABP's customers at Jersey Airport.  This was not disputed.  The consequence of that refusal was to eliminate all competition in the aviation fuel supply market at the Airport and to deprive customers of a choice between the Appellant and ABP for purchasing Jet A1 aviation fuel to meet their requirements.  The other effect was to prevent ABP from providing a one stop shop ground-handling service that it had previously been able to offer its customers which is routinely provided by fixed based operators throughout Europe.

(iv)      The JCRA finding was that the Appellant had unfairly discriminated against ABP in relation to the prices it charged ABP for fuel for ABPs own aircraft, which was also an abuse of a dominant position.  A behaviour that would normally be regarded as abusive is permissible if a business can demonstrate an objective justification for it.  No such justification existed in this case because the Appellant cannot identify any law or contractual obligation that required it to refuse to supply ABP with aviation fuel for re-sale.  As to fuel price discrimination, the JCRA contention was that the Appellant had not provided any evidence at all to prove the claimed higher costs of supplying aviation fuel to ABP.

The statutory framework

35.      The Law applies to any body created by Act of the States or Minister in so far as the States body or Minister is carrying on a business.  It therefore applies to Ports of Jersey Limited.

36.      Article 8, which prohibits hindering competition is in these terms:-

"Prohibition on hindering competition

(1)       Except as otherwise provided by this Part, an undertaking must not make an arrangement with one or more other undertakings that has the object or effect of hindering to an appreciable extent competition in the supply of goods or services within Jersey or any part of Jersey.

(2)       Paragraph (1) applies, in particular, to an arrangement if its object or effect is to -

(a)       directly or indirectly fix purchase or selling prices or any other trading conditions;

(b)       limit or control production, markets, technical development, or investment;

(c)       share markets or sources of supply;

(d)       apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e)       make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

(3)       An arrangement prohibited by paragraph (1) is in this Law referred to as an anti-competitive arrangement.

(4)       An arrangement is void to the extent that it is, or contains or is tainted by an anti-competitive arrangement.

(5)       The fact that an arrangement may have no legal effect, does not bind the parties to it or could not be enforced by action in any court or by any other means does not prevent the arrangement being prohibited by paragraph (1).

(6)       An arrangement may be prohibited by paragraph (1) although not every party to it is an undertaking so long as at least 2 are."

37.      Article 16 deals with abuse of dominant market position and is in these terms:-

"Abuse of dominant market position

(1)       Except as otherwise provided by this Part, any abuse by one or more undertakings of a dominant position in trade for any goods or services in Jersey or in any part of Jersey is prohibited.

(2)       An abuse of a dominant position may, in particular, consist in -

(a)       directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b)       limiting production, markets or technical development to the prejudice of consumers;

(c)       applying dissimilar conditions to equivalent transactions with other trading parties and thereby placing them at a competitive disadvantage;

(d)       making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations that by their nature or according to commercial usage have no connection with the subject of the contracts.

(3)       For the purpose of this Article an abuse of a dominant position may consist of a failure or refusal to do something."

38.      Article 18 contains possible exemptions by the Minister on the grounds of public policy but we are not advised of any such exemption having been granted.

39.      Article 60 of the Law concerns the use of European Union precedents and is in these terms:-

"Authority and Court to have regard to European Union precedents

The Authority and the Court shall attempt to ensure that so far as possible questions arising in relation to competition are dealt with in a manner that is consistent with the treatment of corresponding questions arising under European Union law in relation to competition within the European Union."

40.      We note that Article 16 is very similar to Article 102 of the Treaty on the Functioning of the European Union ("TFEU") (Ex Article 82 TEC), and is in these terms:-

"Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.

Such abuse may, in particular, consist in:

(a)       Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b)      Limiting production, markets or technical development to the prejudice of consumers;

(c)       Applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(d)       Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts."

41.      The principal difference between Article 16(1) of the Law and Article 102 TFEU is that Article 16 refers to trade for any goods or services in Jersey or in any part of Jersey - the focus of Article 102 of TFEU is more on ensuring no effect on trade between member states.  We were not addressed on any practical consequences of this difference for the purposes of the present case, and we mention this only because a proper construction of Article 60 of the Law requires us to consider, before looking for consistency with European Union decisions, whether such decisions have as their focus inter-state trade and the internal market across the European Union as opposed to a much smaller market such as might exist in Jersey, or in any part of Jersey.

42.      It will be seen from the summary of the Decision above that the Appellant contended that in considering the extent of the geographical market one had to have regard to the supply of aviation fuel across a number of different markets throughout Europe.  We think this was a slightly different point.  Article 16 of the Law requires us to have regard to whether there was an abuse by an undertaking in a dominant position in trade for any goods or services in Jersey.  One is therefore looking with a focus on the geographical market of Jersey, as the JCRA indeed concluded, albeit maybe for slightly different reasons.  Nonetheless, the Appellant is in our judgment correct to say that in assessing the activity within the geographical market of Jersey, it is right to have regard to the market options which those who might trade in Jersey have at their disposal.  In the context of the purchase of toothbrushes in Jersey, for example, it would not be reasonable to have regard to trade in toothbrushes in the United Kingdom or in other European Union states, notwithstanding that it would theoretically be open to a Jersey resident to purchase a toothbrush in London, Vienna or Paris - or indeed elsewhere.  On the other hand, where the trade in question is in aviation fuel, which is necessarily attached to a more mobile commodity, namely an aircraft, it does seem to us that it is appropriate to have regard, when considering the market in aviation fuel in Jersey, to consider the market options which those purchasing aviation fuel in Jersey might have.  At that point, it is worth noting that some of the scheduled airlines like British Airways or EasyJet could easily purchase their fuel elsewhere.  ABP or the Jersey Aero Club are not in that position - ABP bases its charter operations from Jersey where its aeroplanes are based and the Aero Club is mostly concerned with its members and their aircraft already based in Jersey as well.  It is unsurprising therefore that in the commercial negotiations between the Appellant and for example British Airways, the latter was in a stronger position to obtain a satisfactory (to it) price for aviation fuel than, for example, ABP.

43.      As to other relevant statutes, we have noted also the provisions of the Petroleum (Jersey) Law 1984.  By Article 2 of that law, petroleum spirit, which we understand includes aviation fuel, is not to be kept without a licence in force authorising the keeping of it in accordance with the terms of the licence.  Furthermore the States by Regulations can make provision for the conveyance of petroleum spirit by road and for protecting persons or property from danger in connection with any such conveyance.  We note that the Appellant had the appropriate licence under that legislation.

44.      We also note that under the Air Navigation (Jersey) Law 2014, the Director of Civil Aviation (whose appointment is made under Article 2 of the Civil Aviation (Jersey) Law 2008) has a duty, in granting an aerodrome certificate, to ensure that the aerodrome is safe for use by aircraft having regard in particular to the physical characteristics of the aerodrome and of its surroundings, and whether the applicant has established an effective safety management system appropriate to the size and complexity of the operation.  By Article 132, a person who has the management of any aviation fuel or installation on an aerodrome in Jersey is required to ensure that before installation from a vehicle or vessel, the fuel has been sampled and is of a grade appropriate to that installation or part of the installation as the case may be and fit for use in an aircraft.  In order to operate a business in competition with that of the Appellant, Article 132 of the Air Navigation (Jersey) Law 2014 would clearly be relevant.

45.      Finally we note that there are relevant provisions under the Air and Sea Ports (Incorporation) (Jersey) Law 2015 ("the Airport Law"), which came into force for most purposes on 8^th September, 2015, and in all respects on 1^st October, 2015.  The primary object of Ports of Jersey Limited under Article 5 of that law was to ensure the provision of safe, secure and efficient port operations for Jersey, and to act in a manner best calculated to secure sustainable growth in the economy of Jersey in the medium to long term.  By Article 7 of that law, no person is permitted to carry out port operations in Jersey unless that person is a licensee under a licence in force at the relevant time, that licence to be granted by the JCRA.  For these purposes "port operations" would include the provision of facilities and services for and in relation to commercial passenger travel and freight transport into and out of Jersey, by air or by sea.  The need for the Appellant to have obtained a licence from the JCRA for carrying out its operations was obviated by an exemption granted by the JCRA under Article 7 of the Airport Law.  We have been shown an exemption document which concludes with the statement that the JCRA gave notice that it exempted from the requirement to hold the licence all port operations other than those carried out by a principal port operator in the licenced port area which was the Airport.  The principal port operator for these purposes was Ports of Jersey Limited.  No one having complained or made representations, the JCRA initial notice came into force on 1^st November, 2015.

46.      An issue which has arisen in this case is whether there was any power in Ports of Jersey Limited to prevent a port operator from providing port operations at Jersey Airport; put another way, whether it was necessary for ABP to obtain a permit from Ports of Jersey Limited in order to re-sell aviation fuel.  We deal with that now.

47.      Were it not for the exemption issued by the JCRA as mentioned above, it is clear to us that the effect of the Airport Law would have been to require ABP (and the Appellant) to acquire a licence for the sale of aviation fuel at Jersey Airport from the JCRA.  It is equally clear that the legislation confers on the JCRA and not upon Ports of Jersey Limited the statutory power to grant licences in relation to airport operations.  In terms of strict law therefore, we do not think that Ports of Jersey Limited had a statutory power to grant a licence either to the Appellant or to ABP for the sale of aviation fuel.

48.      That however does not conclude the issue.  By Article 33 of the Airport Law, the States, by Regulations, were charged to prescribe transfer dates for the purposes of that legislation and make provision on the relevant transfer dates for the transfer of property of either the States or of the Public as specified in those Regulations to a transferee company.  Pursuant to that provision the States made the Air and Sea Ports Incorporation (Transfer)(Jersey) Regulations 2015 prescribing a transfer dated 1^st October, 2015, and prescribing Ports of Jersey Limited as the transferee company.  By Part 2 of Schedule 1 of those regulations Jersey Airport was transferred to Ports of Jersey Limited, which therefore became the owner of the land.  Given that its primary object as set out in Article 5 of the Airport Law is to provide or ensure the provision of safe, secure and efficient port operations for Jersey, and given that it is the owner of the land in question, it seems to us to follow inexorably that in practice Ports of Jersey Limited were in a position to permit or not to permit any undertaking for the sale or re-sale of aviation fuel on the land of Jersey Airport.  It is true that Article 5 envisages that Ports of Jersey Limited would operate either by itself or by another person acting as subsidiary, agent, employee or sub-contractor, and that the Appellant cannot be described as falling into any of those categories.  However, Article 5(1) is amplified by paragraph (2) which requires Ports of Jersey Limited to act in a manner best calculated to secure sustainable growth in the economy of Jersey in the medium to long-term, and the provision of aviation fuel sales at Jersey Airport must be reasonably regarded as falling within the ambit of that paragraph.  The Airport Law under discussion clearly contemplated that licensing would be effected by the JCRA, subject to exemptions, and as those exemptions have been granted, the practical consequence is that it is Ports of Jersey Limited which has the legal power and duty to be concerned with trading operations at the Airport including the operation of the sale of aviation fuel.

Discussion - refusal to supply

49.      Both parties agree that the Appellant was in a dominant position in relation to the market for the sale of aviation fuel at Jersey Airport.  The question which then arises is whether in refusing to sell aviation fuel to ABP to the extent that ABP would then be able to re-sell that fuel to its customers, the Appellant abused its dominant position contrary to Article 16 of the Law.

50.      We note that Article 16(2) provides examples of when a dominant position may be abused; it sets out some signals as to what might constitute abuse but nonetheless it is a matter of judgment for the JCRA, or, on appeal, for the Court, to determine whether what has been done actually does amount to an abuse.  The question whether behaviour is abusive or not was considered by the English Court of Appeal in National Grid Plc-v-Gas and Electricity Markets Authority and others [2010] EWCA Civ 114.  It is clear that this is a question of fact.  The Gas and Electricity Authority had found that National Grid Plc had abused its dominant position in the market in Great Britain for the provision of domestic sized gas meters and imposed a penalty of £41.6m, ordering National Grid to put an end to the infringement.  On appeal, the Competition Appeal Tribunal substantially upheld the finding of abuse of dominant position, but reduced the penalty to £30m.  National Grid appealed against the Tribunal's decision contending that the Tribunal erred in law in upholding the finding of abuse and that the penalty was manifestly excessive.  In the leading judgment, Richards LJ said this:-

"51. ... As an overarching theme, however, [Mr Turner for the National Grid] submitted that in order to determine whether conduct has, in the language of Hoffmann-La Roche para 91 "the effect of injuring the maintenance of the degree of competition still existing in the market or the growth of that competition", it is necessary to have a clear, objective and realistic benchmark to distinguish non-abusive from abusive behaviour and to enable a dominant undertaking to know on which side of the line its behaviour falls; and that the Tribunal's approach to assessing whether the early replacement charges hindered competition overlook the need for such a benchmark. 

...

54. I would reject Mr Turner's overarching submission as to the need for any finding of abuse to be based on a benchmark.  It is true that benchmarks of a kind have been applied in certain pricing contexts, such as in drawing a dividing line between competitive low pricing and abusive predatory pricing, and that according to para 21 of its guidance document the Commission's own approach to assessing anti-competitive foreclosure is usually to make a comparison within appropriate counter-factual.  There is, however, no rule requiring the use of a benchmark in every case, let alone a benchmark that will tell one precisely where the line between lawful and unlawful conduct is to be drawn.  The question whether an abuse exists is highly fact-sensitive and dependent upon an evaluation of a wide range of factors, in the light of the general principles expressed in Hoffman-La Roche and other cases.  It does not have the precision that Mr Turner claims for it."

51.      The learned judge then went on to refer to Bellamy and Child, para 10.058 which emphasised that Article 82 EC did not provide a comprehensive definition of abuse, and which acknowledged that concepts such as "unfair" and "competitive disadvantage" are unclear in their scope and highly dependent upon a factual appreciation.  As remarked by those authors, this means that the distinction between conduct on the part of a dominant firm which is permissible and conduct which is prohibited as abusive is often a difficult one, and the assessment of the actions of the dominant firm in any particular case will be a question of fact and degree.  Richards LJ noted that the text set out a number of considerations including "(v) how far the conduct in question is normal industry practice or, on the contrary, is exceptional and plainly restrictive of competition", and "(ix) whether the adverse impact of the conduct is "proportionate" to any legitimate commercial interest or public policy objective which may be identified as an "objective justification" for such conduct."

52.      It appears to us that at the heart of this appeal is whether the JCRA can properly determine that it was an abuse for the Appellant to decide how it would run its business i.e. by not delivering fuel at wing-tip for someone else.  The JCRA concluded that competition law enables it to do this because the Appellant had a dominant position in the market; and because the delivery of fuel at wing-tip is an accepted methodology for the sale of aviation fuel; and there was in practice no other way of permitting ABP to continue in the market for the sale of aviation fuel.  If the JCRA are right that this was an abuse of dominant position, then the Court needs to go on to consider whether there was any objective justification for that abuse, but the first question is whether it is an abuse at all.

53.      For the JCRA, Advocate Sanders answered the question as to whether it was proper for the JCRA to approach this as it had by submitting that because Fuel Supplies/Rubis contracted for the sale of aviation fuel in this way, all future monopoly suppliers must also do so; and he also submitted that it was in the interests of consumers that the practice continued.  In a sense, it was obvious.  There had been two suppliers of aviation fuel and now there was only one, and thus there was less competition.  He relied on the decision of the European Court of Justice at first instance in British Airways-v-Commission [17th December 2003 Case T-219/99] where the underlying facts were that British Airways had concluded agreements with IATA accredited travel agents entitling the agents to a standard commission on their sales of BA air tickets, with certain additional financial incentives.  The agents were required to give as favourable treatment to British Airways as that accorded to any other airline, particularly in relation to the display of fares, products, brochures and timetables, and the agents were provided with various performance rewards, calculated on a sliding scale based on the extent to which the travel agent in question increased the value of its sales of BA tickets.  Virgin Airways lodged a complaint with the Commission in respect of the marketing agreements, which was upheld, and British Airways appealed.  At paragraph 293/4 of the judgment, the Court said this:-

"293. Finally, BA cannot accuse the Commission of failing to demonstrate that its practices produced an exclusionary effect.  In the first place, for the purposes of establishing an infringement of Article 82 EC, it is not necessary to demonstrate that the abuse in question had a concrete effect on the markets concerned.  It is sufficient in that respect to demonstrate that the abusive conduct of the undertaking in a dominant position tends to restrict competition, or, in other words, that the conduct is capable of having, or likely to have, such an effect.

294. Moreover, it appears not only that the disputed practices were indeed likely to have a restrictive effect on the United Kingdom markets for air travel agency services and air transport, but also that such an effect has been demonstrated in a concrete way by the Commission."

54.      We take from this extract the conclusion that the regulatory authority has no burden of demonstrating that the practices in question had, on the facts, an anti-competitive effect.  It is sufficient to demonstrate that the alleged abusive conduct tended to restrict competition, or was capable of having or likely to have such an effect.  We also draw from this section the conclusion that if it is permissible for the regulatory authority to demonstrate that, by reference to the facts, the disputed practices had had an anti-competitive effect, it should in fairness also be possible for the party holding the dominant position to demonstrate that the allegedly abusive practices had not had an anti-competitive effect.  This may not be a conclusive factor by reason of the analysis in paragraph 294 of the judgment set out above, but that does not prevent it being a factor, and we have taken it into account at different points in this judgment as will be plain.  We do not think it is irrelevant as the JCRA contended at paragraph 27(b) of its response. 

55.      The Appellant's position - and we bear in mind that on an appeal of this nature it is the Appellant which carries the burden of proof - is that it had made a significant investment in order to enter the market for the sale of aviation fuel, and it was within the Appellant's discretion as to how it should carry on its business.  The Appellant's perception was that ABP had had a privileged position in its dealings with Fuel Supplies/Rubis and that in consequence ABP's customers had in fact suffered considerably in the price which they had to pay for aviation fuel, the ABP mark-up over and above the Fuel Supplies price being between 7p and 15p per litre.  The JCRA position was that the provision of fuel by FBOs to their private aviation customers is standard industry practice, a practice which benefits those customers who are able to choose, if they wish, to obtain their fuel supply from the FBO which provides their other ground-handling services.  Thus it was said that the Appellant's refusal to supply ABP for the purposes of resale was not only discriminatory but also deviated from normal commercial practice.  On the evidence before us, it was plain from Ms Barnes that there were many examples of FBOs across Europe which arranged for into-plane fuelling in the ordinary course of business (see paragraph 5 of her second affidavit).

56.      It is of interest to note the merger decision of the European Commission in BP/Statoil, case number COMP/M.7387, dated 15th December 2014 where the Commission summarised the position as follows:-

"(9)     As EU refineries produce insufficient middle distillates to meet EU demand, the demand for aviation fuel in the EU is met by refineries within EU member states and fuel imported from outside the EU.  A considerable volume of aviation fuel is therefore transported internationally (by ships) to be used at EU airports which lack immediate access to refineries or where the local refineries cannot match the local demand.

(10)     Into-plane suppliers typically purchase fuel ex refinery (or ex storage tank or ex ship at an import terminal) and transport it by pipeline or vessel to an off airfield storage terminal near the individual airport. From there, the aviation fuel is transported to an on-airfield storage site at the airport and distributed via hydrants or fuel trucks (bowsers) into the airplanes. At the airports into-plane suppliers rely on access to the distribution infrastructure (i.e. on airfield storage and hydrants) which is controlled by joint ventures in which the into-plane suppliers are shareholders.

...

(12)     As an alternative to investment in infrastructure, into-plane suppliers may supply aviation fuel without investment in the on airfield infrastructure or service companies. One example is the throughputter model, where the supplier has an agreement to use the on airfield storage capacity and into-plane supply services owned and operated by the service company at the relevant airports.  There is also the re-seller model, where the re-seller only acquires title to the aviation fuel at wing-tip once it has passed through the infrastructure at the airport, and then as the fuel is delivered to the aircraft, pursuant to the contract between the re-seller and the airline, it re-sells the fuel to the airline."

57.      Further information is provided at paragraphs (28) and (37 - 38) of the same decision:-

"(28)   According to previous Commission decisions, into-plane supply (also known as retail supply) consists of the supply of aviation fuel at individual airports under contracts between into-plane suppliers and airlines, with the fuel supplied pursuant to the arrangements with servicing companies (of which the company may or may not be a member / owner) that operate the airport fuelling infrastructure (storage, hydrant pipelines) and perform actual into-plane fuelling services with dispenser vehicles or fuelling trucks to the aircraft for a fee paid by the airlines.

(29)     The Commission has in the past considered that into-plane supply of aviation fuel constitutes a separate produce market.

...

(37) The Commission has in the past considered that the geographic scope of into-plane supply of aviation fuel is limited to each specific airport.

(38)     The determining factors in finding individual airports to constitute local markets include the following: (i) Airlines tend to select the supplier that submits the best bid, airport by airport, according to the relative advantages of the suppliers at that location; (ii) Suppliers tend to require access to into-plane infrastructure and must have access to the distribution and fuelling infrastructure specific to each airport in order to supply aviation fuel to airlines; (iii) on the demand side, if the price of aviation fuel increases to an unsatisfactory level at one airport, an airline is unable to turn to another airport in order to obtain the same fuel at a lower price, given the constraints connected with the availability of time slots."

58.      The Commission in that case considered that the geographic scope of the market for into-plane supply of aviation fuel is limited to each specific airport, and we accept that the JCRA was right to proceed on that basis in its analysis of the geographic scope of the market in question.

59.      We draw these conclusions from this decision of the Commission:-

(i)        Re-sale of aviation fuel at wing-tip is one method of into-plane supply of aviation fuel.  It is not necessarily the typical method, which appears to be the description given at paragraph (10) of the Commission decision, but it is a legitimate model (see paragraph 12 of the decision).

(ii)       In this model of re-sale at wing-tip, the re-seller will not have invested in the on airfield infrastructure or service company.  On this basis, one can consider that there are at least 2 different sorts of market in the into-plane supply of aviation fuel - one where the supplier provides the delivery service, and the other where the supplier relies on a third party to provide the delivery service.  ABP fell into the latter category when acquiring for resale aviation fuel from Fuel Supplies/Rubis, whereas the Appellant falls into the former.

60.      Advocate Kelleher referred to the case of Purple Parking Limited and another-v-Heathrow Airport Limited [2011] EWHC 987 (CH).  In this case the claimants alleged abuse of dominant position by Heathrow Airport Limited in preventing the claimants from accessing the forecourts at Terminals 1, 3 and 5 for the purpose of conducting part of their business of picking up and redelivering cars to customers who want to use one of their parking services.  The defendant Heathrow Airport Limited was a subsidiary of BAA Airports Limited, and the owner and operator of Heathrow Airport.  In that context, the defendant operated a number of car parks on the site of Heathrow Airport, some of which were large open spaces and some of which were multi-storey car parks close to the terminals.  The parking facilities offered by the defendant varied in terms of pricing and services offered, and these car parks were managed by a third party.  The claimants owned car parks and provided car parking for those wishing to fly from Heathrow, but all the claimants' car parks were offsite.  Both claimants also were involved in "meet and greet" or "valet parking" activities.  In 2010, the defendant sought to change the arrangements which had previously existed - it is unnecessary for the purposes of this judgment to set out those changes in detail, but in summary the defendant introduced a tariff charge on meet and greet operators where none had previously existed, and the reserved area in a fast track area would no longer be marked out as available for the claimants - the operators would be free to operate from anywhere within the car park.  On the other hand, the defendant's valet parking operation, carried out through a division but not a separate corporate entity, would in the longer term have the ability to operate from the reserved fast track area.  The new arrangements introduced were to affect only the off-airport "meet and greet" operators.  There were other changes which are not material for the purposes of this judgment. 

61.      Mann J made a number of comments which we have found helpful.  At paragraph 79, he said this:-

"Mr Brealey's submissions require one to treat each of those examples, and the "essential facilities" type of abuse, as being individual pigeon holes into which one must fit a case, and having thus fitted it to fulfil a list of criteria said to be applicable to that pigeon hole.  That is an erroneous approach.  The statutory examples, and those developed by subsequent case law, are ways in which the basic wrong can be committed, but at all times an eye must be kept on the basic wrong itself.  Unless the case law contains a principle which says that in factual situations of type X, condition Y must always be fulfilled even though it is not required in all other cases, then the analysis is not as rigid as Mr Brealey says it is."

62.      Having referred to the opinion of the Advocate General in Bronner [infra], Mann J continued at paragraph 85:-

"In paragraph 54 he identifies the first question that the national court had posed, namely whether a dominant supplier could commit an actionable abuse if it refuses access to its distributions system in the absence of other features which usually featured in abuse cases, such as cut-off of supplies, tying sales or discrimination (my emphasis).  In paragraph 55 he disclaimed any intention to provide a comprehensive guide to the issue, though he went on to provide some general pointers.  In none of them did he say that what was necessary for there to be an abuse was an elimination of competition, and paragraph 61 strongly suggests that he did not think it was.  In that paragraph he said:-

"It is on the other hand clear that refusal of access may in some cases entail elimination or substantial reduction of competition to the detriment of consumers in both the short and long term." (my emphasis)"

63.      Mann J noted that in Bronner it was highly relevant that the dominant enterprise was seeking to make use of its own facilities, and he dealt with the matter in more detail at paragraphs 168 to 178 of his judgment.  His introduction acknowledged the strength of the "own facilities" point:-

"168. In an earlier section of this judgment I have acknowledged that prima facie a trading entity is entitled to choose its own trading partners and that it is a strong thing to require that entity to share facilities which it has created with a trade competitor.  HAL [the defendant] relies on these points, and in particular on the latter.  It is necessary to bear these points in mind in the overall assessment of contravention of the statute.  It probably falls to be treated as part of any alleged objective justification, but for the purposes of this judgment it is convenient to deal with the point separately, while acknowledging that it has to be weighed with the other objective justifications at the end of the day. 

169. The cases that I have cited acknowledge that a trading entity may well be entitled to trade to the exclusion of competitors if it is using its own facilities, for which it paid, and the cost of which is being recouped through trading activities.  There may be very good reasons why a trade competitor is excluded from the facilities.  However, it is not automatically a good defence to say that the defendant is merely using its own paid-for facilities.  There are various cases in which a facility owner has been compelled to share with a competitor.  ..."

64.      In Purple Parking, the judge considered that less weight fell to be given to the rights of Heathrow Airport Limited because that company was not being required to share the real fruits of ownership with a competitor.  The forecourts at Heathrow were not developed so that Heathrow Airport Limited could run a meet and greet operation from them.  They were provided so that they could help in servicing the central purpose of Heathrow which is the provision of an airport so that aeroplanes can take off and land with passengers (and cargo).  He found that the forecourts were ancillary to the central purpose of the defendant company. 

65.      In our judgment that is materially different from what we face in the present case.  In this case, the Appellant has invested in equipment which allows it to store aviation fuel and deliver that fuel to its customers.  There is no point in the storage of fuel without an ability to deliver it, and no ancillary question arises.  It would, in our judgment, amount to a strong thing to require the Appellant to share that facility which it has created with a trade competitor.  In making that investment, the Appellant assumed a risk because at that time it was not guaranteed - nor is it likely ever to be indefinitely guaranteed - an exclusive licensing agreement.  That investment was not "irrelevant" as the JCRA contended in paragraph 27(a) of its response to this appeal.  This conclusion is quite independent of any conclusions around objective justification, although it is clearly connected to it. 

66.      It is clear from the European Commission decision in the merger procedure involving World Fuel Services Corporation, case M.7965 dated 28^th June, 2016, that the Commission in that case considered there were three types of suppliers providing aviation fuels at airports, namely into-plane suppliers, throughputters and re-sellers.  The Commission decision records the following:-

"4.1 Introduction

(8) There are three types of suppliers providing aviation fuels at airports, namely, into-plane suppliers, through-putters and re-sellers.

(9) Into-plane suppliers typically supply the largest quantities of aviation fuels to aviation customers and other smaller suppliers active at the airport. They usually purchase fuel ex refinery or ex import terminal. At the airports, into-plane suppliers have direct access to the distribution infrastructure themselves or through joint ventures in which they are shareholders on the basis of a concession agreement entered into with the airport operator.

(10) Through-putters supply aviation fuels to aviation customers and re-sellers. Like into-plane suppliers they usually purchase fuel ex refinery or ex import terminal. However through-putters do not control fuelling infrastructure at the airport. Instead, they have an agreement with into-plane suppliers to use their on airport fuel storage facility and into-plane supply services.

(11) Re-sellers supply aviation fuels to various customers at the airport.  They usually acquire fuel 'at wing-tip', ie once it has passed through the infrastructure of the airport and is readily available to be supplied to the customers. Subsequently as the fuel is delivered to the aircraft under a contract between the re-seller and the end customer, the re-seller re-sells the fuel to the end customer.  Re-sellers have no physical role in the delivery of the aviation fuel at the airport, which is undertaken by a throughputter or into-plane supplier on their behalf.

(12) Customers purchasing aviation fuels at the Relevant Airports can also be broken down into different categories:

(a) Scheduled aviation customers are airlines operating scheduled air services and scheduled air transport operations. Large airlines passenger services and most air freight services are included in this category; and

(b) General aviation customers operate mainly non-scheduled air transport. They include private and corporate aircraft, flight schools, air ambulances and aerial fire-fighters.

...

4.2 Product market definition

...

(20) Re-sellers do not own or operate any infrastructure at the airport and only acquire ownership of the fuel at wing-tip. They operate under an agreement with the into-plane supplier according to which into-plane suppliers deliver the fuel to re-sellers' customers on their behalf. As such, and because they are not directly present they do not need to be authorised by the airport operator."

67.      We take the opportunity of saying immediately that paragraph 4.2(20) set out above is a statement of the Commission's assessment following its market investigation where the relevant market concerned a number of airports other than Jersey Airport.  It is not therefore a statement of fact relevant to Jersey that re-sellers do not need to be authorised by the airport operator, and our finding in the present case is that it does not represent the position in Jersey.

68.      We also have reached the conclusion that re-sellers who sell at wing-tip under an agreement with the into-plane supplier according to which the into-plane supplier delivers the fuel to the re-seller's customers on their behalf is one of at least three legitimate ways of engaging in the market for the sale of aviation fuel.  It follows that a decision by the Appellant to engage in the sale of aviation fuel by refusing to sell to re-sellers and be their into-plane supplier cannot be said to be contrary to industry practice, by contrast with the position described at para 25 of the decision of the Commission in British Midland-v-Aer Lingus (92/213/EEC).  Advocate Kelleher submitted that from his client's perspective, safety is an issue in respect of wingtip delivery.  He gave the example of a customer informing ABP of a particular issue or problem in relation to the fuelling tank of a particular aircraft, but ABP failed to pass on this information to the Appellant, which proceeded to make a delivery and unfortunately an explosion followed.  Advocate Kelleher questioned who would be liable where the Appellant would be delivering the fuel but unaware of the problem, and he canvassed the possibility that ABP might either have had no, or inadequate, insurance.  At all events, the terms of trading would have to be amended to ensure that the Appellant was comfortable with the safety of its operation.  It appears to us that these are not unreasonable features to raise, and, in any particular case, it might lead a supplier of aviation fuel to consider that it would not supply to a reseller, and would make its own into-plane deliveries with a direct arrangement with the aircraft owner or charterer.  In his expert evidence, Mr Derek Ridyard of RRB Economics concluded that there was no evidence that ABP had suffered any competitive harm as a result of the Appellant's conduct and that there was no sufficient evidence that ABP had suffered commercial harm either.  We accept that conclusion for the reasons he gives.

69.      A further question which is prompted is whether in relation to the sale of aviation fuel at Jersey Airport, a condition of trading imposed by the Appellant in its sale of aviation fuel to ABP that ABP does not re-sell that fuel to its customers amounts to an abuse.  The arguments in favour are really twofold:-

(i)        By its very nature, such a condition of trading reduces competition in the sale of aviation fuel because while potential customers would have two sources of aviation fuel if ABP were in the market, they have only one whilst this condition of trading imposed by the Appellant applies.

(ii)       The effect of such a condition - and this second argument was one upon which the JCRA placed a good deal of emphasis in oral submission before us - was to remove choice not only in the aviation fuel market but also in the downstream market of ground-handling services offered by FBOs.  Whereas previously customers of ABP had a "one stop shop" for all ground-handling services including the supply of aviation fuel, now they did not.

70.      These arguments need to be taken separately.

71.      As to the reduction of competition in the sale of aviation fuel market, we accept that prima facie the effect is to reduce competition.  We do not however accept that this is theoretically an inevitable abuse, and on the particular facts of this case, we think it is proved that it is not.  In theory, the argument that it reduces competition depends upon the proposition that the price of aviation fuel offered to ABP would necessarily be lower than the price offered to any of ABP's customers, and the extent of the competition would be in that area of price differential, in that ABP could sell to its customers at a cheaper price than that at which they could acquire the same fuel from the Appellant.  It is a relatively small window of competition because one could assume that ABP would not be purchasing fuel for sale at a loss.  On the other hand, if the Appellant were in fact selling aviation fuel to ABP at the same price as it offered aviation fuel to ABP's customers, competition would not in fact be reduced.  The evidence adduced demonstrates that there is no inevitable abuse by the theoretical reduction of competition.

72.      Attached to the JCRA's draft decision dated 11^th September, 2015, is Appendix 1 which sets out details of the sale of jet fuels by the Appellant to the end of August 2015.  The Appendix sets out all the purchasers of aviation fuel from the Appellant.  All but six out of 51 purchasers acquired that fuel at PAP, and as will be seen from the analysis in paragraphs 128 to 140 below, there was in our view a sound basis for the different pricing structure which the Appellant agreed with those purchasers.  What is of interest however in that connection is that the effective average price per litre in the case of all except British Airways, Blue Island and West Atlantic was not very different from the PAP price charged to ABP.  A review of Appendix 1 to the draft decision therefore shows that any argument that the mere fact of a reduction of competition from two sellers of aviation fuel to one would have an impact in practice upon the cost of aviation fuel fails.  Furthermore, even in theory, that reduction in competition would have had no impact because none of the six customers of the Appellant who had anything other than the PAP price were customers of ABP.  Accordingly the sale to ABP at PAP and the sale to those customers at PAP would have left no margin for a competitive onward sale by ABP.

73.      The theoretical argument concerning the loss of competition in the aviation fuel market depends upon the assumption that ABP could have acquired aviation fuel from the Appellant at a cheaper price than the Appellant was prepared to provide it to the general market and there is no evidence that that is so - indeed quite the contrary.  As the assumption is false, the theoretical argument about competition demonstrably fails.  (Whether the Appellant should have offered ABP aviation fuel at a lower price is a question which is addressed later in this judgment).  But we should not leave the point without noting that in practice, the experience is that as the sole supplier, the Appellant's entry into the market resulted in a significant drop in the price of aviation fuel in the relevant period.  Indeed, in its guidance on the enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, the Commission sets out at paragraphs 86 and 87 that in examining the likely impact of a refusal to supply on consumer welfare, the Commission will examine whether in fact, for consumers, the likely negative consequences of the refusal to supply in the relevant market outweigh over time the negative consequences of imposing an obligation to supply.  This would seem to indicate that it is not inappropriate to look at the actual position as a result of the conduct which is said to be abusive, and we take that factor into account in this case, both in the context of the allegation of abuse by refusing to supply and the allegation of abuse in terms of price. 

74.      We think it is helpful to note the commentary of Robert O'Donoghue and Jorge Padilla in their second edition of the Law and Economics of Article 102 TFEU [2013] where at pages 585-586 they say this:-

"Essential facility principles generally inapplicable.  The previous sections concern the duty of a dominant firm controlling an essential upstream input to deal with undertakings that transform the input into a final product sold on a downstream market.  Different principles apply where the refusal to deal does not concern an upstream input that is transformed by rivals or customers, but where the product in question is used only for distribution or re-sale.  The essential facilities analogue outlined in the preceding sections does not generally apply in the case of refusals to deal arising at the level of distribution or re-sale.  This is because the essential facility principles only apply where there is scope for value added competition, which is usually only possible in the case of inputs used for transformation into a final product.  In the case of physical property, the requesting party uses the essential input to offer a final product or service downstream.  In the case of IP, the input is essential to offer a new kind of product.  The essential facility principle therefore assumes that firms can increase competition by adding value to the input or by offering differentiated products. 

The same rationale does not apply in the context of a distribution or resale, since downstream trading parties are merely reselling the dominant firm's product.  There is no scope for meaningful competition between a dominant supplier and its distributors/retailers where the latter merely engage in resale or distribution.  If companies, all of which are using the same facility, can do little more than sell the result to consumers with substantially the same format and price (which will be governed by the access charges that competitors pay to the owner of the facility).  Put differently, if there is no meaningful competition worth protecting between a dominant firm and its distributions and/or resellers, there is no harm under competition law resulting from a refusal to deal."

75.      We think that applies in this case.  There could be no meaningful competition between the Appellant and ABP in the market for the sale of aviation fuel.

76.      The second argument run was that there was an impact on the downstream market because consumers, namely the customers of ABP, once had two potential sources for the supply of aviation fuel and now only had one, and secondly because whereas previously they had a "one stop shop", now they had to have ground-handling services supplied by ABP, excluding the sale of fuel, and deal with the Appellant in relation to the sale of fuel.

77.      As to the second of those arguments, it seems to us that at worst, for such customers, this was one extra phone call; but in fact it need not have been as bad as that.  There is no reason why ABP could not have acted as agent for their client in acquiring the fuel, just as it turns out Gama Aviation, ABP's successor in the fixed base operation for providing ground-handling services does at present.  In either case, the contracting party as seller was the Appellant, and it was therefore the Appellant which would fix the price of sale, generally PAP.  We also take into account that the fact that ABP could have acted as agent for its customer in the purchase of fuel demonstrates that there was no real impact on the downstream market in any event.  There was a methodology for ABP to provide to its customers a re-fuelling service - all it could not do was to make profit for itself by the acquisition of the aviation fuel from the Appellant at one price, and the sale by it of that fuel to its customer at a higher price.

78.      One further issue arises out of the asserted interference with the operation of the downstream market, which concerns the question whether, even if there were an abusive practice adopted by the party with the dominant position in the aviation fuel sale market, one can take into account any competitive disadvantage in the downstream market.  On this point, the European Union authorities are not clear although the preponderance of those authorities seems to suggest that the effect on the downstream market is only something to be taken into account where the dominant player in the upstream market is itself a player in the downstream market - in other words, if the dominant player in the upstream market imposes a condition of sale in its dealings with another party which improves the dominant player's position in the downstream market where it is competing with that other party, that is an abuse which falls to be taken into account.  The only case which we were asked to consider which suggests that the effect on the downstream market is to be taken into account even when the dominant player in the upstream market is not a player at all in the downstream market is the relatively recent English case of Arriva The Shires Limited v London Luton Airport Operations Limited [2014] EWHC 64 (Ch), a decision of Mrs Justice Rose at first instance.  That case concerned a well-known bus and coach operator (the claimants) and the operators of Luton Airport (the defendant) where the claimants asserted that the defendants held a dominant position in the market for the grant of rights to use the airport land and infrastructure to operate bus services from the airport, and that these had been abused by the grant of exclusivity to a new operator in the market, National Express.  The defendants claimed that the tender process was entirely fair and that National Express won it because their bid was better than the proposals of the claimants.

79.      At paragraphs 99 - 101, Mrs Justice Rose considered whether the fact that the defendants were not coach operators themselves (and were therefore not in competition with either of the coach operators making the tenders) was relevant to the issue of whether there had been any abusive conduct on their behalf which affected the downstream market distorting competition amongst competitors in that market.  She rejected the view, as a matter of law, that distorting competition amongst competitors on the downstream market would be an abuse only if it generated an economic gain on the part of the dominant undertaking, although she accepted that the absence of any commercial gain on the part of the dominant undertaking might well be highly relevant in a particular case, for example on the issue of objective justification.  In particular she rejected the contention that the economic or commercial interest on the part of the dominant undertaking must derive from it being active itself on the downstream market, for which she could see no legal or economic justification. 

80.      However, when one looks at the facts of that case, one can well see why the learned judge reached that conclusion.  The airport operators were paid a fee based on a percentage of the revenue earned by the undertaking to which they granted exclusive rights, and a substantial minimum guaranteed sum, the setting for which was related to the expected revenue to be generated from the concessionaire.  Although they were not themselves competitors in that market, they shared in the revenue generated within it, indeed without bearing any of the risks that would be associated with setting up their own rival service.  That is a wholly different factual situation from the one which applies here where the Appellants gained no benefit whatever from the revenue which would be earned by ABP from its ground-handling operations, and indeed had only the risk associated with the delivery of fuel at wing-tip without any of the profit which ABP sought to make from it.  It does not seem to us that we need to draw any conclusions as to whether as a matter of law the dominant player in the upstream market can create an abuse through his conduct having an effect on a downstream market in which he does not participate, although, other than in terms of price discrimination, we would have to express some reservations about such a proposition, because taking this case as an example, there was no economic benefit which the Appellant could possibly have obtained from affecting a downstream market in which they had no interest.  It seems to us to be entirely within the ambit of the competition law that if a dominant undertaking does not abuse its position in the market in which it is trading, the judgment call is likely to go in favour of such an undertaking where the only impact is in a market in which it is not operating.  That is particularly so where the dominant undertaking in the upstream market must surely be interested in so arranging its business in accordance with acceptable rules within that upstream market to its best advantage.

81.      In this case, Advocate Kelleher made what we regard as a legitimate point that if the Appellant had been required to operate as ABP had operated with Fuel Supplies/Rubis, risks associated with the delivery of aviation fuel at wing-tip would rest with the Appellant although knowledge of the extent of those risks might well rest with ABP.  Thus, for example, in an arrangement whereby ABP were re-selling fuel to one of its customers, which advised ABP of some difficulty with the fuel cap knowledge of which was not passed on to the Appellant, the risk on delivery at wing-tip which the Appellant carried would be adversely affected by a factor outside its knowledge or control.  It is no answer to this to say that the Appellant might had had a claim against ABP - so it might, but the management of risk was outside its control and now lay in an option for litigation.  In other words, the Appellant was exchanging control over its own destiny for the right to claim against another person, and that seems to us to be a commercial risk which it was entitled to take steps to avoid if it thought appropriate to do so.

82.      There is a further reason why it seems to us that on the facts in this case any effect of the Appellant's conduct on the downstream market ought not to be taken into account.  This involves a review of that downstream market.

83.      ABP offered ground-handling services to private aircraft and passengers arriving at and departing from Jersey Airport.  It is the only FBO at Jersey Airport to offer this service.  It has a monopoly in that market.  In our view, it is not appropriate to require ATF to continue the trade practices of Fuel Supplies/Rubis which, although probably not intended in this way, had the effect of consolidating ABP's monopoly to the prejudice of potential competition in the downstream market of ground-handling for private aircraft at Jersey Airport.  This is a factor which does not seem to have been taken into account by the JCRA, and it appears to us to be one which militates against a finding that the Appellant has abused its dominant position in the upstream market.

84.      In our judgment the balance as to whether a refusal to sell to ABP for re-sale purposes was an abuse or not, clearly comes down firmly in favour of the Appellant.  We do not think it was an abuse because:-

(i)        There was in fact no price penalty for the customers of ABP;

(ii)       The Appellant was entitled so to arrange its business in a way that kept its own risks under its own control.

(iii)      The fact that Fuel Supplies/Rubis had operated in a different way provided no justification for requiring the Appellant to operate in the same way.  ABP were not customers of the Appellant, which was itself a new entrant on to the market.  If the proposed terms of trading of the Appellant had been something out of the ordinary, one could see that possibly the arguments over an asserted abuse of dominant position might have been stronger.  However, they were not.  The Appellant's basis for trading was one of several typical bases for trading and, for our part, we can see no justification for insisting that simply because a previous operator had acted in a particular way, a new entrant onto the market must act in the same way.  That does not seem to us to be one of the purposes of competition law, and indeed seems to us to be intrinsically inimical to competition - on the assumption, in general terms, that more than one operator on the market was a possibility, the fact that there were different methodologies for operating in that market would seem to increase competition, and any arrangement which required the same basis for operation would tend to be anti-competitive.  We accept that point has less force where, as here, it was probably impractical to contemplate another operator in the market but that does not entirely detract from the general proposition that it is anti-competitive to require an undertaking to trade in the same way as its predecessors.  That is a barrier to innovation and improvement.

85.      Accordingly we find that the Appellant has satisfied us that it did not abuse its dominant position by refusing to sell aviation fuel to ABP with a condition against re-sale.  For the purposes of Article 16 of the Law, we do not think the Appellant's conduct was unfair.

86.      We now go on to consider whether, if we are wrong in that first conclusion and the Appellant's conduct was prima facie unfair, there was any objective justification for the Appellant to proceed in that way.

87.      The Appellant contends that even if it has abused its dominant position in the market by refusing to supply to ABP for resale, it was objectively justified in taking that approach.  The basis for that submission is that the Appellant had made a considerable investment in setting up arrangements which would enable it to supply aviation fuel, and that it should not be required to share with ABP the fruits of that investment.  That argument really comes in two parts.  The first part is that there is an objective justification in permitting an investor to have the benefit of its investment, and the second, which is linked, is that it is anti-competitive to reduce the incentives for others to invest in the same market.

88.      We can deal with that second objection reasonably swiftly.  The JCRA noted at paragraph 46 of the Decision that Jersey Airport agreed that the market for the supply of aviation fuel at Jersey Airport is not sufficiently big to permit two primary operators in that market.  As the JCRA accepted, it is highly unlikely therefore that any other potential competitor would make the very substantial investment which the Appellant has made to enable that competitor to enter the relevant market.  Accordingly, we do not think that the objection that, by insisting that aviation fuel be sold to ABP for potential resale the JCRA had created a disincentive to ABP to invest itself in the relevant infrastructure, holds any water and we reject that ground of criticism of the JCRA's decision.

89.      The other objection however needs more attention.  It is essentially based upon the decision of the Sixth Chamber of the European Court of Justice in Oscar Bronner GmbH and Co KG v Mediaprint Zeitungs-und Zeitschfriftenvelag GmbH and Co KG and others (Case C7/97) on 26^th November, 1998.  That case concerned a claim that there was abuse of dominant position where a press undertaking, which held a very large share of the daily newspaper market in Austria and operated the only nationwide newspaper home delivery scheme in that country, refused to allow the publisher of a rival newspaper, which by reason of its small circulation was unable either alone or in cooperation with other publishers to set up and operate its own home delivery scheme in economically reasonable conditions, to have access to its delivery scheme for appropriate remuneration.  The Court found that it did not constitute the abuse of a dominant position within the meaning of Article 86 TEC.

90.      The Advocate General's opinion contained these helpful comments:-

"56. First, it is apparent that the right to choose one's trading partners and freely to dispose of one's property are generally recognised principles in the laws of the Member States, in some cases with constitutional status. Incursions on those rights require careful justification. 

57. Secondly the justification in terms of competition policy for interfering with a dominant undertaking's freedom to contract often requires a careful balancing of conflicting considerations.  In the long term, it is generally pro-competitive and in the interest of consumers to allow a company to retain for its own use facilities which it has developed for the purpose of its business. For example, if access to a production, purchasing or distribution facility were allowed too easily there would be no incentive for a competitor to develop competing facilities.  Thus while competition was increased in the short term it would be reduced in the long term.  Moreover, the incentive for a dominant undertaking to invest in efficient facilities would be reduced if its competitors were, upon request, able to share the benefit. Thus the mere fact that by retaining a facility for its own use a dominant undertaking retains an advantage over a competitor cannot justify requiring access to it."

91.      Pausing there, this argument set out at paragraph 57 of the Advocate General's opinion would support in principle the second objection which the Appellant has put forward, and which we have rejected above.  It seems to us that while in theory the Advocate General is correct as to the long term benefits for competition in allowing a company to retain for its own use facilities which it has developed for the purpose of its business, that does not have the same force where there is only room in the market for one operator in any event. 

92.      The Advocate General continues:-

"58. Thirdly, in assessing this issue it is important not to lose sight of the fact that the primary purpose of Article 86 is to prevent distortion of competition - and in particular to safeguard the interests of consumers - rather than to protect the position of particular competitors. It may therefore, for example, be unsatisfactory, in a case in which a competitor demands access to a raw material in order to be able to compete with the dominant undertaking on a downstream market in a final product, to focus solely on the latter's market power on the upstream market and conclude that its conduct in reserving to itself the downstream market is always automatically an abuse. Such conduct will not have an adverse impact on consumers unless the dominant undertaking's final product is sufficiently insulated from competition to give it market power.

...

61. It is on the other hand clear that refusal of access may in some cases entail elimination or substantial reduction of competition to the detriment of consumers in both the short and the long term. That will be so where access to a facility is a precondition for competition on a related market for goods or services for which there is a limited degree of interchangeability. 

62. In assessing such conflicting interests particular care is required where the goods or services or facilities to which access is demanded represent the fruit of substantial investment. ...

...

64. While generally the exercise of intellectual property rights will restrict competition for a limited period only, a dominant undertaking's monopoly over a product, service or facility may in certain cases lead to permanent exclusion of competition on a related market.  In such cases competition can be achieved only by requiring a dominant undertaking to supply the product or service or allow access to the facility.  If it is so required the undertaking must however in my view be fully compensated by allowing it to allocate an appropriate proportion of its investment costs to the supply and to make an appropriate return on its investment having regard to the level of risk involved. I leave open the question whether it might in some cases be appropriate to allow the undertaking to retain its monopoly for a limited period.

65. It seems to me that intervention of that kind, whether understood as an application of the essential facilities doctrine or, more traditionally, as a response to a refusal to supply goods or services, can be justified in terms of competition policy only in cases in which the dominant undertaking has a genuine stranglehold on the related market.  That might be the case for example where duplication of the facility is impossible or extremely difficult owing to physical, geographical or legal constraints or is highly undesirable for reasons of public policy.  It is not sufficient that the undertaking's control over a facility should give it a competitive advantage."

93.      It seems to us that this analysis is helpful albeit the Advocate General is considering in part the effect on the downstream market in which the dominant player in the upstream market is also operating.

94.      The Advocate General's comments are picked up in the decision of the Court.  The European Court of Justice posed the first question which was whether the refusal of a press undertaking which holds a very large share of the daily newspaper market in a member state and operated the only national newspaper home delivery scheme in that state to allow the publisher of a rival newspaper which by reason of its small circulation was unable either alone or in cooperation with other publishers to set up and operate its own home delivery scheme in economically reasonable conditions to have access to the press undertakings scheme for appropriate remuneration constituted an abuse.  The Court recognised Mediaprint's objection that undertakings in a dominant position were entitled to the freedom to arrange their own affairs in that they are normally entitled to decide freely to whom they wish to offer their services and in particular to whom they wished to allow access to their own facility.  Mediaprint relied on McGill (joined cases see 241 and 242/91P, Art and ITP v EC Commission [1995] ECR 1-743, a case which concerned the question whether broadcasters had abused their dominant position by relying on national copyright in their programme schedules to prevent the publication by a third party of weekly TV guides which would have competed with the television guides published by each broadcaster covering exclusively its own programmes.  The McGill decision was described in this way by the European Court of Justice:-

"39. Secondly, in McGill, at paras [49 and 50], the Court held that refusal by the owner of an intellectual property right to grant a licence, even if it is the act of an undertaking holding a dominant position, cannot in itself constitute abuse of a dominant position, but that the exercise of an exclusive right by the proprietor may, in exceptional circumstances involve an abuse.

40. In McGill, the Court found such exceptional circumstances in the fact that the refusal in question concerned a product ... the supply of which was indispensable for carrying on the business in question ... in that, without that information, the person wishing to produce such a guide would find it impossible to publish it and offer it for sale ... and that it was likely to exclude all competition in the secondary market of television guides.

41. Therefore, even if that case law on the exercise of an intellectual property right were applicable to the exercise of any property right whatever, it would still be necessary, for the McGill judgment to be effectively relied upon in order to plead the existence of an abuse within the meaning of Article 86 of the Treaty in a situation such as that which forms the subject matter of the first question, not only that the refusal of the service comprised in home delivery be likely to eliminate all competition in the daily newspaper market on the part of the person requesting the service and that such refusal be incapable of being objectively justified, but also that the service in itself be indispensable to carrying on that person's business, in as much as there is no actual or potential substitute in existence for that home delivery scheme."

95.      On the facts in Bronner the Court of Justice found that there were other methods of distributing the newspapers in question, even though they might be less advantageous; that there were no technical, legal or economic obstacles making it impossible or even unreasonably difficult for other publishers to establish their own nationwide home delivery scheme; and then:-

"45. It should be emphasised in that respect that, in order to demonstrate that the creation of such a system is not a realistic potential alternative and that access to the existing system is therefore indispensable, it is not enough to argue that it is not economically viable by reason of the small circulation of the daily newspaper or newspapers to be distributed.

46. For such access to be capable of being regarded as indispensable, it would be necessary at the very least to establish, as the Advocate General has pointed out at paragraph 68 of his opinion, that it is not economically viable to create a second home delivery scheme for the distribution of daily newspapers with a circulation comparable to that of the daily newspapers distributed by the existing scheme."

96.      Having regard to these questions, the Court of Justice found that there was no abuse of a dominant position in that case.

97.      The JCRA rely upon the judgment of the Competition Appeal Tribunal [2005] CAT 25 in the case of Burgess and others v The Office of Fair Trading.  In that case, Austins, a firm of funeral directors in Hertfordshire, owned and controlled the Harwood Park Crematorium.  Burgess, the appellants, was a firm of funeral directors in Hertfordshire which complained of an abuse of dominant position by Austins.  In essence, Austins refused Burgess access to the Harwood Park Crematorium with effect from 18^th January, 2002.  The Tribunal referred to Bronner and went on in this way:-

"311. In the light of that case law, it seems to us that the following propositions may be broadly stated, at this stage of the analysis:-

(1)       An abuse of a dominant position may occur if a dominant undertaking, without objective justification, refuses supplies to an established existing customer who abides by regular commercial practice, at least where the refusal of supply is disproportionate and operates to the detriment of consumers: United Brands at paragraphs 182 - 183, and also at 189 - 194; Advocate General Jacobs in Bronner at paragraph 43.

(2)       Such an abuse may occur, in particular, if the potential result of the refusal to supply is to eliminate a competitor of the dominant undertaking in a neighbouring (eg downstream) market where the dominant undertaking is itself in competition with the undertaking potentially eliminated, at least if the goods or services in question are indispensable for the activities of the latter undertaking, and there is a potential adverse effect on consumers ...

(3)       It is not an abuse to refuse access to facilities that have been developed for the exclusive use of the undertaking that has developed then, at least in the absence of strong evidence that the facilities are indispensable to the service provided, and there is no realistic possibility of creating a potential alternative: the opinion of Advocate General Jacobs at paragraphs 56 - 66: the judgment of the Court in Bronner at paragraphs 41 - 46

(312) The foregoing propositions suffice for the purposes of the decision in this case but are not intended to be an exhaustive statement on the issue of refusal to supply by a dominant firm under the chapter 2 prohibition. For example, if a competitor is substantially weakened but not eliminated, it is not necessarily the case that no abuse has occurred, in our view."

98.      We note that ABP was not an established existing customer of the Appellant.

99.      We also note that the dominant undertaking in this case was not in competition with ABP in the downstream market.

100.   In our view, the investment by the Appellant was not only a significant investment, but also falls to be taken in parts.  The Appellant imports aviation fuel in containers which are delivered to Jersey Airport whereupon the fuel is offloaded into the Airport Fuel Farm.  It is delivered to the aeroplanes at wing-tip using re-fuelling equipment that it owns.  The investment in the import arrangements and delivery of the fuel to the aviation fuel farm at Jersey Airport may well have been sufficiently substantial that that facility could not easily be replicated; but we are not at all persuaded that it is impossible for a rival to acquire the necessary re-fuelling equipment and personnel to deliver fuel from the Fuel Farm to aircraft at wing-tip.  What ABP complained about was that they had been prevented from using the entirety of the Appellant's undertaking and benefit from all of that investment when in fact an investment by ABP in part of the overall service package would enable them to compete with the Appellant.  Accordingly, there is not sufficient evidence in our view that the facilities which the Appellant provides in delivering fuel from the aviation Fuel Farm to the aircraft at wing-tip is the only methodology of achieving such delivery.  Accordingly, if the evidence had disclosed that the Appellant was prepared to sell aviation fuel to ABP for re-sale, but not to deliver the fuel to the aircraft at wing-tip, we think that there was a realistic potential alternative, and that therefore the Appellant would have been able to rely upon Bronner as objective justification for the refusal.  However there is no evidence that that was the case.  The Appellant's refusal was a blanket one.  In the circumstances, we are not persuaded that Bronner provides a legitimate ground of appeal for the Appellant in this case.  To this day, there is no statement, let alone evidence, that the Appellant would supply aviation fuel for resale if the purchaser delivered the fuel itself to its customer's aircraft.

101.   In its contentions, the Appellant construed the Bronner criteria by reference to an interference in competition in the downstream market of ground-handling.  We do not think that is right for the reasons we have found already.  However, to the extent that Bronner is relied upon as a basis for objective justification in the aviation fuel delivery market, we do not think it is relevant, on the facts as set out at paragraph 87 above.

102.   We now turn to the objective justification asserted by the Appellant in relation to airport licensing.

103.   We have set out at paragraphs 44 to 46 above our view that a licence from Ports of Jersey Limited was necessary for the delivery of aviation fuel from the Fuel Farm to the aircraft at wing-tip.  ABP considered making an application for the relevant licence, but chose not to do so.  The question is whether the fact that it was not licensed was one which it was relevant for the Appellant to take into account, if it did.

104.   The evidence of the discussions between the Appellant and ABP is to be found in the affidavits of Mr Hiren Patel and Ms Maggie Barnes, and in the exchange of emails and letters between the two companies.  It is clear to us that in September ABP's expectation was that it would be offered a basis for the acquisition of aviation fuel which would enable it to act as re-seller.  Its approach to the Appellant was made entirely in terms of volumes.  By the end of September, that was clearly not what was on offer and on 30^th September, the Appellant, through Mr Roger Simmonds, emailed ABP to say:-

"The above [the offer to provide aviation fuel] does not apply to fuel that ABP supplies and charges to ABP's clients. This is something that ABP needs to do for itself with its own licence to sell and supply (does ABP have one?), and its own infrastructure, safety and risk management. ATF will not act as agent for ABP in re-selling aviation fuel."

105.   That could not be clearer and Ms Barnes appreciated it, for she immediately objected by email sent the same day.  On 1^st October, Mr Simmonds gave her the confirmation that he had never offered third party sales as an option, and he set out particular proposed prices.  Ms Barnes objected to the statement that there had been no discussion about third party sales, in her email response on 1^st October.  When the Appellant put forward a further offer on 6^th October, Ms Barnes responded by asking whether the aviation fuel was to be supplied on a basis that gave ABP no financial incentive to arrange third party sales.  The exchange of correspondence during 2014 in effect ended on this point with a letter from Mr Simmonds to ABP in which he says:-

"We have reconsidered third party sales and these are not something we wish to accommodate.  ATF Fuel's management has not received any complaint from ABP's customers about purchasing fuel directly from ATF Fuels.  We are now signed up with the major fuel carnets should the customer not have an account open with us. We see no reason to change these refuelling arrangements."

106.   In our view, by the end of December 2015, the position had been reached where the Appellant made plain to ABP that is was not prepared to engage in a sale of aviation fuel to ABP on the basis that any of it would be available for re-sale.  At this point in time, we do not think there was any suggestion by the Appellant that it was objectively justified in following this course because ABP did not have the necessary licence from Ports of Jersey Limited, notwithstanding that the question set out in the email at paragraph 91 above ("Do you have one?") remained unanswered.

107.   There were further discussions during January 2016, albeit ABP it appears made a complaint to the JCRA during the same month, but a summary of the Appellant's position is then found in a letter sent to Ms Barnes on 17^th March, 2015, in which the Appellant said:-

"ATF rejected the ABP demands for the Rubis- ABP arrangement for the following reasons:

1.     ABP does not have:

a.     A licence to supply aviation fuel at the Airport (ABP customer invoices show that ABP is the supplier):

b.    The insurance to deal with the supply of aviation fuel as required by Ports of Jersey (PoJ):

c.     The infrastructure, safety systems, check and audits to supply aviation fuel as required by applicable regulations and PoJ. 

2.     ATF will not participate in a breach of applicable law, regulations or PoJ policy.

...

3.     ABP states on its customer invoices that ABP supplies fuel but ABP does not charge GST on this supply.  Supply of fuel at the Airport is zero-rated for GST purposes for the majority of Jet A-1 uplifts.  ABP does not have a licence to supply fuel at the Airport, so on what basis can ABP avail itself of this GST rate?

ATF will not participate in a breach of applicable laws or regulations.

4.     If ABP argues that its invoice incorrectly identify the supply of fuel to ABP's customers, then the surcharge can only be for services rendered.  We understand that services rendered are subject to GST at the standard rate. As no GST has been charged on these services, has ABP evaded Jersey tax and wishes to continue to do so through the hybrid Rubis-ABP arrangement?

5.     ATF will not participate in a breach of applicable laws or regulations."

108.   The letter concludes with the confirmation that the Appellant was not willing to sell aviation fuel to ABP with any right to re-sell to ABP's customers.

109.   We now turn to the evidence of Mr Bannister, the Chief Executive of Ports of Jersey Limited.  We have noted that on 1^st February, 2016, he answered the formal question issued by the JCRA as to the provisions, whether statutory or otherwise, by which Ports of Jersey Limited licensed the Appellant to provide aviation fuel at Jersey Airport as follows:-

"ATF provides services to Jersey Airport under a fuel operator's agreement (FOA) between POJL and ATF.

This is an interim arrangement that has been set in place to provide temporary cover until the fuel supply / operator's service has gone through a formal tender process. It expires end of 2016.  This agreement is in addition to Jersey Airport aerodrome operating procedures (AOPs) and the ATF operating manual. ATF have a petroleum licence as issued by the Fire Service to store AvGAS at the Jersey Airport. A copy of the FOA is attached in the enclosed dossier.

I should note that this interim arrangement was invoked as a business continuity and contingency measure following the unilateral withdrawal from the aviation fuel market by Rubis, and is a temporary measure until such time as we complete the open tender process for the operation."

110.   Mr Bannister was also asked under what provision Ports of Jersey Limited had licensed the Appellant's predecessor to provide aviation fuel at Jersey Airport, referring to the relevant provisions or statutory arrangements, if materially different.  He answered this question as follow:-

"When Rubis were the incumbent operator (from 2008 - 2014) they operated as sole owner and operator of the fuel distribution assets at the JAFF [Jersey Airport Fuel Farm].  The operation was covered by AOBs and Rubis' own operating procedures.  They also held a petroleum licence for AvGAS. At that time the only documents governing those commercial arrangements and service levels were the original 20 year contract leases for the JAFF.

As now owners of the JAFF, POJL were advised by their lawyers and industry consultants that a Fuel Operator's Agreement (FOA) should be put in place that mitigated potential risks now that it owned those assets. This was duly put in place as an interim document.  It should be noted that the interim FOA was invoked as a contingency measure upon Rubis unilateral withdrawal from the aviation fuel market, and was meant to provide incremental protection for Ports of Jersey on an interim basis until a proper tender process had been gone through and a formal contract awarded.

...

As you will understand, aviation fuelling is a tightly regulated sector with various international and national compliance regimes in place.  These would be standard for any fuelling operation.  Further, Ports of Jersey must control access to the airfield for safety and security reasons (also tightly regulated) - but again, this would be standard for any operator. All documents and requirements are available.

Jersey Airport maintains three strategic requirements for aviation fuel, which have guided our process from the beginning of our discussions with the previous operator Rubis, namely:-

1.  Security of supply - this was clearly the top priority for an island airport.

2. Benefit to the customers

3. Benefit to the Airport.

As an island airport, the security of supply was the number one issue and in our view must take priority over the other two in order to safeguard the security and economy of the Island and as a lifeline public service to its residents. Additionally, our primary object of POJL shall be to provide, or ensure the provision of safe, secure and efficient port operations for Jersey."

111.   It is apparent that Mr Bannister understood the question in a rather different way from that in which the JCRA intended it to be understood.  He did not give a legal analysis as much as a practical one.  However, the practical analysis in our view is consistent with the comments which we have made about the construction of the relevant legislation as set out above.

112.   In his first affidavit, Mr Bannister described how he had been asked by the Appellant to make the affidavit specifically in relation to the question of whether some form of licence was required in order directly to supply or sell aviation fuel, or re-supply or resell aviation fuel at the Airport.  He made it plain that he was not considering the matter from the perspective of any other statutory bodies nor was he addressing the issue as an expert in legal or regulatory matters.  Indeed, in so far as his evidence was evidence of law, it is of no consequence, because it is the Court which decides the law.  At paragraph 3 of his affidavit, Mr Bannister made it plain that the Ports of Jersey Limited was required to maintain a certificate ("the Aerodrome Certificate") pursuant to Article 125(1) of the Air Navigation Law, and that the Director of Civil Aviation was empowered to revoke, suspend or vary the Aerodrome Certificate if satisfied on sufficient grounds that that was appropriate.  Mr Bannister went on to say that as the owner of the Airport, including the aerodrome, Ports of Jersey Limited has and had the right to determine when and in what circumstances third parties may be granted access to the Airport, use the Airport facilities and conduct commercial or other activities at the Airport, including the sale or re-sale of aviation fuel at the aerodrome.  Subject to any valid direction to Ports of Jersey Limited by the JCRA, we agree with that.  He considered that, given the primary objective of Ports of Jersey Limited to provide or ensure the provision of safe secure and efficient port operations for Jersey, it was incumbent on Ports of Jersey Limited to comply with its primary statutory objective.  He went on:-

"I would however ask the Royal Court to note that, were similar arrangements as those between FSCI / Rubis and ABP proposed today, particularly when I hear the phrase 'title to the aviation fuel [passing] to ABP at the wing-tip of the aircraft', I would, on behalf of PoJL, have a number of queries to raise concerning the legal position relating to the ownership of the fuel and the consequent responsibilities in respect of such fuel, and would require all such matters to be properly dealt with to PoJL's satisfaction before any re-sale of aviation fuel was permitted to take place ..."

113.   Later in paragraph 5, he goes on:-

"5.2 In granting permission for the supply or re-supply of aviation fuel at the Airport, PoJL needs to be satisfied that the requirements of the laws, regulations, guidelines and standards pertinent to any particular service can and will be met/complied with by the operator of that particular facility or service.  For aviation fuel supplies, a fuel supplier needs to comply with domestic and international requirements as to the storage, handling and distribution of fuel, including transportation to and from the Airport, as well as the express requirements of the [Air Navigation Law]. In addition, PoJL would seek to ensure that the operator is able to meet various service level obligations to its customers (to ensure that a sustainable and efficient fuel operation is maintained). PoJL would require formal agreements to be put in place with the supplier / re-seller in relation to the foregoing.

5.3 ... I would ask the Royal Court to note, for the avoidance of doubt, that a fuel supplier would not be permitted to establish a fuel supply operation at the Airport without obtaining PoJL's approval.

5.4 Taking into account the foregoing, I can confirm that [the Appellant], as successful tenderer for the right to use the Airport Fuel Farm for the storage and distribution of aviation fuel at the Airport, had to satisfy PoJL, as the owner and operator of the Airport, that it would comply with the relevant laws, regulations, guidelines and standards for the storage and distribution of aviation fuel at the Airport (and more specifically at the aerodrome). That is a requirement that PoJL would impose on anyone seeking to supply or re-sell aviation fuel or operate any related process at the Airport."

114.   In his second affidavit, Mr Bannister made it plain that many of the points raised around whether Ports of Jersey Limited should, could or would have authorised ABP to conduct fuelling activities were completely hypothetical in nature as no formal request for approval had been submitted.  He maintained his position that Ports of Jersey Limited was very alert to any situation which would threaten the security of supply and to the need for Ports of Jersey Limited to approve any re-selling arrangements.

115.   We accept Mr Bannister's evidence.  We proceed on the factual basis therefore that it was necessary for ABP, both as a matter of law (see paragraphs 46 - 48 above) and as a matter of practice to have a licence from Ports of Jersey Limited before it could engage in any re-selling.

116.   Where then does that conclusion leave us in circumstances where the Appellant asserts that it was objectively justified in not supplying aviation fuel to ABP for re-sale when that company was not authorised by Ports of Jersey Limited as a re-seller?  We note that ABP did not respond to the email question of 30^th September, 2014, nor did it respond to the Appellant's letter of 17^th March, 2015, by producing an authorisation to act as re-seller - nor indeed could it do so, because it had no such authorisation.

117.   At paragraph 62 of the Decision, the JCRA record that the Appellant had stated, in response to the draft decision, that it was objectively justified in refusing to supply fuel to ABP for re-sale because ABP did not have a licence to supply fuel at Jersey Airport.  That approach was also taken by the Appellant at the oral hearing.  The decision then contained this summary:-

"The JCRA does not accept that the arguments advanced by ATF on this point amount to an objective justification for its refusal to supply ABP. In applying Article 16 of the 2005 Law, the JCRA must attempt to ensure that, so far as possible, questions arising in relation to competition are dealt with in a manner that is consistent with the treatment of corresponding questions arising under community law in relation to competition within the European Community. Under EU Competition Law, an undertaking does not abuse a dominant position if its conduct is required by national legislation or where the legal / regulatory framework eliminates the possibility of competitive activity.  This is because the harm to competition is caused by the state measure and not by the autonomous conduct of the undertaking.  Although [the Appellant] has provided the JCRA with a list of legislative provisions which is claim prevent it from making sales of fuel to re-sellers at Jersey Airport, [the Appellant] has been unable to identify which specific provisions of Jersey Law prohibit it from re-selling fuel to ABP."

118.   Having conducted its own investigation, the JCRA concluded that Jersey law did not prohibit the Appellant from making sales of aviation fuel to re-sellers such as ABP at Jersey Airport and that the refusal to do so was not mandated by Jersey law.

119.   We accept that there is no statutory provision which prohibited the Appellant from selling aviation fuel to a third party for re-sale, but we do not think it is reasonable, as a result, to conclude that the Appellant should be required to do so even in circumstances where the re-seller would be acting illegally by re-selling the fuel to one of its customers.  We do not think we need to go as far as to say that to do so could amount to an unlawful conspiracy, although we believe it could, because we simply do not think it is reasonable to expect a party licensed to sell aviation fuel at the Airport to provide that fuel to a third party on a premise that the third party would act unlawfully with it.  It is however worse than that.  In the circumstances of this case, the Appellant would be directly participating in the unlawful activity to the extent that property in the aviation fuel passes from the Appellant to ABP to the customer of ABP in a split second at wing-tip and the delivery of the fuel must on that analysis be achieved by the Appellant acting as ABP's agent in that split second after property has passed from the Appellant to ABP and before it passes to the ABP customer.  If ABP did not have the necessary licence, it follows that the Appellant, as its agent, was completing the unlawful act on its behalf.  In this context, it may or may not be the case that such a delivery would amount to a criminal offence - it is sufficient, in our judgment, that the delivery required a consent from Ports of Jersey Limited, and no such consent had been given.

120.   In these circumstances, we accept the Appellant's contention that it was objectively justified in refusing to supply ABP because that company had no permit or licence from Ports of Jersey Limited to act as a re-seller of the fuel at wing-tip.  Accordingly, even if the refusal to supply aviation fuel to ABP fell to be treated as an abuse of the dominant position on other grounds, there would be an objective justification for it as ABP had no licence to act as re-seller.

121.   We cannot leave this particular part of the argument without referring to a decision of the Tenth Chamber of the European Court of Justice in the Akcenta case (Case C-68/12, decision delivered 7th February 2013).  This was a decision made on a request for a preliminary ruling where the Slovak Competition Authority had found that three major banks with their principal places of business in Bratislava had infringed Article 81 EC by entering into an agreement to terminate contracts relating to current accounts of Akcenta, a Czech company, and to refrain from concluding new contracts with that company.  The Slovak Competition Authority had concluded that the three banks had decided by common agreement to terminate the contracts which they had in a coordinated manner because they regarded Akcenta as a competitor providing services to their customers, and because their own profits had fallen as a result of Akcenta's business. It transpired that Akcenta had engaged in some illegal activity, in respect of which it had been fined €35,000 - for carrying out foreign exchange transactions in Slovakia without a licence.  The question arose as to whether, by reason of that illegality, the banks had been entitled to act as they did.  The Slovak Court referred these two questions to the Court of Justice for a preliminary ruling:-

(i)        Is Article 101(1) TFEU to be interpreted as meaning that it is legally relevant that a competitor adversely affected by a restrictive agreement between other competitors was operating on the relevant market illegally at the time the agreement was concluded?

(ii)       Is it of legal relevance in such circumstances that the legality of the competitor's conduct was not called into question by the competent supervisory bodies in the member state?

122.   The Court concluded as follows:-

"19. In that regard, it is apparent from the order for reference that the agreement entered into by the banks concerned specifically had as its object the restriction of competition and that none of the banks had challenged the legality of Akcenta's business before they were investigated in the case giving rise to the main proceedings. The alleged illegality of Akcenta's situation is therefore irrelevant for the purpose of determining whether the conditions for an infringement of the competition rules are met.

20. Moreover, it is for public authorities and not private undertakings or associations of undertakings to ensure compliance with statutory requirements.  The Czech government's description of Akcenta's situation is evidence enough of the fact that the application of statutory provisions may call for complex assessments which are not within the area of responsibility of those private undertakings or associations of undertakings.

21. It follows from those considerations that the answer to the first and second questions is that Article 101 TFEU must be interpreted as meaning that the fact that an undertaking that is adversely affected by an agreement whose object is the restriction of competition was allegedly operating illegally on the relevant market at the time when the agreement was concluded is of no relevance to the question whether the agreement constitutes an infringement of that provision."

123.   It may be thought to be a surprising conclusion that the Court, considering a matter of competition law, could conclude that competition law is breached even when the complainant is acting illegally but we are charged by Article 60 of the Law to secure consistency if possible with European Union decisions in matters of competition.  Accordingly we need to give attention to a decision with which, on the face of it, it is much more tempting to disagree than to agree.  In fact we do not have to go so far.  First of all it is clear that in this particular case, the banks' objective justification for the restriction of competition failed because they were unaware of the illegality at the time they made the agreement in question.  Secondly, the present case is not one where some complex assessment has to be made by the party in the dominant position.  The Appellant asked ABP whether it in fact had a licence to re-sell aviation fuel, and received no answer.  It is clear, by implication, that it had already established that information from Ports of Jersey Limited.  The rationale which is set out at paragraph 20 of the Court's judgment in Akcenta therefore does not apply.  However, the crucial difference in our view in the present case from the Akcenta decision is that the banks were not required in the Akcenta case to do anything themselves which assisted in the illegality which later on they asserted against Akcenta.  By contrast, in our case, the Appellant was required to supply the aviation fuel to ABP for onward resale, if the JCRA are right, not only knowing that ABP required a licence but also that it did not have one and in those circumstances the Appellant would have been complicit in that unlawful activity.

124.   We therefore do not consider ourselves required to follow the Akcenta decision.

125.   In connection with illegality, we should also mention that we have considered the judgment of the Court of First Instance (Second Chamber) in Case T - 30/89 Hilti AG -v- Commission of the European Communities EU:T:1991:70.  In this case, the appellant held a dominant position within the EEC in the market for nail guns.  It was alleged against it that it refused to supply independent dealers or distributors of Hilti products with cartridge strips without a corresponding quantity of Hilti nails, and that this was anti-competitive - a contention which the Commission accepted.  Hilti's assertion that the use of the intervenors' nails in Hilti tools was dangerous was not accepted either by the Commission or subsequently by the European Court.  The latter took the view that Hilti should have pursued the matter through judicial or administrative channels in the United Kingdom, pressing the UK authorities for a ruling that the use of the intervenors' nails was dangerous.  If this had been done, the legitimate competition rights of the intervenors would have been in no way impaired.  The Court concluded on this point as follows:-

"118. As the Commission has established, there are laws in the United Kingdom attaching penalties to the sale of dangerous products and to the use of misleading claims as to the characteristics of any product.  There are also authorities vested with powers to enforce those laws.  In those circumstances it is clearly not the task of an undertaking in a dominant position to take the steps on its own initiative to eliminate products which, rightly or wrongly, it regards as dangerous or at least as inferior in quality to its own products. 

119. It must further be held in this connection that the effectiveness of the community rules on competition would be jeopardised if the interpretation by an undertaking of the laws of the various member states regarding product liability were to take precedence over those rules.  LT's argument based on its alleged duty of care cannot therefore be upheld."

126.   We consider that this case also involved factually different circumstances.  First of all, it is clear that on the facts, Hilti's justification for its anti-competitive behaviour was not accepted.  That was clearly so on the facts of that case but it does not establish the rule that it is never for a party in a dominant position against whom an allegation of abusive conduct has been made, to form a view as to whether it would be acting illegally if it took a step other than the allegedly abusive step which the competition regulator has criticised.  We also think that perhaps emphasis should be given in paragraph 119 of the extract from the ECJ's decision above to the use of the word "interpretation".  Essentially the position which Hilti had adopted was that it considered that the use of nails produced by the intervenors in the Hilti products would have been dangerous and therefore would have jeopardised the laws of the relevant member state, in that case the UK.  Such a conclusion would involve not only a decision on what the law was but then on a judgment call as to whether the particular product would have been dangerous when used with the Hilti product.  One can see why the European Court of Justice could take the view that those judged with an abuse of dominant position could too readily find a way out of the community rules on competition if they could assert an argument of this kind.  But it also remains true that in the Hilti case, Hilti would not have themselves have been acting unlawfully had they supplied the nail guns and left it to the purchaser to obtain such nails to go with it as thought fit.  Once again, the critical distinction is that in the present case, the Appellant would have been required to supply the aviation fuel to ABP for onward resale, knowing that not only that ABP required a licence but also that it did not have one. 

Unlawful price discrimination

127.   The JCRA contended that the Appellant was guilty of abusive price discrimination against ABP because:-

(i)        It has a dominant position in the supply of aviation fuel at Jersey Airport (which was agreed by the Appellant);

(ii)       It entered into equivalent transactions for the purchase of fuel with other trading parties including ABP (also agreed by the Appellant);

(iii)      It applied dissimilar conditions to some of those transactions by charging the higher PAP to ABP and lower Platts based prices to other comparable customers, especially West Atlantic; and

(iv)      That placed ABP at a competitive disadvantage and harmed ABP's customers through increased prices.

128.   We take first the question of applying dissimilar conditions to transactions with other comparable customers especially West Atlantic, and the JCRA finding that this was an abuse of a dominant position.  If we were to find there had been an abuse of dominant position, we would then need to consider whether there was any objective justification for it.

129.   On the first question therefore we look at whether the Appellant unfairly charged discriminatory prices to ABP - because if it did, that might be expected to distort competition in the markets in which ABP's charter flights operate, a point made in his conclusions by the JCRA expert Mr Wynne Jones.  One therefore needs to look first at the pricing structure of the Appellant.  For the purposes of assessing the expert evidence of Mr Wynne Jones, we think we should also note his assumption at paragraph 52 of his report that the JCRA was correct in identifying that the margin between the PAP and the Platts price had increased by 229% in the space of approximately four months.  This was incorrect, the detail of which is set out at paragraphs 24 - 27 above and we noted that in oral argument the error was not disputed.

130.   As is shown by Appendix 1 to the Appellant's response to the draft decision, all but six of the fifty one customers of the Appellant acquired aviation fuel at PAP.  ABP fell into that class of 45 purchasers.  We noted that it was not contended before us by the JCRA that by charging all forty-five such purchasers at PAP, the Appellant was abusing its dominant position in terms of price discrimination.  The only abuse was said to exist in relation to ABP.  As we understand it, that abuse was argued as much on the basis that ABP should have had a price lower than PAP or alternatively should have had a Platts plus price given the literage or volume of fuel which ABP acquired from the Appellant - in other words, charging for aviation fuel at PAP was completely legitimate for all other customers of the Appellant except ABP.

131.   It seems to us that the starting approach to this issue of price discrimination is to look at whether or not the Appellant can be said to have abused its dominant position merely by charging different prices to different customers.  Put in those broad terms, we do not think it necessarily does amount to an abuse of dominant position.  British Airways, for example, purchased between four and five times more aviation fuel than ABP for the relevant period - and Blue Islands between two and three times the volume which ABP purchased.  Thus one is down to four other purchasers - West Atlantic, which purchased at Platts plus 16 ppl, Flybe which purchased at Platts plus 22 ppl, Netjets Transportes Aeros which purchased at Platts plus 22 ppl and the Jersey Aero Club which purchased at PAP less 7.5%.

132.   We consider first whether a Platts pricing structure was necessarily more favourable than PAP.  We note that Platts plus 22 ppl (Flybe and Netjets) resulted in almost the same price as PAP for the relevant periods in 2015.  It is not possible rationally to conclude that there was an abuse of dominant position where the PAP charge represents approximately the same as Platts plus 22 ppl.  The Platts plus 22 ppl pricing structure meant that these two companies were paying an effective average price per litre which was very similar to that of ABP.  We note that some other customers of the Appellant, which were acquiring aviation fuel at PAP, paid a lower effective average price per litre than both ABP and Flybe and Netjets - not by a very significant amount but clearly there will be small differences in price depending upon the Platts price of fuel from time to time which will have its own impact on PAP, representing as it does the cost price to the Appellant.  We do not wish to labour the point, but what is clear is that Platts plus 22 ppl is sometimes higher and sometimes lower than PAP, and it is hard to see how a pricing structure based on Platts plus would necessarily have benefitted ABP.  The converse of that is that it is hard to see how charging ABP a PAP price can rationally be considered discriminatory when compared with Platts plus 22 ppl.  The other factors for these two companies - Flybe and NetJets - is that they bought considerably less fuel in the relevant period than ABP.  This is a factor but is not determinative in establishing whether the price charged to ABP was discriminatory.  The latter was in fact acquiring fuel at a similar price and in our view was unable to use its volume purchases to secure a lower price for the reasons discussed in paragraphs 136 - 139 below.

133.   So one is left with two other customers of the Appellant - West Atlantic which had a Platts plus 16 ppl pricing basis and the Aero Club which had a PAP minus 7.5%.

134.   The Appellant contended that West Atlantic was an 'early adopter' - in other words that it committed to the Appellant before others had and that should be reflected in the price.  Furthermore, the price for West Atlantic was negotiated very early on at a time when the Appellant had no relevant pricing history to take into account, and at a time when it was likely to be unclear whether there would be other competitors in the aviation fuel market, remembering that at that time the Appellant did not have an exclusive licence.  In our judgment, it is unfair to criticise the Appellant for its responses during the first year of trading in circumstances where the Appellant did not have a trading experience that could easily be relied upon to provide accurate statistical evidence.  We also take the view that the early adopter point advanced by Advocate Kelleher is a good one.  He put it this way: that by its early agreement with the Appellant, West Atlantic in effect established that the Appellant had a business.  We see no reason why West Atlantic should not have had the benefit of that early adopter agreement in terms of the pricing structure offered to it, and it would be unfair to the Appellant to conclude that it had to offer the same favourable pricing structure to all those who came later to the negotiating table.

135.   In its contentions, the Appellant also argued that West Atlantic was not properly treated as a comparator with ABP.  The early adopter point was one reason, but the second was that West Atlantic operated scheduled cargo flights, while ABP operates charter flights.  That is relevant for two reasons.  The first is that offering West Atlantic a more favourable price does not put West Atlantic in a better position competitively in the market than ABP, because the two companies are operating in different markets.  We accept that because West Atlantic does not offer passenger charter flights and thus ABP and other competitors in that market (if any) would all acquire aviation fuel at Jersey Airport at PAP.  In this part of the argument, there was no damage to ABP's competitive position.  Secondly it is said that the fact that West Atlantic is operating scheduled cargo flights means that the Appellant knows when West Atlantic will require deliveries of aviation fuel and how much it is likely to acquire.  The Appellant is thus able to manage its staff and stocks efficiently.  In particular it can organise staff on a shift basis to maintain the service levels generally required of the Appellant by Ports of Jersey Limited without worrying about the extra cost, if necessary of paying overtime to deliver at those service levels on an unpredictable basis.  By contrast, ABP's charter flights are more unpredictable in nature and therefore more costly to service.  It was contended that the JCRA had failed to consider this relevant factor in relation to the setting of a price - and for this reason also, charging ABP at PAP and West Atlantic at Platts plus 16 ppl was reasonable. We should note that in this debate, ABP and West Atlantic purchased similar levels of fuel over the relevant period albeit ABP purchased some eight or nine percent more.

136.   The JCRA argument in relation to comparators contained a number of different elements.  One of them was that the JCRA was entitled primarily to have regard to the volumes of fuel that were sold, and this argument appears not only in the skeleton but was emphasised by Advocate Sanders orally before us.  The argument included the contention that one could have regard to the volume of fuel which ABP would have purchased on behalf of its own customers for resale.  In the context of the discussion about alleged price discrimination, we do not think that this is a valid contention.  It depends upon a conclusion that there was abusive behaviour by the Appellant in not selling aviation fuel to ABP for resale and we have found that that conduct was not abusive.  Accordingly we do not have regard to the amount which ABP might have purchased for resale had that been on the table.

137.   Article 16(2)(a) of the Law charges us to consider whether the Appellant was applying unfair prices.  Article 16(2)(c) of the Law requires us to consider whether dissimilar conditions were applied to "equivalent transactions".  We are now considering the aviation fuel market.  We think the JCRA is right to say that the quantity of aviation fuel purchased is a relevant consideration, albeit the difference between a pricing basis on Platts plus and PAP represents a hard line in terms of customers and that line has to be drawn somewhere.  The overwhelming majority of the Appellant's customers were charged at PAP.  Flybe and Netjets are charged at Platts plus, but their average price is almost identical with that charged to ABP.  There are particular reasons why West Atlantic was able to negotiate a Platts plus price despite its quantity of fuel purchased being slightly less than ABP.  We do not see the quantity of fuel purchased as creating a situation where the Appellant was prohibited from selling on a different basis to ABP.

138.   In the case of West Atlantic, we think that a comparison of the pricing basis offered to ABP was capable in theory of amounting to an abuse of dominant position under Article 16(2)(a) of the Law, and it needs objective justification.  We agree with the Appellant that the objective justification can be found in two ways - as we have said, first of all in relation to the early adopter point, and secondly in relation to the predictability of the customer's requirements in terms of timing and average order size.  The JCRA contended that this is new material that was not put before it earlier, and that the evidence on staffing and fuel costs which Mr Patel has provided amounted to little more than speculation and assertion.  We have considered the contention that the evidence from Ms Barnes of ABP and Mr de Breyne of Fuel Supplies/Rubis suggests that there were no additional costs in fitting in unscheduled flights - but it seems to us that every business is likely to have a different cost structure, and their evidence does not carry much weight in this connection.  The JCRA contends that the cost structure of the Appellant might be relevant to the setting of price but that there must be some contemporaneous evidence or material and none has been adduced.  Given that the company only commenced in business in September 2014 and was being asked to justify with statistical evidence these costs in the middle of 2015, we think this was probably unduly harsh, although as an approach from a regulator, it is entirely understandable and indeed supportable where the business in question has been trading for some time such that statistical evidence could reasonably be demanded.  Nonetheless, the points which are made by Mr Patel in his evidence do not seem to be intrinsically unreasonable and we accept that the difference between a scheduled cargo operator and a charter flight operator for passengers is such that West Atlantic was not a true comparator.

139.   Finally we come to Jersey Aero Club which is able to acquire the aviation fuel at PAP less 7.5%.  The arrangement with the Aero Club shows that it is not in any sense in competition with ABP.  The volume of fuel which it acquires is considerably less, because it is making arrangements for fuel deliveries for private aircraft owned by its members or by visitors.  It is not operating in the same market as ABP.  Secondly, the contractual arrangements between the Aero Club and the Appellant are that the Aero Club acts as an agent for the Appellant in collecting the money which is due by individual aircraft owners to the Appellant in respect of the fuel delivered.  Jersey Aero Club does not fix the price in respect of the sales, which is a price fixed by the Appellant.  The 7.5% reduction reflects the saving of money to the Appellant in collecting the cost of aviation fuel sold to the Aero Club's members and visitors, or put another way, reflects the cost to the Aero Club of collecting money due by its members and visitors to the Appellant.  We do not see this as a comparator with ABP in any sense, nor do we think it is unreasonable that the Appellant should, in effect, have an agency agreement with the Aero Club such that the latter made a charge for collecting monies due to the Appellant.

140.   In deciding which evidence we considered to be most significant in relation to this appeal, it is right to say that we have given some weight to the fact that fuel prices at Jersey Airport have dropped considerably during the relevant period since the Appellant commenced trading.  Customers purchasing aviation fuel obtained a considerably better deal than they were getting from Fuel Supplies/Rubis and ABP in the years before the Appellant started its business.  That fact has led us to view with circumspection the contentions of ABP and the evidence of Fuel Supplies/Rubis.  Of course, if the absence of any competition has the result in the future that aviation fuel prices should go up, there may well be an opportunity for the JCRA to reconsider the arrangements which the Appellant has then put in place and its potential discriminatory price structures at that time; and indeed Ports of Jersey Limited might well have that subject under review as well in the context of its licensed operators.  The Appellant is not by this judgment receiving a blank cheque to charge in the future whatever it likes, because it has a dominant position and one of the purposes of the Law is to ensure that such a position is not abused.  On the other hand, we think it is right to give credit to the Appellant for the significant impact which its business has had on aviation fuel prices in the Island since it started business.  In giving that credit, we record also that we were told - and this was not contested by the JCRA - that the quality of aviation fuel now supplied is an improvement on what was available previously.

141.   It must not be uncommon in appeals of this nature in other jurisdictions that new evidence arises at the time the Appeals Tribunal hears the appeal than was available at the time the decision taker originally took its decision.  Furthermore the nature of the argument which is presented is bound to become more refined.  We think that has occurred in this case, albeit some of the arguments advanced by the Appellant have been consistently advanced from the outset.

142.   At all events, we are satisfied on the balance of probabilities that the Appellant, for the reasons given, has not abused its dominant position in the market for the sale of aviation fuel at Jersey Airport during the period in question, whether as a result of its refusal to sell to ABP for the purposes of resale or by the pricing structure offered to ABP, namely PAP.

143.   For these reasons, we think the decision of the JCRA was wrong.  We set it aside and the appeal succeeds.

Authorities

Competition (Jersey) Law 2005.

JT (Jersey) v JCRA [2013] JRC 238.

Telecommunications (Jersey) Law 2002.

British Sky Broadcasting Limited and others-v-Office of Communications [2012] CAT 20.

Petroleum (Jersey) Law 1984.

Air Navigation (Jersey) Law 2014.

Civil Aviation (Jersey) Law 2008.

Air and Sea Ports (Incorporation) (Jersey) Law 2015.

Air and Sea Ports Incorporation (Transfer)(Jersey) Regulations 2015.

National Grid Plc-v-Gas and Electricity Markets Authority and others [2010] EWCA Civ 114.

Bellamy and Child, para 10.058.

British Airways-v-Commission [17th December 2003 Case T-219/99.

BP/Statoil, case number COMP/M.7387, dated 15th December 2014.

Purple Parking Limited and another-v-Heathrow Airport Limited [2011] EWHC 987 (CH).

Bronner [infra].

British Midland -v- Aer Lingus (92/213/EEC).

Law and Economics of Article 102 TFEU [2013] Second Edition.

Arriva The Shires Limited v London Luton Airport Operations Limited [2014] EWHC 64 (Ch).

Oscar Bronner GmbH and Co KG v Mediaprint Zeitungs-und Zeitschfriftenvelag GmbH and Co KG and others (Case C7/97).

McGill (joined cases see 241 and 242/91P, Art and ITP v EC Commission [1995] ECR 1-743.

Burgess and others v The Office of Fair Trading.

Akcenta case (Case C-68/12, decision delivered 7th February 2013).

Case T - 30/89 Hilti AG -v- Commission of the European Communities EU:T:1991:70.