Home > News > High Court rules that the Chancery Division has exclusive competence over competition law claims

Following a two day hearing, the High Court (Master Clark) has last week delivered judgment in Arora Management Services Ltd. v. Heathrow Airport Limited [2019] EWHC 1945 (Ch), dismissing an application by Heathrow Airport Ltd (the operator of London Heathrow Airport) to transfer a Part 7 claim for a declaration by Arora Management Services Ltd (a company within the Arora Group, which has substantial land interests at Heathrow Airport) regarding the interpretation and effect of Condition A85 on the Heathrow Airport Terminal 5 planning permission which regulates new passenger car parks at Heathrow Airport.

In 2015, Arora applied to the London Borough of Hillingdon (‘LBH’) for planning permission for a 9-level multi storey car park on a site which it controls at Sealand Road, within the airport boundary. HAL, which controls the existing on-airport passenger car parks at Heathow (with which Arora’s proposed new car park would compete) objected. The critical issue was whether the proposed new car park would be subject to the 42,000 space ‘parking cap’ imposed by Condition A85 on the Terminal 5 permission. If it would not be subject to the cap (within which there was headroom for the number of spaces proposed), and would therefore involve substantial additional car parking provision at Heathrow beyond the capped amount of 42,000 spaces, then the view of LBH was that permission should be refused on the basis that it would undermine efforts to encourage travel to and from Heathrow by sustainable transport means. Over the next c. 2 years there was an exchange of several leading counsels’ opinions on behalf of Arora, HAL, and LBH offering different interpretations of Condition A85. HAL’s position was (and remains) that the effect of Condition A85 is that only those new car parks on land that HAL has notified to LBH as “substituted” car park land count towards the parking cap imposed by that condition (which if correct means HAL has a veto on new car parks counting towards the cap).

The position reached a stalemate whereby all parties agreed that the planning application turned on the interpretation of Condition A85 but LBH could not decide (having received conflicting legal advice). Arora therefore decided to take the exceptional step of applying to the High Court for a declaration as to the interpretation and effect of Condition A85 on the following grounds:

  1. The planning law ground: that, applying established principles of interpretation of planning conditions, Condition A85 does not give HAL a monopoly on notifying new car park land to LBH;
  2. The competition law ground: that HAL’s interpretation would mean the Terminal 5 permission is contrary to Article 106 TFEU taken together with Article 102 TFEU on the basis that it would be a state measure conferred to a party with “special or exclusive rights” (HAL) and which has a dominant position in the market,  which risked exacerbating that dominant position.

The claim was issued pursuant to Part 7 of the Civil Procedure Rules given the anticipated need for expert evidence on the competition grounds. As it was not a claim for judicial review or statutory review, it was outside the Planning Court’s jurisdiction and was issued in the Chancery Division, in which the Competition List sits. CPR r 30.8 and Competition Law Practice Direction provide that a claim “relating to the application of” Article 102 TFEU must (save where the Commercial Court or the Competition Appeal Tribunal has been expressly conferred jurisdiction) be commenced in the Chancery Division and, if commenced elsewhere, must be transferred to the Chancery Division.

HAL applied for a transfer to the Queen’s Bench Division, contending that (1) this was not a claim “relating to the application of” Article 102 TFEU since no breach of that article was alleged; and (2) the preponderance of the issues was planning related and the QBD was more suitable to hearing planning issues given that the Planning Court sits within the QBD.

Agreeing with Arora, the Court rejected both of HAL’s arguments. In a judgment of general application to claims raising a mix of issues one of which is based on competition law, Master Clark held that the intention of CPR r 30.8 and the Competition Law Practice Direction was that, save in the aforementioned limited exceptions, the Competition List of the Chancery Division should have exclusive competence in relation to non-JR proceedings concerning competition law, and that it was consistent with this to give the term “relating to the application of” Article 102 TFEU its natural, broad meaning. The Court also held that there was nothing about Council Regulation 1/2003 on the implementation of the rules on competition which compelled a different conclusion, contrary to HAL’s submissions which contended that the Regulation required only those claims alleging a breach of the competition law provisions of the TFEU to be heard by the designated specialist courts of Member States. In any event, the claim alleged a contingent breach of Article 102 taken with Article 106 TFEU. Finally, the Court held that in any event, even if there was no obligation under the CPR and Practice Direction to keep the case in the Chancery Division, the Court’s discretion would be exercised in favour of so doing given that the Chancery Division was a suitable forum for determining planning issues in the context of Part 7 or Part 8 proceedings, which it had done on several previous occasions, and a significantly more expert forum than the QBD for dealing with the competition issues.

The judgment is available here.

The claim will now proceed to a full trial before the Competition List of the Chancery Division.

Charles Banner QC appeared for Arora Management Services Ltd, instructed by CMS.

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