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This was an appeal before the Court of Appeal (Lindblom, Singh & Haddon-Cave LJJ) from the judgment of a 3-judge Divisional Court (Hickinbottom LJ; Holgate and Marcus Smith JJ.), in which Heathrow Hub Ltd (“Hub”) contended that the Secretary of State for Transport acted unlawfully in coming to the conclusion, enshrined in the Airports National Policy Statement (“ANPS”), that the expansion of Heathrow Airport should proceed by way of what is known as the North-West Runway (NWR”) Scheme (involving a new third runway as well as associated infrastructure including a new terminal), as opposed to the Extended Northern Runway (“ENR”) Scheme which Hub had advocated (involving lengthening the existing northern runway so that it could operate as two runways in one).
Hub purport to have IP rights to the ENR Scheme and intended to charge the airport operator, Heathrow Airport Ltd (“HAL”), a license fee of £100m in relation to those rights in the event that the ANPS preferred the ENR Scheme over the NWR Scheme. Hub did not intended to deliver the ENR Scheme itself; its proposal was reliant on HAL delivering the ENR Scheme, paying Hub for the claimed IP rights relating to that scheme.
Hub’s claim and appeal centred on the request by the Secretary of State for a guarantee/assurance from HAL that it would deliver the ENR Scheme in the event that the ANPS favoured it. HAL did not provide such a guarantee/assurance.
Hub contended that the request for a guarantee/assurance was in breach of competition law (Article 106 TFEU taken with Article 102 TFEU) on the basis that it gave one ‘bidder’ a veto over a rival bid (a characterisation which the other parties did not accept). That in turn gave rise to the question of whether HAL had a dominant position in the relevant market (airport operation services and associated services) and whether it had ‘special or exclusive rights’ so as to fall within the scope of Article 106 TFEU.
Hub also advanced various public law challenges arising out of the request for a guarantee/assurance.
The Court of Appeal, in agreement with the Divisional Court, found that the request for a guarantee/assurance was not material to the decision to adopt the ANPS in its final form endorsing the NWR Scheme, because the ENR Scheme had failed on its merits before the Secretary of State had needed to consider issue of its delivery, which was where the guarantee/assurance came into play. The Courts differed on the issue of dominant position and ‘special or exclusive rights’ albeit both judgments were expressly obiter on those issues.
Charles Banner QC appeared before both the Court of Appeal and Divisional Court for Arora Holdings Ltd, which participated in the proceedings on behalf of the Arora Group who wish to build the new terminal that is to be part of the Heathrow NWR Scheme. He was jointly instructed by CMS’s planning and competition departments.
Richard Moules and Andrew Byass appeared for the Respondent, instructed by the Government Legal Department.
Richard Turney appeared for the First Interested Party, instructed by Bryan Cave Leighton Paisner LLP.
