Federal Court upholds validity of examination notices issued to Paul and Moses Obeid

8 August 2014

The Federal Court has today found that compulsory examination notices issued by the Australian Competition and Consumer Commission to Paul and Moses Obeid are valid.

The notices were issued under Section 155 of the Competition and Consumer Act 2010 (CCA) and require Paul and Moses Obeid to attend the ACCC offices, give evidence and produce documents in private examinations. Justice Farrell dismissed Moses and Paul Obeid’s application seeking a declaration that these notices are invalid.

The proposed examinations are part of the ACCC’s investigation into allegations of cartel conduct in relation to the 2009 tender process conducted by the NSW Department of Trade and Industry for an exploration licence over the Mount Penny coal tenement in the Bylong Valley.

Moses and Paul Obeid challenged the ACCC’s notices by arguing that the right to apply for the necessary approvals for mining activities was not the acquisition of a “service” for the purposes of the cartel provisions in the CCA.  Those applications in turn led to the issuing of exploration licences following a competitive Expression of Interest [EOI] process.

In her judgment, Justice Farrell said:

“The conduct of the EOI Process on this commercial basis appears to have been designed to maximise competition for, and financial gain from, the right to explore the State’s coal reserves, as any private party might have done if the State had not reserved the mineral to itself"

Her Honour was not satisfied that what was alleged in the notices were not “services” within the meaning of the CCA and accordingly dismissed the challenge to the notices.

The ACCC’s investigation follows the report produced by the NSW Independent Commission Against Corruption in Operation Jasper concerning this tender process.

As this matter is subject to ongoing investigation, the ACCC will not make any further comment.

Release number: 
MR 202/14
Media enquiries: 
Media team - 1300 138 917